From Inception to Iconic: All Raise x Mayfield

It is never a straight line from inception to achieving breakout status for companies.

Entrepreneurs navigate many stages of getting the world to share their vision – inspiring employees with their mission, getting investors to write the check, propelling customers to buy the product and most importantly, growing as a CEO.

In this session, entrepreneur whisperer and investor Rajeev Batra (Marketo, Servicemax, Outreach) chats with three founders that Mayfield has invested in – Sandi Lin, CEO of Seattle-based customer training leader Skilljar, Christina Ross, CEO of New York-based modern FP&A software provider Cube and Janice Chen, CTO of Bay Area-based CRISPR platform Mammoth Biosciences – to share their learnings and highlights from their journey.

Transcript

Rajeev:
Thanks everyone for coming and attending. I don’t do these that often, and it’s a pleasure when I get to, especially with guests like Christina Ross, Sandi Lin, and Janice Chen, three female founders… Actually, I should stop using the word female founders because I believe they’re just founders, and I have a certain philosophy about these things. And, Sandi and I often talk about this when I tell her that I truly approach the world being blind to color, gender, race, et-cetera. And, life circumstances, because I’ve, myself, wanted to be treated that way, but I also recognize that that’s not how the world works always. And so, it is all of our responsibilities to promote and work hard at creating equality at every single level and do what we can do.

So, I take that responsibility very seriously, and I hope it’s a lifetime of work that I can continue to dedicate myself to. And so, I’ve had the pleasure to work with Sandi and Christina, and other CEOs in the portfolio who are not men, not of traditional backgrounds. As a matter of fact, I’ve also worked for two venture capitalists who are not men. I’ve worked for a number of venture capitalists who are males, but I’ve also had the pleasure of working for Virginia, who was a great mentor and Heidi Roizen as well. She’s one of the key people who was responsible for having me come out to Silicon Valley and had me put on this path of pursuing venture capital. So, I’d like to thank everyone for being here and giving me this platform to have a fun conversation with Sandi, Christina, and Janice.

I’ll just kick off with quick introductions. I’m one of the partners at Mayfield, I help lead the enterprise software practice and I focus and specialize on application software, SaaS. And that’s what I’ve been doing, supporting entrepreneurs in that area for 14 years here at Mayfield, and I did venture capital at a couple other places before this. I have been in the enterprise software industry for a while, both as an entrepreneur and as an executive. So, with that, I’d like to introduce the panel. We have Christina Ross, the Co-founder and CEO of Cube Software, and Christina, maybe you can just give a… Maybe, I’ll just do a quick round table, and then you guys can talk more about yourselves and introduce yourself. So, we have Christina Ross, the Co-founder and CEO of Cube Software based out of New York. Sandi Lin, the Co-founder and CEO of Skilljar based out of Seattle. And, we have Janice Chen, the Co-founder and CTO of Mammoth Biosciences. And Janice, you are in San Francisco, or Berkeley, or where are you based these days?

Janice:
San Francisco, these days – the company is in Brisbane, which is just north of south San Francisco.

Rajeev:
Great, so why don’t you go ahead and introduce yourself and a bit about why you’re here and what do you hope to share with the audience today?

Janice:
Sure, thank you so much, Rajeev, for the introduction, and thank you to All Raise for giving me the opportunity to be on this panel with these amazing founders. It’s truly a privilege to be able to talk about our journeys. And so, my name is Janice Chen, I’m the co-founder and CTO of Mammoth. I actually consider myself a scientist founder, so coming in from the life sciences biotech industry. A little bit about my background – I did my PhD in Jennifer Doudna’s lab at UC Berkeley. And, you may know her from her recent Nobel prize on the discovery of CRISPR as a gene editing tool. So, I know part of our goal here is to tell you a little bit about our stories and how we got to where we were to hopefully inspire others who are considering this path.

But for me, I never really considered starting a company. Part of considering my career options was really just talking to people, attending panels like these, and learning about what PhDs did and the next step in that career, both in academia and industry. And, I think a lot of what motivated me was having someone like Jennifer be a really strong mentor and really pushing me to think big. For me, the breakthrough moment was sort of near the end of my PhD when we discovered that CRISPR could not just edit DNA, but also detect DNA. And then, being able to show that the technology could detect cancer-causing HPV in patient samples was really what unlocked me and my co-founders to realize, okay, we have something really powerful here to be able to transform it into a company.

So, sort of after that moment, it was sort of an obsession for all of us to think about how can we actually build these CRISPR technologies to address unmet needs in healthcare and really building the technologies beyond just the academic lab. Coming out of grad school, there really wasn’t much to lose, and we just decided to take the leap of faith. So myself and my co-founders Lucas, Jennifer, and Trevor decided to come together and start the company. At Mammoth, we are developing this Nobel prize-winning CRISPR technology as a programmable search engine for the genome. And today, we are discovering and developing these novel CRISPR proteins to diagnose and cure diseases. And in the future, a platform will enable industries beyond healthcare, such as agriculture, bio-security research, and more. So with that, I’ll hand it over to Rajeev to introduce the next speaker.

