The Story Behind Purple Metrics Closing Their $1.2M Pre-Seed Round (Guta Tolmasquim / Purple Metrics)

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Guta Tolmasquim: Yeah so I started the fundraise the very day Silicon Valley Bank went bankrupt. And so then

Jason Yeh: good timing Guta.

Guta Tolmasquim: yeah I'm always I always have the best timing

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Bootstrapping and raising venture capital are two different things, entirely, both with their pros and cons. With bootstrapping, you have more control over your company, but you can't scale as fast. With venture capital, you can scale a company two to three times as fast, maybe even more. But you have less control over your capital and your company. But there is one thing both have in common.

They require a leap of faith.

Today's [00:01:00] guest is pretty unique. She's someone who has gotten to experience both types of companies, both bootstrapped and venture-backed.

That gets this Gouda, Thomas Kim. Founder and CEO of purple metrics, which recently closed their first institutional round of capital. He $1.2 million pre-seed led by a Stella, one of the top venture capital firms in Brazil. But before purple Metrix, Gouda founded brand gym, a company she bootstrapped and built all by herself. As you can imagine the transition to building a venture back company was interesting. But before we get into the details. I was curious to learn about little Gouda and see if there were any hints of entrepreneurship, hidden enter childhood.

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Guta Tolmasquim: Okay, so I always, was always super nerdy in terms of studying and reading. Uh, so always had my nose into a book. Uh, and I was super into [00:02:00] school. I loved it, loved studying. So the typical nerd. Stereotype, um, wasn't super good at sports, you know, those kind of things. Uh, but I was always, uh, very good in math, which is not very common for, um, for a kid to be into it.

And so then my parents started stimulating the creative side of my brain. So I would love to color and I would make games. So board game, I wanted to like be a board game designer when I grew up. Uh, so, so I remember these two sides of story, storytelling, creativity, and the logical part of like liking to do homework, uh, with numbers and stuff like that, and those are, Uh, funny enough, [00:03:00] the base of Purple Matrix, cause it's a matrix for creativity and branding, so, uh, it's always been there.

Jason Yeh: that's a, it's a really interesting background. I was, I was, I always tell people, so like my background is in science and computer science and grew up just, you know, doing math competitions and the nerdiest things possible too. And I studied computer science in college and I always tell people if I were to do it again, I'd want to study design in computer science.

Like I'd want to balance the two because I, I feel like I didn't get, All that exposure, but, but you did as a little kid. Um, what about on your personality side of things in terms of, are you naturally, were you naturally outgoing as a little kid, or were you the stereotypical bookworm reading books, not like, not being comfortable around other kids?

Guta Tolmasquim: Um, I think I, I always had this leadership in me, so I would organize my cousins [00:04:00] into a secret club, cousin club, like stuff like that. And, uh, uh, uh, but I wasn't very popular at school until I was like 15 or 14. Uh, so I was more, no, not a lot of, a bunch of friends, but I wouldn't be the one in front of everyone, but it was more about, it tells more about the other kids than it tells about myself because in my, at home, I was always, I was always extroverted and, I, I did theater classes and surf lessons.

I wasn't very good at it, but I, I'd love this performing stuff as a kid.

Jason Yeh: wow. You really are kind of setting the stage for this perfect mismatch of, of [00:05:00] characteristics that I actually think do quite well in fundraising. Um, but before we get there, I, uh, you know, I kind of want to bridge the gap because at some point you took all this background information and,

Guta Tolmasquim: sorry, I wasn't there and I'm not very self confident.

Jason Yeh: sorry.

Guta Tolmasquim: that's something that's very important for fundraising that I didn't have.

Jason Yeh: Okay. So that is a good element, uh, to find, to find out. And then maybe we'll touch on how you found that later. But before we get to PurpleMetrics and the venture backed startup that you run now, tell me a little bit more about PurpleMetrics. Coming out of school and entering the professional world, I happen to know that you you've been an entrepreneur for a while.

Tell me about your transition into the world of working and how you got to entrepreneurship.

Guta Tolmasquim: so I think I, I've always been an entrepreneur, but I didn't know it because you see there was this apartment like in my [00:06:00] family, uh, and I decided to put it on Airbnb in like 2014 because it would be better than just, you know, Renting it for someone. And I started a YouTube channel, so I always produced content in English about Rio, cause no one was doing it in 2015, 2016, cause we were, we were hosting the Olympics.

Uh, so I always had in me this, let's do something new and I would organize, organize a lot, a bunch of stuff at school cause we didn't have. So I changed a few rules there and nothing very major important, but I always had these characteristics of like personality traits, And then I went into a traditional career.

Uh, and that's something very funny that my nickname in my first job was CEO. People would [00:07:00] like, they called me, Oh, the CEO is coming. Cause I would organize everyone in the projects, but I had the traditional career. through, like, from when I, like for probably eight years. And at some point I realized that we didn't have an in branding and I, I realized startups needed branding, but they weren't doing it because there wasn't a supplier, there wasn't a company that could, um, do it in a way that would fit their needs.

