Capital Innovation Lab’s Money Map is a comprehensive self-directed, online resource for entrepreneurs and small business owners to learn about raising capital for their start-up or early-stage business. This case study shows an example of how a business has built its “money map” and the journey and decisions that informed it.

Mamava is a pioneering company that addresses a critical need for lactation spaces in public areas. Its innovative lactation pods have reshaped the landscape for breastfeeding people, offering them comfort and privacy during their daily routines.

The company is now in its Scaling Stage, as its current need for funding arises from a desire to scale to meet the increasing demand for its products. But it hasn’t always had a clear path, and has reached significant milestones while navigating market uncertainty, policy shifts, insufficient funding streams, and other challenges.

Business Overview

Mamava was started by Sascha Mayer and Christine Dodson. The pair met when they were working at a brand-design studio in Burlington, Vermont. Mayer was a brand strategist, while Dodson worked in account management and had held management positions at an advertising agency and a financial services company.

As mothers frustrated with the lack of lactation options in public spaces–both had pumped breast milk in bathrooms, closets, and cars–Mayer and Dodson saw the need for comfortable, private, human-centered spaces for breastfeeding people. They pitched the concept for freestanding lactation pods to the owner of the design studio, and he encouraged them to incubate the idea during their downtime.

In Mamava’s Pre-Launch Stage, Mayer’s and Dodson’s full-time jobs allowed them reliable salaries and design resources to prototype their minimum viable product–the lactation pod. However, it didn’t give them the time and flexibility to work on the Mamava concept uninterrupted, which Mayer says slowed their business development.

In 2010, an update to the Fair Labor Standards Act within the Affordable Care Act required employers to provide reasonable break time and a private space for nursing mothers during the workday. Now that policy compliance could drive demand, the business idea became viable so Mayer and Dodson put more focus on the project. In 2013, Mamava had three working prototypes and was seeking investors.

Funding Strategy

Mamava’s founders started by bootstrapping capital from their own pockets, friends, and family. Although Kickstarter and other donation-based funding platforms had come onto the scene, it wasn’t until the 2012 JOBS Act that investment crowdfunding was allowed. While the SEC began the approval process nationally, states like Vermont approved intrastate investment crowdfunding by the summer of 2014.

With a supply chain and durable goods, Mamava’s manufacturing costs were expensive. At the time, it cost about $6,500 just to build a prototype. Mamava needed upfront capital, so it began setting up an intrastate crowdfunding campaign.

In 2015, FreshTracks Capital entered the picture. The venture capital firm had been following Mamava for years, and when it caught wind of the impending crowdfunding campaign, it jumped at the opportunity to offer the company a term sheet, which is a nonbinding investment agreement. It wanted to invest in the company before its capitalization table got overloaded with hundreds of state-wide investors.

Early stage companies are generally advised to avoid venture capital because it can mean a gamble on the ownership and control of the company. VC firms often place at least one of their team members on the board of directors of the startup company, which can significantly impact decision-making.

Mayer and Dodson had to choose: They could continue with the investment crowdfunding plan and maintain full control of their company, or they could go with FreshTracks.

Because Mamava was a category creator–meaning they were one of the earliest movers in the lactation pod space–the biggest hurdle was getting potential investors to understand the problem their product was solving. Male venture capitalists pushed back on the need for the company’s lactation pods, which was a built product in a time when mobile apps and tech deals  were the most sought by investors.

But Mamava’s founders entered into valuation negotiations with FreshTracks with confidence and strong revenue projections. In the end, Mayer and Dodson determined the potential benefits from a partnership with the VC firm outweighed the risk of giving up some control of the company. The firm led the first round of investment with $250,000 in July 2015, and were then joined by angel investors, friends, and family for a total seed round of $463,000.

Today, Mayer says she and Dodson haven’t lost control of the company, and FreshTracks has proven itself to be a catalytic partner in fast-forwarding Mamava into its Growth/Scaling Stage. The funding helped propel the development of the company’s custom app to help users search and map lactation spaces, which it began to develop before receiving seed funding. Once this technology was built into the units, Mamava was even more compelling for ongoing investors in future funding rounds. FreshTracks also helped the founders network with mission-aligned professionals who later became key employees at the company. Mamava began recruiting its first full-time employees in the second half of 2015, then welcomed its first chief of sales to the team in March of 2016.

Conclusion

Mamava's funding trajectory showcases the challenges and decisions faced by founders during various stages of company growth.

From bootstrapping and navigating funding options to maintaining control and scaling, Mayer and Dodson demonstrated business savvy and strategic thinking. Today, their ability to adapt to market changes, leverage opportunities like policy shifts, and engage investors who value the company’s mission as well as its financial potential has contributed to Mamava's continuing success.