She Told Her Investors the Code Was Being Held Hostage. Then She Bought Back $2.5 Million of Equity for $225,000.

Erica Wassinger was across the table from a founder pitching a $75,000 investment. Everything was trending up and to the right. Then the founder said there was just one little problem. A dev consultant in Ukraine was holding her code base hostage.

Most founders save that kind of news for after the wire clears. This one led with it.

Erica's fund, Proven Ventures, sent the money anyway. Her investors had been surveyed on what industries they knew and what connections they had, and between all of them they worked the problem until it was solved. The founder, whom Erica calls Kelly, then bought every one of those shares back for $225,000, paid out of a slice of her monthly revenue. About a month after that, Proven led a multi-million dollar equity round. The shares Kelly had just bought back were worth $2.5 million.

Erica tells this story like a scientist who ran a good experiment and lost the bet. Either it shows the genius of the model, she says, or the joke's on her fund. It's designed to hand the upside back to the founder, and it did.

Kicking and Screaming Back to Nebraska

Erica grew up in Lincoln and spent summers in the Sandhills, where every neighbor doubled as an aunt or a grandma who bossed you around and watched out for you. She left. Dallas, then New York. Fifteen years ago she moved back to Nebraska kicking and screaming. She now says it's exactly where she's supposed to be.

Her route into venture capital wasn't the usual one. She studied journalism at Kansas State, "before influencer was a job title," which meant she graduated into a collapsing industry. What she loved about the work was the superlatives, the trending, the portfolios. She figured she wouldn't last long pitching mommy bloggers, so she found venture capital and stitched together an education. Wharton. Berkeley. A finance crash course that started with show me a spreadsheet and ended with how to structure a deal that works for everybody.

Stu did something similar with a Harvard Business School scaling ventures program, and the two of them compared notes. His point, which Erica backed: running a five-person team is a different job than running a fifty-person team, and the founders who don't grow with the company get outgrown by it.

I like that she has the credentials and still calls them stitched together. Founders who admit what they didn't know and go get it are the ones worth backing.

Why She Cuts Your Forecast in Half

Proven Ventures has a hard rule. Founders have to pay themselves a salary.

Erica says convincing them is a Herculean effort. Most founders list their own pay as zero when you first review the financials, let alone what it would cost to replace the roles they're quietly doing. She's got two reasons. The first is psychological. A founder who's backed into a corner at home can't think with abundance, and she wants them rested and performing. The second is the cost of the business. The founder is also the business development team, the bookkeeper, and the operations lead, and none of that is in the forecast.

Stu added the part that makes this hurt. A buyer calculates what it would cost to replace you. If you've been paying yourself $100,000 and a buyer thinks it takes $300,000 to hire someone as good, they subtract the $200,000 from the price. Underpaying yourself isn't frugality. It's a hidden debt you hand to whoever buys you.

The forecasting rule is just as blunt. Every founder has three forecasts: the one in the investor deck, the real one, and the one they privately need to hit so their mental health stays intact. Proven cuts every forecast by 50 to 60 percent and commits to that number. In Kelly's case, that meant buying the shares back at 5 percent of gross revenue every month.

She Hates Pitch Decks. Her Love Language Is a CRM.

Stu asked the question every founder wants answered: how do you get Erica's attention?

Her answer is the best fundraising advice in the episode. She says she kind of hates pitch decks, because they signal that a founder spent more time preparing to talk to an investor than to a customer. If you're going to send her something, send the demo you give your customers. One of her portfolio companies sells to cardiothoracic surgeons. She doesn't understand what's in that sales demo, because she isn't a cardiothoracic surgeon. She loves seeing it anyway, because it shows the founder's commitment to the customer and the sales motion.

She won't even let you use a deck on a call. She wants you to tell her about your customer, the problem you're solving, how the product creates value in their world, and how a dollar of capital turns into $3 of revenue. She put it into a Founders Field Guide to being capital ready. Financials can be messy, but she wants you to know your cost of goods sold and err on the expensive side. She wants to see the KPIs a CEO sets each month or week, tied back to the forecast. That's where she sees repeatability.

Then she says it: her love language is a CRM.

