Fundraising EQUALS Hard Work (Equals)

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Christina: Bobby Pinero, who ran finance at Intercom for like 8 years, is building one of the tools he wished he had. and he's just, like, very sharp. He had assigned intercom from, I don't know, 20 people or something to, like, hundreds, you know?

so I'm pretty excited about that one

This is funded a show where founders who raised millions of metric capital share the gritty side of what it actually took to get that money in the bank.. I'm Jason. Yay. Not too long ago. I was trying to get my ideas funded. And back in the day, I was a VC listening to founders, pitch me for money.

IF you paid attention to the clip that I played at the beginning of the episode, you might recognize that voice. It was our season two guests, Christina Casio, Bo. Founder of Anta. And she was identifying Bobby Panera. Today's guest. As the founder that she was most excited about coming up long before he had raised any rounds of venture capital. Uh, [00:01:00] since then I've been watching Bobby from afar.

Fast track to now. And we get to talk to him about closing his series a round from one of the biggest venture firms in the game. Andreessen Horowitz. This isn't to say the road has been easy, though.

When Bobby was raising his first round for equals the next generation spreadsheet company, he always dreamed of building. He was told by countless VCs that he would never be able to pull it off. But as it turns out, They were wrong.

Bobby: I think as a kid I was, uh, you know, uh, pretty nervous and pretty scared and pretty kind of timid. And I... Always had this, like, really intense focus on whatever it was that I was doing at that point in time, so I always,played a lot of sports growing up, a lot of baseball, a lot of soccer, a lot of swimming, um, When I got to be a little bit older, I saved up, I [00:02:00] was hell bent on buying a computer.

It's the number one thing I wanted, uh, when I was, I don't know, 13, 14 years old. I worked in my mom's office doing, like, random little accounting tasks. Uh, she would make me fill out, like, random journal entries, or just do, like, manual, tedious work.

And I remember I bought this, like, it was like a gateway, if you remember gateways. Um, and it was, just for me, it was like when I got something in my head, I was hellbent on it. there's also just a part of me that, you know, and I've had to kind of outgrow this over the years, and it's still something I work on.

It's just, um, timid, shy, afraid, um,

Jason: would say that you're a hard worker and you have that entrepreneurial spirit, but on the other side, um, I guess what you're describing is introversion. Like how would you describe your, sort of natural personality?

Bobby: yeah, I think, I think I kind of, um, you know, one of the things I worked on a lot by myself is just,[00:03:00] feeling like, um, I, like, belong and feeling like I'm doing what I, you know, like, all the things that I've kind of achieved and the things that I've, uh, worked towards, um, are things that I'm, like, worthy of, and, uh, for a long time, um, I guess I've kind of felt not that way, and so that, like, knocks on your confidence, it makes you afraid, um, Um, And so, uh, you know, tying this into, like, ultimately raising money, right, like, I remember there was, when I raised the last round with, with Andreessen, uh, one of the kind of scariest moments of it was going into that, the, the partner pitch of it, and I remember for, like, days before, I was like, I don't, like, should I be here?

Jason: yeah,

Bobby: is crazy.

Jason: You're, you're, you're kind of teasing what we definitely want to dive into, um, and this background given your like pristine resume is not what I would have expected, but it is a conversation I [00:04:00] think it would be super helpful to hear about. So let's, let's rewind a little bit before we get into the exciting round that you just raised.

Um, It seems like you have this sort of dual track of being someone who is an achiever, right? Like, in athletics, and then later in academics, and we can talk a little bit about your professional career, but, um, you have balanced this feeling of, I guess, imposter syndrome? Is that something that you would use to describe it?

Yeah, I mean, and I can relate to that. So, um, Maybe tell me a little bit more about the evolution of you and getting into your professional life. Um, where'd you end up going to school? Did you play sports? Like, what did you study?

Bobby: Yeah, so I went to, uh, I was fortunate enough to go to Stanford for college. Um, and I, I did play sports. I rode, crew at Stanford. Um, and I was, I'd never rode crew before I got to Stanford. I actually walked onto the team there. I always swam. [00:05:00] um, again, that was, this is kind of, When I get something in my head, I'm hell bent on doing it, and so I decided, I remember seeing an advertisement for the crew team, and there were two spots left on the team to make it, and a bunch of people were trying out, and I was like, I remember at one point, first it was like, no way, I don't have any chance, uh, there's people here that are bigger, faster, stronger than I am, and then at one point I remember, you know, it was probably a few weeks into going to practices, and I just remember sitting there and being like, there's no reason why any single one of these other people can beat me.

If I train harder, if I spend more time, if I commit to this, there's no, there's absolutely no reason why anybody should be able to, uh, why I shouldn't be the one to make it. And so, once I had that idea in my head, it was, that was it. Wasn't gonna let anybody outwork me. Um, and then at Stanford, you know, the, um, The main thing that kind of really [00:06:00] changed my perspective, the trajectory of my career, was a class I took by Steve Blank.

He wrote The Four Steps to the Epiphany, and the class was called Engineering Entrepreneurship. It was by far the best class I've taken in all of my academic career, certainly at Stanford. And the idea behind the class was you had ten weeks to start a company. So you spent the first three weeks kind of identifying a problem and you had to go interview people, you had to talk to real people, um, you know, out in industry and try to hone down on what was a problem that you could go solve.

And then you spent the next five, six weeks actually kind of scoping out what a solution to that would look like with their feedback, iterating with them, determining whether they would pay for something like this. And then you spent the last week or two pitching it to real VCs. And getting feedback and that was it.

I was hooked after that, And so everything in my career, uh, up [00:07:00] until now has been kind of leading me to the point of, uh, starting my own company.

Jason: Amazing. But so you had had that experience and exposure to like the idea of starting your own company back in undergrad, but it took you some time to actually decide to launch your own startup or have you done other things before Equals that were, that was your own company? Can

Bobby: No, it took me 10 years to get there. I knew that ultimately I wanted to get there, but I don't think I had the confidence to be able to do it. I also didn't know that, I didn't have an idea or something that I was like absolutely hell bent on.

It goes back to kind of like that one track mind for me. It wasn't, there wasn't something that had taken me over and kind of all consumed me. Um, but I kind of treated my career as this progression, and this is in hindsight in some ways, but like it is this progression to getting me to. The point at which I could start equals.

