Vettery was almost too lean


Date: Mid-2016

Outcome: Raised $9M Series A. Acquired in 2018 for a reported $100M.

Vettery, a product I would describe — in what I feel is a massive compliment — as LinkedIn if it was designed by Apple, got a little bit of ink┬áback in 2016 for the sheer simplicity of its Series A deck. At a glance, it is full of simple visuals and is probably meant for presentation instead of reading. It is the antithesis of Carta’s deck, which I raved about.

But its simplicity makes it easy to demonstrate how some of the rules change between seed (when you probably don’t have product/market fit) and Series A (when you probably do).

If Carta’s deck was sharp and to the point, Vettery’s was fuzzy bordering on impressionist. Yet it delivered a powerful message even though it was high level almost to a fault.

What do I mean when I say the rules change between seed and Series A? Investors start judging you less on what they think of your team and how much they buy your story and more on your demonstrated results and what they suggest about your growth trajectory. In extreme situations, they don’t care about you or your product at all. They just care about the cash coming in.

So what do we have here? There’s no description of the problem or the market. They roll right into talking about the product. But they only touch this at an extremely high level. These aren’t even bullet points. Vettery’s core priorities are just floating there for the viewer to mentally associate with these two user stories. It’s a fascinating choice that makes sense in the context of the deck and the team’s design sensibilities.

In the room, this could be an opportunity to talk about how important these pieces are, how Vettery excels on these dimensions, and how they contrast with the status quo. But that’s optional. The real meat of this deck is in the next two slides.

All of the data is obscured here, but we don’t need to talk about the specifics. In fact, this fits perfectly into the overarching theme of this post. The team probably went into some more depth when they pitched in person, but they’re visualizing some of their key metrics and they are all going in the right direction. I don’t need to know any particular month’s GMV. When I first scan through this deck, it’s obvious at a glance what the trend is.

After they make the case that the company is doing well early on, they come on with the market size slide, which establishes that it’s a large market and that there are other big players. But it also suggests something else that might get an investor thinking (and which they would later confirm in their research): If the U.S. market is $120B and only 14 companies are making more than $1B in revenue annually, that sounds like an extremely fragmented market. A fragmented market suggests a patchwork of services that don’t play well with each other and a hodgepodge of inconsistent user experiences.

They framed the opportunity as particularly ripe, then showed why they were uniquely ready to capitalize.

You might have noticed a particularly glaring omission in this deck: There’s no team slide! Blasphemy! But consider the big picture: the product was in-market, the company was a known quantity, and the team was easy to find. They were cashflow positive. I doubt this team was cold emailing dozens of VC firms. Why waste a slide when your audience already knows exactly who you are?

Other notes:

  • I have used Vettery as both an employer and a candidate and I was shocked when I found out it was a subsidiary of a giant company. When you’re used to the kind of design, responsiveness, and cohesion you get with LinkedIn and Indeed, a product this delightful seems like it could only come from a small, focused team. Turns out it did — the company only had 25 people when they raised Series A.
  • There aren’t a lot of numbers in this deck — and rightly so given the direction the team chose — but I got nervous when I saw “Candidate Acquisition Cost: $77 | Average Revenue/Placement: $15,960.” Recruiting is a crowded space; they have costs associated with the employer side of this product too; the employer is the party paying; not everyone candidate will get hired… Is that really a helpful metric or just two numbers meant to underscore an eye-popping profit margin? If I was sitting in that room, I would have believed the overall story but I would not have felt good about that assertion.
  • Consider how the business model — no advertising, hiring company pays per-hire — drove Vettery’s product decisions and resulted in a clean, delightful, and personalized experience on both sides. Look at the competition slide: On the left are ad-driven businesses. They are essentially volume businesses where recruiters and job seekers alike are sifting through mountains of detritus. On the right are expensive full-service agencies. The products in the middle — including Vettery — all have similar business models and all trade on having vastly better user experiences. And there are some markets where you can never over-index on the user experience.
    • It’s important that they demonstrate their attitude towards design through their design of this deck because it’s the only time they know for sure they’re going to be able to communicate that.
  • I’d love to know how they made the decision to sell at the $100M price. It was probably a profitable exit all around, but I’d guess it was at best 2-3x the Series A valuation. That’s not an amazing venture-scale outcome. Having access to an enterprise salesforce and a toehold with Adecco’s existing customers might be a big advantage for Vettery, but it feels like Adecco got the better end of the deal.