To get her attention, skip the cold intro. Fill out the contact form on her site, which feeds her CRM, and she checks it constantly. Or listen to an episode like this one and send a personalized LinkedIn invite that says what you liked. Stu said the same about his own site. A friend wanted an introduction for a professor who needed help with his ed tech tools, and Stu told him to use the website, because a text or email has a very high chance of getting lost.

I'll say it plainly. A founder who can't show an investor the sales motion isn't ready for money, no matter how good the deck looks.

Capped at 3x, and Beating the Top Quartile

Proven Ventures runs a $10 million fund, invests only in Nebraska founders, and is putting its last $1 million of Fund One to work in its fifth year. Fund Two, likely in the next year to year and a half, will probably reach beyond the state.

The mechanism is what Erica calls debt equity. Proven invests, the buyout is structured on day one, and the founder buys shares back as a percentage of gross revenue each month until the fund has reached 3x. If the founder exits at any size, they hold preferred equity that earns a return. Compare that to a traditional equity round, which takes 20 percent of your company and sets a clock on your exit.

The gap she's filling is the one in the middle. A founder is bankable but not venture. The bank won't underwrite without four or five years of financials or a house as collateral. Equity feels too expensive, and a venture fund's timeline might not match the founder's market.

Erica then explained why she's happy to cap herself. Funds are measured by a few metrics, most of them fake, because investors can write up a company's value however they like. One metric requires cash going back to the investors. Carta's Q2 fund analysis, she says, shows Proven outperforming the top-quartile fund by three times on that one. She'd much rather clip the coupon and cap the fund at 3x, she said, and know she's actually sending cash back to her investors. She also said she's menopausal and doesn't have room for more volatility.

Her goal is the oddest one in venture capital. She wants to be obsolete on your cap table. She wants Fund One to stay inside its ten-year window with no extensions.

There's an honest cost, and she names it. Proven gave up real upside on Kelly's company. She also says the profitability and EBITDA that Silicon Valley treated as dirty words in 2021 are now what brokers and acquirers use to set a price. She felt crotchety and old saying so as a VC, and it has ended up saving her companies.

Stu brought the other side of the table. His friends-and-family seed round in 2013 included a $25,000 investment. In 2021, that investor received a check for $967,000. Different structure, same lesson. Investors don't need a billion-dollar outcome to get paid, and neither do founders. Erica thinks Silicon Valley glamorized growth at all costs, and that most businesses don't hit milestones that way.

The Founders She Never Worries About

Ask a venture fund what value it adds and you'll hear connections and introductions. Erica thinks that's table stakes. When she looks at the texts from her portfolio founders and the agenda for their meetings, the value is solving problems. The 3 a.m. panic. A portfolio full of mistakes gives you pattern recognition, and that's what she can hand a founder.

Her best founders, though, are the ones who could care less about her value-add. They don't count on it for their success. They call when things are really bad, and they tell her the truth. In one portfolio company, an executive hire went wrong and burned through cash. Their reaction, she says: get rid of the person, move on, no big deal. She doesn't worry about follow-on checks for founders like that, because they'll figure it out.

Proven does allocate follow-on capital for every company. But writing a check to a struggling company is white-knuckle work. Writing one to a founder who tells the truth is easy sleep. Stu closed the loop: capital doesn't mask bad problems, it accelerates great growth.

What Stuck With Me

Most VCs talk about how big the outcome could be. Erica talks about what you'll pay back, how fast, and when she gets to leave. She wants to be a Nebraska investor in Nebraska fashion: no theatrics, results only, in the land of Warren Buffett.

I also appreciated the way she handled the pretend-cowgirl joke. She's a huge fan of Dax and Bodie, the founders of Silver Spur Ranch in Idaho, and Stu said a great entrepreneur isn't so different from a cowgirl. You figure it out with limited resources. You keep the herd alive. You can't bet the farm every time.

She runs a fund built on that idea. Most investors want to stay on your cap table forever. She wants to be paid back, shake your hand, and get out of your way.

Recorded for the Startups with Stu podcast. More at startupswithstu.com.



