Nov 18, 20225 min read

Scale by the Months, On to Cohort III

Updated: Aug 9, 2023

Note: Scale VC is now Redbud VC

Redbud VC is an early-stage venture capital fund and studio investing monetary and social capital in early-stage tech founders.

Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.

Check out the newly launched Cohort III here

Two years ago, Jai Malik and Willy Schlacks met on how to support founders building early-stage tech startups from the middle of the country. Though they were motivated by getting back into the trenches of building a startup and the possibility of producing outsized alpha, what has always been a north star for them is hard-earned capitalism — helping people create wealth born through the struggle of entrepreneurship. To do this takes a community, and they built one at Scale. The secret sauce of Scale’s success is the collective power of successful operators who dedicate their time to equipping Scale founders with knowledge, resources, and networks.

A few decades ago, when Willy and Jabbok Schlacks were kids, they started their first business, building modular sheds. Despite no formal high school or college education, they have built 15+ companies, and most recently, their first VC-backed company EquipmentShare, where they’ve raised $3B+ in debt and equity and hired thousands of employees. Although the Schlacks have executed a crazy growth trajectory of zero to multi-billion in six years, they’ve learned an enormous amount and are on a mission to help other entrepreneurs embark on a path of growth.

Scale’s thesis, “the greatest driver of venture returns, are founders strengthened by struggle,” can be said for almost any successful Midwestern or undercapitalized region’s tech startups. At Scale, we believe that, when embraced, constraints equal power. Scale doesn’t remove constraints but instead brings years of expertise (from Willy, Jabbock, and others) to offer a compass that guides founders through unchartered territory and removes unnecessary barriers.

Today, Scale is proud to launch Cohort III with 8 companies bringing our total to 22 portfolio companies across three cohorts (company bios here). Cohort III saw double the applicants to Cohort II and more than I & II combined with a ~3% acceptance rate. In addition, 90% of the applicants had a technical founder or team member.

The companies are spread across 11 cities, and 50% of the companies are based in the Midwest. Even though over 50% of our investments started at the idea stage, Scale companies have cumulatively raised over $10M. Even more important Scale companies are growing with an average annual revenue run rate of over $200k. Even some companies that have struggled to fundraise in this volatile market remain profitable and capable of growing at high monthly rates.

Scale is just getting started; stay tuned for more information coming soon about our next Cohort, and for now, read about Cohort III below.

Brownstone (Proptech / Palo Alto)

Brownstone is pioneering affordable housing with community home sharing through pod-style living. Brownstone’s 100% occupancy rate in two communities is an early indicator that pods can be the future of affordable living. The founders are a recipe for success with strong technical and domain expertise. James Stallworth (CEO) comes from a background of couch surfing and building software products while Christina Lennox (CPO) went from being homeless to building and operating a real estate portfolio.

Caralyst Health (Health Tech / St. Louis)

Caralyst Health is a physician recommendation engine based on personal characteristics and preferences. Caralyst uses a proprietary machine-learning algorithm to foster high-quality therapeutic relationships between patients and doctors. Matt Millett (CEO) and Owen Zhang (CTO) are both ex-FAANG engineers who set out to build the best product for connecting patients and physicians. Matt’s medical degree allows him to use his clinical experience to build a more effective platform.

Celcy (Food Robotics / Baltimore)

Celcy is building the kitchen appliances of the future, starting with automated at-home meals. Celcy’s first product is a robotic IoT freezer and oven that cooks from your phone. Max Wieder (CEO) and Eddie Holzinger (CTO) have deep software and hardware expertise with extensive backgrounds designing spacecrafts for NASA and building complex backend data structures. Over the last five years, they’ve bootstrapped R&D to a patented and working product.

Hallway (Augmented Reality / Columbia, MO)

Hallway is building custom avatar identities for everyone in the digital world. Hallway’s ML-generated tools produce professional-grade motion capture and animation for anyone to be a distinguished creator. Bryan Pratte (CEO), Brett Koonce (CTO) are a team of engineers who have built the world's highest precision machine learning motion capture and animation product. They’ve been building products together for six years for companies like Reddit, Houseparty, Eventbrite, Epic Games, etc., and now they are pioneering the future of creators by building their own products.

Kaveat (Legal Tech / NYC)

Kaveat is a contract review platform for creatives. Kaveat uses NLP to provide contract insights for creators to have the negotiating power of legal professionals. The Kaveat team, Dorothee Grant (CEO), Elizabete Ludborza (COO), and Christine Shen (CTO), have experience building products, modeling, influencing, working as a legal officer, and reviewing contracts. It’s hard to beat their founder market fit as they’re offering models, influencers, and creators a product to represent themselves when negotiating with large agencies.

NameDrop (Social Networking / Salt Lake City)

NameDrop is a localized social networking platform that connects people based on interests within a pin-dropped radius. Lisle Moore (CEO), Jacob Peden (CPO), and James Guymon (CTO) bring a unique and diverse pool of experiences to building a social networking platform. Lisle is a decorated musician (e.g., wrote the NBA theme song), Jacob has been an NFL strength trainer, and James has extensive experience with data science and building AI/ML tools for analyzing data.

ScanRite (Health Tech / Columbia, MO)

ScanRite is an algorithmic-based SaaS platform for physicians to accurately assess a patient’s imaging needs — which are wrong 40% of the time and boost communication with the imaging departments. Founders Zain Khan (CEO) and Yasir Shirazi (CPO) have been friends and partners for decades, building and exiting companies. Now, they’re on a mission to tackle the biggest problem they’ve faced.

Ruminant Robotics (Robotics / Columbia, MO)

Ruminant Robotics is building a vertical lawn care service business powered by electric autonomous lawnmowers. Ruminant is led by Kolton Speer (CEO) a software and computer vision engineer and Aaron Fuller a computer and an electrical engineer (CTO). Kolton has experience building software for Caterpillar as well as a Ph.D. in CS with a focus on computer vision while Aaron has experience building products for Garmin.