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Michael Houck on Raising with a16z, Launch House & What Came Next

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Jason Kirby
Sep 5, 2023

 

In this episode, Michael Houck shares his journey of raising capital for his company, Launch House. He discusses how he started his entrepreneurial journey with no connections in Silicon Valley and worked his way into roles at Uber Eats and Airbnb. Houck then started Launch House during the height of the pandemic as a way to be around other people. This led to the founding of Launch House, a co-living community for founders. The concept gained attention and momentum, leading to a successful capital raise. 

Here are some key points in this episode

03:12 - Launch House gained attention and momentum. 
05:28 - Zig when others zagged. 
10:09 - Investors want support and excitement. 
19:28 -  Transition from a VC-backed company to an independent community 
23:30 - Growing a newsletter with content marketing and paid ads. 
26:29 - Build a personal brand for success. 
30:45 - Strategies for growth apply to any industry. 
38:02 - Building an audience before launching. 
40:46 - Superconductor breakthrough sparks investment potential.

About Michael Houck: 

Michael Houck is an entrepreneur and founder who gained attention for his role in launching and growing the co-living community, Launch House. With a background in startups like Uber Eats and Airbnb, Michael leveraged his network and innovative ideas to create a unique and successful venture. While Launch House faced challenges and eventually pivoted, Michael has since focused on building his brand through his popular newsletter, which has quickly gained a large following.
He is also the creator of Megaphone, a service that helps founders amplify their reach and connect with other creators. Michael's expertise in community building and content marketing makes him a valuable resource for entrepreneurs looking to grow their brands.

Links mentioned:

Get more tips on how to build, grow, and raise capital for your startup https://join.houck.news/ 
Connect with Michael Houck on Twitter: https://twitter.com/callmehouck
Amplify your content organically through: https://megaphone.network/
Hosted by Jason Kirby - https://www.linkedin.com/in/jasonrkirby/
Email Jason at jason@thunder.vc
Don't forget to hit subscribe for more episodes!

Fundraising Demystified — Podcast

Michael Houck on Raising with a16z, Launch House & What Came Next

Published: · Host:

Episode page: https://blog.thunder.vc/cultivating-hype-and-attention-to-raise-capital-successfully

Video URL: https://youtu.be/3xW6Bt-l4xQ

Key Takeaways

  • Momentum and narrative matter: Launch House grew by "zigging" during lockdowns and cultivating visible hype.
  • Signal begets signal: early angels (e.g., Balaji) created FOMO; tranche pricing rewarded first believers.
  • Metrics that moved the A: paid cohorts → NYC expansion → subscription ARR; plus a uniquely structured fund.
  • Not all startups need VC: if speed/moat demands it, raise; otherwise, build toward cash flow.
  • Audience-first advantages: Houck’s newsletter/community quickly scaled to ~$50K MRR and seeded new products (e.g., Megaphone).

Summary

  • Guests: Host Jason Kirby interviews founder Michael Houck.
  • Core topics: fundraising strategy, cultivating hype, tranche pricing, seed and Series A processes, community-led growth, subscription ARR, venture fund structure, PR crisis and pivot, audience monetization, creator/partner amplification.
  • Funding timeline: Seed ~$3M (2021); Series A ~$12M (≈$10M from a16z); venture fund ≈$7M writing $25k–$100k checks.
  • Tactics: early high-signal investors; momentum via content & press; LA/NYC cohorts; membership at ~$3k/yr; FOMO; accelerator-style community; audience-led growth post-Launch House.
  • Advice: Raise if market speed/moat requires; otherwise pursue cash flow. Focus on moats (data, hard tech, bio) as software moats compress.