So I started doing this alongside, as a, as a part time as a startup. Second journey. Uh, and it became so, I mean, I, I would cry like going back home cause I had so much things to do cause I was doing like brand gym, my first company at the same time that I was working in a large, uh, advertising agency with all, all the things that [00:08:00] you imagine when you think of advertising, like.

Long hours and things like that. So I would wake up at five or 6am to work in the projects of the startups. And then I would go and work until 9pm and then I would just need, had to get home to sleep and then I would work weekends. And then I totally couldn't handle both, like working.

I was doing the Olympics, like international projects for Coca Cola, the Olympics, and then the startups. I couldn't like live this double journey. And then my dad said to me, like, I think you need to focus entirely. And then just a little backup round on my dad. He is, he works for the government. Uh, he, he is a director of a museum.

And my brother, who is now my co founder, is a developer. And he, for like five or six years, would say, look, what are you doing in technology? I mean, [00:09:00] you should have a stable job. You should quit and go work like with a petrol company, you know, something like that. So he's very conservative in terms of career.

And at some point he said, look, I think you've already decided you're just afraid to reach it. Like, And, and then that's when I realized, if it's so obvious, To him that is very conservative in those in terms of career Oh, it's obvious like I'm just resisting So and then I so I say that brain gym picked me and not the opposite way because I resisted as long as I could

Jason Yeh: Right.

Guta Tolmasquim: Because I was afraid I didn't know.

Jason Yeh: Well, I, I think that, yeah, I, well, I think this, we'll see, but this might be a theme which I really love. So, you know, there are, there are stories of people becoming entrepreneurs where the story that's told is like, you know, I'm working a corporate job and I just said, Fuck it. Like this is not me.

[00:10:00] I'm going to like put all my chips on the table and just go out in the world and try to start my own company. Um, which is a, a path that happens, but I sort of loved hearing this story, which was like, look, I, I, I had my main thing and I was working and I was working. And it wasn't until like the opportunity really pulled you in where it was it needed you to go that way that you decided, you know.

That's when I'm going to kick this off. That's when I'm going to go full time on Brandgym. And I don't want to, I don't want to like, uh, marginalize or, or not tell the full Brandgym story, but you ended up growing Brandgym, uh, to an impressive size, many clients, um, And at some point this kind of led you to the next company that you wanted to start.

So tell me a little bit about the insight that you had while at Brand Gym that made you want to work on Purple Metrics. And, you know, if you thought about like how you thought about [00:11:00] that company in the beginning, was it just another company? Was it, I

Guta Tolmasquim: no, yeah

Jason Yeh: capital? Did you know what venture capital was?

Yeah.

Guta Tolmasquim: I knew because I was working with startups and tech companies and very close to the venture cap, to the VC, to the VC funds. So I was really already understanding tech a lot. And what happened is, I wanted to do something more, Like a product and more recurrent, but I didn't know if it would be tech based or not, uh, but then again, I followed the pain cause that's my, that's my style.

And I know it's beautiful to say, Oh, you should follow the pain. But what happens is that usually founders, they follow the business, right? So there's this market size and an opportunity and no one's doing that. And that's the value that we can capture. And it's very, I think it's easier to pitch investors in that way.

my way is like. Why is no one measuring it? So it's the same [00:12:00] thing with Brand Gym was why aren't they doing branding? I mean, they are launching a company, they need to, you know, so it's, uh, so I was working with tech companies that measure everything, very data driven. And I was doing, I have, I started my career as a performance marketer, as a growth marketer in 2008.

So I, I understand numbers a lot and how media works and so on. So I would have this sit down and have this conversation with founders that would be, all right, so why are you doing branding? And they would go, Hmm, cause my CAC is super high, or I need, I have this churn that I don't know why it's happening, or, uh, I can't reach the right audience, or, uh, they don't, are not buying through this price point.

So it would be very tangible. Outcomes that we, we would look for. And I started pursuing it and we started to see the results. So cock drop would be like every time [00:13:00] and stuff like that. Cause obviously it's well positioned. People understand what the brand is and, Oh, it's for me. So I will buy it. And so we started to see the results and I'll start, I was started to, to, people would ask me, how can we measure branding?

And my answer would go from, well, we really can't, it's subjective. And I started to think about it a lot. Cause you know, people were asking me this a lot. And then I started to realize, wait, why is that so? And then now not very, in the first time I started a company, it was more like an impulse and now it was more like, Oh my God, why is no one solving this problem?

And then I started to look into it and I saw. It's a problem all across the world. So I started talking to marketers. I talked to people in Australia, in Israel, in the UK, in the US, in Mexico, in Argentina, they all said, I don't know a way to measure it. [00:14:00] And I really need, cause I having my budget cut, cause I can't measure the impact and I can't.

Make decisions and I was like, oh my god, it's not a Brazilian problem. Why is no one solving it? Maybe it's impossible. So I started looking into it and I realized maybe because I have this unique background No one knows math and branding, you know brand people they they go Into branding because they don't like Logical thinking so it's all about the concept and creative.

Maybe no one

Jason Yeh: Right.

Guta Tolmasquim: really Put this together. I don't know. Uh, and then I started to look a little bit at numbers and so on. And then I decided to have, and I decided it should be pure SaaS, all software, like HW, uh, Amazon and, and, and CS in the cogs and that's it. And now open AI, uh, and that's it. Uh, and then I raised money from angels.

