The Hardest Check to Get Is the First One

Lessons from Thruline Thursday 16: Building the Circular Economy - What It Really Takes to Fund a Mission-Driven Startup

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Every circular economy founder eventually hears the same thing. The mission is compelling, the pilot looks good, and the investor would love to know who else is in the round. Everyone is interested. Nobody wants to write the first check.

That was the thread through Thruline Thursday 16, where host Phil Dillard sat down with Dan Kurzrock, CEO and Co-Founder of Upcycled Foods (the company behind ReGrained), ecosystem builder Gaia Montelatici, and circular economy advisor Cara Pepper Day to talk about funding a mission-driven startup.

A system not built for this

Capital is chasing AI. Circular companies need infrastructure before they have scale, which means long sales cycles and heavy R&D that venture timelines were never built for. Patient capital exists, but few funds will lead, and the goalposts keep moving. Investors want traction, traction takes capital, and a letter of intent rarely counts as an offtake agreement. Companies with modest revenue get squeezed hardest, too far along for early-stage funds and not far enough for the next tier.

How Dan worked around it

Dan skipped traditional venture capital for most of ReGrained's life. His team raised through WeFunder crowdfunding and anchored rounds with corporate venture investors. His advice working with corporate VCs is to have zero or more than one, never exactly one.

When equity stalled, ReGrained launched a services line as a source of capital. It was a practical move with a strategic payoff. Revenue keeps a company running without waiting on a lead investor, and it gives investors the traction they desire. For a circular company with a long road to scale, a second income stream is a way to stay in the game while the capital catches up.

The conventional route had its own cost. ReGrained pitched around 400 VCs and family offices for a $6 million Series A, and the round fell apart when the lead fund never closed its own fund. One lead became a single point of failure.

What is working now

Founders who have raised recently including, Ravel, focused on textile-recycling technology, tend to match their company to what a specific fund already backs, saving time and better leveraging resources. Then study how other founders won over specific investors, and build a customer network first. They choose strong messaging and lead with the problem they solve. "Better fiber for textiles" lands faster than a headline about waste, because circularity works best as the enabling technology and not the main pitch. 

Most founders don't arrive with this playbook, and they shouldn't have to build it alone. Fund research, investor-specific messaging, and sequencing a raise are learnable skills, and a trusted partner who has done the work, like us at Thruline, can save months of trial and error.

The capital stack can widen from there.

• Grants. AI tools have made applications far easier to write.
• Community rounds and family offices. Both spread the bet beyond a single lead.
• Modular CapEx. A $5 million unit that works as both pilot and commercial version beats a $50 million plant.
• Proprietary data. Vertical datasets, like allergen-free grain availability, can draw in investors looking for sector-specific data.

The long game

None of this makes the lead check easy to find. But the work that earns it happens earlier, in customer relationships, community, and a capital stack where no single yes decides your future. Investor lists are easy to build now. Trust still takes time, which is where a trusted partner helps most. At Thruline, we work alongside founders on exactly this, from sharpening the story to mapping the capital stack and making the right introductions. When everyone is waiting for someone else to go first, patient relationship-building is the strategy.

If you missed the session and would like access to the full recording please contact us. Thruline Thursday runs monthly, and upcoming sessions are on our link page.