Full Transcript

Jason Kirby: Hey everyone, thanks for joining us today. This is Jason, your host of Fundraising Demystified. Today we have Michael Houck on with us today, former founder of Launch House. Okay, sorry—we’ll restart that.
Michael Houck: Sorry—Houck, the “U” trips people up. I should have said something.
Jason Kirby: Hey everyone, thanks for joining us. Your host, Jason Kirby, Fundraising Demystified. Today we have Michael Houck on with us. I’m a member of your community—was a member of your previous community at Launch House. I’m stoked to have you on the show and learn about your journey of raising capital from a16z at Launch House, what happened there, and your founder journey overall. Give the audience some background on how you started your entrepreneurial journey, and we’ll go from there.
Michael Houck: Super stoked to be here—thanks for having me. I started with basically no connections in Silicon Valley. I grew up outside Philadelphia, worked at a small startup as an engineer, then cold‑emailed my way into Uber Eats early. I helped grow that business—operations, data science, building product—then jumped to Airbnb as a PM to help build Airbnb Plus. I was laid off during COVID—our product required in‑home visits—and that’s when Launch House started.
Michael Houck: During the pandemic I wanted to be around other builders, so I booked a co‑living house in Tulum and convinced 18 early founders to live together for a month. It turned into a three‑year journey: we raised from a16z, raised a venture fund, and a lot more. That’s how it began.
Jason Kirby: Let’s start with Tulum. You set up an entrepreneurial co‑living environment—super valuable. What became the birth of Launch House and the capital raise? And what was that journey through subsequent raises?
Michael Houck: Launch House wasn’t meant to be a company. My future co‑founder and I were working on something else and planned to build it in that first house. But people were interested—we were living in Tulum during lockdowns, posting on Instagram and Twitter. Press picked it up—New York Times, TechCrunch—and people asked how to join, when the next house was, if we were incubating companies. We realized there was momentum for a new kind of founder community in a remote‑friendly world. We brought on a third co‑founder and went all‑in.
Michael Houck: We ran a second house in Tulum with applications. Then we went to LA, renting a house (Paris Hilton had been the previous tenant) for three months. We put over $200k of our own money on the line with no real plan beyond: fill it with great founders, help them build, and see if we could make our money back. That’s how it started.
Jason Kirby: Founders think money appears overnight, but you had momentum and attention—unique concept in a desperate time for human connection—and your target audience overlapped with capital allocators. What happened after putting $200k on the line? What metrics did you hit to raise capital?
Michael Houck: We zigged when others zagged. Momentum came organically and we leaned into it—cultivated hype to keep a “cool factor.” In LA I interviewed 200–300 applicants that December. We ran the house for three months and brought ~100 people into the community who paid for the experience. We’d tried to raise before LA and were told “not yet”—one offer wanted too much equity for too little cash, so we self‑funded. After those cohorts, with rising caliber and attention, we kicked off a proper raise.
Jason Kirby: Was that the seed round?
Michael Houck: Yeah—call it seed. About $3M (2021). We brought in a couple of high‑signal people early, then used that momentum to close the rest quickly.
Jason Kirby: Lessons learned—what made your raise unique, beyond a hot market?
Michael Houck: We hadn’t launched subscriptions yet—just one‑time fees. We knew we needed signal. Our first investor was Balaji. We framed Launch House as a proto–network state—a future city of builders. He was excited and wrote the first check. We tranched the round: Balaji came in at a $5M cap; six–seven weeks later the round closed at a $20M cap. First believers deserve a discount when they materially help the company.
Jason Kirby: Right—early backers getting a 4× paper markup in six weeks creates buzz and support. Founders shouldn’t over‑optimize valuation at the expense of momentum and allies.
Michael Houck: Exactly—and he pushed our thinking bigger, too.
Jason Kirby: You then raised an A. Outsiders might see “just a co‑living house,” but you sold a much bigger vision—the kind top firms want. What happened between closing the seed and raising the A? What metrics did you hit?
Michael Houck: We expanded to NYC (Chelsea) and launched our subscription product—$3,000/year membership on top of cohort fees—so ARR spun up quickly. We also formulated a fund in early 2022. The unique part: the majority of the fund’s carry flowed back to the Launch House, Inc. entity (with GPs getting a smaller slice). Short‑term: strong cohort revenue. Long‑term: fund economics if we consistently attracted top founders.
Jason Kirby: Fund size and check size?
Michael Houck: About $7M. We started with $100k checks then shifted to $25–$50k to take more shots on goal.
Jason Kirby: And the Series A—how did it come together?
Michael Houck: We weren’t planning to raise yet. But we built a strong relationship with Andrew Chen at a16z—he followed from our Tulum days. After a fireside at the LA house, he left energized about our vision to build a YC‑alternative community outside SF. The A was about $12M total—~$10M from a16z.
