Meet Scale VC: The Unicorn Founder-Backed Incubator + Accelerator Investing in Founders-First

Published in

Redbud VC

6 min readAug 11, 2021

Reach out to Brett Calhoun, Director at Scale, at brett@scale-vc.com for questions about Scale and the portfolio companies. Follow us on Twitter at @scaleincubator and @brettcalhounn.

Key Points on Scale (cohort dates are subject to change)

A new incubator, Scale, in the heart of Missouri is investing $40k+ cheques in US-based founders.
Sourcing, incubating, and investing with a founder-first focus.
Built and advised by the Founders of unicorn EquipmentShare, Countdown Capital, Zapier, MainStreet, and Veterans United.
The Cohort attendance will be a hybrid (zoom/in-person) model with free office space, resources, mentors, capital, and warm introductions to the right investors and customers.
Investment support will not solely focus on pitch decks and business plans but also on personal growth and building a business from the ground up.

Although the last 18 months have been nothing short of adversity for some, the pandemic has challenged entrepreneurs to build new, innovative solutions. A new incubator brewing in the heart of the Midwest, Scale, hopes to empower entrepreneurs and equip them to take advantage of the newfound opportunity to build between the coasts.

The Team

Founded by serial entrepreneurs Willy and Jabook Schlacks, founders of unicorn EquipmentShare, and Jai Malik, founder & GP of Countdown Capital, the Scale team is getting in the trenches with founders and leveraging all their resources (including capital) to make sure each startup in the cohort is successful. The founding team is joined by three other advisors/investors who also founded soonicorn to unicorn startups in Columbia, MO: Wade Foster (CEO/Founder of Zapier), Brant Bukowsky (Founder of Veterans United), Brian Whorley (CEO/Founder of Paytient), Lori Coulter (CEO & Co-Founder at Summersalt), and Jackson Moses (Head of Partnerships and Founding Member of MainStreet). The team is below:

Scale is investing with a founder-first focus, meaning the team cares most about resilient founding teams with a passion for problem-solving. Our team believes the key to true outlier success is the founding team.

“Most people think there’s this divorce between their own individual journey and then a company journey — and it’s just not true,” — Willy Shclacks

Cohort I Application

Scale has an open, low barrier application until August 25th with acceptance by September 3rd. The Cohort is open to any entrepreneurs (even if you have a napkin idea) and is willing to invest in at least one company that has raised or is currently raising pre-seed funding. There will be 4+ companies selected for Cohort I, starting on September 20th. Over the next two years, there will be a total of four cohorts, each lasting 3 months (3 months in a Cohort and 3 months recruiting).

Throughout the 3 months, there will be free office space, a hybrid attendance model (zoom/in-person), mentors, 11 Scale Sessions, a demo day with an introduction to the right investors, and a team that will be on the front lines with the founders. The Scale team can be imagined as a Co-Founder for 12 weeks and an advisor for a lifetime. Although we are in the business of building businesses, at Scale we are also focused on the founder’s personal growth and how that mirrors company growth, which will be built into the curriculum. The curriculum is based upon the learnings, failures, and experiences of the 4 unicorn founders backing Scale. The application process is as follows:

Each founder fills out the Scale application separately
The Scale team will review your applications and get back to you by August 27th, and if approved, we will send over a DISC assessment to each founding team member.
After the personality assessment, the founding team will be invited to an in-person interview together the week of August 30th,
If all goes well, we will wire the $40k+ to the Company in September and send the next steps for the upcoming Cohort schedule.

Investment Thesis

Scale’s thesis is that “the greatest driver of venture returns is the selection of founders strengthened by struggle.” The fund’s thesis is rooted in the founders’ mission to solve the (i) lack of capital, (ii) lack of education, and (iii) lack of networks in an area that is ripe for innovation, the Midwest and anywhere outside of NYC, SF, and Boston. According to Crunchbase, in 2020, the Midwest (i.e., AR, IA, IL, IN, KN, KY, MI, MN, MO, NE, OH, WI, TN) only received 6.33% of total VC dollars, and Missouri alone only received 0.25%. According to Pitchbook, over the last decade, over 70% of VC funding was allocated towards California, New York, and Massachusetts, with the average investment allocation in Missouri at 0.38%. Historically all VC dollars have been allocated to those three cities, and only half of US metro cities have seen VC dollars.

Regardless of the access to capital in the Midwest, there have been substantial outlier successes. The heightened adversity has led to an extra layer of struggle that strengthened successful founders. For example, i) Zapier was founded in Columbia, MO, with less than $2M in venture funding and is now valued at over $5B, ii) EquipmentShare was founded and stayed in Columbia, MO, and is now valued at over $2B, and iii) Veterans United was founded in Columbia, MO, received no venture funding, and is a unicorn. The founders who make it through adversity have the highest rate of outlier success.

From the Schlacks’ perspective, they have experienced the struggle of building a billion-dollar business in the Midwest and going from 1 employee to over 2,000 in five years. Together, the brothers experienced the Midwest's lack of resources, capital, and network. Through the Schlacks’ journey as operators, they have failed a lot early on, which turned into learnings for the long-term. The process of failing and learning has led to building a billion-dollar business, which is now a pillar company in mid-Missouri. Through their own struggles, the Schlacks have accumulated a wealth of knowledge, capital, insights, and resources to reinvest in the next generation of Midwest unicorn founders.

Scale’s other founder, Jai Malik, has seen some of the problems between the coasts by looking from the outside in, coming from the east and west coasts. Many entrepreneurs in the Midwest are capital-efficient yet lack the initial network, coaching, and direction in the early days when going from idea to MVP to iterate (repeat) to ultimately finding product-market fit. Many founders on the coasts start off by raising a pre-seed round in the idea stage that ultimately invites VC dollars and a network in the door for customer intros, follow-on investments, and potential partnership opportunities.

The founder-first focus is a hypothesis born from the Schlacks’ experience graduating from YC and seeing first-hand 90%+ of startups fail to exit (354 exits / 3,802 total investments) and 99%+ of startups fail to reach unicorn status (25 unicorns divided by 3,802 total investments), even though they had all the resources, capital, and network to do so. Yes, there is a slew of reasons (e.g., bad timing or fake product-market fit), but the overarching fail point of the companies was the weakness of the founding team. We believe a strong founding team will pivot and build a successful business regardless of the problem.

Closing Remark

Scale’s mission is to build a prosperous and flourishing startup ecosystem in the Midwest with founders ready to make a difference and lay the foundation for generational wealth between the coasts.