Rajeev:
Janice, thank you so much. That’s a really inspiring, and I’m sure we’ll learn more about how you guys are as a team, sort of taking the journey, have taken the journey forward to truly building a groundbreaking platform company. Sandi, why don’t we go next with you?

Sandi:
Sure. I’m Sandi Lin, the CEO and Co-founder of Skilljar. We build customer education software for companies to deliver product training, and specifically we’re best at end users, customers and partners or people outside the four walls of your HR and employee system. I am an engineer by training, civil engineering actually, with a focus on transportation, and supply chain, and large-scale systems. Worked for that for a few years after undergrad then went to business school. I did not identify as somebody that would ever go to business school, so I’m happy to share that experience as well. And then, after finishing my MBA, I joined Amazon as a Product Manager in 2009. So, I have some pretty large company experience as well. I kind of always wanted to be an entrepreneur, my dad was an entrepreneur, I always had that little voice inside of me that said, can you do it? Can you do it?

But honestly, I was terrified about the career risk, the financial risk, the throwing myself off the cliff to all these things I wouldn’t know, and be responsible for. And, it actually has been terrifying, so I’m happy to talk about that as well. Skilljar now, we’re about 170 people, we’ve raised over $50 million in venture capital, 400+ customers. So, it’s been quite a journey and we pivoted a few times early on, but our mission is to create the win-win-win: where anyone can get the skills they need to succeed in a changing economy; where customers can get the full value of the products and services they’re trying to use; and where companies can also drive business outcomes through learning.

Rajeev:
That’s great, Sandi, thank you for that. And, you are changing the world in many, many ways, by enabling people to really be equipped in this new digital economy. I call it the new digital economy, but because today’s software is only, still 2% tech, still only sort of 2%, 3% of the GDP. And, equipping the next generation workforce, with the ability to use the products and services to do their job better is a pretty incredible thing to do. And while doing that, you’re also enabling incredible business success. And, it is pretty remarkable, all the wonderful things you’ve been able to do in the last few years. And, I think you’ve only gotten started. So Christina, you’re up next, you have a wonderful story as well. And both of you, Christina and Sandi share something in common that you both were Techstars entrepreneurs. And, I know there was some questions around advice on sort of getting into accelerators, incubators, et-cetera. And so, maybe you guys can share that too as well when you talk about this. So Christina, with that, please.

Christina:
So, my name’s Christina Ross, I’m Co-founder and CEO of a company called Cube. We’re a real time FP&A platform for modern finance teams and businesses to make faster, smarter decisions. And, I’ll start by saying that I know not everyone thinks of finance as the type of company, or finance centric company, as being mission-driven, but we very much are. Our mission is to elevate the role of finance in an organization. When you think around the corporate table, who often has the seat that’s thought of as the back office, and that’s typically the finance persona. It’s ready for a rebranding, it is still thought in many ways, if you know the movie Office Space, stapler in the basement. But, the reality is the future of finance is incredibly strategic. And, it’s the difference between companies that do not do well or fail, and the companies that really excel.

We’re also moving finance from being a cost function to being a growth function. I’m a former CFO, I very much have been a startup groupie in many ways, for most of my career. After being at big companies like GE and a consultant with Deloitte, I found this little company, no one had heard of called Rent the Runway. There were maybe 30 people at the time, and I joined as their first head of finance. And, I repeated that journey a couple of times through different startups. And, one thing I learned in that journey was how important the finance role is to survival in companies, in stages like these and how misunderstood they were. And, one of the reasons why they were misunderstood is they weren’t empowered to do the work that they were there to do because they spend all their time manually aggregating data on all these different spreadsheets.

So, I’m sure some of you are dealing with that now or have seen it. And, what we built at Cube is a financial planning and analysis platform to not only take away all the manual pain, but empower these finance users to make faster smarter decisions and be heroes within their own organizations. So, I’m super excited to join the panel today because I felt like when I was first fundraising, there was this unwritten playbook that I didn’t have access to. And, if someone had opened up that playbook for me, it would have saved a lot of challenges. There’s so much growth and so much journey ahead still, but hopefully we can share some of those pages with you all today.

Rajeev:
That’s great, Christina, and I think it’s important to underscore again that it’s hard to get inspired by boring software – what’s software? What can it possibly do? But if companies can make better decisions about where to allocate their resources, both financial, human, and other resources, they can drive better outcomes, right? Innovate, create better products and services that actually make an impact and change the world. So that’s the connection between that and really bringing things to life. And of course, Janice, your company is at the forefront of transforming so many things. And, it speaks very closely to me and some of the causes I’m involved with given I have a special needs child.