Jason: So let's, let's talk about that a little bit. Um, would love to hear a little bit [00:08:00] about this trigger point around your career. You were a rising star as, as, uh, Christina said at Intercom, you know, you, you built that finance team, huge company. Um, what was the thing that made you decide to step away from like a great career or something that you could have kept going on to, you know, starting from zero and starting your own company?

Was there a moment that you remember?

Bobby: Um, there are a couple moments, uh, I'd say, towards the last couple of years, I was at Intercom for 8 years, I joined when there was 20 people left and it was, I mean it was almost 700 people by the time I left, and um, I'd say probably for like the last year or two, I knew that it wasn't the right fit for me anymore.

Um, Just a big company, and I'm kind of a, I'm an early stage person, like, I really love the building from scratch, the moving really quickly, the working with a tremendous amount of urgency, [00:09:00] um, and, you know, you get to a 600 person, 700 person company, and it's all of a sudden you're having meetings, meetings to pre wire before the meeting, and it's like, let's all Get into the meeting so that nobody's surprised and I'm like why if everybody knows what's like gonna be happening this meeting Why are we having the meeting? And so I just liked it. There's a little bit of just how I'm wired that I was kind of like this isn't This size of company in the stage just really isn't as exciting to me

Jason: Yeh.

Bobby: But then there was another moment where And it's funny, you play this recording from Christina because part of the story here is I actually almost ended up joining Vanta after I left Intercom and Christina and I, that's how Christina and I got to know each other. And, um, for me, I was deciding whether or not I was going to go start my own company, uh, or go and do the kind of first finance hire and build a company again. So, uh, [00:10:00] And I just remember, like, having, thinking through, like, am I ready to do this first finance hire thing again? And there was just this, like, instinctual kind of, like, yes, I could do it, it'd be interesting, I'm sure I'd learn all sorts of new things that I didn't learn from Intercom.

But it was kind of, it wasn't like that hell yes, it wasn't that, like, overwhelmingly Like, that energy just running through me, and then when it was, Hey, let's go start Equals, it was like, all my energy came back. It was all this excitement, all this like, Hell yes, absolutely. And that was the moment for me, it was like, Okay, that's it, that's the path.

Even though it's probably a riskier path, and All the things, it's harder, and you know, all those fun things. Um, it was the energy.

Jason: that's amazing. And, um, like I wasn't sure that this is the path or the topic that we would keep focusing on, but [00:11:00] because the idea of confidence is so important when it comes to raising capital and because you've talked a little bit about this, like eating feeling that you, you have at different stages of your life and your career, even as it's going in the right direction, which I, like I said before, I can totally relate to.

I think I'll keep asking you this question. As we talk through different stages of the company, but you know, you, you're having conversations with an impressive founder that's already building a great company. You have that option. Um, you don't have the excitement that you do when you start thinking about your own thing, but as you jump into it, there is this moment where you're like, even at the angel round, you're like, I'm going to have to start putting myself out there and asking people to give me money.

And so this first pass, I want to talk about, you know, in different interviews, I might skip over this, but I kind of want to touch on each one and see what that activation energy was for you to overcome some of the anxieties that you had. [00:12:00] But you raised an angel round that is not reported on Crunchbase.

Can you talk a little bit about that? I mean, Christina was one of those angels. Um, do you remember the feeling of like, Oh my gosh, I'm going to have to start asking people to trust me.

Bobby: Yeah, yeah. Um, so, so, uh, our angel round was connected to our seed round, so we did actually both of them at the

Jason: You did. Okay.

Bobby: and then, it wasn't so much as, hey, well let me say it this way. Oh my god, people need to trust me, happened more when the money landed than

Jason: Yeah, right.

Bobby: when the house.

I was like, oh my god, all this money landed in our bank account. Holy shit, people now need to trust me, people trust me with this.

And, um,

Jason: to do something with it. Right.

Bobby: now I need to do something. I mean, we raised a lot of money before we'd even, we'd hired a team. Um, and so, um, there was a lot of, [00:13:00] holy shit, now, you know, we got to do, we got to deliver on what we promised.

Um, but going in, you know, one of the, one of the things that I'm fortunate in, um, in going out to raise money was, you know, I picked, and this is why it took me 10 years to get to the point of starting my own company and, you know, getting to this level of confidence was. This is, I was raising to build a product in a space for a buyer that I know super well.

I've lived the problems, I've done the job, I know how to talk to them, I know how to get in front of them, I know how to write blog posts that resonate with them because I've done it. And so, for me, the thing that gave me confidence going into this seed round was like, I know this is the thing that I wish had existed for myself.

And so, um, You know, that didn't mean, I still did go and talk to hundreds of people similar to me in similar companies and similar roles and kind of [00:14:00] get the idea and make sure that it wasn't just me off in the silo wishing that this had existed. But, that was, that's where the confidence came from, from like doing that actual decade plus of work and being in the trenches.

Jason: Yeah. And I think this is a really important part to highlight for you because like, if you go look up your round, your fundraising on Crunchbase, it's like 6. 6 million led by Kraft Ventures and David Sachs, all like huge brands. Christina Cassioppo, I think the, the, the founder of, um, A couple other huge startups invested in you.

And the thought can be like, look at Bobby, like Stanford grad, whatever, can just like stumble out the door and raise 6 million plus, you know, in his first round of finance financing ever, and there'd be like a bit of. Like God, you know, like it was just so easy for him and he didn't even have to try. He didn't even [00:15:00] have like a real product at the time.

But the reality is you spent 10 years building two things. One, your deep expertise in a space. Like you said, you know, the customer, you know, the problem space, you know how to market to them, you know their psychology. That's not easy to get. Uh, but then two, Your network, right? The network of people that have seen you execute, um, from a 20 person company all the way to a 700 person company, the network of people that trust you for other reasons.

And all those things lead to an amazing seed round, you know, that you probably didn't have much, if any traction, but like it's something that I repeat a lot is the, the rounds that look like they went the fastest probably took the longest time to prepare for. And in your case, you know, 10 years of a career before you decided to pull the trigger, right?

So, um, I loved hearing about that. Yeah.

Bobby: for me, so much of the, you know, I got to know David, um, and I got to know a lot of the craft team from my [00:16:00] intercom days. I got to know Christina Shen, who ultimately led our Series A. I got to know her because she was at Bessemer while I was at intercom. And so a lot of this is, um, you know, when folks ask me for, well, my journey on being able to raise money and get kind of plugged into the venture community.

