The Tesla of Construction Equipment?!

“So… why are you raising money?”

Mike Ma tossed the question at the Slovakian co-founders.

On paper, Adam and Patrik don’t need it. 

$12,000 profit per unit. 25 orders signed worth $1.1 million. Customers calling them, not the other way around.

So why tap venture dollars?

Because hardware has a cruel little cash flow secret that even perfect unit economics can’t fix.

🎧 #173 STAG: The Tesla of Construction Equipment?!

From National Swim Team to Construction Tech

Two decades ago in Slovakia, Patrik watched Adam slice through the pool. “How could this big mass move so fast?” he wondered 😂 

The two became teammates on the Slovakian National Swim Team. They had no idea they would one day become co-founders.

Fast forward: Adam earns an engineering degree at Florida Tech on a swim scholarship. Patrik starts working in the electric construction industry. Then Patrik calls Adam with a wild idea that would eventually become STAG. 

“I almost yelled, ‘yes!’ Within a week I was on a plane to Slovakia.”

Adam didn’t hesitate. 

The mission: build the “Tesla of construction equipment.” Start with a compact electric mini skid steer that cities will actually allow as diesel rules tighten. 

Together, they launch STAG electric mini skid steers.

40,000 Miles + One Trailer + $650K Prototype 

Tesla rewired car distribution. STAG didn’t need to.

Dealers already have service bays, parts, and buyers. “They have huge customer bases who come to them already,” Adam said.

So Adam and Patrik bootstrapped prototypes. Together they poured in $650,000.

Then they bought a truck, strapped their mini skid steer prototype to a trailer, and logged 40,000 miles in a year. If there was an equipment dealer within range, they stopped. 

“It’s a blue collar industry,” Adam says. “A lot of handshakes and tire-kicking.”

It worked. Dealers said they’d buy it.

Bobcat dealers even asked HQ for permission to sell STAG. The answer? “We’re not going into this right now—you’re free to sell it.”

Adam and Patrik got 25 unit orders from 6 dealers which translates to $1.1M in committed revenue.

A Machine That Prints Money (Eventually)

Patrik calls STAG’s electric mini skid steer the “swiss military knife” of construction. Small footprint. Big jobs.

• Price to end customer: $54,900

• Diesel comps: $45,000–$48,000

• Build cost: $29,000–$32,000

• Dealer price (20% discount): ~$44,000

• Net margin: $12,000 per unit

And the kicker? Owners save ~70% on maintenance and total cost of ownership vs. diesel.

Regulations are pushing diesel out of downtowns. Dealers are literally calling STAG and asking, “When can we buy these?”. 

So… why raise?

The Hardware Cash Flow Trap

Elizabeth Yin nailed it with a Costco analogy. Costco gets membership cash upfront and pays suppliers later.

STAG has the inverse.

1. Pay suppliers up front (batteries especially).

2. Wait 90–120 days for parts.

3. Build.

4. Ship to dealers.

5. Wait another 30 days to get paid.

No supplier terms. No friendly credit lines. Not yet.

Why Traditional Financing Says “Come Back Later” 

Yes, PO/AR financing exists. But for fledgling hardware startups, it’s pricey, picky, and often painful. One supply hiccup, and you’re toast.

“If something little happens,” Adam says, “the financing can basically ruin you.”

Banks want 6–8 months of operating history before offering sane terms. Until then, you’re stuck in hardware purgatory: demand is real, margins are great, but working capital is missing.

That is why STAG is raising money.

The VC Verdict

Reactions came fast. A $2.3M pre-money price makes the deal especially attractive.

Priced like an idea, but with a working prototype to prove it. 

As Jesse Middleton put in perspective, peers have raised tens of millions just to reach that point. 

And Elizabeth Yin admitted, “Even some of my software companies can't match what you've built with this little capital."

The Untapped Opportunity

“How many VCs invest in construction?” you ask… 

Not many. And usually it’s software, not steel.

Meanwhile, cities keep tightening diesel rules. Contractors still need to work. Electric equipment isn’t a “maybe.” It’s a “when.”

This isn’t a market to invent. It’s a market to serve.

🎧 #173 STAG: The Tesla of Construction Equipment?!

The Pitch Show LIVE in Brooklyn!

 🎉  Live Show Alert! The Pitch is hosting a LIVE recording in Brooklyn on December 4th! There will be pitches, your favorite VCs, and a happy hour after the show. 

Tickets just went on sale!