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.

Airbnb paved a desire path


Date: Fall 2008

Outcome: Entered Y Combinator. Raised seed from Sequoia. Is privately valued at $30 billion as of this writing.

One of my favorite pieces on design is 99% Invisible‘s explainer on “desire paths.” These paths illustrate that, regardless of how a space or product is designed to be used, people will depart from your design in favor of the path of least resistance. Or, in visual form:

In 2008, the hospitality industry thought it had a pretty good handle on how people made travel decisions. They thought they had a monopoly on trusted and safe brands and that to go downmarket meant dirty, scary motels or — shudder — hostels.

Airbnb saw a desire path.

airbnb slide 4

Something interesting happens when you find a desire path: You expand the market. Even Uber didn’t think that far ahead. And notice how Airbnb actually revealed TWO desire paths: people who were looking to lend out their couches and spare bedrooms were listing them on Craigslist — a platform in no way designed to capture this sort of activity — while many more people were looking for “alternative” (inexpensive and/or personalized) hospitality. None of this activity was being properly captured, even on Couchsurfing.

The hotel industry was focused on serving high-margin business and comfortable recreational travelers. They believed in the value of their brands. Airbnb saw millions of people who were looking for trustworthy temporary housing but who were priced out of most brand-name lodging. And they came along when many people suddenly needed to cut their expenses and bring in more money on the side to afford mortgages they could no longer pay.

They paved that desire path just in time.

When you’re pitching a company with a clearly-delineated market, it’s not hard to model how big you can get. But how do you think about your financial future if the market is hidden or dark? You have to find that desire path — what people are doing when there’s no product doing it for them. There are typically two places to find these.

  1. Data. That’s what that slide above is: A desire path hiding in plain sight. The hard part is that these desire paths will typically emerge in unusual datasets. It’s hard to find a hospitality industry report in 2008 that was talking about Couchsurfing or Craigslist. Read and learn across disciplines.
  2. Customer validation. You have a theory that a valuable set of customers doesn’t show up in the data? Build an MVP and see what happens.

Pair those together and you have a compelling pitch.

Other notes:

  • Most investors might say that, in a two-sided marketplace, you’re better off shoring up supply first before trying to scale up demand, but they secretly want you to bring both along at an efficient pace.
  • The User Testimonials slide is great because the testimonials specifically address how Airbnb is competing on dimensions that the big hotels can’t match. Per the first bullet point, it’s also important that they included testimonials from both sides of the marketplace.
  • I love perceptual maps on competition slides. They clearly illustrate a market’s softest spots.
  • I also love a simple Product/Solution slide. Airbnb definitely qualifies.
  • The Craigslist dual-posting feature is pretty rich considering some of Airbnb’s growth tactics.

Dropbox was a magic show


Date: September 2007

Outcome: Raised $1.2 million from Sequoia and others. IPO’d in 2018. $12B market cap as of this writing.

You can read the deck linked above — despite the bland colors and reliance on text, it keeps each slide short and hits on almost everything you need in your deck — but the legend of Dropbox really starts with this video.

(Source is here and also links to a later, more polished version of this video that came out just prior to their Series A in 2008.)

I’m generally not a fan of video demos (except as backups to real demos). But that’s not what this video is. This video is Drew Houston performing magic.

No, seriously. Like David f-ing Blaine. Put yourself in a 2007 mindset — bury yourself in USB memory sticks — and watch this video.

  • His tone is so matter-of-fact. He’s just having a casual conversation about this little thing he spun up.
  • This little thing he spun up does things you’ve never seen before.
  • He makes it look easy. He’s even throwing in theatrics and inside jokes.
  • You (probably) have no idea how he’s doing it.

That’s a magic show! It seems so simple now, but that experience was sufficiently advanced enough to trigger the exact same responses you get from great magic: Amazement and curiosity.

