Social intelligence startup Spatial recently landed $2.1 million in seed funding. The employees of Spatial are (from left) Phil Martin, Griffin Morris, Will Kiessling, Lyden Foust and Nathan Rooy. (Photo provided, Nathan Rooy)
CINCINNATI -- In October, Spatial closed a round of investment that netted the social intelligence startup $2.1 million in seed funding.
It was a heady moment for the Over-the-Rhine-based company, which uses more than 30 sources of social media data to gather information about places and provide that info to customers.
Champaign, Illinois-based Serra Ventures led Spatial's latest round of investment. Other investors included Covington-based Connetic Ventures, M25 Group and Caerus Investment Partners.
How did Spatial do it? Here are nine things the company had going for it:
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1. It had an idea investors liked. Spatial uses the information it gathers to "empower people to navigate like a local anywhere in the world."
"There are billions of clicks on mobile apps every day," said Rob Schultz, managing partner of Serra Ventures. "Spatial being part of that equation represents a tremendous opportunity to build a big, exciting company."
2. It was accepted into and completed the OCEAN accelerator in Oakley. That was the company's first big break, Spatial co-founder Lyden Foust said.
Through OCEAN, the team met Tim Hoerr, CEO of Serra Ventures, Schultz said. Hoerr has served as mentor for companies in the program, and Serra has invested in Ringr, a graduate of OCEAN's first class.
"We're very excited about the high-tech community in Cincinnati," Schultz said. Serra has also invested in other local startups such as LISNR.
3. It kept in touch with potential investors. When Spatial started the OCEAN program in January 2016, Foust said, the team began sending out a weekly email to Serra and other potential investors, reporting on their progress and asking for help.
4. It secured a respected customer with an international reach. In 2016, Spatial was one of 12 companies selected for the Techstars Mobility Accelerator program. The company got in with help from some local connections, Foust said.
Chris Bergman, CEO of local startup Choremonster, connected Foust with Ted Serbinski, the managing director of Techstars Mobility. Local startup advocate Cintrifuse connected him with David Cohen, founder of Techstars.
"By continually keeping those two updated and showing progress, we were able to make it into the program," Foust said.
Techstars made Spatial visible to the Ford Motor Co., Foust said, which decided to partner with Spatial to put its technology into Ford's products. That's why the team splits its time between Cincinnati and Detroit.
5. It secured an initial investment from a respected local firm. While talks were going on with Ford, the team pitched the business to several Tri-State investors, including Brad Zapp and Kyle Schlotman, the owners of the Connetic Ventures.
Once Connetic took a good look at the company and decided to invest, Foust said, that eased the way for others and gave Spatial a ton of momentum.
"When Serra heard that Connetic was in our round, that really sweetened the deal," he said.
6. It secured an investment from a respected regional firm. Once Serra decided to invest, Foust said, that encouraged investors from other cities, because "a lot of people respected Serra."
7. It knew how to pitch. For Foust, pitching to an investor is no different than pitching to a friend. "We're sharing a vision of what we believe the world is going to be, and what we're building," he said.
Spatial's investors don't just see a way to get a good return on their money – they truly believe in Spatial's mission, he said.
8. It found investors who shared its values. "They believe in building a capital-efficient style of business," Schultz said of Spatial, and that's something that's important to Serra as well. Spatial has also done well at setting milestones for the business, articulating them, communicating them to investors and apprising investors of progress, Schultz said.
9. It had an ambitious goal. With the money it has raised, Spatial plans to hire data scientists who specialize in artificial intelligence. "We are going to build something absolutely amazing and going to change the way people see and understand the world around them," Foust said.