Interview by Afdhel Aziz | Forbes
Struck Capital is a next generation Seed Venture Firm based in Los Angeles which leads seed rounds in Los Angeles. Struck seeks founders who truly want to tackle the world’s largest problems. I caught up with founder Adam B. Struck to find out more.
Afdhel Aziz: Adam, welcome. Tell us a little bit about yourself and your journey.
Adam Struck: I was born in Johannesburg, South Africa and immigrated to the United States due to economic and political instability in the country. My family is originally from Europe and was decimated in the Holocaust. From an early age I had a keen sense of the moral compass of man and his ability to be followed in pursuit of greater good or ignored resulting in terrible atrocities.
As a Lincoln Douglas debater in high school on the national stage, I debated the principles of right and wrong in the context of real world policies. I completed the Kellogg undergraduate certificate program at Northwestern University but also majored in philosophy. I believe my studies instilled in me a desire to achieve self-actualization, an understanding that money is only a means to an end. I went to Georgetown Law as a way of figuring out what I wanted to do during the financial crisis and then accepted a position at Kirkland & Ellis.
While I was so thrilled to be at such a prestigious firm, I constantly felt I was on the wrong side of the proverbial fence. I took a leap of faith and started Long Island Brand Beverages and after experiencing rapid success was in a position to sell the Company. At that point I knew I could use the money I made in pursuit of more. I decided to combine my legal, operational and ethical expertise in hopes of helping founders with world-changing visions find product market fit – this led to the creation of Struck Capital as it stands today.
Aziz: Thanks for sharing that Adam. Tell us about your investment thesis at Struck please?
Struck: As an industry agnostic Seed fund, Struck Capital backs bold founders. When we assess a founder, we are looking for an individual with true information asymmetries and a visceral connection to the problem. If the vision is a true order of magnitude better than the status quo, we become very interested. We look for founders who flourish in the face of adversity because there is nothing more polarizing than a Seed stage startup. We also look for founders that have the gravitas to convince talented peers to change paths and join the mission.
Many companies find product-market fit, it’s the ability to recruit world class talent that really allows a company to scale. We then go deep on financial and character diligence (TAM, unit economics, competitive landscape, technical review, defensibility/moat, customer calls, reference checks, etc.). We also stress test our network to ensure we are the right fund with the right strategic ties to lead the Seed round and advance the founder’s mission.
Aziz: And tell us a bit about some of the companies you’ve invested in that combine financial returns alongside social and environmental impact?
Struck: Let’s start with Aquabyte. The risk of world-wide protein shortage is increasing dramatically as experts anticipate protein consumption will double by 2050. Fish farming, with $160Bn in yearly production, is the fastest growing sector of food production in the world with more fish being farmed than beef. Aquabyte’s computer-vision enabled algorithmic closed looped control feedback system tackles global food deficit by filling the gap between current supply and projected demand. Aquabyte’s combination of world class technology with a mission-driven approach has the attention of the largest funds in the world, recently closing a Series A led by NEA.
Then there’s ScratchPay. As Millennials get married later and forgo early parenthood for pet ownership, pets have become critical components of the family. If a pet is rushed to a veterinary clinic under exigent circumstances, the out of pocket costs for pet owners are extremely expensive. Insurance coverage is less than 2% in the US and even with coverage, owners still need to front out of pocket costs. ScratchPay is the only tech-enabled mobile-first lender vertically focused on the pet care space. ScratchPay has facilitated thousands of procedures for animals in need, who otherwise would be euthanized. As an animal lover and owner of a rescue, I truly understand Scratch’s profit with a purpose mission. With integration in 1 out of every 10 vet facilities in the U.S. and world class strategic investors like Mars Petcare, Scratch has achieved tremendous impact.
Aziz: Thanks Adam. And finally, tell us why you think Los Angeles has the chance to be the next Silicon Valley?
Struck: LA is still completely underserved – for every 1 VC fund here there are 20 in Silicon Valley. There is also a very strong foundation of technical talent in LA – universities produce more engineering graduates than any other county in California, including Silicon Valley. The ecosystem has also matured over the last half decade, with huge unicorn-type tech companies built in LA – Snap, Clutter, Wag, Scopely, Divergence, Rocket Lab, Cornerstone OnDemand – to name a few. When founders from these companies fully vest – they start new companies and that contributes to the network effects we are seeing.
Compared to Silicon Valley, the weather is better, the cost of living is less and the culture is diverse. This coupled with a very strong venture capital community allows founders to live and build in LA. We are very excited about the long term prospects of the LA tech community and look forward to Struck Capital being a staple of Seed stage investing for years to come.