Truly special demos break a lot of the rules — and you don’t have to limit them to Sand Hill Road investor pitches. Garner a big public response to your demo and you’ve just indirectly demonstrated traction and validation for your product. And then those investors will descend from their ivory towers and start pitching you on why you should take their money.

But that’s extremely rare. And the bar for magic in technology gets higher all the time, whether you’re Dropbox or… well, Magic Leap.

The phrase “It just works” is only in the deck once, but that was their most important value proposition. Consider how that value proposition is hammered on over and over again — particularly in the demo videos, but also in the “Why better?” slide.

Significantly, they note that it “doesn’t make you change the way you work.” You see again and again in the video how you just move files to new folders like you always would have done before. But now that folder is connected to online storage AND to your collaborators. Simultaneously. You didn’t do anything special. It just happened. It just worked.

One of the hallmarks of great magic is that it seems so simple on the surface. That works for messaging and communication too.

Other notes:

  • I love how Dropbox talks about competition in this deck. They spend several slides after the demo on why and how it’s better than the status quo or other players. They walk a fine line between talking about changing market conditions and shouting “YOU SUCK” at Carbonite and Foldershare.
    • Some advice on talking about your competitors: First, assume they’re smart. Then figure out why they’ve made the key decisions and ostensible mistakes that have driven you to start your company. If they’re a major incumbent, what strategy taxes or technical debts are holding them back? If they’re a smaller company or another startup, what’s the best explanation you can come up with for their decisions? And how are you better positioned to capture the same market — or a better market?
  • I’ve seen decks where every slide looks like it was designed by a different person. Dropbox doesn’t overcomplicate it: They just used their logo like a watermark and used that as the template for every single slide. Unless you have a professional designer helping you, pick one theme and stick with it.
  • This guy is why magicians don’t reveal how they do their tricks.



Date: Late 2008

Outcome: Well…

Let Uber’s first deck soothe the nervous founders out there: You don’t have to be a design genius to get funded. You just need to stay out of your own way. Communicate the key points directly. Don’t overthink it. Dive right in.

That’s what Uber’s deck does, immediately addressing the problems on both sides of the market. You can even see hooks for the founders to start the conversation: “How many times have you been out with your partners at a late dinner and you needed to hail or call a cab? It’s an awful experience! It’s so inefficient!” Investors are immediately invited to relate to the primary use case.

(As an aside, I know at least one NYC-based venture investor passed on Uber because he didn’t see the need. And why would he? He’s a white guy in the #1 taxi market in the country and he lives in an upscale, well-traveled area. When has he ever had a problem hailing a cab? This phenomenon is a huge problem in the VC world, which is why an effective pitch is so important.)

Slides 4 through 16 are almost entirely dedicated to describing the product. A demo would have sufficed — in fact, a demo ride with the founders would have been an ideal time to talk about the information in all of these slides. What these slides actually accomplish is a demonstration of how broadly the founders have thought about this idea. They lay out pieces of the product roadmap and separate them into digestible pieces. That’s also what the market slides accomplish: They show how deeply they understand the market and lay out the size and growth potential.

Put this all together and it communicates to early investors the most important message of all: This team is smart, diligent, and committed. Obviously, they got that message across. In fact, it was an epic understatement.

Other notes:

  • Based on the date and the (laughable) progress slide, this was clearly a pitch for friendly angels to finance their first cars and early product development. But the funding environment back then was different. If you’re pitching angels today — especially outside the Bay Area — they’ll want to see more evidence of traction and a more detailed crack at your business model.
  • The design is text-heavy — I think they’re using the default Powerpoint font — and that means the rare change in style stands out. Notably, “Digital hail can now make street hail unnecessary” is large and green, which calls your attention there.
  • “The NetJets of car services/Limos” is incredible to read now in light of the countless “Uber for X” pitches. This trope is so played out that, if it actually is a helpful metaphor for you, it’s best limited to emails and verbal discussion, not the deck. Better: Just be direct and call it a marketplace for X.
  • “Profitable by design”? Can’t win ’em all.