Started and was a lot of just my intercom days. It was spending time there and, you know, raising money there and being in board meetings and building a reputation as somebody who's excellent at what they do. Um, and that enabled, uh, a lot of these, uh, a lot of these venture meetings for, for equals

Jason: Yeah. Um, the, yeah, so I'll just underline one other thing too, is that if someone wants to recreate what you did for your seed round, they have to think about, well, what did Bobby do over 10 years? And how much time do I have to like short circuit that? I mean, that's kind of how you have to think about it.

If you want to, I imagine you [00:17:00] built a lot of relationships Sort of through osmosis or just through the normal course of day to day, you weren't like, oh my god, I need to grind to like, meet this VC and spend time with this VC so that when I do raise the money, right? So you did it over 10 years. The, the challenge for anyone that is coming in cold and deciding that they want to do something like you did, Um, is to, to think and deconstruct, well, what did Bobby actually have and how much of that can I get done in a shorter amount of time?

Very challenging. Um, so the, the fun thing to talk about now, which is. The last round you raised, uh, you announced, I think it was like a 16 million round. Is that right?

Bobby: That's

Jason: Uh, led by Andreessen Horowitz. Very exciting. Um, congrats by the way. Um, here's where I think it's really interesting. I, I've, I've interviewed a lot of founders who have Uh, an incredible background and spent many years building their reputation and they cash those [00:18:00] chips in much like you did to raise your seed round.

But a lot of that kind of is no longer, uh, applicable when you go out to raise a Series A. For sure your reputation matters, for sure having some sort of level of comfort. But what is a little bit scary, and this is what we're going to talk about, is now shifting to around the financing that has a lot more to do with what you've done to date.

Um, so I wonder if we could talk a little bit about this, um, the, the dates in Crunchbase are a little bit harder to align exactly how much timing you had between, you know, when money hit the bank and how much time you had to actually build your company. Um, but as much as you can share, you know, I'd love to hear you set the stage for when you realized that you wanted to go out and raise a Series A.

Bobby: Yeh, so, our story is, uh, we raised a seed, uh, it was probably early [00:19:00] 2021, uh, April, May, uh, that was when we really started, started Equals. Uh, and then we spent about a year, uh, heads down, it was, we built a small team, it was probably about 8, 10 people by the end of that year to get to our first version of Equals out in the world.

So, we spent... A year heads down, I mean, I was, I don't write code, I have, I spent a lot of time speccing product, uh, dreaming up things that we ultimately did build. Um, and then I spent a lot of time priming the market, so writing and kind of, uh, getting folks excited about what we were. We weren't sharing what we were building quite yet, but at least, uh, uh, starting to get signups and starting to get in front of people.

Um, so we spent a year heads down building the product. We launched in. We put our first sneak peek of equals out in April of 2022 and then we launched properly in June of 2022. And, uh, we just got, I mean, it was kind of lightning in a bottle. We, uh, we [00:20:00] really kind of hit on something that was, uh, people were excited about.

The demo video that we put out. Uh, really kind of took off, um, and, uh, we had just this really, really, really exciting, even though they were smallish numbers, uh, uh, momentum over the course of the first four or five months, uh, that we were out in the world. And I remember, uh, it was, as these things go, it was just so, uh, uh, just around the same time that the market, the SaaS market, was melting down.

The market in general was melting down, but all of the fundraising market, I mean, I remember getting calls from, uh, folks at Kraft being like, how much runway do we have, uh, we need to batten down the hatches, this is, you know, it's over, like, nobody's raising any money at all. And, I'm sitting there like, hold on, we got something really exciting.

We got really exciting momentum. Um, I kind of think we should go out and test. [00:21:00] Even though we're early, we should start to put some feelers out. And, I'm a, we can talk about fundraising strategies. Like, I tend to be more of a, When you're fundraising, you're fundraising, and it's like you're running a full process, and you're doing the whole thing, and you don't kind of dip your toes in the water, you like commit to it and go.

Jason: Totally.

Bobby: Um, in this case, we put a couple feelers out, and we started to get a little bit of people starting to bite, and then it was go time. And then it was like, okay, now we need, now we're going to start a whole process, and we're going to start pulling people in, and we're going to, um. And so we ended up closing the Series A, I think it was October, uh, 2022.

So just a handful of months after we launched, um, early for a Series A, uh, definitely both from a kind of traction revenue, um, and, um, you know, uh, time and market, uh, perspective. Um, but [00:22:00] so much of raising money is being able to capture momentum, tell a really compelling story, uh. how people extrapolate where you're going as opposed to, uh, just kind of what you've done.

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Jason: [00:23:00] Even in the face of so much rejection from investors. Bobby still strongly believed in what he was doing. And when you strongly believe in what you're doing, it becomes much harder for naysayers to hold you back. And we return. Bobby talks about stepping through self doubt and stepping on the gas. For a series, a.

Can you, can you share, I mean, you don't have to get very specific, but can you share how much runway you had when you, like, kinda started lightly dipping your toes in the [00:24:00] water?

Bobby: Yeah, 18 months,

Jason: You still had 18 months.

Bobby: Yeah. I mean, I'm a, I am, I'm a proponent of, uh, raising when you don't have to raise. And, uh, I tried like, you know, right now when we're planning our series B I'm targeting 18 months as the time that we, that that's when. We're going out to Raid Series B, and we did the same thing at Intercom.

It was always like, I never ran us tighter than, uh, you know, 12 months, and I was like, horrendously uncomfortable.

Uh, 18 months, and

Jason: you're a finance guy, right? That's, uh, that's what you're supposed to do. Um, no, this is interesting. I mean, so tell me a little bit about this because like, you're right. You should always raise when you don't have to, but the reality is like, you only had four months of traction, right? So whenever I help people think about when they should fundraise, one of the things that I always help founders kind of distance themselves from is this idea that they're like, well, you know, If we raise a month [00:25:00] later, we're going to have like 10 percent more X, you know, 10 percent more users, 10 percent more revenue, like, and so like, it will be better.

And I'm always like, especially at the earlier stages, even as you go later, it's like, it's not so granular the way a VC thinks about like, if you are this far along versus an inch further versus, you know, It's always, to me, this idea is like, if you wait another three months, will the narrative change?

