📡 This week at TFG
TFG Office Hours just got a refresh. New schedule, sharper formats, and a new addition on Sundays: the Founder's Lab Podcast, hosted by members of our community. Full breakdown further down.
On Thursday’s from 12:30PM to 1:15pm EST, Ben Wiggins hosts his special office hours where he answers questions posed by the community and founders. If you have any questions you’d like to ask Ben on startups, fundraising, investor relations, please submit them using this form.
We're collecting feedback to make Office Hours sharper. Two minutes of your input shapes what we run next. Drop your thoughts here.
Not in the Discord yet? Join the Community here.
🔎 Investor Lens
Same Dollar, Different Machine: How Investors Read CapEx-Heavy vs. CapEx-Light Businesses
Adapted from Ben Wiggins' Investor AMA. Read the full post here.
A few weeks back, we asked Ben a question that comes up constantly inside TFG: how do investors actually evaluate a software startup differently from a hardware or manufacturing one? His Investor Mailbag post tackles it directly, and the answer is more useful than the usual "software is easier, hardware is harder" framing most founders walk in with.
Four things worth pulling from the piece:
The metrics that matter shift when the cost structure does.
Software businesses are evaluated through a scalability lens. Once the product is built, adding customers happens at near-zero marginal cost, which is why investors anchor on growth rate, ARR, CAC, LTV, retention, and churn. The underlying question is not "Are you profitable?" but "Is this a growth engine that throws off serious cash flow once it matures?" Hardware businesses get a different treatment. Gross margins are lower, working capital is real, and inventory has to be paid for before revenue collects. So investors focus on gross margin percentage, inventory turnover, cash conversion cycle, capital requirements, and return on invested capital.
Losses are tolerated very differently across the two.
In software, burning cash to grow is often a feature, not a bug, as long as the unit economics work. Investors will accept negative cash flow if every dollar spent on sales and marketing predictably generates several dollars back. In hardware and other capital-intensive businesses, profitability and cash flow start mattering much earlier. Scaling production requires real dollars in factories, tooling, and infrastructure, which means investors are more skeptical of growth models that assume unlimited expansion without proportional reinvestment. The question moves from "How fast can this grow?" to "How much capital will it consume to reach scale?"
The risk profile is fundamentally different.
Software companies face product risk and competitive risk, but once they hit product-market fit, they can scale without large physical constraints. Hardware companies carry all of that plus operational risk: supply chain disruptions, manufacturing defects, commodity prices, regulatory issues. Investors adjust their required returns accordingly. Tighter cost controls, stronger balance sheets, and clearer demand evidence become non-negotiable at a stage where software founders might still be in pure conviction-selling mode.
Counterintuitively, hardware founders get a longer pre-revenue leash.
This is the part most software founders miss. Because investors know capital-intensive ventures require capital just to exist, hardware and deep tech founders often have more room to operate pre-revenue. The flip side, Ben notes, is that software founders frequently get hit with the question, "Why don't you just find a CTO and bootstrap to an MVP?" Different sectors carry different expectations about what should already exist before someone writes a check.
The piece is worth reading in full, particularly Ben's framing of how valuation methodologies themselves differ. Software gets revenue multiples. Hardware gets EBITDA, free cash flow, and earnings multiples once it's past the earliest stages. The underlying investor question is the same in both cases: how many dollars come back, how soon, and how certain is the outcome. The lens just shifts based on the kind of machine you've built.
✨ Founder Spotlight
Kevin Wu
Kevin Wu, NicklPay's founder and CEO, is also one of the original members of The Founders' Group. From the early days of the community, he has been the kind of member who shows up for everyone else's venture, not just his own. He has mentored founders through tough stretches, brought sharp insight into deck reviews in a way that has saved more than a few founders months of bad direction, and consistently set the tone for what generosity inside the community is supposed to look like. Long before NicklPay was getting attention from outside the room, Kevin was already paying the community forward.
That is part of what makes the current moment for NicklPay feel earned. Kevin is one of the more consistent examples inside TFG of what the 5C framework actually looks like in practice. The traits read clean enough on a slide; spotting them in a real founder over a real stretch of time is the harder thing.
In Kevin, calm comes through as steady, non-performative progression, the kind of founder who builds in the absence of an audience. Capable shows up as the speed of execution that compounds month over month. Curious is the determination to find the right answers rather than the convenient ones. Coachable is the rarest of the five in practice: receiving real feedback and actually changing behavior afterward. And committed lands as operational maturity and long-term thinking in a problem space that rewards both.
That combination is hard to find, and Kevin has shown all of it over the long stretch. It is exactly why NicklPay reads as a venture-backable company rather than a feature company. The product matters. The operator running it matters more.
If you're in the Discord, send him a congrats. He has put real care into helping a lot of the people reading this, and this is a moment worth marking.
🎙️ TFG Office Hours
The Lineup Just Got Better. Here's What's Running.
We have been running TFG Office Hours daily for several weeks now, and the format has earned a refresh. Starting this week, here is what the schedule looks like:
Monday — Open Mic. Bring whatever you're working on, whatever you're stuck on, whatever you want a second set of eyes on. The room is the agenda.
Tuesday — Path to Funding. Founder education focused on the fundraising journey. Stage-by-stage walkthroughs, structures, term sheets, investor psychology, the things you wish you'd known six months earlier.
Thursday — Ben Q&A. Weekly office hours with Ben Wiggins. Open submission, anonymous if you prefer, and consistently one of the most useful hours of the week if you have a real question.
Friday — Deck Review. Bring your deck. Get sharp, specific, actionable feedback from people who have seen a lot of decks. This is one of the highest-leverage hours we run.
Saturday — MVP Viability. A working session focused on whether what you're building actually solves a problem someone will pay for. Useful regardless of stage, brutal in the best way pre-launch.
Sunday — Founder's Lab Podcast. New addition. A more traditional recorded podcast format, hosted by Anushrot Mohanty, Adam Rhinehart, and Tray Bailey. More details on guests and format coming soon.
If you have ever wanted to be in front of a mic talking about what you're building, this is the door.
What This Actually Sounds Like in Practice
For founders who haven't dropped into a session yet, here's a snapshot from Ben's most recent Q&A. The hour covered when to pivot, advisory equity ranges, LLC to C-Corp timing, pre-revenue investment, and the framework Ben uses to evaluate founders. That last one is worth surfacing on its own.
Ben's 5C Framework for evaluating founders:
Calm — emotional steadiness when things break, which is most of the time
Capable — committed to continuous learning rather than relying on what you already know
Curious — a scientific orientation toward data and your own assumptions
Coachable — willing to receive feedback without flinching, and willing to actually act on it
Committed — persistence through the long stretches when nothing is working
The session also produced a clean answer to one of the most common founder questions we hear: when should you switch from an LLC to a C-Corp? Ben's framing was that LLCs are fine for early stages and even friends-and-family or pre-seed rounds, but the moment you're raising meaningful institutional capital, it's time to convert. Until then, you're optimizing for simplicity and lower cost, which is exactly the right move.
Look out for the announcement in the server, and join us for Office Hours!
đź’¬ Join the Conversation
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As always, The Founders Group is 100% FREE.