Related blogs

He Lost Everything — Then Built a Global Education Company

He Lost Everything — Then Built a Global Education Company

He Had 48 Hours to Leave Syria. He Left Behind His Wife, His Daughter, and His Sick Father. One week after Fadi Alshalabi crossed the border out of Syria, his wife called to tell him she was pregnant with their second child. He was starting over in Berlin. No home. No job lined up beyond a visiting researcher contract at the Technical University of Berlin. His wife and daughter were still in Damascus, where his wife said she and Fadi would look at each other every morning when their daughter left for school on the bus and not say a word. Their eyes said it all: this might be the last time we see her. It took seven and a half months to get his family out. Two visa rejections from the German embassy in Beirut. A personal favor from a German diplomatic contact he'd worked with at Damascus University. And then, finally, in early 2014, his wife and daughters arrived in Berlin. That was the third time in Fadi's life that a country had tried to push him out. It would not be the last. The University Official Who Wouldn't Get in Line Before the escape, Fadi Alshalabi had built a good life in Damascus. He was the Head of International Affairs at Damascus University, the youngest person to hold the position in the institution's history. He managed 45 staff. He directed EU-funded education projects, which meant he traveled regularly to Europe and had his own budget. For an academic career in Syria, it was exceptional. Then 2011 happened. The Arab Spring moved through Tunisia, Egypt, Libya, Yemen — and into Syria. Assad chose a military response. Tanks in the streets. Planes overhead. Massacres. And the regime started asking Fadi to help tell their story. Appear on CNN. Appear on Al Jazeera. Defend the narrative of a government that was bombing its own cities. Take his staff to pro-Assad marches. Attend party meetings. He refused. Every time. He kept accepting EU funds. Kept traveling. Kept running his team. That made him a problem. The regime started looking for reasons to arrest him. The president of Damascus University — and Fadi says he thanks him for saving his life — found a way to issue him exit papers in a single evening before a weekend. Someone drove him to the immigration office. They stamped his passport. He had 48 hours. He left. No real goodbye. No plan. Just a border crossing and a phone call to his wife explaining that she and their daughter were suddenly on their own. Post-9/11, 72 Hours to Leave America What made the Syria escape particularly brutal was that it was the second time Fadi had been forced out of a country in a matter of days. Years earlier, he had been living and studying in the United States. Then 9/11 happened. As a Syrian national, he was given 72 hours to leave. He doesn't elaborate on the anger or the injustice of it in the podcast. He just mentions it as context for why he describes himself as someone who's had to be resilient not once but repeatedly, in different countries, under different circumstances, each time starting from scratch. Three expulsions in one life would break most people. Fadi treats it as background. Seeing His Own Students in a Food Line The idea for Niuversity came from two places. The first was his years standing in front of 400 and 500 students at Damascus University, realizing that maybe 10% of them would ask a question out loud — and 10% of 500 is 50 people, which would consume the rest of the semester. The other 90% had questions they'd never ask. Learning styles that didn't match the lecture hall. Curiosity that had no safe way to surface. He wanted a different system. Something that let everyone learn at their own pace, ask questions without embarrassment, and actually finish. The second part arrived in December 2015, in the cold outside a Berlin refugee processing center. Fadi and some colleagues from the Technical University had rented a van, loaded it with food and old clothes, and were distributing supplies to Syrians who had been sleeping in the streets waiting for paperwork. He was serving food when he recognized someone in line. Then someone behind that person. Then someone else. Four of his own students from Damascus University. Standing in a food line in Berlin in December. He said that on that day, they were dead. Their eyes, which had been full of dreams when they sat in his auditorium, were empty. The basic needs weren't being met. There was nothing left for dreams. He started talking to them. They couldn't finish their degrees. They didn't speak German — the integration process would take two years minimum. But they needed income now. And Fadi knew that in three to six months, he could teach them skills they could sell online. Web design. Digital marketing. Social media management. Video editing. Things that worked on Fiverr. Things that required a laptop, not fluency in German. That conversation in the cold became Niuversity. 