Our new head of platform and newest portfolio company

We have some bittersweet news at Earnest. The inimitable Ben Tossell is going full-time on Makerpad and stepping down from his role running platform at Earnest. Fortunately he’s not leaving us as I’m thrilled to announce Ben and Makerpad will be joining as the latest Earnest portfolio investment ?

When Ben came on board last year, Makerpad was still an experiment spun out of his previous startup newCo. Over that time he’s done an amazing job balancing growing Makerpad with making himself available for weekly founder 1:1s and creating a vibrant community of mentors and founders and generally rolling up his sleeves to help our founders in all kinds of useful ways. But as the no-code movement kept building up steam, Ben kept cranking out the best tutorials, content and community for it anywhere. With new no-code platforms and tools launching every day, Makerpad just kept growing like a rocketship.

In his great interview on the Indie Hacker podcast, Courtland asked him frankly “why is this still a side project for you?” It was a good question (thanks Courtland!). Ben and I had frank conversations about this all along and it became clear that the opportunity was too big to not have his full-time attention (plus a team… did I mention he’s hiring?) focused on it.

So this means two things:

1/ We are hiring a new head of platform. Is that you? We are going to run a public process for the role this time so please apply here or forward this to the person you know most likely to love working with our founders and mentors, and building our community and tools.

2/ If you haven’t checked out Makerpad yet you should, it’s the best resource on the web for building tools without code.

For Investors: What is a Shared Earnings Agreement and How does it compare to a SAFE?

This post will answer some common questions from investors looking to use a SEAL themselves or considering co-investing with us. If you are a founder looking to raise capital you will probably find the main Shared Earnings Agreement page more helpful.

Relevant excerpts from our public term sheet are pasted inline but the full document is viewable here.

Wholesale Gorilla: the best wholesale app for Shopify

Earnest Capital is proud to back Wholesale Gorilla, which allows any Shopify store to seamlessly serve wholesale customers.

Matt and Hallie, from Louisville, Kentucky, founded Wholesale Gorilla in a classic scratch your own itch story. Hallie launched Graymarket Design, a scarf and textile vendor on Shopify. When wholesale buyers started inquiring they found Shopify was not able to support the key features wholesale customers need like bulk pricing, minimum orders, freight shipping, NET30 payments, and so on. Rather than bolt on a separate wholesale portal, they built out a custom app to allow logged in wholesale customers to use their existing store. After using the app to run their own business for two years, they made it available to other merchants. With zero marketing they have accumulated a huge waiting list of customers that they have been diligently working their way through.

At Earnest Capital our core thesis is around enabling distributed entrepreneurship and any time we can back a company and double-down on that we love it. Wholesale Gorilla enables a literally seamless—the product actually transforms the full shop UI for logged in wholesale customers—transition from DTC e-commerce startup to growth via local retailers and wholesale distribution. We are excited about the Wholesale Gorilla team because as avid customers of their own product, the team is always going to stay a step ahead for their merchants than the inevitable dev shops or copycats.

Shopify merchants should check them out directly on the app store. Merchants not on Shopify but looking for a powerful wholesale engine should say hello directly to stay in the loop for future announcements.

The first two Earnest Founders

Earnest has been live for two months and we have been slowly working our way through conversations with hundreds of amazing founders. We make investments on a rolling basis and have quite a few more founders joining soon, but we have also backed two awesome founders in recent weeks and just can’t keep it quiet any longer ?

HostiFi was founded by Reilly Chase. Reilly used to run an IT managed service provider in Grand Rapids (on the side with a day job as a security engineer) and noticed that 1) Ubiquiti’s wifi platform was becoming very popular and 2) their Unifi software platform is a pain to set up repeatedly for every client. So he built HostiFi, a cloud wrapper for Unifi. The business is B2B2B, so his customers are IT service providers who deploy more HostiFi instances with each client they set up. Reilly has plans for a small suite of services built around the same model—making open source software easier to deploy—for the same customer base. A really cool constellation of Micro-SaaS. CaptiFi for wifi portal software was just launched. FYI: Power users with Ubiquiti at home can use HostiFi for free for up to 25 devices. Reilly recently sold his house in Grand Rapids and went full-time on his business and has been documenting his hardcore year here.

Callingly was founded by Leon Klepfish. Leon developed a popular WebRTC click-to-call button that found a broad user base but struggled to build a business. So he asked his users what they would actually pay for and the result was Callingly which is a platform for distributed sales and support teams to manage inbound requests for a call back. The product sounds simple: when a visitor fills out a form requesting a call, Callingly dials the distributed team until it reaches an operator, then connects the call with the requester. But the real trick is building an intuitive UI for the complex routing rules and reporting requirements that large teams and companies demand. Post-investment Leon is going full-time on Callingly while he and his wife Tyler raise their 1-year-old Calvin in Phoenix.

Both of these businesses fit a broad pattern of B2B SaaS that we really love, where the founder has spend quite some time working with or in an industry, notices a niche problem that every business in the industry has, and launches a SaaS to solve that particular problem for the whole industry. Both of these founders are inspiring makers that we are excited to be working with.

Is Earnest Capital Live Yet?

Yep. We’re not much for big splashy launches but we have quietly gone live and are making investment decisions on a rolling basis. We expect to announce the first few very soon. Please apply here or say hi and start the conversation before you’re ready to apply. Check out our FAQ with answers to common questions.

If you’re new to Earnest, we provide funding and mentorship for bootstrappers, indie hackers, and makers. We invest via a Shared Earnings Agreement, a new investing model we developed transparently with the community that aligns us with founders who want to build profitable, sustainable, calm companies.

We invest in businesses of all kinds, though we are particularly interested in SaaS, e-commerce, and scalable online education. We also occasionally put out Request for Startups briefs outlining topics we’re particularly interested in like Remote Tools for Remote Teams.

Request for Startups 1: Remote tools for remote teams

Request for Startups is a series of posts outlining a few specific theses that we feel are likely to hold good business opportunities for founders that are aligned with our goals. It’s a list of ideas, some less polished than others, and isn’t prescriptive on what problems should be solved or what products should be built. It is just a few topics we are particularly interested in and we are “tapping a tuning fork and seeing who resonates.”

A lot of smart people seem to agree that “the future of work is remote” but most investors and accelerators are very focused on their local markets, most require or strongly encourage their portfolio companies to move to Silicon Valley, NYC, London, Berlin, or whatever city they have their open plan offices in.

Earnest Mentorship

For the last six months, I’ve spoken to 100s of world-class founders, investors, and operators. One question I have asked them all is to tell me their thoughts on mentorship: what worked and what didn’t from either side of the table. Not all of them had a strong mentor relationship in their journey, but all agreed that it was or would have been a huge boost to their trajectory.

We have made mentorship a cornerstone of our strategy but haven’t spoken much publicly about how we will approach it or who—Read to the end for a preview—the Earnest Advisors are. So let’s dive in.

Funding for Bootstrappers 2: What we learned

Six weeks ago Earnest Capital soft-launched by posing the question: could we build a funding model for bootstrappers? We had been working for months 1 on the technical details of an early-stage investment structure that aligns an investor with a founder who wants to build a sustainable, profitable, calm company and doesn’t want to raise traditional venture capital. Here is what we learned.

  1. …and thinking about it for years