So You Built a Claw Machine — Now What?
By Scott Henderson, Managing Principal, NMotion powered by gener8tor
Imagine the claw machine you invented in the previous post in this series is earning a few thousand bucks a month, and people are lining up with their loose change. Congrats, you’re making money. Now the question is: Do you keep it small, or do you go big and raise capital?
There are three good reasons to raise venture capital. And none of them are "because some blog told you to."
Reason 1: You Found Something — And Now Everyone Wants a Bite
You spotted something the market didn’t. Maybe it’s a weird little niche. Maybe it’s the next Uber. Doesn’t matter. What matters is, now that people see you making money, they’re coming for it.
Startups attract competitors like buzzards to a fresh carcass. It’s not personal. It’s just how markets work. Amazon? They live for this. Jeff Bezos literally said: "Your margin is my opportunity." That’s not a metaphor — that’s a business model.
So you raise capital to defend your ground, move faster than the copycats, and build moats while the wolves are still circling.
Reason 2: You’ve Got IP, and It’s Actually Worth Protecting
If your claw machine isn’t just a gimmick — if there’s real tech under the hood — you might be sitting on something worth locking down. Patents, proprietary code, custom hardware… these are more than bragging rights. They’re leverage.
Think Tesla. Think Harley-Davidson’s iconic engine sound. These are not just products; they’re defensible positions. And capital helps you hold them.
VCs love startups that don’t just build, but own something unique.
Reason 3: You Need to Get Customers — Fast
This is where it gets real. Most early-stage startups don’t die because they have a bad product. They die because no one hears about it fast enough.
So you raise money to buy time — and customers. Literally. You use that capital to lower your CAC (customer acquisition cost), and you keep those customers around long enough that their lifetime value (LTV) makes it all worth it.
It's math. Ugly, beautiful, spreadsheet math.
Let’s say Spotify pays $30 to get you in the door, and they make $10/month from your subscription. If you stick around for a year or two, that’s a win. If you bounce after two weeks? Not so much.
Venture capital bridges that gap. It helps you survive the “we’re not profitable yet” part — long enough to actually get profitable.
Why Growth Matters More Than Looking Good on Paper
Let’s get honest. When investors look at your claw machine, they don’t care how polished it is. They care how fast it’s growing.
A startup pulling in $5K/month is fine. One pulling in $50K/month is fundable. One growing 20% every month? That’s a rocket ship waiting to happen.
Yeah, you’ll probably lose money up front. But those who keep growing 20% every month win because they figured out how to bend the curve up.
Founders who can prove:
low Customer Acquisition Cost (CAC),
high Lifetime Value (LTV), and
a path to compounding growth
…those are the ones investors throw money at. Not because they’re lucky. Because they’re prepared.
The Point
Raising venture capital is not about cashing in — it’s about buying time to win. Time to defend your turf. Time to scale your moat. Time to turn customers into a movement. And yes — time to grow like hell.
So if you’re building your version of the claw machine, ask yourself:
Do I have competition breathing down my neck?
Do I have something worth protecting?
Do I need to grow faster than my bank account allows?
If yes, then maybe it’s time to raise. Just don’t forget: the money doesn’t make your company valuable.
The growth does.
What did we miss? What would you challenge? Let us know in the comments.