Uh, so from the start I knew, but I, I thought it would [00:15:00] be something within the old company and it would be a service, we would do service and measure it. So it started as a different company within a holding, uh, the same group, but investors, they put money in the tech company. And then right after we launched, we realized it's two separate companies and we split it.

Spent half a year at Palmetrics and I left Brand Gym and after, uh, like half a year later, I sold it. Truly accident.

Jason Yeh: Got it. Okay. That's a great background. No, that's a great background and awesome that you got your first exit while you're going into your next company, which

Guta Tolmasquim: During the, almost during the fundraising.

Mm

Jason Yeh: You kind of touch on something that I've been thinking about a lot, and I don't know where this will go, but I kind of want to hear a little bit more about it.

So, uh, you were like, actually started the company, knew it was going to be a software company, knew I needed some money in order to build it up first, because it's, you know, software. [00:16:00] Software forward. Uh, and then you just said, and so I read just raised from angels. Tell me a little bit about it. We don't have to go through the full angel fundraise.

Um, but my guess is, I guess, working with startups. And venture capital firms, you, you happen to know some people in the game who would want to back you. Like, where were you able to get angel funding from in the beginning?

Guta Tolmasquim: Nice. Yeah, that's a great question. So, uh, my friends and family, I don't come from a poor family, but it's either not a rich family. They couldn't give me money. Neither my friends from school or college. So I didn't have this. Um, natural backwards background to go to, you know, uh, but on the other side, I was working with nice people and nice founders and they were feeling the pain.

They were the ones asking me, how can we measure? And I, um, so the, there was this [00:17:00] one angel and I have worked with. A couple companies from his portfolio and he's the first angel of, um, a few software companies here that had this big exits and so on, and he's a psychologist. So he understands people and then he became an investor.

So he always also have this mixed background, which is very similar to mine, not very similar, but in terms of, you know, feeling the both the two sides. And at some point he looked at me and said, Do you think of becoming an entrepreneur? And I said, like, cause in Portuguese there's, there is a verb. Like, do you think of entrepreneuring?

And I said, you mean like again? And he said, Oh no, no, I mean for real. And I said, but Brangim is for real. And I make fun of him ever since. [00:18:00] Uh, so I texted

Jason Yeh: Oh, wow. Awesome.

Guta Tolmasquim: thinking of doing it for Rio now. And he started laughing. Um, so I built very close, very close to him. Uh, first I had to get a co founder, which is my brother.

Uh, when he was on board, uh, I called him. I was already, uh, doing this Zoom calls with him. so I have talked to him like a couple times, and he had shown interest before. When you decide to do it for real, let me know.

Jason Yeh: It's always cool to hear founders talking about the angels they met early on that ended up turning into long lasting relationships. There's nothing like having someone believe in you wholeheartedly enough that they're willing to pour their own money into whatever it is you do along your entrepreneurial journey. There's a reason they call them angels. [00:19:00] After the break Gouda shares what it was like going out to raise institutional capital for the very first time.

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[00:20:00]

Guta Tolmasquim: Um, so after I got a co founder, I looked at him and said, Look, I think that's it. And he said, uh, Yeah, sure, let me know when you are ready. And I said, Oh, I'm ready. And he said, all right, you need a business plan. I said, I have one. and then I said, well, will you, will you put money in it? And he said, yeah, sure.

And I said, do you want to lead an angel round? And he said, yeah. So, I mean, I know it sounds easy. It wasn't, cause it was built over time. And then I went after other, uh, founders and, and like C levels of tech companies that I have

Jason Yeh: So the thing that, here's the thing that we're going [00:21:00] to use this as a jump off point to talk about is I know it wasn't super easy, right? Like, because you did have this. Get your co founder in. You did have to work on it. You have, you did have to have these conversations, but you did have the advantage of having this amazing relationship with an investor angel who just believed in you and trusted you.

And he was kind of this person that was ready to back you and then probably created the momentum that allowed you to add on a few other people for this angel round. And it wasn't, necessarily easy, but it also wasn't a full grind. And one of the things that I tell people is that a lot of times when you have an advantage early on, like a great relationship with an angel or you were in YC and raised around out of YC, or you come from a really rich family, these are all advantages that allow you to raise an initial early stage round of capital, but it can actually kind of, impact the [00:22:00] way you think about what it's going to be like the next time you go out and raise, and you might think that it'll kind of happen the same way.

And so, what I wanted to ask you or have you talk a little bit more about is what was, what was the point where you were like, okay, got this angel money in, I'm building some stuff, Now, I think I want to, or need to, go raise another round of capital. What was the trigger point for that and how were you thinking about, um, how you'd approach fundraising then?

Guta Tolmasquim: yeah, what happened is that our money ended in April, March, April, 2022. Not the best time to fundraise. And since I was very good in two things, which is bootstrapping a company. And raising from angels, I [00:23:00] decided to go raise from angels again. Uh, so I had this angel bridge round or whatever you like to call it. So I took more money from angels. I, I, I talked to a few funds, uh, but I, I'm not even sure I started, uh, an institutional fundraise cause the market was super close.