Carta’s headlines were better than this one

(Originally eShares)

Source: Carta itself.

Date: Early 2015

Outcome: Raised $7M. Raised $17M later in 2015 and another $42M in 2017.

Here’s a common error that founders make on their decks: They write lazy, boring headlines. Yes, investors have a real list of things you need to hit in your deck, but they’re not learning to read. Literally title a slide “Problem” and you’ve just wasted 30% of your visual space. And because you won’t be there to walk them through the deck the first time, you’re forcing them to understand whatever complicated or abstract visual you use with incomplete context.

There aren’t enough hours in the day. They’ll either pass without a second thought or you’re going to have a single unproductive meeting with them and that will be that.

Carta (again, formerly eShares) shows us how it’s done. This thing is a masterpiece of headlines. Watch this.

What is eShares?

eShares is capturing the next generation of IPOs. We are an SEC registered Transfer Agent. We issue electronic shares, options, debt, and derivatives. We automate their approval and compliance and track the shareholder registry.

How do you make money?

We charge $20 per transaction and everything else is free. Then we add bundle-on services such as 409A.

How are you doing?

We are growing revenue 40% month-over-month. Cohorts continue to contribute over time. Our customers love us. I mean, they *really* love us. And they are getting larger and larger and getting traction with the law firms. Our product is beating Solium head-to-head. Perkins Coie chose eShares after an in-depth evaluation.

We are lean and mean. We are a small product focused team raising $6-$8M Series A to converge private market.

That is all in the headlines. I changed nothing and omitted nothing. With this deck, an investor can understand this company in less than 60 seconds. It directly hits everything on the list except the specific customer problem, and that ends up addressed later on. In any case, their demonstrated growth and traction implies the existence of a real problem that the team understands very well.

Because the full story is told in the headlines, the rest of the content carries much more weight — when an investor has a question, it’s usually addressed somewhere in the details. The deck essentially pitches itself.

So how does that square with CEO Henry Ward’s takeaways from this fundraising process? If the vision was so clear, why did so many VCs pass? (Read the whole post. It’s wonderful.)

It is hard to get investors excited about a problem that doesn’t personally hurt them. Even one degree of removal from the problem is too far for many VCs. If they haven’t personally managed a cap table for years because their lawyers are doing it or their founders are handling it, they were never going to fall in love with the problem. And if — as Henry suggests — their addressable market wasn’t large enough for dollar signs to trump all other concerns, then they needed to deeply understand and care about the problem and believe that the team could go all the way.

It’s a grind to make that happen until you find the perfect investor. And it can take a lot of no’s to get there. A good fundraising process can feel very slow… until it closes at lightning speed.

Other notes:

  • I’m not a fan of the visuals that are basically examples of what the product looks like. Especially in the first part of the deck where they’re showing off electronic stock certificates and SEC documents that don’t really mean anything to the investor. But I’m not sure what else I would put there. If I thought it was a real problem or I was looking to shorten the deck, I’d probably compress those slides 4-7 into a single, all-text slide.
  • Great use of the market landscape right at the beginning to illustrate where the other players in the market are and how Carta will land and expand.
  • Solid discipline on the revenue growth slide. They may have been able to display a very impressive paying-customer conversion rate — if it’s growing over time, that’s a great sign — but the slide was already cluttered and the revenue speaks louder.
  • Carta may be telegraphing a vision of a marketplace for private equity by practicing it on its own employees.
  • Okay, they’re practically trumpeting it.