Founders from the venture studio Fractal say they're being 'blacklisted'

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Startup studio Fractal created 130 companies in 3 years. Founders say the deal structure has led VCs to 'blacklist' them.

For an aspiring entrepreneur hoping to create the next Shopify or Flatiron Health, Fractal's offer seemed too good to pass up.

"There's a cancer on all of the businesses that are coming out of this studio," another founder said. Fractal set out to create software for niche American businesses, from country clubs to scrap yards to cattle ranches.Of the dozens of Fractal startups that have raised a seed round of funding, about half had Bienville Capital lead the deal, according to people familiar with the matter. Only one Fractal-born startup has closed a Series A round, considered the first round of funding after a company has shown progress in building a business model.

Mike Furlong started and sold a company, Indio, that made software for insurance brokers. He met Nate Baker, whose unicorn startup,, helps lenders digitize the closing process, through mutual investors. In 2020, the two got to talking about other industries that lacked the software to compete in a digital era.

"This is a really unique opportunity to have a $1 million, own a material amount, and make enough that I can stuff away a bit for savings," the founder said.

 

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