They weren't, they weren't putting money into companies. Uh, so I, I raised more from angels and then again, and then I realized like, that I don't know how to raise capital. I didn't know. Uh, so what happened is that obviously it was April 22 and obviously I could have told myself that, Oh, it's the market and the micro environment.

But I realized talking to a few funds back then that they wouldn't do it anyways. [00:24:00] They weren't going to do it. And, but I knew, I knew cause I always, I'm building this, I'm kind of an influencer, I'm building this very close to marketers. I know there's a pain and I know no one is solving it. And I know it's big because every company in the world potentially needs to measure this.

So I knew, and they weren't seeing it. And I was like, why, what am I doing wrong? And then I did what I always do. I went to study, to study. So, uh, so I had this second chance cause. I raised again from angels and the market, and I had this perfect excuse that it's the market is very bad right now. So it's not my fault.

Jason Yeh: and then I can go back in a year after and try again. And that's what I did. I love that. I love the fact that you, you did realize that you were good at raising from angels, but then you had this instinct that like, [00:25:00] Something is different about the way you have to raise from institutional funds. And, uh, you know, we'll sort of fast forward. I mean, you, you talk about having an excuse about like, you know, we're not raising now because the market is bad.

You went out and raised and not much better of a market. So like you really had to be on your game, but at the same time, I know it must've been quite difficult. Painful at times. Do you, do you, do you remember, do you remember any of the worst experiences while fundraising for this last round and any stories that stand out of like something that happened that was like, uh, like

Guta Tolmasquim: It's, it was the hardest,

Jason Yeh: punch to the gut,

Guta Tolmasquim: yeah, it's the hardest thing I've done in my life, for sure. I mean, for sure. I mean, it's harder than I, I never, I have this luck of being, uh, uh, school wasn't very difficult for me, and, or passing on like hiring [00:26:00] processes and stuff like that, I never had like a really to do something really difficult.

And this was really difficult for the first time in my life. And I went to the best college, best university in Latin America. I mean, it's not that I haven't tried, it's that it wasn't difficult before. And this was very, very difficult for me. Um, I think the worst part is, is receiving, cause I had all these great relationships with people from the industry, cause I've been working with them for five or six years.

And so people that I admire and admire and that I really respect. And that I trust in terms of business, and they would say, look, I don't think you can grow an international company because I don't think you have it in you, or, I think you are targeting the wrong audience.

Your MRR is low and it will keep being low [00:27:00] because you're selling this at $10,000 a year and you could be selling it at $100,000 a year if you are targeting enterprises. And I would say, look, but, I won't learn as much because there are a few enterprises. I don't want to spend a year selling to them. I want to get feedback fast enough.

I don't care about the MRR I need to, to like improve the product. And they go, yeah, that's not the right way to build a startup. Uh, and it's people I do respect and I, uh, and I like them, you know, uh, and people just saying what happened, what happened is that I remember sending you this text message, everyone, cause people were waiting to fundraise cause the market was very, so everyone went raising by Q2 of 23.

So we had all these MRRs competing for funding. So you had companies with 20k MRR or 200k MRR, so [00:28:00] investors were a bit lost on valuation and stuff like that. So I had like no's that were just like, uh, you know, we are putting money into a company with a higher MRR because we can. They actually sent this email because we can and well, we decided to, so, but we love you.

Uh, and then, so hearing all these no's. From people that I truly There are investors that I, I looked at and I said, I don't respect this person, I don't want them to be my, like, my associate, I don't wanna be associated with them. But the good ones, the good ones hurt.

Jason Yeh: yeah, like it feels really bad when someone you respect says no or says no. That your baby is ugly, right? Like that, that really hurts. Um, and I know that you went through a period of time where you were getting lots of no's and nobody wanted to invest. So, where I, where I'd like to kind of bring you to is, do you [00:29:00] remember the moment when Steve, Things started shifting.

And in particular, an awesome firm in Brazil ended up leading your round, Estella. And at some point they reached out to you and said, you know what, we want to do this. Do you remember where you were? Do you remember when you got the note that like, this was actually going to happen?

Guta Tolmasquim: Yeh, Uh, but, but, it wasn't as simple as that, so, uh, the partner that led the deal on their side was on vacation when I started raising, so he was on vacation and then I, I talked to him three or four weeks after I was already fundraising. So I was there. And I, and things were going good with a couple of firms that I liked, that I like, I do like, I can still, like, I would still have them on my cap table.

And so I was very relaxed and we went for coffee and I had no expectations cause [00:30:00] he would, he understands a lot of marketing, about marketing. He's, he's an advertiser and he wasn't very excited about Purple Metrics when I started it. He was like, look, you have a real company that, has profit. I mean, you can live out of it.

Why are you leaving this company to build a software company? Do you know how hard it is? So he wasn't very excited about Purple Metrics So I wasn't really counting on him cause he really got it. and I went, well, alright Let's talk to him. But I have done a bunch of stuff. Like I have a few angels that are LPs of the fund that were talking about me, with him already and stuff like that.