Like, will the ability to tell a bigger story change and your, like, the confidence that you do that with? Or is it just going to be like, two or three more months of incremental growth? When you go and decide to raise... 18 months in advance, you're looking at what you're, you could do in the next, call it 12 months.

Cause a lot of people say six months is maybe what you budget for. And there should probably be like significant things you can do. Um, inflection points, launches, et cetera. Um, [00:26:00] so at this point when you went four months after launching, like, What was your thought process? Was it just the idea of like, in my head, I don't want to raise when I have less than, you know, 18 months of runway, or was there kind of another analysis for you?

Bobby: No, for us, it really came down to what can we do if we put more money on the balance sheet. And so, we had a lot of confidence in the direction, the momentum that we were, that we'd built up over four or five months. I felt very confident that, uh, should we need to go raise again in six months from now, if this process failed, that in six months from now, we'd be able to go and raise, uh, uh, an exciting round.

Uh, But for me, the main thing that kind of drove it was, Wow, if we can actually put some money on the balance sheet right now, So, like, Equals is a really hard product to build. Um, I can't tell you how many in our seed process, How many VCs told us we were absolutely out of our mind. Do you know how many thousands of engineers Google [00:27:00] has building Sheets?

Do you know how many thousands of engineers Microsoft has building Excel? You'll never even come close. Do you know how many people have tried to build a spreadsheet? You'll never come close. Um, and, uh, for us, uh, the calculus was, we can actually accept, like, we know what we need to build. We've known, we knew from day one, we put together this really comprehensive roadmap of every single little feature, everything, and it's allowed us to move really, really fast.

And we knew what we needed, we knew what we needed to build, and just that we were under resourced to be able to go do that. And so for us it was, how do we build this faster? How do we take this to market faster? Uh, let's put more money on the, on the balance sheet to do that.

Jason: I love that. I mean, the way, the way you're describing even going into this in your company, Is like filled with confidence, right? You have this strong belief in what you're doing. And yet it seems like, I mean, everyone is going to face rejection when [00:28:00] fundraising and that starts eating at your own like inner, you know, inner voice and then some, somebody's in there is going to start talking about like what it means to fail.

Um, tell me a little bit about dipping your toes in the water of like seeing if there is interest. Um, and. How much, like, hesitation you had around that? Like, when did the voice start entering in your mind? The one that started talking to you as you were going to your final partner meetings at Andreessen?

Bobby: So the, for, uh, I think there's maybe two separate things here, but I think the, um, the, the doubt for me came more from a place of, like, going into that, the partner meeting at Andreessen. It was, it was just like, This is like one of the absolute best VCs in the world. Uh, I'm going in to raise, like, do I belong here?

Is this, am I like crazy? Like, what, I'm a finance guy, and like, I just, you know, this is, am I a founder? And like, is this really, [00:29:00] and the thing that shifted for me in the kind of couple of days preceding that meeting was, um, just really reflecting on, I was like, no, this is actually what I've been working on.

This is what I've been working towards for the past, like, ten years. It's to get me to this point. This is, like, I belong here and this is exactly what I'm supposed to be doing and that gave me the confidence to then walk in that room and be, you know, tell the best equal story that I could.

Jason: Yeah.

Bobby: Um, and then, um, you know, more tactically on, you know, dipping kind of your toe in the market and trying, uh, you know, testing whether or not, There's an interest for what you're, where you're at, the traction you have, the product, the vision.

Um, you know, the, the main consideration you have there is kind of, um, again, I'm kind of a big proponent of like when you raise, you raise and you go for it. And you commit yourself and you're all in and you, [00:30:00] uh, and so, uh, testing the water is kind of like this like dangerous place to be because you don't really want to indicate to.

Raising money is a game. You don't want to indicate to investors that you're like actually raising, uh, because if you don't raise, then it kind of looks like this black mark on the company. It's like, Oh, they tried to raise, but they didn't raise. And why didn't they raise? And Oh, you know, VCs, we're all humans, right?

And humans are kind of, we all look to each other for signals. And so if somebody else passed on a deal, like that makes another. Investor more likely to pass on the deal. And so just want to kind of, uh, be careful. And so that, that, that was really the downside consideration for us as we started to think about dipping our toe in the water.

Um, but you can do that in a way that's kind of delicate, right?

Jason: Yeah. With that strategy, so like, I know how I would run that strategy, um, but I wonder if you did it too. Like, there is something about, [00:31:00] Testing the waters and seeing if something bites so that if no one's biting, you can just be like, I'm going to pull back like this is, that wasn't actually a raise. But in order to do what you did, and you did it well, it sounds like, is like you started getting some interest and then you wanted to surround that interest with a process quickly.

Had you done any of your prep work for that process? So that if the interest did come in, you would be able to like actually get stuff together. You would have your materials, you would have introductions ready to go. Or was it kind of like flying by the seat of your pants and you're like, Oh my God, now we need to go find all of our introductions.

Bobby: No, not at all. We had the deck ready, the, we had two decks. We have a pitch deck, data deck. Um, we had a list of all the investors that we wanted to talk to. Showed things like the dip our toe in the water was okay. If it, if it goes, then here's exactly what we do. And it's a list of 50 investors. Everybody that's going to introduce us, when they're going to introduce us.

All the decks [00:32:00] ready. My pitch nailed. Like, you know, that takes me a week or two to, like, practice the pitch and prepare all the questions, uh, think through, um, you know, how I'm going to respond to every single question, uh, get all our data in the right place, um, so all of that was ready to go, which is, well, what makes these things hard?

It's like dipping your

toes in water. It's an expensive exercise and it's, uh, it's tiring. Yeah, um,

Jason: right? It pulls you away. Like, you know, it's funny. I asked you that question kind of leading the witness. I knew the answer for a couple of reasons. One, like, You're a finance guy and finance guys don't leave anything up to chance. They know exactly how these things fit. And then two, like successful fundraisers look the same.

And that's kind of the, one of the messages that we put out there that I try to put out there is like pulling back the curtains is like, this could like, look like. You know, pristine, down the middle, like, personality that just jumped in and then raised the money because of his network and then went out there and then, like, you know, dipped his toes [00:33:00] in the water and then, oh my god, like, 16 million just fell in my lap.

