Looking for EdTech Funding in Seattle

Last two weeks have been a huge learning experience about funding. I started off with many weird and wrong impressions about funding. I found out more about funding – angel and VC, and gaps in our business plan.

First Look Forum

Much of my learning was thanks to First Look Forum, and meetings with many coaches, fund partners, etc. First look forum is run by a non-profit – WTIA. Unlike accelerators, they don’t take any equity or payment. They set the companies up with coaches for – presentation, pitch, business and funding.

Each angel or seed investment fund operates roughly the same way. They have associates or partners who filter whether or not they want to consider funding the company first, then… actually, I don’t know after because we never got beyond that point. Still, we came this far – finalist for First Look Forum – one of 12 startups selected out of 60+ applicants, and presented to a roomful of angel investors. I went around and talked to as many people as I could to learn what stood out … what were the holes in our presentation. Some of the people I talked to were investors in various angel funds in Seattle.

Market Size

I would look at companies like Secret getting funded, and could never figure out why Angels or VCs would fund yet another social media app.

VCs look to fund companies that have the potential to address 100 billion market – order of 100 million will not help their returns on only a handful of investments every year. Social Media apps have the potential to capture a large advertising market – the key here is ‘potential’. So, VCs are interested in them.

One important thing I learnt was that our market size is too small for VC – only $1.3 Billion K-5 Math Content market.

Many Angel investors look for deals that will result in VC funding later. Few look for deals that might be just good businesses. This kind of business is not exciting for VCs, and by extension for Angel investors. But, it may be just the right type of profitable, purposeful company for you and me to build.

Marketing Plan and Growth

Investors also want to see how we would capture our market. School market is known to be tough to get into. It scares investors. Because of the tough market, I had a very slow growth curve. That was also a problem.  From watching better presentations, I would say investors are looking for significant growth in the next 3 years. Mine was over 5 years of slow steady growth. Investors would rather the business succeed fast, or fail fast. Funding is a double-edged sword.


Investors like to see something that makes the company unique and is protectable. We showed annecdotal evidence that our math learning approach is unique and more helpful, but, we still need the scientific study to quantify that. With the study, it may be more convincing for investors.

Even with the study, the content still would not be protectable. Someone else could build similar content. A recognized brand will be more protectable. That will take time and money to build.


You might think as I did – we’d be able to do all that, if only we had the money for the research and building out the product. But, no-one will invest in us until we’ve proven it first. That’s the Catch-22 of building a startup, and hence of investing in one. It is as much an art as a science. Investors have to go with their gut feeling. So, sometimes they invest in people they know and trust. Sometimes they invest in something that they have personal experience in and understand. Finding the right investor is also an art more than a science.

Educational Funds

At the start of this process, I started looking at companies like ours, and who they had been funded by. Some common names came up again and again, and I contacted those. None of them are in Seattle.This strategy seemed to work well at first.

Kapor Capital – said they decided not to invest after looking at our website.

New School Venture Seed Fund (now Reach Capital) – talked to us, and were willing to give feedback. To be honest, after our first conversation, I thought they would say ‘No thanks’ too. I thought the answers I gave on moving to iOS – no, and to participating in co.lab accelerator – can’t, would disqualify us. But, to my surprise, they asked to talk further. Still ended up with a ‘No’. We are in competition with Motion Math, in which they are already an investor. I think my strategy of looking at who’s funding other companies like ours just backfired.

Learn Capital – said they were doing a new fund for late stage companies, not seed funding for now. Tom Vander Ark is active in the education community and responded promptly – which is great.

Learning Accelerator – I found out about them from a news article announcing that they had made investments in a few educational companies on a trial basis. Each company would build some OER (Open Education Resources) prototypes, and then be eligible for more funding. They said they aren’t accepting any more companies for now, but, might connect in the future.

Intel Education Accelerator – This is a new Accelerator being run by Intel. It might’ve been an interesting one to pursue, were it not for the requirement of moving to San Francisco for 4 months! Most of the current/potential team is well settled in Seattle. Nevertheless, it shows Intel’s interest in education, and digital learning. So, I tried to reach out to people at Intel. But, I suspect like Reach Capital, they prefer that any prospects go through their accelerator first.

Friends and Family

A friend offered to provide financial help i.e. funding. But, the only way we can take such funding is if they are an accredited investor. If they meet the net worth requirements, they are considered an accredited investor. If the company takes funding from an unaccredited investor, it places an onerous financial reporting burden on such a small company.

What next?

Refusal only makes me more determined, more interested, more certain. If you are crazy like me, and can maintain your optimism in the face of lots of rejection, I’d definitely recommend looking for funding 🙂

The whole process did help me plan out where the company is headed next. I will try to raise funding again, after addressing investor concerns. It may take 1-2 years to be further along in proving that we are the best content for kid’s learning and have the right strategy to sell to schools. We will apply for SBIR grants to help us get to that point.

Many many thanks to all those who helped me understand how to raise funds, and those who are helping me apply for the grant – putting their faith in me.

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