How KM Tools Transformed from Garage Startup to $2M VC Success

Jonathan Katz-Moses stood in his garage workshop, the scent of fresh-cut pine filling the air, as he fine-tuned a prototype router sled. A lifelong woodworker, he had no intention of becoming a startup founder. Yet, a decade later, his company KM Tools had just closed a $2 million venture capital round—a disciplined leap from handmade tools to a scaling manufacturing empire.[1]

From Garage Bench to Online Workshop

Jonathan's journey began in 2015, rooted in passion rather than ambition. By day, he worked as a corporate engineer, but his evenings belonged to woodworking. Frustrated by overpriced, under-engineered tools from big-box stores, he started machining his own solutions. His first creation, a precision router sled for flattening slabs, solved a real pain point for hobbyists tackling live-edge projects.

Sharing videos on YouTube changed everything. "I posted a build video expecting a handful of views from friends," Jonathan later reflected. The video exploded, garnering thousands of views and comments begging for plans or kits. That spark ignited KM Tools. He quit his job, invested savings into CNC machines, and began fulfilling orders from his garage in upstate New York.

Initial challenges hit hard. Supply chain hiccups meant waiting months for aluminum extrusions. Packaging fragile tools for shipping led to breakage complaints. Worst of all, scaling production solo proved exhausting. "I was machining parts until 2 a.m., packing boxes at dawn, and driving to the post office myself," he said. Cash flow teetered on the edge as he bootstrapped, reinvesting every dollar from sales into inventory.

"Woodworking taught me patience, but starting KM Tools tested it like nothing else. Every splinter under my nail was a reminder: build what makers need, not what looks flashy."

Community became his lifeline. Forums like Lumberjocks and Reddit's r/woodworking buzzed with feedback. Jonathan iterated relentlessly—thicker aluminum for durability, modular designs for versatility. By year two, repeat customers formed the backbone of revenue, proving product-market fit in a niche few investors understood.

Milestones That Built Momentum

The first real milestone arrived in 2017: landing KM Tools' inaugural wholesale deal with a major woodworking retailer. After months of cold emails and trade show demos, the order for 500 router sleds validated demand beyond direct-to-consumer. Revenue jumped 300%, funding a move to a 2,000-square-foot workshop.

• 2018 Pivot to Direct Sales: Spotting gaps in big retailers' offerings, Jonathan launched an e-commerce site. Custom jigs for dovetails and box joints flew off virtual shelves, hitting $500K annual run rate.
• 2020 Expansion Amid Pandemic: Lockdowns boosted DIY woodworking. Jonathan hired his first employees—two machinists—and introduced the Slab Flattening Mill, a bestseller that processed 4x8-foot slabs with CNC precision. Sales doubled to $1.2M.
• 2023 Product Line Maturity: Launch of the KM-12 Dowel Maker streamlined joinery, earning rave reviews. International shipping to Europe and Australia added 20% to revenue.
• 2025 VC Breakthrough: After a decade of bootstrapping, $2M in later-stage funding from manufacturing-savvy VCs. This fueled factory automation and team growth to 15.[1]

Not every step was smooth. A 2021 supply shortage delayed orders by three months, testing customer loyalty. Jonathan pivoted by offering free upgrade kits, turning frustration into advocacy. Another pivot came in 2022: from pure hardware to bundles with digital plans and video tutorials, creating a full ecosystem for woodworkers.

By 2025, KM Tools shipped thousands of units monthly, with a cult following among YouTube creators and pro shops. Gross margins hovered at 60%, a testament to disciplined operations. Jonathan's North Star remained creator-led: every tool designed in the shop, tested on real projects, refined by user input.

Lessons from a Woodworker's VC Leap

Jonathan's path offers hard-won wisdom for indie hackers and early founders chasing sustainability over hype.

1. Discipline Trumps Hype in Fundraising. After ten years of proof, Jonathan entered VC talks with data: three years of 50%+ YoY growth, $2M+ ARR, and 40% margins. "We approached venture fundraising with the same discipline we apply to product development: clarity, proof, and momentum," he told Business Insider. He ignored flashy funds, targeting partners who grokked manufacturing and DTC brands—those adding ops expertise beyond checks.[1]
2. Build for Makers, Not Markets. KM Tools thrived by obsessing over user pain. Jonathan spent weekends in the shop, not boardrooms, ensuring tools like the router sled saved hours on flattening. This creator ethos fostered evangelists who spread the word organically, driving 70% of sales via referrals.
3. Scale Operations Before Ego. Resisting premature hires, Jonathan automated incrementally: CNC upgrades first, then ERP software for inventory. This kept burnout at bay and margins healthy, proving bootstrappers can VC-fundraise from strength, not desperation.

"VC isn't the endgame; it's fuel for the mission. We prioritized partners who understood manufacturing, consumer products, and creator-led brands, and who could add strategic value beyond capital."[1]

These insights resonate beyond woodworking. In a world of AI wrappers and viral gimmicks, Jonathan's story shows deliberate building wins. Niche mastery led to a $2M raise in a "tough" VC climate, where retail startups scraped for scraps.[1]

A Leap Secured

Today, KM Tools stands as a beacon for disciplined founders. Jonathan eyes automated factories and global expansion, all while hosting free workshops for local makers. His garage origins fuel a multimillion-dollar operation, proving woodworker's grit scales.

What is your biggest takeaway from Jonathan's journey? Have you bootstrapped a niche product to VC? Share your thoughts and stories in the comments below!