But it's, it's like, in order to do that well, you have to take what's given to you and take your advantage and then, like, put in the hard work to make sure this all happens, right? Like, You have to have all that ready and, and love hearing you say like, no, no, no, no. Like we put a ton of work, even in the dipping your toes strategy and two weeks of practice.

And like, we were ready to go. And so everyone has to understand that, you know, you need to be ready to go. Um, so. One more thing that I just wanted to kind of pick apart here. Um, one of the things that I love was that you kind of open sourced slash shared a little bit of your strategy for Series A and some of the things that you've Sort of developed in terms of your process for fundraising, especially as data becomes a bigger part of the fundraising story.

Um, is this stuff that you have sort of pieced together on your [00:34:00] own or is your network of founders who have raised money in your, in your venture capitalists? Are they coaching you around this? Um, tell us a little bit about this and you can, if you want to like tease a little bit about that Twitter thread that you put out there, you know, that'd be helpful as well.

Bobby: So, I actually wrote a blog post on this too. I, uh, I go a little bit counter to most, uh, other, uh, fundraising processes in that. I, uh, almost, and we did this at Intercom, and I've done this at Equals, like, never share a raw data dump. Like, investors will always ask you, give me, like, a model in Excel. Give me all of your customers.

Give me all of the transactions of every customer. And I'm almost always... The answer to that is no, and, uh, but you have to, if you're going to say no to that, you have to be prepared to, uh, you have to have something else for them, right? Because they want to understand what's going on in your business. [00:35:00] And so what I do, and we, again, we did this at Intercom and with Equals, is you've got your pitch deck, which is your standard kind of, this is what the company is, this is why we exist, this is the traction and momentum that we have.

But then I always create something called the data deck. And the data deck is basically the story of the business in numbers, and you try to answer every single question that the investor is going to have about how your business works. And the reason you do this is you actually don't want to learn this the hard way.

You share a raw data dump with an investor, you share a model with them, you share all of your cohorts, all of your customers, and guess what, they're going to own the narrative on how your business works. They're going to come back to you with 50 questions. Why is this cohort like this? Why does this? Oh, have you thought about this?

Have you thought about this? And all of a sudden you're on the back foot answering to the investor their questions about your business You're you're just in a horrible place doing that What you want to [00:36:00] do is you want to step forward and you want to tell them how your business works You want to say this is how our business works.

We acquire customers through these channels. These are the unit economics for that This is the lifetime value of these customers. This is, you know, every cut that the investor would ultimately put together themselves is, are things that you need to have looked at and prepared for them in advance. And that just lets you own the narrative.

And so you, you come at it, uh, you're not answering questions, you're explaining to them how the business works. And so, um, You just like, you're just in such a fundamentally different position when you're raising and you're doing that. Then if you're answering questions and trying to just send them stuff and they're doing analysis and send you questions back, um,

Jason: There was, there was something that you had put in one of your writings that you're kind of dancing around here, which is essentially like owning the narrative for your data and like [00:37:00] applying your story, the story that you want them to understand about Equals or your company. I think a lot of people think that you should be putting out a deck or a story or a pitch that is like, choose your own adventure.

You know, it's like. If you like this, then I want to make sure I put some data in here about this or a line or two about the way we do this. But if you're more like this, you know, we'll also talk a little bit about this in case they're interested. And that can be like one of the most damaging ways to try to get an investor excited is because it's all like kind of diluted down and not a really, really strong point of view.

I think people are afraid that if you put your own narrative onto your data or in your deck, It might not, it might not resonate with the investor that you're talking to. And that means rejection. But like, what you want is that, you know, like you need that strong point of view. Yeah, exactly. You want to lean in, like you were talking about, take a step [00:38:00] forward and be very bold with what you say, whether in words or numbers.

Bobby: But that's also, I mean, that, that goes back to like how you run your business too, right? Like you should know the direction that you want to take things in and what is the strategy that you're going to apply and what is the narrative on your business and what are the top three things that you need to nail when you raise this money?

And if you, if you own that, if you know that, then tell that story and if those are things that you really believe, then the no's are, thank you, like, you're not aligned to this and so I'm not going to have to spend the next two years in board meetings arguing with you about whether or not this is the right strategy or the wrong strategy and actually I'm going to bring on somebody who's aligned to this, who sees it the same way I, like, so many investors don't see it the same way you do and that's okay.

That's okay. They don't get it. And you know, um, but you want the ones that get it, the ones that are aligned with you. And so if you can get really clear on what it is for you, then you'll find that people who were, uh, bought into that.[00:39:00]

Jason: So, and it's funny you say, right now we were just talking about this idea that so many investors will not be aligned with you. Um, you teased out a moment of like, not. You know, learning the hard way on certain things. And throughout this conversation, I think there's been a lot of great moments where pull back the curtain and be like, Oh, it wasn't all easy.

Lots of work, whatever. Um. You did raise 16 million plus from Andreessen Horowitz, 6 million plus from Kraft and other amazing investors. That doesn't mean that every single time that you went out, people were like, yes, Bobby, you know, you talked about this idea of like, how crazy is it to say that you're going to compete with Microsoft and an Excel and Google with cheats?

Um, so I imagine there were some not very fun moments along the way. I wonder if there are any. Specific interactions. And of course you don't have to name names, but like, what are some of the crappiest moments, you know, of your, your fundraising [00:40:00] journey is maybe, especially in this last one,

Bobby: Um, I mean, in the, I remember sending out the pitch deck to an investor and then just, no, no, okay. All right,

cool.

Jason: guess, you know, that was kind of nice, you know, not, not wasting your time, but man, that is a little bit of an ego hit.

Bobby: Yeah, I think it was no, and then how is this different from Airtable? And I was like, okay, um, you know, fine, that's okay. Um, and then, um, I think the ones that, uh, um, The ones that kind of, uh, sting the most are, um, are the ones that I think you need to be most careful about are ones where, uh, they get You know, folks get really deep with you and then they come back and they're like, Hey, look, and it's okay.

Not everybody's going to have conviction about the idea. They say, Hey, look, I have a fundamental disbelief in [00:41:00] this. So like one, one in one very well known, prominent fund, uh, didn't believe that our core differentiator, pulling data, having a spreadsheet that's connected to that data was enough. It was enough for people to be excited about.

It was enough for people to. Um, you know, move use cases over out of Excel and Sheets. And that, that one probably stung the most because it was like, that makes you like, is it enough?

