Case Study
About NCT Ventures:
NCT Ventures is a venture capital firm founded by serial entrepreneurs. They are passionate about people and believe that an idea is only as good as the entrepreneur tasked with turning that idea into a great business. Over the last 26+ years, NCT has helped build many successful companies and are always excited about sharing their experiences, methods, and time with entrepreneurs through hands-on operational support.
The Challenge:
Reducing the risk, cost, and time-to-market for existing and new portfolio companies in order to drive better exits.
Reasons
- Overhead required for internal development resources that were not needed full-time
- Long lead time required to evaluate technology partners
- Poorly executed technology projects leading to wasted money with no results
- Loss of institutional knowledge associated with technology due to turnover
What They Wanted
- Rapid speed-to-market to gain validation
- Reduced investment required for technology
- Technology partner(s) that could understand business objectives and make pragmatic decisions related to technology
- Ensure that their portfolio companies were positioned for success now and into the future.
The Solution:
QStart Labs provided a proven process designed to reduce the typical cost, risk, and time to launch for companies with an internet or mobile-driven business model.
A team that has launched over 50 companies
"Pay for performance" business model to ensure aligned interests with their portfolio companies
Pragmatic approach to development
Rapid speed-to-market with 100% ownership of code generated
The Results Were Amazing!
Existing Portfolio Company Results
In the beginning, QStart Labs engaged with two of NCT’s portfolio companies. Both companies had very solid business models however, prior to QStart Labs, both companies had each spent in excess of $1,000,000 on internal and external technology teams trying to build technology without achieving the basic needs of the business. After partnering with QStart Labs:
- 2 companyies have since had a successful exit
- The other recently took on capital at a valuation of approximately $40 million (a 7x of the value before QStart Labs started working with them)
Needless to say that our early success with these companies was so dramatic that NCT Ventures, and others, enthusiastically invested additional monies to further accelerate the growth of each company.
Source Of Post-Revenue Deal Flow
QStart Labs has proven to be invaluable not just to portfolio companies that NCT has invested in but as a source of deal flow for post-revenue growth companies that have proven themselves worth investment by NCT.
And What Does NCT Have To Say About Our Partnership?
NCT Ventures has been investing in technology companies for the past 15 years, and we have been frustrated by the fact that we find ourselves funding recreations of core technologies we have funded in the past. QStart Labs is the first technology company that actually aligns their interest to us as investors. Their business model allows NCT to increase speed-to-market and enhance our ROI. We particularly like that QStart Labs is incentivized to help make our portfolio companies successful and that we incur costs only when development is needed vs. carrying internal overhead.
– Rich Langdale, Managing Partner, NCT Ventures