Brian Mac Mahon, Expert Dojo founder, share his views on early stage fund raising & Accelerators

This blog post was written by : Luis Bravo. 

This article is based on a conversation we had with Brian Mac Mahon on the Fundraising Radio podcast. Here is the link to that episode if you would like to check it out: https://www.fundraisingradio.com/Brian-Mac-Mahon/. For the uninitiated, Brian Mac Mahon is the founder and CEO of Expert Dojo, one of the largest accelerators in Los Angeles. Expert Dojo is a pure international accelerator based in Santa Monica. Expert Dojo considers itself to be the gateway to the United States for everyone else in the world. The size of their accelerator programs are usually only about 12-13 people, they like to keep them very small and curated. Their cohorts are small because they are very focused on growth hacking, brand, investment and outreach. The companies and people they admit into the accelerator are from all over the world. For example, they recently accepted companies from Egypt and Spain into the accelerator. Expert Dojo is a very prolific investor, they are currently investing in one deal per week. Brian describes himself as a regular guy who has lived in many places and countries and who has started multiple startups. The startups he has started run the gamut, from proptech to technology platform companies. 

What Expert Dojo invests in and how to get into Expert Dojo:

70% of Expert Dojo’s cohort’s and investments are international founders and 30% are immigrant founders. The common denominator between all of their founders is that they are all exceptional at what they do. In essence, their entire thesis is to be as inclusive as possible. Because they are an international accelerator, most of the companies they see and invest in already have a product or a service. Expert Dojo, is industry agnostic, as long as their LP’s, principles, and GP’s have knowledge in that particular sector. For instance, they have invested in and accepted medtech companies, artificial intelligence companies, and automation companies. Expert Dojo is intensely focused on building an American brand and making sure that the brand speaks to the American consumer and on growth hacking the product. As a result they tend to get early-stage companies. 

Brian on what type of startups/founders should join accelerators:

Brian cautions founders that unless you are incredibly lucky you cannot get there on your own especially, if it is your first startup. He also advises that whether or not a startup should join an accelerator depends on the team that they got and the team that they want to build going forward. Brian notes that an accelerator is good for some companies and bad for others, but what he highlights is that every founder needs to be surrounded by the right people and team. Brian tells founders he interviews for Expert Dojo, that if they do not see value in what Expert Dojo provides to go somewhere else because it's about how fast a company can scale and get to the proverbial goal line.  

What Brian and Expert Dojo look for when searching for deals:

The two main things that Expert Dojo and Brian look for are proof of execution and ability to scale.  Proof of execution does not necessarily mean that the founder has had to have done it before, but there are clues in people’s lives as to what they have achieved and what they have not achieved. For example, Brian just invested in a founder who does not even have a website for the company she started, but she is a neuroscientist with a degree from John Hopkins and is a former actress. Moreover, she built basically everything herself and Brian knows that based on her past achievements the chances of her not being able to start a successful company are quite slim. In terms of ability to scale, the future product that a company is building has to have the ability to scale. He also looks to see whether the startup has the team in place to actually be able to scale and make things happen. That means do they have what it takes to go through the different stages of entrepreneurship. Expert Dojo calls the first stage the Viking stage, which is the outreach and branding stage and the second stage is the structure stage which is very much about the processes and the procedures. The next stage is the knights of the round table, which is when you have 7 or 8 team members which are all better than you in doing their specific task. The final stage is the Sensi stage. In summary, Expert Dojo wants to make sure that a startup has the future team building capacity( boards, advisors, team members/employees etc.) to make it through the scaling that they are going to do. Then they look at the market and analyze the forces that could knock the startup off their trajectory. Expert Dojo does this by finding out what those forces are, how challenging they are, what type of risks they represent, and how to mitigate against that risk. After Expert Dojo looks at these factors they have a very clear picture of whether they like the founders and the business. 

Major Risks Factors for a startup:

Brian warns that startups should be aware that some companies have billions of dollars in venture funding and will use it to destroy you. He gives the example of Uber, who has billions in venture funding and is using it to destroy it’s competitors. Brian predicts that when Uber decimates its competitors they will raise their prices by 60%. Essentially, Brian is cautioning founders that established and well funded companies will utilize unfair competitive practices and their ample resources to crush them and the other competition they may encounter. But he states that startups have an advantage because large established companies are old and decaying in thought and innovation. He also suggests that startups can win if they are aware of these threats, make sure that they do not run out of money, and aggressively growth hack. 

How startups can adapt to COVID-19:

Brian recommends that a company should pivot, innovate, and reinvent themselves in order to survive the COVID-19 pandemic. For instance, one of Expert Dojo’s portfolio companies, MeetCareGivers had carers who would go to the home of older people and then make sure those older people were taken care of in their own home. But COVID prevented this from happening, so they pivoted to selling services to the same consumer and market. They sold masks, ventilators, and meals. As a result, MeetCareGivers is thriving and doing better than ever. Additionally, he shares that one of Expert Dojo’s companies reinvented itself from a cruise entertainment company to an online cruise experiential company. 

Raising Money during COVID: 

Brian points out that there are many investors who are investing at twice the rate they did Pre-COVID and that it is definitely possible to raise a lot of money amidst the pandemic. This is because these investors know that a lot of money is made during recessions. Although Venture Capital firms that have funds are investing aggressively, Brian notes that a lot of Angel Investors have left the market. Specifically, amaetur Angel investors who were torn between investing in companies, houses, or alternative stocks. These are the people who have pulled back. Brian also remarks that no matter the circumstances great companies will always get funded. He suggests that startups trying to raise money during the pandemic should focus on their growth, underpromise and overdeliver, and to not make it look like they are looking for investors, so they won’t come off as desperate. Instead he recommends that founders quitely pickup names of investors that are within their local market, who have invested in similar spaces and to start updating these individuals. But don’t say to them “please can I have some money”. What you say to them is “look at the epic business I’m building, we are going to be a unicorn and this is how we will get there.” This will get investors interested and will make them more inclined to invest.

Brian’s parting advice:

Brian advises that early stage startups are one of the greatest endeavors you can do in your life, because you get to ignite something which most people in the world will never get to experience. Also because you get to ignite this creativity that you have been given to bring something to the world that has never existed before and you get to be the one to create it. And if you focus your mind on scaling the company to the maximum, make sure you are building it with a budget that allows you to do that, then you just go with that, you surround yourself with investors, you make sure the investor group know what your doing, you make sure the VC’s know what you are doing, you make sure your team is well placed to be able to scale, and then you put your foot on the metal and go for it, the next couple of years will be the greatest opportunity you’ve had in your entire life. So Brian urges founders to go for it, give it everything you got, forget your work life balance and focus every ounce of energy on building a monstrous startup and the investment and money will come to you. 

To find more info on Brian and Expert Dojo or to get in touch with them, here are some useful links:

Brian's LinkedIn: https://www.linkedin.com/in/brianmacmahon2/

Apply to Expert DOJO: https://expertdojo.com/register/international-accelerator/