3D Cloud’s Contrarian Playbook: Why They Chose Patient Capital Over VC Money to Build a New Category

3D Cloud’s Contrarian Playbook: Why They Chose Patient Capital Over VC Money to Build a New Category

In 2011, when most tech startups were racing to raise venture capital, 3D Cloud took a different path. In a recent episode of Category Visionaries, founder Beck Besecker revealed why they deliberately chose to build their 3D commerce platform with patient capital from former operators rather than traditional VC funding.

The Case for Patient Capital

“We’ve always raised money from high net wealth, former founders and entrepreneurs. We’ve never really raised monies from financial entities like a VC,” Beck explains. This wasn’t just a financing decision – it was a strategic choice that would shape their entire approach to category building.

The rationale became clear when 3D Cloud spent nearly half a decade exploring different market segments. “We probably spent four years trying to find it. We did fashion and shoes and luxury items and cars and industrial equipment and healthcare equipment,” Beck recalls. Under traditional VC pressure, this extended exploration period might have been impossible.

Building with Former Operators

For founders considering a similar path, Beck offers specific advice: “I encourage a lot of people, if you can do it, find a family fund that is financed by a former entrepreneur who understands operations and is patient, especially unless your business model is fully baked out and you’re ready to go.”

This approach brought more than just money. It provided access to experienced operators who understood the realities of building something new. For instance, Dan Gilbert, founder of Rocket Mortgage, became not just an investor but a crucial influence on 3D Cloud’s culture.

The Venture Capital Trade-off

Beck’s perspective on traditional venture funding is nuanced: “I know a lot of great venture capital growth equity, private equity folks, the issue for me is… these things aren’t always going to turn out a ten times winner, right? Some are going to be three, four, five times. But unfortunately, I think those companies end up getting shuttered before they can be meaningful businesses.”

He adds, “If I were a founder of a completely venture backed company, just feeling like the clock is ticking all the time. It just doesn’t feel comfortable to me.”

Radical Transparency with Investors

This funding approach required a different kind of investor relationship. Beck emphasizes the importance of complete honesty: “If all I hear from good news from you, I can’t believe anything you say. You’ve got to be balanced.”

Their protocol for handling challenges is straightforward: “The moment I have bad news, my brother and I call each other up, like, what are we going to do? And the answer is always the same thing, which is be fast and transparent.”

The Results

This patient capital approach has enabled 3D Cloud to maintain steady, sustainable growth: “Historical growth rate 25% for the last five, six years. That was just about the right pace. We’re not a hockey stick business. Right. We’re kind of keep building the foundation business.”

More importantly, it’s allowed them to focus on long-term metrics that matter. As Beck notes, “The most important metric I care about is retention… And the worst thing you can do is take a client where the value proposition isn’t very strong and you’re constantly trying to fill the holes.”

For founders building potentially category-creating companies, 3D Cloud’s story offers a compelling alternative to the traditional venture-backed playbook. It suggests that sometimes, the best way to build something truly new is to partner with people who’ve done it before – even if that means taking a slower, more methodical path to growth.