Uh, you

kind of like start to,

Jason: questioning. Yeah.

Bobby: yeah, you start to like, oh shoot. Um, but, um, you know, look like, it comes back to your own conviction and your own belief. And, um, It's really what you're looking for, like one or two people to like believe in you. And, um, if you believe in the idea, you know, then that's it. Go for

Jason: The flip side of that question, um, that I love having founders. [00:42:00] Relive is, do you remember when you got the, the word from Andreessen, who was the lead by the way?

Bobby: it. Christina

Jason: Christina? Yeh. Do you remember when you got the note, or the word, or the call, um, that they would be, you know, leading you around? Uh, what, what did that feel like, and where were you?

Bobby: I was in my room, uh, uh, I was on a call late at night and, uh, Christina was like, look, I want to do this deal. And then you get, you get, uh, I mean, it's, uh, you're just so excited. You've been in the trenches for, I mean, at that point I'd been talking to her daily for six days, seven days, answering questions.

She's talking to our customers. She's digging into the data. We're getting questions from. You know, principals on the team. Hey, can you pull us this? Hey, can you pull us this? And so you're like deep in it

Jason: And you had other people passing along the way too, you know, right?

Bobby: We had other people passing along the way hey, it's too early. Hey, we don't you know [00:43:00] We can't quite get there.

Oh, the space is too crowded all sorts of you know all the reasons and then You know, I remember talking to Christina and she was like grilling me on some topic. I don't even remember what it was. It was like, you know, uh, Asking me a bunch of questions about the direction, the buyer, the persona, use cases, things like that.

And then at some point she's just like, look, uh, I want to do this deal. And then, and so you get like really excited. You're like, yes, but you can't show the excitement, you know? Uh,

Jason: Yeh, you're like, Oh, um, that's interesting, you know?

Bobby: That's the, that's the like fourth person to tell me that, of

Jason: Right, right, right. Oh God, there's so much competition for this. We're going to have to negotiate.

Bobby: Yeah, but then, yeah, you are kind of, you know, you're, you're like excited on the inside, but you're kind of also trying to, you know, poker face it a little bit and, you know, you want to make sure that you are giving yourself, uh, optionality [00:44:00] to push on, on price and, um, you know, get the best terms in the deal, uh, get the things that are important for you.

So from there, after that, it was, um. She wants to do the deal, and then it was the process of kind of negotiating, uh, price and terms, and, uh, you know, you want to... One of the things that I always try to do in fundraising processes is, you want to just make sure that you don't... You want to get it, you want to keep as many of the investors in the same point in the process as possible, so that when you do get that first yes, you have all, you have everybody else that's kind of right around the same point, so that they're ready to make decisions.

I see a lot of founders... It's kind of, you know, a lot of people are like, oh, let's start with our Tier A, then Tier B, and then Tier C, and we're going to talk to five VCs, and then if that doesn't work, we'll talk to these five ones, but what actually do yourself a disservice, because then if somebody gets excited, now you've got all these people in mismatched timelines, and you're trying to get one, let one person [00:45:00] wait, hold off on one person, but they don't want to wait, and then you're trying to catch another other, other person up, but you're trying to move them too quickly, and so, The hard part about raising money is it's like talk to everyone at the same time as fast as you possibly can and keep them on the same timeline as possible, which means you don't sleep a lot and it's crazy and you're taking a lot of meetings and it's all night all day, but that's the most effective way to do it.

Before the episode ended, I asked Bobby if he had any advice for founders going out to raise. Here's what he had to say.

one of the things that I found really helpful. Um, that I had in both of my fundraising processes and I've been trying to do for others, um, when they're in fundraising processes is, uh, have a, uh, have a founder texting buddy during your process.

Somebody who's raised money, um, who's not involved in your company, who, uh, [00:46:00] um, can just be a sounding board. For everything that goes on and you know, you need to set expectations with them that it's a pretty big commitment up front, but I had texting like, um, oh, and the founder of intercom was my texting buddy in our seed process and I cannot tell you how, how valuable that was to me.

It was, I mean, and it was to the level of like, Hey, I got this email. I got this text. What do you think about my reply? How should I answer this question? Um, and what happens in these fundraising processes is every, every VC has their own style and they have their own game and they each, um, they're each trying to pull you away from, uh, they're trying to kind of pull you into their web and their way of working and their way of thinking about the company and, [00:47:00] um, You need to have somebody who can kind of remind you of a few things throughout it all.

One, that this is your company. It's, you're making, you're, uh, you're giving other folks the privilege to buy a chunk of your company, the thing that you're gonna work on all day, all night, you're gonna obsess about. And so, um, don't let them kind of like play various games with you. And to be confident and stand up and just, you know, um, push for kind of what you need and what you want.

so I find it really helpful to have a texting buddy, but they have to be committed. And, you know, again, it's like, you can text them at 10 o'clock at night and then they're going to respond and they're going to be in it with you sending, you know, drafting stuff up and whatnot.

Jason: That's a, that's a great piece of advice. I mean, it, um, you know, a Sherpa, somebody who can, Help you, um, sort of get out of your own head [00:48:00] because there are a couple of things, right? Like in the process, you have a lot of anxiety and a third party objective. I that knows kind of what these things look like can give you much clearer advice.

And I also think that founders are sometimes too close to their business to kind of be as objective and sort of straightforward as they need to be in a lot of situations. And, you know, you're a baseball guy. And sometimes I, sometimes I throw out these analogies. I'm a big sports guy. I used to work for Major League Baseball actually.

Um, but I always say like fundraising is this thing where it's like, It's not supposed to be adversarial or competitive, right? But it kind of is. And the analogy is that you have one side, which is essentially playing in the major leagues and doing the same thing 10 times a day. 52 weeks a year practicing and practicing and practicing.

It would be like a major league pitcher, right? And then some person who's like, you know, I've, uh, I read, uh, Bobby [00:49:00] Panera's blog posts about fundraising about. Hitting a fastball from a major league pitcher. I think I could do this. He said like, you know, rotate his hips and stepping up. You do it once every two years and you go in there expecting to be great on your own.

And it's like, you got to make it a team based sport. You got to have support. You got to practice. You got to do as much as you can because in those situations, even someone like you, you are kind of at a disadvantage. You just don't have as much data. You don't have as many reps. Um, and it's a tough thing.