A lot of the research that is being done around finding a cure for his condition and the condition of many children like him has benefited from CRISPR technology to create, for example, mice models and other things. And, it may even have efficacy and the eventual therapies that they might come across. So, I think there’s a few questions that came from people, and then there are some questions I think we have discussed together as a group and in our conversations. In terms of some of the opportunities and challenges you face as entrepreneurs in raising capital, hiring people, building companies, creating winning cultures. Maybe, we start with a topic around fundraising. I think that’s, that’s probably a pretty key and important one, all of you have sort of touched upon it.

I have two questions I really want to dig into – one is fundraising, there’s a few questions here. I’ll just rattle them off, and then let’s sort of make more of a dialogue around this. How do we fundraise when we don’t have product market fit? If the MVP is primitive, is their a chance to get funding? Do VCs invest at the early stages, pre-seed seed, et-cetera? And so, if you are in beta and pre traction, what are the most important data points to share when applying for grants and accelerators? Is it market size, potential revenue? Are there tools and services you recommend that can help guide a new founder estimate that stuff?

So, the point is, it feels like there’s questions around what stage do I need to be in order to engage in a fundraising process and what are some places to start? Do I go to VCs? Do I go to Angels? Do I go to friends and family? Do I go to incubators? Why don’t we start with you, Sandi.

Sandi:
All right, cut me off if I’m going too long because I have opinions. So, I think first of all, for kind of less demographically advantaged founders, this is actually a more important issue because often we don’t have the same access to generational wealth or high net worth individuals. My parents were immigrants that came to this country with nothing. So the, oh, you can self-fund yourself financially or hire a team that can self-fund themselves financially often becomes a more acute issue, I think for less represented founders more than others. And then, also I can say for me personally, I very much upfront decided I was not willing to go into credit card debt and/or sleep on people’s couches, or all the sort of war stories you hear about fundraising.

And that was a decision that I made for myself early on. So, I think one of the secret playbooks or pages that Christina mentioned is that all of the dialogue for early stage fundraising, prototypes and traction, a lot of that is just a way for the investor and the entrepreneur to get to know each other, because there are angels through VCs that will fund on a PowerPoint and there are angels and VCs that will not fund through a PowerPoint. And, the same fund, or person, or partner will say one thing and do another in any given situation, so it’s all situational. And so, a lot of the dialogue around these very fundamental business questions is more around kind of getting to know you, get to know you as a person, get to understand how you think about the space.

So for me, and I started this company in 2013, so the environment was very, very different, and I was also terrified by the fundraising process and asking for money. So, the idea of applying to an accelerator made a lot more sense for me because I kind of understood that process, right? I’ve applied to schools, I’ve applied to jobs, I kind of knew how to get through that. And then, it doesn’t hurt to apply, and if you get in that gets you along another milestone to the journey. So, I think the accelerators were much more prominent in the early stage fundraising ecosystem back in 2013 than they are now. But I’m very glad that I did so in hindsight, because I think it helped get… There’s a big difference between having zero money and having $100,000, or what it was at the time, because it’s a huge difference in terms of just being able to pay your annual bills, out of something that’s not your own pocket.

Rajeev:
And that, was Techstars Seattle, correct?

Sandi:
Correct.

Rajeev:
Great, okay. And Janice, how about you, how did the fundraising process start for you, or how did you even think about it?

Janice:
Yeah, so first of all, for us, fundraising has been a team effort. I’m not the CEO, so I didn’t lead the fundraising effort. Our CEO, Trevor Martin, is the one that led that effort, but it really was a team effort between the founders, and sort of the core employees at Mammoth. And certainly in the early stage, like Sandi said, I mean, everything’s so vulnerable, right? It’s kind of a chicken or the egg problem, I think is what a lot of the questions I think we’re getting at. You don’t have the capital, so how do you get to showing your prototype works, but you also need to show your prototype works to get the capital, right? So, there is kind of this dilemma, certainly in the early stages. I think, I can speak really only to my experience in the biotech industry.

And, this is my first startup and really my first real time job. So, I come from a unique, I guess, background where I came to this with completely fresh eyes, which has been great, but also has also been really challenging. For our industry, biotech is extremely capital intensive, it’s really hard to bootstrap. You need lab space. A lot of what’s great about coming from academia is that you do… At least in my case, we were able to do a lot of that proof of concept work as part of our research as PhD students. So, a lot of the early prototypes, if you will, were done as an academic graduate student, and we’re able to out license that technology or in license that technology to Mammoth from UC Berkeley. We had, again, a lot of great networks being in the Bay Area, being in Jennifer’s lab, connecting with Trevor, ultimately connecting with Mayfield and getting a lot of momentum around, okay, getting alignment on what is the mission of the company? How can we continue to build this platform and kind of leveraging, again, the resources as well.