92% Completion. Nobody Believed It. The global average for online course completion is between 8% and 12%. Coursera, one of the largest platforms on earth, sits around 8-10%. Fadi built a system with live teaching — not recorded modules, but live instruction with interaction — and pushed the completion rate to 92%. When he said this at conferences, people assumed he was lying. Not exaggerating slightly. Lying. He had the statistics. He kept sharing them. At a startup competition in Berlin, his team won second place. A woman from Google came to him afterward and said: from my side, you deserved first place. The committee made a different call. She told him to ask for a favor. He asked for one thing: a video call with the director of the Google Skills program in Dubai. Not an email introduction. A face-to-face video meeting. She arranged it. On the call, Fadi told the director that Google's own platform had a 2% completion rate, and that he could raise it to 92%. The director said that was impossible. He proposed a pilot of 100 students and invited her to attend herself. She accepted. He graduated 100 out of 100. Completion rate: 100%. Google signed a two-and-a-half-year contract. Meta followed. Niuversity was, for a stretch, flying. The Email That Ended Everything In 2020, Covid hit. For an in-person world, the logic was: everything moves online. Niuversity was already online. This should have been their moment. Instead, the funding dried up. Google, Meta, and the other large organizations that had been paying Niuversity to offer courses for free to refugees had their budgets cut. They sent emails. Politely. Sorry, no more funding. Next month is the last one. Fadi had 12 employees and thousands of active students. Within weeks, he had neither. His German residence was tied to his business. He went to renew it and showed them the bank accounts. The contracts were canceled. The income had stopped. They gave him six months. Then in July 2020, a letter arrived at his home. Seven years after arriving in Germany. Two daughters who spoke fluent German and were fully integrated into school. German employees he'd paid. Taxes he'd filed. The letter said: your residence is revoked. Germany is listing Syria as an unsafe country, so we cannot forcibly remove you. But you have no right to work. Wait until Syria is safe. Then we will send you back. He spent three days in the hospital. A near heart attack. Doctors asked him to write his will before a procedure to check his heart. He wrote it. Then he called his German business partner. Then they found a lawyer. They raised a case against the German authorities. It cost money. They won. Two more years of residence. Then another two years. Then eligibility for citizenship. Two years ago, Fadi Alshalabi and his entire family became German citizens. What 80,000 Students Later Looks Like Niuversity has now taught more than 80,000 students across more than 40 countries. The team is back down to five. The model has pivoted: teaching university professors how to actually teach online — not just point a laptop camera at themselves — and how to integrate AI into their courses. There's a new accreditation: European Digital Credentials, which the EU recently began allowing private institutions to issue for the skills portion of academic programs. For students in the Middle East who complete Niuversity courses, those credentials can now transfer to university credit hours in European institutions. And Fadi is trying to bring it back to Syria. He's visited four times since the fall of the Assad regime. He sees his mother again. He's looking for donors who can fund programs for Syrians who can't afford tuition. He's asking what a post-war education system can look like when you build it with digital credentials, live instruction, and a completion rate that nobody else has figured out how to replicate. He's still working on the business model. Still figuring out how to turn the mission into something financially sustainable. He's honest about this — he and his partner came to entrepreneurship without entrepreneurial blood, as he puts it, and have had to learn every hard lesson on the job. What Stuck With Me Most entrepreneurship stories are about someone who saw an opportunity and chased it. Fadi's story is about someone who kept having opportunities taken away — his country, his status, his funding, his residence — and who built something meaningful anyway, every time, in the gaps between catastrophes. The 92% completion rate doesn't come from a clever algorithm or a growth hack. It comes from a guy who stood in front of 500 students in Damascus and noticed that 90% of them were invisible, and spent the next decade trying to make them visible. It comes from watching his own former students stand in a food line in Berlin in December and deciding that the right response was to do something about it. Nelson Mandela said education is the most powerful weapon with which you can change the world. Fadi quoted it in the episode like a man who has actually tried to pick up that weapon in a country under bombardment, and carry it across three borders, and keep carrying it. He's still carrying it. Recorded live at a Startups with Stu retreat. More at startupswithstu.com.