Jason Kirby: So roughly $15M in equity financing for Launch House plus a $7M fund—big numbers quickly. You crushed content and community. But the elephant in the room: Launch House today?
Michael Houck: Technically it exists—Brett, my co‑founder, pivoted the company. I left in December 2022. We had a major PR crisis last September, right after I launched my newsletter (originally a Launch House side project). Investors were supportive through the tough months. I won’t rehash it—press tells the story it wants. By December I believed the brand wasn’t recoverable, so I moved on, spent the winter in Cape Town, and then focused on the newsletter when I got back. Brett wound down the old model by March and later pivoted.
Jason Kirby: Was capital returned? What about the fund?
Michael Houck: Our investors didn’t ask for capital back; the company retained cash to pursue a new direction. The fund continues investing. I resigned from the fund to focus on the newsletter, but recommend founders work with my former partners.
Jason Kirby: Your newsletter/community ramped from near‑zero to about $50k/month in a few months—how’d you seed growth?
Michael Houck: Having a modest Twitter/LinkedIn audience helped (20k+ each at the start). Collaborations and recos with peers matter—a lot happens in DMs and group chats. The “dirty secret” of big newsletters: most scale with paid ads (FB/IG, now Twitter; sometimes TikTok). You can acquire subs for <$2 with good creative and targeting. I invested modestly after proving legs with content and cross‑promos.
Jason Kirby: If LTV is ~$12/yr and CAC ~$2, that’s a 6:1—great, and you don’t need VC for that engine.
Michael Houck: Exactly—and I’m not interested in raising for this business.
Jason Kirby: The personal brand you built alongside Launch House let you start fresh without porting IP. Tips for founders building brand they can take with them?
Michael Houck: Form a peer group with creators in your niche and similar size; grow together. MrBeast did this early—study the craft with others. Be authentic: comment early on their posts so they recognize you before you DM. Also, I’m launching Megaphone (megaphone.network): $99/mo SaaS to route your content to big creators for amplification; creators set their rates—you fund payouts directly. Early wins include a thread hitting 1.6M impressions and a LinkedIn page growing from 0→2,500 followers in 24 hours.
Jason Kirby: These strategies work beyond startups—I used them across industries (trade shows, influencers in education and esports). Applicable anywhere you can identify niche influencers and customers.
Michael Houck: Totally. Creator Jake Klaus (Creator Science) says the startup niche can be tough—audience is discerning and time‑strapped. But if you have credibility and show results, it’s a great niche. That’s the difference.
Jason Kirby: Will you raise for Megaphone or continue bootstrapping?
Michael Houck: No plans to raise. Build the skateboard → bike → motorcycle → car. We’ll expand to more niches only after we see repeatable growth systems. Early customers are founders and ghostwriting agencies, but creators across many niches are already on the supply side.
Jason Kirby: I’m hearing more founders avoid raising unless necessary. What advice do you give teams with product and some revenue deciding whether to raise?
Michael Houck: Raise when speed is essential—big/competitive markets where density wins. Venture is an accelerant, not default. Otherwise, build toward cash flow. If you take VC, you’re implicitly aiming for fund‑returner outcomes—consider that path carefully.
Jason Kirby: Exactly. Many should prioritize free cash flow. Building audience first can de‑risk product later.
Michael Houck: Look for defendable moats if you go big: data, hard tech, bio, energy—software moats are compressing as tooling improves.
Jason Kirby: With AI lowering build costs, many SaaS niches get crowded—great small businesses, tough moats—another reason to chase cash flow unless you have a unique wedge.
Michael Houck: Exactly—smart money will flow into IRL breakthroughs (space, energy, materials). We’ll see fewer software unicorns as differentiation gets harder.
Jason Kirby: Wherever you take it—media, accelerator, fund—appreciate you joining the show!
Michael Houck: Thanks for having me.

FAQ

How did Launch House get early investor interest?

By running visible, contrarian co‑living cohorts during lockdowns, drawing press, and building hype that attracted high‑signal angels.

What were the key fundraising milestones?

Seed of ~$3M (2021), Series A of ~$12M led by a16z (~$10M from a16z), and a ~$7M venture fund writing $25k–$100k checks.

Why did Michael Houck leave Launch House?

After a PR crisis and brand challenges in late 2022, he believed the brand wasn’t recoverable and focused on building his newsletter/community.

How did Houck grow to ~$50K/month so quickly?

Mix of existing audience, content collaborations, and paid acquisition (subs often <$2) with sponsorship/affiliate monetization.

Should I raise venture for my startup?

Raise if the market demands speed and you have defendable moats; otherwise, prioritize cash flow and audience-led traction.

Jason Kirby
Jason Kirby

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