Particularly, with incubators, I think for biotech companies, that’s really critical to get the lab space and show initial proof points early on. And ultimately kind of lay out a plan that you can execute on. I think, the other piece for fundraising is, for us, it was really important to make sure that we were in a position of strength when we were to go out fundraising, just to make sure that we could really leverage kind of the value creation that we had been developing at the company. But certainly, in the early days it’s hard and there’s a lot of uncertainty, but it is just being super thoughtful about who you’re talking to and making sure that the investors that you’re interested in are really aligned with you, the founder, and the company, and the mission.

Rajeev:
That’s great, and Christina?

Christina:
All right, I have a few thoughts, so let me just cover some of them. First, is I’ll start with a warning, which is, you’ll get a lot of, “why don’t you just” advice, which is what I got during the finance journey of, oh my buddy, so-and-so started a company, and he raised like $15 million before he had anything. It’s okay if that doesn’t happen to you, because you’ll hear the stories of the one-offs, you’ll hear the stories of the 1% of deals that make it worth talking about. So, fundraising is hard despite the fact that you’ll hear lots of stories about how easy it was for some people, it’s hard. Two, my fundraising strategy was to play Moneyball because the beginning is the absolute hardest, in my opinion. And then, it gets a little easier, and a little easier, and a little easier.

And if you know Moneyball, the idea is to get on base. And so each step of the way is you’re making progress in your journey, in your startup, it’s to get on base, it’s to get the next win. And, getting my first dollar of funding was moving a boulder up a mountain. So, I really resonated with Sandi’s point of, zero money and $100,000 is such a big difference. And at later, stages of fundraising, $100,000 is nothing. At early stages of fundraising, $20,000 would have made all the difference in the world. So, just make that incremental progress to get on base because that’ll allow you to go further and further. I think, the other really important thing is your fundraising, that it took me a while to figure out, is it’s all about fit.

So now, that I’m a lot more involved in things like sales and marketing, everything I relate to a funnel or a funnel exercise of what comes in at the top of the funnel and at the bottom. And, when you’re fundraising, you’re thinking about your investor funnel, they’re looking you just as much as you’re looking for them. So, one thing that changed my mindset on things was actually being in a dinner where it was mostly investors and a couple of founders, and the way they were talking about founders, how do we get in these good deals? And I was like, wait a minute, they’re all fighting over us, I thought we were fighting over them. So, get your mindset in, they’re looking for you, you’re not just looking for them.

And then, when you think of that funnel, it’s all about the right fit. If someone rubs you the wrong way, you don’t have to work with them. If, someone doesn’t understand your space, then that’s their loss. I spent so much time trying to get people to understand what our company was and how it worked, they weren’t going to be the believers because they didn’t understand it. And so, what I should’ve done is moved along earlier rather than trying to get them to see my side. So remember, it’s ultimately a fit exercise, I’m sure there’s lots of other nuggets, but those are a few things for me.

Sandi:
I was going to add also, there is a deal out there for you, especially now with AngelList and all kinds of virtual ways. You no longer have to just pitch local people in their area. So, I completely agree with Christina, I think for my first round, I pitched over a hundred potential funders, and I had actually set myself a quota where even before I was fundraising, I said, every week I’m going to meet with one new person that could be an investor in my company. And, I held myself to it, because it was very uncomfortable for me. So, there is a deal out there for you, and it’s like work.

Rajeev:
That’s some great advice. I think, a couple key things I heard here, there’s some questions around what stage should I be fundraising? At what point should I go out and start fundraising? And, I think fundraising in a way, it is a state of mind because you need capital, some sort of capital to develop your product or service and get it out there. And so, there’s an old adage that says, entrepreneurs or founders should always be fundraising. And, I don’t mean that in the sense of, you have your business to run and your product to build, but there’s this concept of you do need capital, so you always have to kind of be attuned for the fact that you are open to capital or capital conversations, especially in the early days. Because let’s face it, it’s hard, right?

So, you kind of have to have almost this subconscious background process running in your mind that this is something you have to do. Because it is not one of these things that you’re going to do all this stuff, and then you’re going to go fundraise sort of in a serial fashion, right? Yes, at some point that’s what it becomes. But, I think it is a bit of a state of mind, because in the early days, it’s the people who believe in you, they really have to believe in you and they have to believe in what you are trying to do. And, they have to be comfortable with the fact that whatever it is that you’re going to do will also change, and evolve, and morph. And so, it’s a little bit of both of those things.

And, it is a bit of a, sort of this somewhat amorphous exercise, but it’s a state of being, state of mind. And like Christina said, hey, you’re at a dinner, there’s like eight, nine people and their investors. If, you have that sort of background process running in your mind, you’re like, wait a second, these are potential investors. Now, one of them might be interested in what I’m doing or none of them might be, but they like what I’m doing, or who I am, and what I represent. They might say, listen, it’s not for me, but I know somebody else who’s really looking for something like this. So, I think that’s an important part, and the other thing I would say that I’ve observed is, there are a lot of people out there who want to support entrepreneurs. Especially, in today’s day and age, I think, A, they want to do that, B people have a lot of money.

