• Sergio Muñoz posted an article
    The True Startup Story of Yoke see more

    An interview with Michael Johnson of Yoke as told to Sergio C. Muñoz

    Note from Sergio:  I connected with Mike at LAVA's Meet the VC event in October of 2015.  We developed our relationship for a few years and then after returning again in October of 2017 with a fresh $750,000 investment, he was investor-ready. HOTB issued him a term sheet for $600,000 and an investment of $300,000. Now, with MRR of $30,000, Michael and his partner, Ben Thomas, are now ready to syndicate the remainder of his $3M angel round.

    "I was born and raised in Cleveland, Ohio and came from a family of entrepreneurs. My mom and dad both owned their own business and the apple didn’t fall far from the tree. I was the kid with the lemonade stand. In 4th grade I was forced to stop selling candy out of my locker because my business was cutting into the vending machine proceeds that went to support after school programs.

    In 2003, I started college at Arizona State University and met my best friend and future business partner, Ben Thomas. We shared an immediate connection when it came to living an active and healthy lifestyle, enjoying life to the fullest, and viewing challenges as opportunities to create something new. We both possessed that entrepreneurial drive to create our own success.

    After college, Ben and I were completely fed up with the lack of access to healthy food during work hours. The only food option available in our break room was from the vending machine. We knew there was an opportunity here, so naturally we dug in. We learned about a brand new concept called micro markets, self-checkout shops that combine the quality of Whole Foods with the convenience of Grub Hub and places it right in your break room.

    We were convinced micro markets were going to change the vending industry, but the existing technology was in the dark ages. Overpriced bulky equipment that ran on clunky software made scaling micro markets next to impossible. Operators could only afford to put them in 1,500 person offices and even then running them was a pain.

    Ben looked at me and said, “Everyone has a kiosk in their back pocket. Let’s build a self-checkout app that allows micro market operators to take this concept to any size location.” In 2015, we brought this idea to a long time mentor of ours in the payments space and he believed we were on to something.  So, we opened up shop at WeWork in Hollywood and started talking to vending operators about a smarter way to grow their business.

    We put together $750,000 and came to market with affordable plug & play hardware and user-friendly software designed to help operators scale their micro market footprint. A micro market typically produces 2-3 times more revenue than a bank of vending machines, and we have the only system designed for locations with 100+ employees.

    Micro markets are now the single largest growth driver to the vending industry. We currently service over 75 micro market operators with hundreds of locations nationwide. We have $35,000 in monthly recurring revenue, 5,000+ mobile app users, and are processing over $200,000 of merchant payments every month.

    That little kid back in Ohio always dreamed about starting a business, but to wake up and realize that I get to go to battle every day with my best friend by my side is beyond imagination."

    For more information: www.yokepayments.com



  • Sergio Muñoz posted an article
    Stats from the Halo Report see more

    By Sergio C. Muñoz, SVP at HOTB Software and member of the Board of Directors at LAVA

    The Halo Report provides analysis and trends on US angel and angel group activity. Earlier this month, The Halo Report issued a special Minority Report analyzing 2,382 deals in 2016 where the gender and race of the entrepreneur was verified using data from the Angel Capital Association of 13,000+ angels. Assuming a basic breakdown of 100 entrepreneurs, 58 of funded angel deals went towards white males, 26 were for non-white males, 13 were for white females and 03 were for non-white females. This is what could be termed as the current state of affairs. Via LAVA, it is not my intention to debate the political gamesmanship behind the current partisan political culture nor to complain about the dismal figures for non-white female entrepreneurs. Rather, the intention of this post is to begin an effort at impacting those numbers in a positive direction.

     To live successfully in the entrepreneurial eco-system requires two fundamental elements: Singularity of Purpose and Sufficient Capital Resources. The singularity of purpose for any entrepreneur and also any investor is the same: Making money through supply and demand economics. The big differentiator in the equation probably lies in that 58% of the sufficient capital resources is going toward white males and 42% goes towards all others. If we want to balance the numbers just for the sake of balancing the numbers, we have to begin with the realization that institutional bias and prejudice in business and social affairs have created this purposeful imbalance for generations. And it is a long-tailed monster that has chipped away at the confidence of the non-white entrepreneur for decades.

     As an executive with an angel group in southern California, I find myself consistently pleading with female entrepreneurs to gather or create the confidence to go through the discovery process to open themselves for investment. A majority percentage of those female entrepreneurs find the right reason to reject my pleas and convince me that they aren’t ready for my type of funding. Accordingly, at the end of the year 2016, the term sheets that my team wrote at HOTB also skewed towards the white male entrepreneur because they were the most willing to go through the enormous effort of laying their heart and their money on the table for the reward of receiving investment.   

     I talked about this phenomenon through with Jean Huang, Vice President at Bernstein Global Wealth Management in Los Angeles. She summarizes her thoughts with the following wisdom: “Risk is a muscle and it just needs to get exercised.” Then, we talked present-day statistics: 16% of LA based angel funding is going to female entrepreneurs but women control 51%, or $14 trillion, of personal wealth in the US and are expected to control $22 trillion by 2020, according to the report Financial Concerns of Women released by the private bank, BMO Wealth Institute.

    For Ms. Huang, she estimates that 70% of her clients are women and she believes that “women are more emotional and anxious around money and take longer to make decisions.  Higher returns mean higher risk and women generally aren't as comfortable around risk as men are.  As they spend more time in the liquid capital markets, women will find they are no longer satisfied with future expectations of more muted returns. Nonetheless, I'm confident that over time and deal by deal and opportunity by opportunity, all involved in entrepreneurship will find their way to economic success.  And that success will feel a lot more satisfying than buying an S&P index fund.”

     I am hoping to connect with the next generation of entrepreneurs and angel investors that are going to help positively impact next year’s numbers with the angel groups in the Angel Capital Association and thus positively impact The Halo Report for 2017. To connect with Women in LAVA, please join us on Wednesday at  our event:

    Women in LAVA invites you to a panel discussion supporting female entrepreneurs by helping them better understand one of the most important sides of the equation – the Money. From Angel Investors, private investors, venture capital and more, we plan to get “down and dirty” with specific deal points and terms, revenue benchmarks and board involvement. 

     6:30pm - 8:30pm PDT

    Bernstein Private Wealth 1999 Avenue of the Stars, 21st floor Century City, CA