So yeah, I love that advice.

Bobby: ​

That was my conversation with Bobby Pinero, founder and CEO of equals the next generation spreadsheet. Taking the enterprise world by storm. And let this be a reminder to you. If you're going to fundraise. Go all in.

When we come back, I'm interested in hearing my producer pages, thoughts on Bobby and his journey to closing his series a.

​A ton of founders. I meet know that dilution when fundraising is something they [00:50:00] should be careful about, but beyond that, they don't really know what goes into it. And that's a problem because not knowing how your ownership is affected when you raise different amounts of capital at different valuations can be quite damaging.

If you're even slightly unsure about it, head over to adamantventures.com click on tools and grab my free dilution planning tool. That'll run me through the basics of dilution, show you an ownership, sensitivity table, and even help you see the impact of multiple rounds of fundraising on your final ownership levels. I hope that helps. If you have any questions on the topic, feel free to hit me up.

Jason: Hello Jason.

Hey, Paige. How's it going?

Paige: I am not sure why that was so funny, but we're gonna roll with it. I just listened in on your conversation with Bobby and off the bat I just wanna mention I'm I've been working alongside founders for a while now. I've, I've learned a lot about the fundraising process, a little bit about do's and don'ts, and [00:51:00] I was very, um, inspired honestly by how much he knew about

Jason: the fundraising

Paige: conversation

Jason: and

Paige: a process.

just very

Jason: very impressive

Paige: So I don't know if you

Jason: any thoughts around that,

Paige: but

Jason: just seemed so well orchestrated,

Paige: around how to run a good fundraising process.

Jason: Yeah, I noticed that too. I wish I had asked him more questions about that 'cause I picked up on it as well. He . Doesn't have tons of fundraising experience and he wasn't an investor, but he definitely was on the elite end. My guesses are a couple things. one, I think he's just very, very smart. I think he's very smart and he's probably thought about this at a deep level and tried to deconstruct it himself.

and he probably approaches it. Like any other problem that he tackles, he kinda understands what needs to get accomplished, who the stakeholders are and how to influence them. so I imagine a lot of that, comes from there. and then, you know, [00:52:00] he was part of Intercom really early on. They raised a ton of money and because he was running finance there, he was probably at least, arm's length associated with the fundraise.

So at least he's seen some of those . And how the founders of Intercom ran fundraisers, so he probably went to school on that. And then I don't wanna discount the fact that he's got a great network. and whether it was because of the stuff that he did at Intercom and the people he knew there, or if you'll remember, and we led off with this, um, Christina Casi Opa, who is, the founder of Vanta and, one of his angel investors who raised a ton of money and went through yc.

she and the other people in his network, . who have been through fundraisers, I'm sure were sources of information for him. So, yeah. So he had a lot of ways to get great at this. It also doesn't discount the fact that even with all those advantages, if you will, to learning about fundraising, it's still very impressive of what he's been [00:53:00] able to do and set up and execute.

But that would be my guess on why he's, especially good at this.

Yeah,

Paige: he was in good hands, but he also, at the end of the day, it's up to you to execute. So kudos to him for.

Jason: dunno I just think he,

Paige: it.

Jason: but I did,

Paige: I

Jason: was curious about something.

Paige: when

Jason: he, the beginning of the

Paige: he was talking about how he had his

Jason: round,

Paige: which was an angel round,

then he ended up connecting that round to a seed round.

And I'm just wondering, I don't know, I'm honestly just confused around What

Jason: causes you to do that? Is it

Paige: like

Jason: kind of necessity?

Paige: Is

Jason: it to do that? What,

Paige: and the, just some of the facts behind how that

Jason: happens.

Yeah,

Paige: be

Jason: so that's a strategy that I talk a lot about. so I've written about this idea of building an angel army.

I imagine he did something similar. but it usually plays out like this. It's like we know that [00:54:00] we can . Get some, we can get something done in the company if we just have a little bit of capital.

If we just have a little bit more capital in the company, we could move a little bit faster, execute on a couple things. And especially at the earliest stages when you raise money from angels like that, fundraise can um, sort of put you on the radar for more formal investors, more institutional investors, like people that are trying to invest at the pre-seed level.

And A lot of times I'll tell people, you can go out and raise from angels. but raising from Angels is going to add a bunch of credibility to what you're doing. And even if they're tiny, tiny checks, like $5,000 from the founder of, I don't know, adamant or $5,000 in the founder of Vanta, I'm not sure how much they invested, but even those small amounts all of a sudden become this kind of

Credibility marker that someone as interesting as Christina Casibo would invest in you. [00:55:00] And if more and more people hear that good people are investing in you at the angel level, it can cause a lot of investors to start leaning in and wanting to learn more. and it's that momentum that, everyone's looking for in any fundraise, whether it's at the seed series, AIPO, like momentum is everything.

And so what Bobby was able to do and other people should do, is if they're able to generate momentum with these smaller angels, there is an ability to look around and be like, oh my gosh. there are now VCs looking at my deal and interested in meeting me. I might as well use this momentum to then kick off the full fundraise.

And it's funny that you pointed that out. Like he did the same thing in a different way in this series A, as he was testing out the market and waiting for people to start leaning in. And once he felt the momentum, he was like, okay, like now it's time to surround it with the full [00:56:00] process and go.

Paige: I love it. I love his senses around this. I feel like he's very good at tuning in to when he should start executing on the process and obviously it's working for him. yeah, that, that does make a lot more sense. So it's basically an angel round becomes a seed round when there's so much momentum being built from angel investors, um, that investors wanna get in on it.

Is that basically a good summation?

Jason: that's right. The, like, the next round of investors. See the people that are interested now and use that as indication that this might be a good time to try to invest anyways.

Okay.

Paige: All right. I think that makes sense.

Jason: something else that I

Paige: wanted to bring up that I think you'll think is hilarious because something that Bobby said, which

Jason: stood out to me was that he's a big component or

Paige: he,

Jason: he stands behind

Paige: raising

Jason: phrasing

Paige: when you

Jason: don't need to.

Yeah.

Paige: I

Jason: I'm pretty sure that this is something that you oppose or,

Paige: or go against.

Jason: I'm curious, [00:57:00] and I'm wrong,

Paige: wrong

Jason: I'm curious on your thoughts

Paige: around, so Bobby basically would prepare and start fundraising way ahead of time. Like he would still have a decent amount of runway left and he would decide to go out there and, you know, start working

Jason: This process.

