Michael Scott, Venture Capitalist?

Let’s take a minute to imagine the founder journey—but not through Elon, or Zuck, or some sleepless YC grad. Nope. We're going full Michael Scott, Regional Manager turned startup icon.

So picture this: our guy Michael stumbles into a business that’s actually selling. Paper, of all things. But hey, it’s working. He's got customers, he’s got revenue, and somehow the numbers are going up. Time to raise some cash.

Dilution, Baby

Here’s where the fun begins. Michael starts raising money. First a little, then more, then a full-blown Series C. But what happens every time he takes on that sweet VC funding? New shares get issued. That means Michael’s percentage ownership in Dunder Mifflin gets diluted.

And guess what? That’s okay.

Because while the percentage of the pie he owns shrinks, the pie itself keeps getting supersized. Like, Costco-level supersized. That’s the startup math no one puts on the T-shirts:
Smaller slice × Bigger pie = More money.

From 90 Cents to $41.75

By the end of the journey, Michael’s holding onto his original million shares. That’s right—he never sold. But thanks to growth, each share now clocks in at $41.75. What used to be worth lunch money is now worth a beach house and a boat named “That's What She Said.”

Total payout? $41.75 million.

Not bad for a guy who once grilled his foot on a Foreman.

Growth > Ego

Too many founders chase valuations like they’re trophies—big numbers that look good in TechCrunch but fall apart when revenue doesn’t catch up. Michael (accidentally?) did it right: he focused on selling. He grew revenue. He made that pie bigger with every round.

And when it came time to exit? He didn’t just cash out. He feasted. 🍕

So what’s the moral of the story?

Forget owning 100% of a sad little microwave pizza. You want a mega slice of a New York-style, 5-topping VC-funded pie (just not Sbarro’s). You want growth, and you want the kind of scale that turns early sweat equity into late-stage champagne problems.

Growth is money. Growth is power. Growth is how Michael Scott went from selling paper to pocketing $41.75 million.

Be like Michael. But maybe… don’t open a café disco.

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.

🕹️ Claw Machines, Rocket Fuel, and the Venture Capital Game

By Scott Henderson, Managing Principal, NMotion powered by gener8tor

Imagine, just for a second, that you’re the first person to ever come up with the idea for a claw machine.

You know the ones — drop a couple quarters in, maneuver the joystick, hope the claw doesn't drop your prize like it’s made of cooked spaghetti. We’ve all seen them at arcades, pizza joints, gas stations, wherever nostalgia and neon lights intersect.

But now picture this: you’re the inventor. And your invention? It’s actually making money.

Steady money. People are lining up to play. The thing prints quarters like it's the Federal Mint. In short, you’ve built a business.

So here’s the question: Why on earth would you take outside investment?

Because You're Not Selling a Claw Machine. You're Building an Empire.

That claw machine — it’s not just a game. It’s your prototype. Your proof of concept. Your foothold. And maybe it’s pulling in $5,000 a month. Not bad, right?

But what if someone came along with the resources to help you install 100 of them across the country? What if you could go from $5K to $50K to $500K in monthly revenue?

That’s where venture capital comes in.

Venture Capital Is Rocket Fuel

There are only two things you need to remember from this post if nothing else:

1. Your startup is a claw machine.

2. Venture capital is rocket fuel.

Venture capital is what happens when people with big checkbooks bet on people with big ideas. But unlike banks — who like tidy spreadsheets and proven revenue — venture capitalists invest in uncertainty.

They don’t care if your business model is still half-baked. In fact, they expect it. What they want is the potential. The possibility that, given the right conditions, you’ll turn your claw machine into the next Apple. Or the next WhatsApp.

A Quick Reality Check on Risk

Let’s be real: most startups fail. Most rockets don’t leave the launchpad. Some explode on takeoff. Others drift off-course and flame out quietly.

Venture capital knows this. It’s baked into the model.

These investors are placing dozens, sometimes hundreds of bets, hoping that one or two claw machines will hit escape velocity — and stay there. Those outliers? They more than cover the cost of all the others.

So Why Raise Venture Capital?

Because the traditional path is slow.

You could keep your business small and steady. Nothing wrong with that. In fact, that path — bootstrapping, linear growth, staying private — can be great for a lot of people.

But if your ambition is scale, if you're swinging for the fences, then you need fuel. Not a gallon of gas. Rocket fuel.

Venture capital isn’t for everyone. But for those who take it on, it’s a commitment: not just to growth, but to reinvesting every dollar back into the business. No dividends. Just forward momentum.

Growth = Value

Let’s go back to your claw machine.

I'm gonna tell you something that will blow your mind. The world of finance is nothing more than a ritualized process for determining the present value of future revenue.

That's easy when you have a proven business model like a pizza shop in a college town, but startups are organizations in search of a scalable, repeatable business model. How does one even start to figure out the present value of future revenue when your startup is so early?

It'll about betting on those startups who are growing their revenue month over month. Even if the actual revenue number is small. It's all about growth.

If it’s making $5,000/month, that’s something. But if it’s making $5,000/month and growing 20% month over month? And you keep that growth rate up consistently? Now you’ve got something people want to buy — or take public.

This is what investors mean when they talk about an exit or liquidity event. It’s the day your shares — and theirs — become real money. Through an acquisition. Or an IPO.

That's when your little claw machine turns into a serious payday.

Need Proof?

When WhatsApp took a $60 million investment from Sequoia Capital, they didn’t just pocket the money. They poured it into growth. In less than five years, they went from scrappy startup to 450 million users.

And then Facebook bought them for $21.8 billion.

The founder walked away with over $10 billion. Sequoia made $3 billion on that one deal. That’s venture capital at work — high risk, yes, but eye-watering reward if you pull it off.

Final Thought: What Is Venture Capital, Really?

It’s not a loan. It’s not a grant. It’s not magic.

It’s rocket fuel.

It’s the belief — and the bet — that your claw machine can change the world.

So the next time someone asks you what venture capital is, tell them this:

It’s high-stakes belief. It’s shared risk and reward. It’s money with a mission: growth.

Now, go build your machine.

Applications are now open for the NMotion Accelerator Fall 2025 cohort, which comes with a $100K investment, twelve weeks of working shoulder to shoulder, and lifetime access to the NMotion powered by gener8tor network.

Learn more at www.nmotion.co today.