And we went for coffee and it was like a match like no other. So he got it and he got in a way that he said like, but look, if, that's the vision and I agree, the next move is this one. I mean, and he, we would compliment each other and I started changing [00:31:00] the, like the business plan, from his input.

And then, yeah, so that's, that's, I kind of knew back then that like, that it would happen. I had this feeling. Feeling that it would happen, but obviously a lot of anxiety because nothing was really set in stone. But then I met his, uh, the, the, they work in, in doubles, like in partners. So I met the other person and she's great.

And we like, also had a great talk and then I pitched the entire fund on a Monday and then on a Thursday, my main angel, the one that I talked about, he's an LP in the fund, like a relevant LP in their fund. And he said, I'm organizing, I'm hosting a lunch. To the LPs of the fund of Estella, come by, And so I, I went there and then the partner look at me and like, give like, uh, yeah, it's going to [00:32:00] happen.

He's like, Said to me like, it's gonna, it's happening. and I was like, uh, and I was like, all right, thumbs up. Like it's happening. And I said, cool, nice. I'm happy. And he said, me too.

Jason Yeh: was the feeling when you saw him and gave you the thumbs up? Like,

Guta Tolmasquim: but then it took like a month or a month and a half to, for, until we got the term shit.

So it was like, it was a shaky process. Emotionally shaky process, but it was like cool. Like I don't know the feeling is I Didn't want to celebrate because you know until money's in the bank. We didn't even have a term sheet So it was far from like a real fundraise, but and I remember you telling me like Those are good signs, but don't really believe in it.

So it wasn't, I was mentally trying to convince myself that this wasn't happening, so I didn't like become super happy, super happy, [00:33:00] cause I was holding myself, cause you know, to, to keep focused on, finishing the fundraise, but I mean, it was a bit of a relief mixed with happiness cause I really liked them and I think it's the best investor for us.

I genuinely believe it.

Jason Yeh: yeah. That's awesome. Yeah. I hope people see part of this video because like, you know, I love asking the question about the feeling and remembering where you were when you got the note or the word or talk to them and you knew something was going to happen. And I don't think anyone will ever forget their first.

Yes, like their first main fundraise and it actually happening. I like remember it so well because it, you know, when I looked at your face, you know, you're kind of like Ear to ear smile looking off to the side and it's just like you're tapping into those really positive feelings, which, you know, don't last very long because obviously then it goes into now we need to execute now we need to [00:34:00] actually, um, um, you know, do the things that we said we were going to do.

But that moment of pure joy, uh, of getting past the, uh, The excruciating pain of fundraising and into the promised land, um, is, is such a unique one. Uh, I wonder if you could continue on and, you know, I said at, there was three, six months of you talking to people, talking to investors that you really respected, everyone's saying no, and you're finally

able to get, This awesome from Estella to say

Guta Tolmasquim: No, I know, I feel saying no and I feel ghosting me.

Jason Yeh: Yeah. Yeah. So then tell us what happened after you, you signed the term sheet. Like, you know, is it all the same? People were still saying no. What was the

Guta Tolmasquim: Oh no, then after it, everyone wants to, you know, wants to invest, obviously. But then, I mean, they were the first ones. Yeah, so I started the fundraise the very day Silicon Valley Bank went bankrupt. [00:35:00] And so then

Jason Yeh: good timing, Guta.

Guta Tolmasquim: yeah, I'm always, I always have the best timing. Uh, and then it took like, I delayed it for a couple of weeks. Then it were like two or three months until the term sheet. Uh, yes. Cause it was April and then the term sheet came on Valentine's day in Brazil, which is June 12th. and then.

It took like a couple of weeks of negotiating the terms because they were traumatized, not traumatized is a strong word, but they said, look, we, we, we have some bad experiences with discussing side letters because side letters is when it should be all bureaucratic. And then we go back into discussing and it's very heavy emotionally for us and for founders.

So we'd really like to test with you this. Let's like, my [00:36:00] term sheet was almost like a sideload. It was so like, everything was there, like on the detail. So it was a couple of weeks cause we also decided to flip the company. We weren't sure we were flipping it to Delaware and Cayman to offshore structure.

Um, and then, so it was a couple of weeks and then we signed the, what, what is it?

Jason Yeh: The term sheet.

Guta Tolmasquim: Then we signed the term sheet and then we started the, yeah, and then we started the due diligence that took so long, like a month and a half, maybe. And we were flipping the company, which also takes like a couple of months.

So it were like another, like fundraising. So the yes came in the middle of the process. It took almost double the time. And then, and I remember like you texting me, like, Have we signed it? I was like, no, I wonder if we'll ever sign this, this thing. Uh, and then I signed [00:37:00] it. I was at a disaster event in Silicon Valley.

We signed it. And that Friday, the, the, safe with the sign letter. And then we went to this. Brax, Happy Hour, and all the VCs were there, and obviously, like, I told them, like, off the records, just sign the, the, the safe. So there were all these founders and, and VCs, and we, it kind of like I got drunk together with them.

Basically, that's what happened.

Jason Yeh: I mean, the thing, the thing that I'll underline is, um, you're the first interview that I've done with someone raising in the middle of the worst fundraising environment in the history of venture capital to have like actually walk through with me. Um,

Guta Tolmasquim: Really?