If people haven’t noticed, the Fed’s been printing money at a prodigious pace. And so, there is that opportunity, one just has to also believe it’s possible, right? I think, yes, it’s hard, and the statistics are not very encouraging always, but I think first of all, one has to believe that it’s possible. And, that’s an important component. One question I have for all of you: at what point, and this is connected to fundraising in a way. Was there a specific point in time at which you said, I’m going to go start this, I’m going to be an entrepreneur – there’s a shift that happens in your mind.

And, was there a shift that caused you to say, this has to happen, I’m going to succeed at this and you crossed a threshold? Because, I think that’s an important part to making a commitment to becoming an entrepreneur, and then sort of raising capital then becomes part of it, right? It’s this moment that you cross this threshold. I’d love to hear that from the group here. And, did that conviction help in sort of saying, I have to find capital now, and now I’m going to go execute on some strategy?

Christina:
I can answer that. I knew I always wanted to be an entrepreneur because I became this entrepreneur groupie where I was doing startups, but I wasn’t the one in charge, so something was always inside. The way I made it happen though, that was the hardest part. So, the mind shift for me was how do I now move my life around this thing that I really want to do? How do I take what’s in here and make it part of my environment? My story was I had a full-time job as a CFO, I was making good money. I had two and a half year old twins at home, I was in my mid thirties, this isn’t really the time you start a company and take no income in. But for me, if I didn’t do that at that moment in my life, there’s no way I would have done it 10 years later.

That’s the story that I told myself to make the change. And, I had a conversation with my husband, there’s actually a very specific story where we were going to buy a house. And, we said, well, if we buy this house, we have to get a car, maybe two. And, we have to maybe have someone to watch the kids during the day. Anyway, I’ll make a long story short, we realized we would be tied down financially and I would never be able to do this. And so, we made a decision that in order to be the entrepreneur that I felt up here, I was going to have to change my life. And so, like Sandi said, I didn’t want to sleep on someone else’s couch. But for us, that meant some other sacrifices. And, I gave myself a time limit of a year, of, if I’m not making the right amount of progress in a year, I’ll revisit this.

And then, it was off to the races. So, I spent a good six months of time before I quit my job, really understanding what it meant to be an entrepreneur, reading every single book. Not about how awesome certain people are, but literally how hard it is. Because, if you prepare yourself for how hard it is, I don’t want to say it’s not hard, but it doesn’t surprise you. So again, I’ll use the example again, that I had twins and everyone told me it’s the hardest thing that ever happens to you having two babies the same age. And, when I did it, it wasn’t that bad because I was prepared for it to be the worst thing that ever happened in my entire life. And of course it was wonderful, but same thing with being an entrepreneur, everyone’s like, it is the hardest job in the entire universe. But, once you get yourself there mentally and get your environment there, then there’s no stopping you.

Rajeev:
And Christina , and how your first check come about? There’s a lot of conversation here, I’m seeing a lot of comments on, what was your first check that gave you that confidence and that allowed you to… And, did things accelerate after that? And, how many people did you raise capital from in your sort of early, early phase? And, was that before Techstars, after Techstars? And, you were in Techstars New York, right? And so, when did that first capital show up, and where did Techstars fit in? And, maybe we talk about a little bit about how you seed happened, and how you series A happened, so people get a little bit of a full picture here?

Christina:
Yeah, I had a lot of, “why don’t you just” advice in the beginning. And everyone’s like the market’s so frothy, everyone’s so wealthy, just have 10 people write you a $50,000 check, you’re all done. I’m like, okay, who are these people who are going to be writing a $50,000 check? I didn’t have the network of wealthy people, I knew a couple. I have like a rich cousin and I got a check from him, but this was a friends and family round. And, you can only pull together so much in a friends and family. But, I wasn’t getting the $250,000, $500,000 that I would need to hire people who were really going to commit to building this product with me. So, I actually started cold calling or cold emailing, I looked out on LinkedIn for people who were associated with my somewhat niche-y industry, and pitch them, literally just live pitch them.

And, I got some initial interest, but I also didn’t know how to close at the time, how to close an investor. And so, I had a lot of people sort of waiting for the round to come together before they commit their checks. And, it really took one final yes, so by the time I got the yes from Techstars, if you’re in the program, every other check… Once people heard this one signal from the market, my round literally closed immediately. So, I went from maybe having 150K to 600K in two days, covered. And then, once I had that, I was oversubscribed for my round, before I knew it, I was picking which investors I wanted or not in my pre-seed. And, we ended up having to cut it off at 1.25M.

