Form Mobility’s Capital Strategy: Beyond Traditional VC Funding

Infrastructure startups face a unique challenge: they need massive capital but traditional venture funding often doesn’t fit their business model. In a recent episode of Category Visionaries, Form Mobility founder Matt LeDucq revealed how his team structured their $420M+ raise to build zero-emission trucking infrastructure while maintaining control of their company.

Rethinking Traditional Infrastructure Funding

The conventional approach to infrastructure funding typically involves giving up significant control. “It’s really popular to take a lot of money at once, build and create two classes of shares,” Matt explains. In these traditional structures, “the private equity or the infrastructure investor gets a pref on the cash flows and the management team gets some sort of class b share.”

But Form Mobility saw a different path. “We just didn’t think that our business was mature enough to warrant that type,” Matt notes. “We thought we could create a lot of value in the enterprise and just knowing how to build a network of zero emission charging facilities.”

The Non-Dilutive Advantage

Of their $420+ million raised, Matt reveals that “the vast majority of that is actually non-dilutive. We also have some structured capital in there. We also have some debt mixed into this.” This creative approach to capital structure allowed them to maintain control while accessing the substantial funding needed for infrastructure development.

The strategy emerged from a fundamental belief in their long-term value creation potential. “We didn’t want to accept that we’re going to essentially work for a fund,” Matt explains. “We thought that we could control that a little bit more, and we wanted to preserve that.”

Learning Through Experience

Form Mobility’s approach wasn’t developed in isolation. “We got some really good advice for some really smart people, and we got some really good advice along the way from founders, from bankers, from friends,” Matt shares. This external input helped them see alternatives to traditional infrastructure funding models.

Their current execution plans demonstrate the strategy’s effectiveness. They’re “going to be putting about $30 million of assets in the ground this year,” with projects that started “back in late 21, early 22” now coming online.

Blueprint for Infrastructure Startups

Form Mobility’s funding approach offers several key lessons for founders building infrastructure companies:

1. Question Traditional Structures: Just because an industry typically follows certain funding patterns doesn’t mean those patterns are optimal for every company.
2. Think Long-Term: Their focus on maintaining control stemmed from a clear vision of long-term value creation.
3. Mix Funding Sources: By combining different types of capital, they achieved their funding needs while preserving equity.
4. Start Small and Prove: They’re methodically deploying capital, with plans to put “$100 million of assets in the ground in the next 24 months” while proving their model works.

For infrastructure founders, the key insight is that you don’t have to follow traditional funding paths. As Matt puts it, “If you are in a space like ours, you just don’t have to continue to dilute yourself to raise capital.” By thinking creatively about capital structure and focusing on long-term value creation, founders can build substantial infrastructure businesses while maintaining control of their vision.