Oct 05, 2026
Read More
AI Business Development, ChatGPT Creates Startup Plans in Real Time

AI Business Development, ChatGPT Creates Startup Plans in Real Time

Ryan Petersen represents a new generation of entrepreneurs who understand that artificial intelligence isn't just a buzzword—it's a practical business development partner that can accelerate startup planning in ways previously unimaginable. As co-founder of Swintros, an innovative job platform technology, Ryan has discovered methods for leveraging ChatGPT that go far beyond simple content generation. His approach demonstrates real business value through systematic AI integration into every aspect of startup development.

Jul 30, 2025
Read More
Building More Than a Startup: Becoming Who You’re Meant to Be | Episode 63

Building More Than a Startup: Becoming Who You’re Meant to Be | Episode 63

She Spent 15 Years Building an App That Started as a Spreadsheet in a D.C. Hotel Room The idea for Healthy Anywhere came to Lee Balcomb at 1am in a corporate apartment in Philadelphia with nothing to eat. She'd flown out of San Francisco at 6am, waited out a multi-hour tarmac delay, and finally arrived hours later to four walls and no food. That was January 2003. She told herself: never again. She was going to map her options before she traveled so she'd always know where to go. That was the spark. Twenty-two years later, she's still building. This conversation was recorded live at a Startups with Stu retreat in Laguna Beach, California — the kind of event host Chad Willard San puts on that has people meeting outside, on the beach, doing real business. Growing Up Foggy in Montgomery Lee didn't grow up thinking about food systems. She grew up in Montgomery, Alabama, eating out almost every night. Shoney's. Little Caesars with a two-liter Coke. Krispy Kreme crullers on Saturday mornings. By seventh grade she was trying SlimFast and protein bars, not to lose weight exactly, but just to feel better. She was bloated. Foggy. Not okay in a way she couldn't fully name. It wasn't until her 20s, after she moved to California, that she had the experience of eating vegetables that came from the ground rather than a can. Extra virgin olive oil. Fewer chemicals. She had never felt better in her life. It sounds simple. It changed everything. Then she got a consulting job that had her traveling every week, and she was determined to eat well on the road. She discovered, quickly, that airports at 6am don't make that easy. Soup, Mexican pastries, protein bars, frozen yogurt. No thanks. She'd wait for the layover. The layover would disappear. She'd land late in a city with nothing open. Philadelphia at 1am was the line. The 14-Column Spreadsheet Nobody Asked For The first version of Healthy Anywhere wasn't an app. It was a spreadsheet she built on a Friday night when she found herself stuck in Washington, D.C. after a work trip. She was there for the weekend. She sat down and went through food writers, top 100 lists, menus, Google searches, everything she could find. She built a list of 78 restaurants across 14 columns. Wild fish. Organic vegetables. Leafy greens (real ones, not just romaine and iceberg). Healthy fats and oils. She had the best weekend of her life. Artisan espresso with organic milk. An all-organic green juice in a glass reusable jar. Brunch. Dinner. All of it mapped out and worth going to. Before long, coworkers were asking her where to eat. She became the person you came to. That's usually how it starts. When private equity bought the company she'd worked at for years and the culture caved, she finally decided she was done waiting. In 2018, she left. She was going to build this thing. The Decompression Nobody Warns You About She thought it would take $200,000 of savings and two years, and she'd have a million users. Instead, she walked out of her job and felt the wall hit her. She needed months just to decompress. She hadn't realized how tired she was after eleven years of going hard. She sat with the walls for a while. Then she figured out she didn't know marketing. Or websites. Or really anything about building a product. So she did what some founders do and most don't. She went through the courses. She read 60 books that year. She got a holistic nutrition certification. She studied sustainable food systems at UC Berkeley, going deep into the connection between how food is grown and how it affects the body. The lightbulbs, she says, were going off constantly. Food grown properly tends to be healthier and taste better because it's fresher. The scoring system she started building in 2019 came directly out of that immersion. Sixty books in a year is not a casual statement. That's a person who decided to earn the thing. The AI Contractor Who Quietly Wrecked the Pipeline Not everything worked. She brought on an AI contractor to help automate the curation process. They worked together for a stretch. Then, well down the road, she discovered how bad the output actually was. Everything had to be manually redone. The damage wasn't visible until it was a double whammy. Time lost. Work lost. Trust in the automation approach, at least