Jason Yeh: And, and I mean, it's, I'm very proud of you. Yeah. I'm very proud of you.

I know it was incredibly difficult. And so getting [00:38:00] to this point, um, has to feel great and you fully deserve it. You know, though, the thing that I'll end with is I always like to ask people about their, their companies and funny elements of their company. So you're measuring branding, you're measuring advertising.

Um, have there been any like crazy. Uh, campaigns or weird things that you've worked in, either, uh, funny industries or just in your work in branding, I would love to hear anything. That's

Guta Tolmasquim: one story which is funny and I think it's not what you asked, but it's funnier. Uh, that is the first, the first, so, uh, Purplemetrics is a research widget. You can answer questions and then the user can type an answer. Like, we ask, why did you say it, and then they can answer wherever they want. And the very, like, one of the very first comments that the user left on the platform [00:39:00] is, Someone is not busy.

Who is the unoccupied person that made up this research?

Jason Yeh: Well, that's one way to use it.

Guta Tolmasquim: But I do have a question for Awesome. Uh, do you, do you remember that I sent you the, I sent you our deck and then you commented on it and then I sent it back to you and you said, It's a great deck. Can I use it as an example, uh, for, like, in my workshops? And I said, like, Yeah, sure. Uh, after we raised, uh, but then I was thinking after a little bit later, uh, did you really think that he was a great deck or did, was you, were you just trying to make me feel confident?

Jason Yeh: Uh, that should have [00:40:00] been what I did as a, as a good coach. I should have liked. No, I, you know, the, um, this is what I think was great about it. Uh, the, it's the before and after.

So the progress you made from where I saw you in the very beginning and where are you able to get the deck? You might've, you might've iterated on the deck after you sent me that version too, you know, but, uh, you did make a huge difference.

There was a huge difference in what you started with in PurpleMetrics. And where the story ended up at, which was just like night and day to me. So I thought you did great.

That was my conversation with Gouda Thomas Kim. Founder and CEO of purple metrics. The top branding measurement software company on the market. Let this be a reminder that a fundraise starts way before you go out to race for Gouda. It was the relationship she had built early on.

That ended up being the very thing that allowed her to push her pre-seed [00:41:00] to a close.

After the break, I'll be sitting with my producer page and I'm excited to hear what she noticed in this episode.

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Jason_Yeh: Hey, Paige, how are you doing?

Paige Randall: A little tired because we're recording this on a Monday, but besides that [00:42:00] feeling pretty good.

Jason_Yeh: Yeah. Mondays are always like a little bit. Exciting, but also like, uh, me, tiring because I know how much there is to get done, but I'm glad to be doing this.

Paige Randall: Me too, because this was a fun episode, like, I think Gouda has an interesting perspective, this is something I was thinking about. How she, so she started Brand Gym, which was her first company, and she bootstrapped that. I know she had Angel Investments and whatnot, but that was a bootstrapped company. And then she realized, uh, you know, I can't, I can't make Brand Gym venture backed, but I think there's an opportunity to create some sort of software in the same vicinity that could be venture backed.

paige-randall_1_04-08-2024_143543: So I think this is like a cool perspective and story where we've seen and are going to see with where she takes PurpleMetrics where now she's experiencing the opposite of like what it takes to scale a company with venture dollars and all that goes into that. And. You know, not to mention she raised it during [00:43:00] 2023.

this cracked me up. The fact that she started her fundraise on the day that SVB crashed.

Track 1: Yeah, I mean,

those type of stories just blow my mind because I think you and I at this point both know how hard it is to fundraise, so if you layer on top Weird, crazy black swan events like SVB crashing. It's like, wow, that was not super fun.

paige-randall_1_04-08-2024_143543: that puts a damper on the conversation just a little bit when you're going out to meet with people,

Track 1: Totally.

paige-randall_1_04-08-2024_143543: but she did have like, there was something I wanted to talk about, which is this dynamic she had with this one angel investor throughout her, you know, entrepreneurship career and how he had invested in brand gym.

And he had basically kind of told her like, Hey, anything you do, I'm going to support. And I want to hear your thoughts on that because I think it's really interesting and something kind of rare, but amazing that you see with angel investors that can be like, what do you call them? A strategic, maybe you can, how about we start with that?

What's a strategic angel investor?

Track 1: [00:44:00] Look, I mean, I don't think there's a, they, a Webster's dictionary definition of what a strategic angel is, but I mean, you can think about the term angel investor as just someone who is. Sent from the heavens to help you. And maybe one of the hardest times of getting a company off the ground where you need that initial capital.

And they certainly are angels to, to help you like that. Uh, and I think that part of the definition is just like money, right? Strategic.

When you add the word strategic, it probably means that there is additional value to your business, right? So, um, it might be if you are in the Real estate industry doing real estate tech, a strategic angel would be bringing capital, but also insight strategy relationships around.