So, it was a waiting game for the signaling. I see in the comments here, “What does good at closing look like?” So, I saw this in some of the other questions before, I was new to asking for money, and the first problem with what I just said is, I’m asking for money. I’m not asking anyone for money, I have a really amazing business that, if you’re lucky, you have the opportunity to invest in. That’s a mind shift change. So number one, I had to get out of the, I’m asking you for money for my business, and instead it’s, I have a really cool opportunity, I might have some space, maybe I can let you in. And, one piece of coaching that Techstars gave us was the language you’re using. It’s maybe I can squeeze you into the round, how much do you have? We have a certain amount to allocate.

So again, you’re thinking of it like a constraint and resources is part of it. And then, when it comes to closing, people might have some objections. So, it’s like closing a sale, too. You might ask them, they were like, oh, this is interesting, I could be interested in investing. And then, I used to leave it there and be like cool, I’ll call you later. Instead, now I asked them, well, what would it take for you to get to say 25, 50K? And, they might say, well, I really want to see another small fund in the round. Okay so, assuming there’s another small fund in the round you’re in. So get their specific objections. And then, when you get that fund and you call them, then you come back, so that’s the soft close. And then, when you want them to write the check, say, I needed in 24 hours, give them a time limit, and the round is closing.

So, you get them from whatever objective they have to saying, assuming that objective is met, we have a deal basically, and then get them to the other side. Because, everyone wants to sort of commit, but never go all the way. And then finally, the seed and series A are longer stories. And we want to give them more time to Sandi, and Janice to cover.

Rajeev:
Christina, that’s wonderful, and I can testify to Christina’s approach because she worked this magic off of the fundraising, painting an amazing vision for the company that she was building, her background, why she is committed to it, and the product that we’re building. So much so that Mayfield preempted the series A. We preempted the Series A by probably, I don’t know, 12 to 18 months, is that fair?

Christina:
Yeah.

Rajeev:
And so, she did do this Jedi mind trick on us as well, and we’re glad that it worked out. Sorry for the Star Wars reference, but Christina’s starting to do sports references and Christina’s not a sportsperson, so I’m really excited to see that. And I think, one thing that Christina, you’re describing here and Sandi you’ve described this as well, is that fundraising is a sales process. It is a sales skill, and I believe that every person in the world is in a way a salesperson. You have to embrace selling a little bit, and especially as an entrepreneur, you’re always selling, right? You have to attract capital, you have to attract customers, you have to attract employees. And oftentimes, I find entrepreneurs, especially product entrepreneurs – and I apologize if I sound a little judgy here – but there’s a little bit of aversion to, I’m not a salesperson, I’m a purist, I’m creating a product and this is going to change the world.

But, deep down we’re all salespeople, and selling done right is a good thing, because selling is about solving somebody else’s problem. And, it’s a very empathetic act because it implies that you listen, you pay attention and that person is trying to solve a problem and you have a solution for them. And, in the case of Christina, the way Christina has described this is they want to invest in you. They want to invest in an innovative company, they want to invest in entrepreneurship and entrepreneurs. And yes, they want to make a return, but this is really risky stuff. So, they are seeking a company and a founder to invest in. And so, if you tap into that, sort of think about it from that standpoint.

I think it is about understanding their needs and seeing whether what you have to offer them fits that. And so, thinking about it as sales and developing your inner salesperson, I think is something that I would encourage people to really think about and embrace. And, if it’s a place where you need help, get some skills around that, or even role-playing and working with your friends, et-cetera, it’s okay to do that.

Sandi:
Especially if we’re talking about angels, a lot of time, their goal isn’t necessarily to make money from an investment, it’s around what they can say to their friends about what they did lately, who else is in the company – I co-invested with so-and-so. And so, this is where they kind of hoard to the close, especially early stage investors are a little bit driven by fear of missing out and what else is going on. And so, to me, a lead, our quote unquote lead was not the biggest check at all, but it was somebody I knew had a lot of cache with the other, in my case, Seattle investors. And so, nobody has to know how much somebody else is putting in. Yes, it’s going to come out on the closing docs eventually, but your lead can be somebody put in $5,000, $10,000 in, but you say so-and-so is leading the round.

If, they have the right brand reputation, that will get other people to move too, especially when they want to co-invest with so-and-so, right? And then, I’m not familiar enough with the actual transaction vehicles anymore, but I think there’s SAFE and other types of convertible things where… I mean, part of Techstars coaching is also set your first goal really well, so you’re always 50% full. So, if keep your first, we’re raising 200,000, from friends and family. Even I was able to cobble down, I think a 100K of commitments from my own savings, and like Christina, I had also given myself a year. I had saved to make this possible, I had every moderately non-poor person I knew was asked to participate. Of which, you’ll be able to hustle up, with enough effort, some degree of funding, and then you’re 50% closed. And then, all of a sudden, the next day you’re oversubscribed. So, you’re expanding the round and that’s a bit of the psychology.