for that period, lost. She talks about this the way founders who've been through real setbacks do: as a lesson she's integrated, not an identity she's carrying. The app is over 600 locations worldwide now. The scoring is entirely manual. That's intentional. Everything goes through the same evaluation system, the same thresholds, the same standards. If Alice Waters recommended a restaurant, Lee would still put it through the scoring system. That's not perfectionism. That's the product. Colorado Springs, 30 Restaurants, and a Developer Who Disappeared In 2025 Lee had the realization that she could spend every day of the rest of her life building and end up with a few hundred users. She needed a different approach. She'd always wanted to do something like Restaurant Week, but healthy-anywhere style. A citywide event, app-powered, built around community. An excuse to wrap her best customers up in something real and give them a reason to get excited. She picked Colorado Springs. She had never been. She knew exactly one person there, a woman named Sandy Griffin who was organizing a local health and fitness expo. Sandy told her to go for it. Less than 12 weeks later, Lee had 30 restaurants signed up, more than $2,000 in prizes, and a new app build in development that was going to make the whole thing sing. Four days before the launch party, the developer went dark. She didn't cancel. She didn't postpone. She figured out a QR/PHP workaround herself and coded it until two hours before the party started. It wasn't elegant. It wasn't what it was supposed to be. But it worked. She went on live TV twice. She got 60 to 70 email addresses from people who came through. Four restaurants out of the thirty drove 72% of the QR scans. Current app members drove down from Denver, Boulder, and Fort Collins. One woman brought her husband for the whole week, went to five restaurants, came to Lee at the end and said, "Who do you need? Because if you can do all of this by yourself, imagine what you could do with support." She didn't hit the subscriber numbers she'd hoped for. She's honest about that. But the connections she made, the podcasts she'll record with a leader in international hospitality, the celebrity chef she met through it, the people who showed up like they were arriving to something important, that stuff is harder to quantify and easier to dismiss if you're only looking at conversion rates. The lesson she pulled from it: don't run a citywide event until you have 200 super-users in that city first. Then you're building a party for people who already care, not hoping strangers convert. Why She Won't Raise Money Yet Lee is bootstrapping. No investors. She said it almost like a dare when Stu asked her about it. She's been at it since 2018. She doesn't have a sustainable business yet in the traditional sense. She knows she'll probably need capital at some point. But she won't go after it now because she doesn't feel like she's earned it. That's a rare thing to hear. Most founders treat fundraising like a milestone to unlock, a sign that the work is real. Lee treats it the opposite way. She wants to prove the thing can move on its own before she asks anyone else to believe in it. There's something almost stubborn about it. Also something honest. She's not willing to paper over the traction problem with someone else's money. She described the product itself with total clarity: very highly curated, very specific standards, designed for people who are busy, health-conscious, traveling, and unwilling to let a hectic schedule get between them and eating well. The app has a gut-friendly filter. A "best brunch" award. It surfaces regenerative farms, house-fermented foods, anti-inflammatory menus. When she showed a San Antonio restaurant called Farm Table, it had hit almost every threshold in the system. She called it almost a clean sweep. The product is real. The market is real. The match between them is still being solved. What Stuck With Me Lee mentioned an 84-year-old angel investor who told her to stop stressing. To look at everything she'd built, everything she'd learned, and understand that this was already a phenomenal success regardless of what happens next. She reflected on that conversation, she said, a lot. And then she said the thing that landed: "It's not what I'm building. Ultimately, it's who I am becoming." Most founders don't say that. Most founders are so deep in the metrics and the milestones that the person doing the building barely comes up in conversation. Lee said it naturally, without fanfare, the way you say something you've actually had to work to believe. She's been carrying this idea since 2003. She's been building it full-time for eight years. She coded her own launch solution two hours before the party started when the professional she hired didn't show up. And she's not done, not close to done, not even pretending to be close. There's no grand theory here. Just someone who cares enough about a problem that she keeps showing up for it. That's either the definition of a founder or the definition of something deeper. Maybe both.

May 04, 2026
Read More

Comments