Real estate. Um, it could mean someone who is strategic within fundraising overall, because they just have a huge network within fundraising. I, I think it's a pretty, um, broad term that just means additional value outside [00:45:00] of the dollars that they're putting in.

paige-randall_1_04-08-2024_143543: Yeah. Yeah. I think I like was kind of thinking it was something else or it had more specificity to it, but that makes sense. It's basically just like a godsend investor that's like, which is kind of what Guta had, which I found so fascinating. Like he was like, whatever you do, I'm going to invest in, you know, which is

Track 1: That type of, that type of angel isn't as, um, isn't as rare as you might think. Certainly it's, they don't grow on trees, but, um, I think those type of angels might be the more sophisticated, um, of angels where they kind of know it's like, you know, I had, I was lucky enough to have angels like that where

paige-randall_1_04-08-2024_143543: Hmm.

Track 1: they might not believe that the thing that they're backing this time is going to be the thing, but they're like, We know that this person, this entrepreneur has something special in them, cropped the whole arc of their career.

And I want to back [00:46:00] them now, because if I back them now, then that gives me a front row seat to see the next couple of things that they do. And they know that their investment is a bit more of an investment in your total career. So, you know, I could see that angel being like, I think Guta is special.

Brand gym, you know, You know, it might not be the thing that returns a thousand X on my

paige-randall_1_04-08-2024_143543: I see what you're

Track 1: but if I think about this check bundled in with the check for the next company that she does, and then I blend all the returns over that, it's going to be a great investment. And of course, if for me, just thinking about me, the people that backed me in my other companies, They 100 percent have an opportunity to invest in me in the future in anything I do because of the support they showed me.

And I think the same thing happened with Gouda and the angel that you're thinking about.

paige-randall_1_04-08-2024_143543: Yeah. And it was interesting cause for Purple Metrics, she ended up having to raise a [00:47:00] decent amount of, well, she, first off, she wanted to raise a decent amount of angel funding. And then she had tried, she talked about how she had tried to go out and raise when the market was really shitty and she didn't have any luck.

So she came back in a year and tried again and she utilized angel investing a lot throughout that time. And I kind of want to dive into this topic that I think keeps popping up. Within, you know, this pre seed, like, early stage company, this lean towards utilizing angel funds more. Like, I kind of want to get your opinion on this.

Like, what's your opinion of, you know, angel party round or angel money round, a big round with angels versus pre seed funding.

Like, what are your thoughts on that in this current market?

Track 1: Well, I'd say like, even before this market started evolving into what it is today, I've always been a fan of bringing on angels as a lead into a bigger round. Um, because angels a lot of [00:48:00] time will make decisions based on Their relationships, the, the vibes of a founder. It's much easier to convince an individual angel to jump on board.

Um, much easier than it is to convince a, a, a venture capital firm from a cold start to invest. And so bringing on an angel early on can start the momentum train and credibility of yes. You know, I got Paige Randall to invest. Wow. Paige is investing. If I got Paige to invest, maybe I can get John Jonathan Lee to invest.

And if I have Paige and Jonathan invested, well then maybe this venture capital firm, when they hear about what's happening, they'll realize like, it's not just my feelings about this company. There are other credible people

that think it's interesting. So that flow and strategy works in any market. I think what you're referencing now is, is something that we've discussed internally, that I've talked to our friends at Carta about, which is this idea that I believe the pre seed round is, is very challenging right [00:49:00] now.

And the bar to raise a seed round is so high. So there's this, there's this weird middle ground of when a company starts and a company starts growing. Before it gets real revenue traction, if you need capital to build the company and build the product that will get you to that revenue traction that seed investors are requiring now, what happens that middle ground, especially as pre seed investors are like, are tending to say that they don't actually love investing in zero revenue businesses anymore.

So, um, depending on what business you run and how much software you need to build ahead of time, how much needs to go in before you can actually start landing revenue, um, the idea that you might need to raise more investment. Angel capital today than previously is something that I want everyone to consider.

So, um, I think Guta saw it early on. She had the network of rays from Angels, and it's something that I think will continue on for, you know, the next couple of [00:50:00] seasons.

paige-randall_1_04-08-2024_143543: Yeah, I also think, and she touched on this a little bit too, I, I kind of like this, this uh, dynamic of an angel bridge round. I don't know if I know everything about it, but I'm assuming it sounds like it's when you start to get traction from a, a lot of angels and a lot, a decent amount of money is piling in and then that makes another, uh, VC fund, maybe like a pre seed fund want to lead the round or something like that.

Is it possible for an angel to lead a round? Like, I have so many questions around this. I, I don't, I

Track 1: Yeah. It's, it's a good question. You know, this idea of what does it mean to lead around? Um, again, I don't think there's a formal definition around what it means to lead. Uh, Technically, you could say, Oh, this angel has led the round. And that might mean if we use that terminology, we, that might mean that you had an angel set the valuation.

Um, it might mean that the angel has a big check in there. It might mean a couple of things like the [00:51:00] angel is taking a board seat. Um, but in general, I would say to be a lead. That other potential investors respect as a lead, you would have to certainly, um, set the valuation. That's easy to do. Anyone could do that, right?

You don't even have to put money to quote unquote necessarily at a valuation, but they'd want the amount of capital invested to be meaningful. And, and then like a meaningful portion of the round, usually lead investors take over more than half, at least half of the round, the full round.