Rajeev:
Yeah, that’s great. And look, there’s a balance, look fundraising is difficult, especially in the early days. But, with difficult things also comes appreciation for the resources that you acquire. And then, how you think about spending them. I do wish that fundraising were a bit easier for entrepreneurs, especially for, entrepreneurs of diverse backgrounds and women. It needs to be easier, but there is something to be said about fundraising. The barriers to fundraising actually do create an appreciation for the capital you have and how you’re going to go spend it. And, because overcapitalization does create a lot of problems as well. And so, I do believe that when founders do have a tougher time raising capital, they build different types of companies. I’m not suggesting that fundraising should be made difficult, but I always think about silver linings – anything that’s hard usually produces, right? Like diamonds are created by putting a lot of pressure on things.

Let’s shift a little bit from early stage fundraising to a little bit about sort of the company building side of things. You have capital now, I guess one last thing on capital would be, is in the beginning, all capital is the same, it’s green, dollars are green and you just need the money. How do you think about the quality of the investors that you bring on board, whether they helped create a domino effect, or people who are helpful and provided you advice? And, how has that sort of affected your thinking as you built your company? Because, you need capital, but then you need things beyond capital. How do you think about investors and quality of investors as a component of fundraising and building your business?

Sandi:
I think, I might’ve gotten some advice from Rajeev once, that do no harm is a good place to expect from your investors, in the full range of things, right? Because for the most part, your choice of an investor, as long as they do no harm is not going to make or break your business. And, if you’re expecting them to transform your vision or whatever, you’re probably expecting too much. And, many investors can actually be destructive in terms of taking your time resource, kind of meddling with what should be management decisions. So, I think the first bar is do no harm. And then incrementally, I mean, it’s also true that there’s very few… And, what I appreciate, Rajeev and Mayfield is, that they can go the distance from early stage through IPO, but also realistically many investors have a sweet spot of, maybe they’re helpful in the early stage, but they’re not going to be so helpful in scaling the business later.

So at least for me, finding people that I could really kind of trust at the core value level. And, I don’t think it’s, for me at least, both my series A and series B leads had tried to invest multiple times, several years prior to actually allowing them to do so. And so, by the time that the timing was right, I always knew they were in it for the right reasons, that they were true believers in both me and the company. And I think for me, that felt really important. And, here’s where reputations with institutionals – both the partner and the firm – do matter. Because, there’s also cases, and you know what happened already to Skilljar, where sometimes a partner moves on for whatever reasons. And so, what is the firm’s reputation in those circumstances too, of standing by the company and standing by the entrepreneur?

Rajeev:
Yeah, we met Sandi when there were eight people in the company and I tried to preempt an investment in the company, I think, twice. And then, she finally relented and said, “Okay, fine, let’s do this.” So, thank you for that, Sandi.

Sandi:
Well, see, I had such a low view of investors, I didn’t trust any of them. Very bruised from pitching 100s, and especially being in Seattle, which is not an early stage capital rich environment. I think, the good advice is always run a process. And so for me, preempting was hard because I really believed I had to run a process. And then, for a series A, I said, I’m going to have undeniable tractions, so I’ll never have to go through this pain and suffering again. So that being said, I think when I spoke to Christina, I was like, “Take Rajeev’s money, because you can actually trust him.”

Rajeev:
So, let’s talk a little bit about once you have capital, how do you really think about deploying that capital? What are the things that are important to you? How do you sort of think about what’s next? So, you have capital, so what do you do? I mean, what are some of the biggest challenges that you face in starting to build your company?

Janice:
Yeah, I think that’s the most exciting part now that you have the runway, right? You have to think really critically about how you’re going to deploy the resources. I think, probably first and foremost, it’s really focusing on the product and the opportunity. It’s about building evidence for the vision, making sure you can really execute on the value proposition that you’ve defined for the company. I think, that it takes a lot of discipline, I think, as well to define sort of what the roadmap looks like for the company. I think, really being clear on what your value inflection points are. Again, I think it’s really critical to be in a position of strength when you are going to go into that next fundraising round, because as Rajeev pointed out, and Sandi and Christina, I mean, not all money is the same.

It’s really important that you have the leverage to talk to quality investors who will be able to… You have the ability to select your investors, I think that’s not necessarily the case for everyone, but if you are in a position of strength, you absolutely have the ability to say no to people that you don’t feel like are aligned with your vision. And, you don’t have to take the first check that comes through. So, I think being really disciplined on how you’re using that money, bringing in the best people. I think that’s probably number one for us, when we started out, we had the money, we said, look, who would be the best person in the world to help us execute. And that, was kind of where we focus because you can’t deliver on your mission if you don’t have the right people in your company.

