Accelerating WorkHound Week 8: Counsel vs. Capital

4 min readAug 4, 2015

Choosing counsel over capital when pursuing investment

This week’s update is written by WorkHound’s tech co-founder, Andrew Kirpalani. It’s a brutally honest reflection about our learnings around investment in the accelerator.

(Quick overview of this blog series at the bottom of page)

Let’s Talk About Capital

It’s no secret that startup accelerators are often aimed getting young companies ready for investment. Many also follow the lean startup methodologies that have been popularized in recent years. Experimentation and a cycle of try, fail, and try again are at the core of this philosophy. However, failures in sourcing investment can prove fatal, and because contracts are involved, there are very few second chances.

A Capital Idea

Straight Shot dedicates a full week of its curriculum to educating entrepreneurs about investment and all its implications. I considered myself reasonably knowledgeable in this area but by the end of the week I realized I didn’t know shit. I also realized that the illusion of knowledge here is how founders get themselves in deep shit.

Capital can be dangerous

This isn’t to say that investors are the devil, far from it. I was exaggerating to make a point. Capital is fuel any business needs to run and sometimes the tank runs dry before we get to the next station. But fuel can burn. There seems to be more of a desire to “win” in this area of business than any other. You never hear horror stories of founders getting pushed out of their company by a marketing plan. Both Max and I tend to do business in a relationship-first, partnership mentality. This makes the more impersonal nature of the investment game a challenging one for us to navigate.

In addition, having both been heavily involved in Startup Weekend, Max and I are invested in lean startup methods. WorkHound is a company built on experimentation, learning from failure, and rapid decision-making. But making rapid decisions around investment is dangerous. Learning from failure can mean losing your company. So what’s a founding team to do?

Capital vs. counsel

Ask for help. Max and I are fortunate enough to have several savvy investors in our personal network. One of the most sophisticated of these is also a close personal friend. We made the decision to ask this person to invest counsel rather than capital.

I believe finding this investment mentor will prove to be one of the most important choices we’ve made. Arguably the largest value any accelerator provides is the mentor network. But unlike sales, marketing, technology, or design mentors, the investors in the mentor network may end up doing business with you directly. Everyone is doing their jobs but incentives aren’t necessarily aligned.

So we level the playing field by getting an expert on our side. By asking only for advice and not money we ensure that our goals are 100% in alignment and that there is no risk in sharing any and all information about our business. We can’t fail and repeat if we choose to raise money, but with this help, maybe we can get things right the first time.

Quick Overview

(See Week 1 post for more details)

At WorkHound, we’re tackling a big issue in the trucking industry: the 97% driver turnover rate. We’re building a platform to allow drivers to share feedback with their companies. Companies then receive the aggregated feedback to improve the driver experience.

This is our weekly post highlighting our learnings and actions each week in the Straight Shot accelerator out of Omaha.