There are times when a lead investor could technically be less than 50 percent of the company, but again, it's much more about, you know, whether or not you're a lead is the more important thing about being a lead is that the other potential investors.

Respect the idea that you are a lead. It's a bit ambiguous, but I'm saying like, I guess what I'm [00:52:00] saying is if Mark Zuckerberg came in and wanted to invest 500, 000 in a two and a half million dollar pre seed round for a, a social startup. That founder could probably say, you know what, Mark Zuckerberg is leading the round.

He helped me set my valuation and he's putting 500, 000 in. That's not half of a

paige-randall_1_04-08-2024_143543: That looks pretty good.

Track 1: It looks pretty good. And everyone around the table is going to be like, okay, yeah, that, that feels like a real lead, you know, whereas if, if. You know, my sister, that's a bad example because I think she probably, she probably is fairly influential in certain circles.

If, you know, if my cousin, you know, who's not in tech decides to invest 25, 000 into a round, I couldn't go to everyone else and say like, oh, my, my cousin's leading the round. No one would respect that. Does that make sense?

paige-randall_1_04-08-2024_143543: Yeah. [00:53:00] Yeah, I think that makes sense. Oh my gosh, there's so much, like, we could have a whole episode dedicated to me asking you questions about angel rounds because I find them absolutely fascinating.

But I didn't

Track 1: I'll, point out the fact that as we were getting into the recording, you were like, I think I know all the answers. So it's going to be weird. I don't know if I have any questions.

paige-randall_1_04-08-2024_143543: I don't know anything, I'm

Track 1: No, no, there are always more questions to ask Paige,

paige-randall_1_04-08-2024_143543: thank God, cause we gotta fill up these debriefs somehow. So thank God I still have endless amount of questions it seems, like there's always, you know, you think you know something and then you are like, oh wait, there's like a whole other

Track 1: I'm always learning, right? I'm always asking questions. So I think, I think we can fill out these debriefs.

paige-randall_1_04-08-2024_143543: yeah. Estella. Estella was the lead in their like one of their well known, um, venture firm in Brazil. And something I found very cool was that a few of her angel investors, I'm not sure if they were angel investors from Brandgym or from Purple Metrics, they were LPs in the company. Estella, like at Estella. [00:54:00] And so they had a little bit of influence over there of like, kind of trying to get her in, um, which originally, um, the, the investor that was trying to like carry the round wasn't interested at all in, in Purple Metric she was talking about. She was like, I just was like, whatever, I'll meet him. And it ended up being an amazing match. But I wanted to go back to the topic of like these angel investors being LPs. Is that something that you see? Um, or maybe that's not the right question I'm trying to ask. I guess the point I'm trying to make, maybe it's not even a question, is that sounds like an amazing way to, like, build your network.

Like, is to meet, meet angel investors that are LPs at venture firms as well. If, if they genuinely believe in you and think you're an amazing founder, that could help you a ton down the line.

Track 1: I mean, I think you, in this, in this episode, in this conversation with Guta and looking at her fundraise, we identified that she had an angel that had incredible [00:55:00] influence over a venture capital firm because, you know, they were investors in the venture capital firm. Um, and certainly if you can find angel investors who are LPs in your favorite venture capital firms that you might want to raise from in the future, that's great.

But no one. You know, no one needs to work backwards from that very specific requirement page. I think the general concept is that if you take money from people who are in the ecosystem, that is going to expand your network and your ability to get in touch with, in a credible way, VCs who might invest in you.

And so, and that might be a second degree connection through, um, an LP, but it might be a third degree as in your, your, um, your angel investor is friends with an LP in the venture capital firm that you want to invest in. And so that itself could be influential because you [00:56:00] could ask your angel, Hey, it looks like your friends, they're friends.

With page and she's an LP and adamant ventures. Maybe you mentioned to her that she should look at, you know, that, that her, that firm should look at our company. That itself is, is influential. And so that's more of the thing, the takeaway that I I'd like founders to get out there, which is that

angel investors.

With a very small check can be extremely influential in the way you approach fundraising.

paige-randall_1_04-08-2024_143543: Yeah. That reminds me of, um, what, uh, we just hosted that panel for some founders who raised Angel Rounds and, um, Shannon, uh, the founder of Esker Beauty was talking about how she just wanted this one person on her team. Um, like on her cap table so bad for barely any money. Like she was like, I could care less if it's 2, 000.

I wanted this person because they're an amazing asset and value add to me. And I, I think that is something cool to think about. Like, it's not always about the amount, [00:57:00] like you just said. It's about how can like, Number one, do they genuinely believe in me? And number two, is there some strategy here that they, they want to help me like connect with the right people?

Or they want to help me in some way, um, and believe in what I'm doing. I think that's, that's the most important part. And I think Guta did an amazing job at utilizing her network and, and, and creating this round through this network she built over years and years and years. So kudos to her.

Track 1: Yeah. I think the takeaway of all of this is don't sleep on angels. Yeah. There are all sorts of ways, um, to bring on investors and the smaller checks might not be, um, smaller amounts of value overall. Right. Great stuff. I think that's the debrief.

paige-randall_1_04-08-2024_143543: That's the debrief. [00:58:00] ​

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