Do you like that? Do you not, I dunno it's working for

Paige: but

Jason: Yeah,

Paige: to hear your thoughts.

Jason: no. I'm a actually a big supporter and you might, maybe you're thrown off because I just describe it differently. if someone thinks that they're going to um, run outta capital and

A year, a lot of people will wait until it's three months away from running outta capital to start preparing to fundraise. I would rather people fundraise well, well in advance, like start, start to prepare to fundraise a year in advance so that they have the flexibility and comfort level to go fundraise with a lot of, momentum and preparation behind their backs and

At that time, because you have a year of [00:58:00] runway, it means you don't need to fundraise, right? technically wouldn't have to fundraise. So I think he just described it differently overall. fundraising where you have a gun to your head because you're about to run outta capital, means that just don't have a lot of options.

And that desperation, like that desperation can be picked up by VCs a mile away.

Paige: Yeah

Jason: you want to go into a fundraise where when people like look at the opportunity and they're like, well, I'm not sure I wanna invest. You're like, I don't really care. Like I don't need you. Like I don't need this money now.

I just wanna do it because there's a big opportunity. And I think if you have the opportunity slash flexibility in your runway, you absolutely should be thinking about what it means to fundraise well ahead of your cash out date. then the

Paige: know, I see, I see where I got confused now. I think it's, I got mixed up in you telling [00:59:00]

Jason: founders, like you at some of your workshops, you've said, I think majority of you in here might not have

Paige: raise venture capital. You're .

Jason: Speaking about

Paige: before, like

Jason: recognizing if

Paige: your

Jason: business actually needs to raise money or not, That's right

Paige: about

Jason: knowing

Paige: he's a

Jason: business that needs to raise money

Paige: and getting

Jason: ahead

Paige: of the process on that.

Am I

Jason: That's a hundred percent correct.

yes

Paige: what I mixed up then. Okay.

Jason: Yeah, and the, the other thing I'd say is, When someone is thinking about raising capital, a lot of times this is just like it. It reminds me of another lesson I tell people is a lot of people make the mistake of they're, let's say they're a year out from a fundraise, and they're like, well, every day that I generate like.

1% more revenue means that I'm a little bit better. And if I have 2% more revenue, then maybe I'll have 2% higher of a valuation. and the reality is the decision to make an investment and [01:00:00] put a valuation on a company. Isn't so scientific that the labors are so granular, like every little incremental amount of improvement is going to change things.

That's not how it works. And because of that, what I tell founders is, you might have a year's runway, you might be making progress over the next few months, but that progress that you make might not actually change the story that you tell. to investors, and if that's the case, then the months from now till the next three, four, or five months, where the numbers might lightly change, but the story doesn't actually improve your ability to fundraise.

Actually all it does is reduce your runway, which. If that's the case, then you should just go out now, so you go fundraise with the exact same story. Just more runway, more flexibility, and more comfort in the way you actually execute things. So it all adds up to a lot of the things Bobby does, which is start prepping early and kick off the fundraise when he is able [01:01:00] to build momentum super early on.

Yeah,

Paige: I also feel like it helps you,the further out you plan it helps you not feel so desperate to investors because, you know, you still have time to talk to other people. You still have options. Whereas

Jason: a lot

Paige: people that you know, like you're saying, wait till the last three months. Of course they might,

Wreak of desperation because in a way they are. So, like, getting

Jason: of

Paige: of that is, is

Jason: very good. So

Paige: I,

give him credit.

Jason: seems like the way to do it

Paige: it if you're gonna go

Jason: out there. Obviously.

Paige: it's not

Jason: not always

Paige: and maybe it

Jason: doesn't work out Totally.

Paige: but,

Jason: Yeah. and I, I will, I will say like a lot of this is easier said than done, when we talk about any of these scenarios, I'm always like. Painting the perfect picture and the perfect situation and what it would be like, this and that.

And there were always,

Paige: never happens.

Jason: yeah, it never happens except if you're named Bobby Panero, But otherwise, you know, there are always exceptions. There are always challenges and [01:02:00] difficulties that make it, hard to do these things. But we'd always like to share what the perfect

Paige: Yeah

Jason: is. So you can always, sprint towards that.

Paige: Even in Bobby's case, like he was on eggshells. So the last second, like he, he had the most out

Jason: Yep

Paige: had so much knowledge around it and he still towards the end, you're waiting for that, that answer. And I think it goes to show like always gonna be, what do you say? You always say like, it's not over till it's actually over,

Jason: something like that.

Yeah, it And honestly, even the best one run fundraisers, even the best outcomes. you read about a $16 million raise led by Andreessen Horowitz with participation from craft, like the equals fundraise was. And if you peel back the layers, he'll tell you a bunch of funds, pass a bunch of funds, pass

Paige: Yeah

Jason: funds, don't believe in you.

And especially if you're like, pricing aggressively, and you're going for something big. There are gonna be tons of [01:03:00] people that say no. And it almost always at the very end still feels like, oh my gosh, I'm not sure if this is going to happen. So I always like making sure people hear that story.

So if they're in the, they're in the fog of war right now and going through the battle, it's like, I don't want them to be so thrown off by the anxiety they're feeling because like most fundraisers feel it.

Paige: Yeah.

Jason: That's why I love this podcast.

everyone use it

Paige: encouragement to understand it's not

Jason: sunshine

Paige: rainbows. It's gonna be messy. But some of the best fundraisers out there have been At the end, and then everything pulls together. It's supposed to be, so

I think we'll wrap up there.

Jason: Yeah. You're, you're picking up on a lot, Paige. I like the insights that you're seeing and, and the right questions. but this is definitely, this is a great . This is a great interview for all of us to go to school on. I'm excited we were able to do it.

Paige: Yeah, me too.

Jason: Awesome

Paige: Jason.

Jason: Thanks. P.

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If you're looking for more insights, strategies, and support around fundraising. Subscribe to our weekly newsletter. It's at [01:04:00] funded pod.com/newsletter. Also find me on social I'm at J Ja that's J a Y Y E H on almost every platform. So hit me up. I respond to newsletter replies and DMS.

This episode was produced by page Randall.

Thanks also to John or Lee from adamant.

One last, thanks to our sponsor magic mind, the world's first productivity shot.

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