Sandi:
Plus one on team, because the day you close your round is now the day you’re raising your next round, in a sense. And, to scale, you need people especially super early, and it is a war for talent out there. And, you need to give that person, the 18 to 24 months to scale the business… For them to assemble their team and scale, and I think there’s a question in the chat earlier about Techstars. Techstars specifically looks for team, right? Because, you’ve got to be able to convince those first… Well, for Techstars, at least one other co-founder to go in with you, at least at the time they didn’t take solo founders. And then, anything capital raise, and I’d love to hear Rajeev’s perspective, but on the investor’s mind is, how are they going to attract the team to take them to the next level as priority one.

I imagine in Janice’s business and some e-commerce businesses, you do have to like pay for stuff. Pay for lab of space, or pay for raw materials, but at least in software, my business and Christina’s business, a lot of it is about hiring people to build things or sell things. And so, being able get that core group together quickly and your selection of those people’s incredibly important.

Christina:
This is one of my favorite topics in the entire world, which is how to spend money and where to put it. It’s part of our mission, so I’m so glad I get to at least partially answer this question, but you have to think of capital or money as your fuel, and you either want to put more fuel into your business or pull back depending on how the business is performing. So, one common mistake I see at the very, very early stages, when people get their first pre-seed capital is actually not spending it fast enough because they want to make it last long enough. You just need to know that when you put that fuel in, what do you expect to get out, and are you seeing those results to determine whether or not to double down. For example, you put money into your business, you hire a sales person or another engineer, and suddenly you’re producing 10X more.

Then, put as much money as you can, as quickly as possible to get to that end state to raise more money. So, you sort of have to start with where is your next stage, which might be your next fundraise, or it might be a certain set of deliverables or milestones, and budget your capital to get you there. But, feel free to spend what you need to take you there, but also know when is the right time to pull back if you’re not seeing the results to give you enough time to meet those end results.

Rajeev:
That’s great, and in all of this ultimately, right, I know we were talking a lot about fundraising, and ultimately all of you are trying to build great products and services, create customers with the hope that eventually you don’t have to raise any more capital. And, that your businesses are getting financed through customers. And so, like everybody said, once you have the capital, kind of really thinking about what other key priorities the business becomes incredibly important. And from my perspective, financial capital, when you raise capital, it’s about turning it into human capital. And, that’s the number one determinant. And, I think while we have incredible opportunity now with remote and distributed work, it also presents a lot of critical challenges.

It is a really competitive market, so thinking really about key hires and being able to move pretty quickly, and making decisions pretty rapidly about things that are working and things that are not working. And, I do believe for most entrepreneurs, they probably spend too little time thinking about hiring. And unfortunately, hiring is a full-time job and you’re a full-time CEO, do you kind of have two jobs. But, that’s I think a pretty, pretty important piece. I think, we just have a couple more minutes left, maybe we’d do a rapid fire type situation here. One piece of advice for everybody in the audience today, maybe Janice, why don’t you go first?

Janice:
Sure, there’s so much really good advice I’ve received since starting. And, I think the one that’s kind of resonated with me most is just make sure that you’re really building your guiding principles and values for yourself, and for your company, and keep asking the why. I think, for me, and I’m sure for everyone else on this panel, that journey is really turbulent and unpredictable. And so, you’re going to experience a huge bandwidth of emotions, right? And, I think if you can understand your why, understand the purpose of what you’re doing, what the company is doing, it’ll keep you grounded and it’ll keep giving you the power to move forward. So that, would be my advice.

Rajeev:
Well said, Christina?

Christina:
Venture capital, if you’re assuming you’re taking venture capital, is a 10X, a 100X business, you’re going big. So, get into the mindset that whatever you’re doing when you’re pitching is big, big, big, your big, your idea is big, what you’re trying to do is big, And, get your head around that as opposed to, well, we can grow two, three X, and have an exit. No, we’re thinking big, so just get your mind around that. And that, was also game changing for me.

Rajeev:
Sandi?

Sandi:
I would say, in a different kind of track, take care of yourself, it’s your company and your ability to sell investors. Candidates will only reflect your own sort of mental and physical wellbeing. And, I know it feels hard, but you are not your company, it feels like your company, it feels like your identity, it feels like every rejection is rejection of you. And so, to keep perspective, take walks, try to eat healthfully, get enough sleep. These things are really important for you to be on your A game, because if you’re not in your A game, it’s hard for your company to be on it’s A game too.

Rajeev:
That’s great, thank you for that, I think that’s pretty spot on and amazing advice from all three of you. And, thank you for letting me be part of your dreams, and living vicariously through all of you. And, I really appreciate all the entrepreneurs here who are trying to change the world and really make an incredible impact. And, for me, I’m always just… I wake up just not even believing that I get to do this for a living every day, to work for each and every one of you. So, thank you so much.

Sandi:
Thank you for having us.

Janice:
Thank you Rajeev, and All Raise.

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