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ELEVATE: The Growth Accelerator

Casestudy on ‘Present’ with Manasi Vartak

Video 8: ‘Present’ A Casestudy with Manasi Vartak

- A little bit of background. During my PhD I worked on this system called ModelDB. For those of you who are in AI, ML,
data science, models are becoming the new code. So like you're seeing that every company is building AI, ML, but the
way that it's being done is really ad hoc and brutal. So my thesis work we developed an open source system called
ModelDB. Think about just like a database stores data ModelDB is a place to store models and information about them.
And this system actually got a ton of traction while I was at school. It was adopted by banks, research groups, smaller
companies alike. And that was a really good piece of evidence that there's a need for such a system and there's appetite
from the largest players to use and buy such a product. So by the time that I did the accelerator last summer the system
had been in existence for a while. We were seeing good traction and I was feeling comfortable about starting a company
and you realize that that's one of the first things you have to overcome before you can go out and raise funding is you
kind of need to gird yourself and be like, okay, I'm gonna do this. And this is maybe the right time for me, the right
opportunity. And then you need to internally make that decision before you can go out and raise funding. So for me it
was the fact that machine learning is exploding. It was exploding last year too. The tooling business for ML really had a
gap that our system could have filled and that was good early user feedback indicating that that was somewhat of a fit
of this particular system to what I was seeing in the market. My decision to raise venture funding was really driven by
four things that are listed here. The first one is the market opportunity. It's huge. And the time was right to hit that
opportunity and take advantage of it. Two years down the road, I don't think that opportunity would have existed or will
exist. So it was the right time personally also is the right time for me. Verta is a very infrastructure heavy business so it
needs a bunch of engineering resources and some of the top engineers to build a software system of this complexity and
robustness. So it's not a thing that I could go off and do with just me and a friend. So it's labor intensive and I wanted a
plan for that. We also have big ambitions. We think that we are experts in this space and we can really change the way
that machine learning is done today and in the future. So we wanted to be the machine learning company and if you
have those kinds of ambitions then you want to start off with the right resources and the biggest resource is do you have
the money to pay people or to get computers you know to get legal support to get marketing support to make your
company successful. And in my case, I was getting out of school so there was no option to bootstrap. Sometimes that
can be a viable thing as well. So that's why I decided it was the right time to raise venture funding. The thing to keep in
mind about venture funding is that usually the businesses that are venture funded are the ones that have sort of the
chance to be really big businesses. So people talk about billion dollar businesses or a unicorn. So like those are ideally
suited. It's hard to tell from the outset whether your business is gonna be that if you have those ambitions and the
market and your expertise lines up, then absolutely. I think lots of people should consider venture funding and I think
that was also a good time to raise venture funding. In terms of the timing of the fundraise, again mentioned this a bit
earlier. When should you fundraise? You should fundraise when, well the zeroth point there is you've decided that you
want to start this company and you will see it through come hell or high water. It's like you need to have that internal
resolve before you can go and convince other people to join you whether on the team or in terms of giving you money.
Practically it means a couple of things. The first one is you want to demonstrate some early traction. In our case it was
building an early prototype, putting it in front of early users and getting a sense of what they're saying whether it's
actually meeting a particular need. The second one is expertise. For me it was domain expertise, for lots of founders out
there I'm sure it's similar. You know you're an expert in maybe HR or marketing or robotics and you want to take it to
the next level. We'd receive positive feedback. And finally you also need to understand the landscape out there. So like
what changes are you seeing or who are the other players? How are they moving and how do you imagine carving that
path? And to be clear the expectation is not that you have everything figured out. It's like you're going on an exploratory
journey. You're gonna have the first few steps mapped out and kind of an idea of where you want to end up at the end.
But like the expectation is not that you would have mapped out every step from like here to the top of Mount Everest.
No. Like you kind of need to know how you're gonna get to the base camp and then you'll figure it out or you'll find
other people who can support you. But in general think about prototype, traction, what's special about you that you can
bring to this company and also how is the landscape that you're entering. All right. So that's why should one a raise seed
round. The next one is how much do you need. And this can be challenging for founders. It was definitely something that
I hadn't done before. I'm a first time founder. If I haven't mentioned this before I'd done smaller projects. You know I
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

had actually worked with GC for a rough draft. If any of you guys are students then rough draft is a really good way to
get small amounts like 25k worth of funding for your project. So I'd worked on that but sort of large scale valuation
determination or like just estimating the funds you need wasn't something I had done before. So how do you do that?
Here are just some rules of thumb and I've thrown up some numbers that can serve as a rubric for other people. Note
that this was gonna be very different depending on your business. This is for a tech heavy business and this is also for a
business in the Bay Area where hiring is the biggest expense. So if you look at this table on the right side assume that
you've given yourself a year to prove out whether your business has legs to grow it to a level where you can go out and
ask for more funding. So this might be one year, it might be two years. It depends on the complexity of the product that
you're building and the time it would take to reach your customers. So if you're selling it to enterprises like we are one
year doesn't cut it, you actually need more. If you're doing say a B2C play perhaps you need less. So like change, tailor
that to your situation, and the things you think about are the first thing is people, how many people are you gonna
need? In my case it was engineers. So then you look at, all right I need an engineer. How many of those do I need?
Maybe you need two. In this case, I'm assuming I need six engineers. I need them for a year. And suppose I'm paying
them like 150k. Again this is Bay Area. The salaries here are insane. And then you just multiply it out. Okay. So that's how
much hiring will take up. There's a lot of operational costs that goes into running a business whether that's you know
formation, documents it's offer letters, it's getting a marketing person even if it's consulting, getting a salesperson,
operations. So factor that in and these are really round numbers, just an estimate for a year. And then you add it up.
And in this case it turns out to be an even number of like 1 million. Note that this does not include buffer. You should at
least add like 20 or 25% buffer because unexpected things are gonna happen. You might need to do visas. And I'll touch
upon that a little bit later. We live in the world where you need to figure out visas. A lot of talented people might not
come from the US so you need to figure out how to get them the right paperwork so that they can contribute to your
company. So that's determining how much money you'll need. So the other part of raising money is also what is the
valuation of your business. So valuation means for a VC or for someone investing money in your company what is your
company worth? And right now you might not have a product. So like the worth is really your best estimate of where
you will be at the end of a year. So you're saying, hey, if everything goes right then our valuation will be whatever
amount you think is appropriate. And the best way to figure out that amount is to talk to other founders, maybe folks
who are in this accelerator or other that have raised money and then get a ballpark. So for a seed round depending on
like your experience starting companies or the amount of traction you have the seed round will amount to anywhere
between 10% to 30% of your equity. So suppose that you said you want your seed round to be equal to 30% of your
equity then you can compute backwards and figure out what your valuation will be. So that math is a little bit involved
for me to talk through it but I'm happy to provide some links after to figure out like, okay if my valuation is one, if my
raise is 1 million and I am willing to give away 20% of the company for that then how much is my company valued at? So
a little bit of math but it's pretty straightforward I promise and can walk you through it offline. Cool. I'll talk more about
what kind of VCs to look for but the key thing about valuation is you don't necessarily want to maximize your valuation.
The thing is this is not gonna be the only round that you're gonna be raising. You're gonna be raising a seed than you'll
be raising a series A, B, C you know hopefully all goes well. And then your company becomes really big. So it's the long
game. Don't try to optimize for a huge valuation that your company is not gonna be able to live up to. Instead go for
something that's more like you can sleep you know you can sleep soundly with that valuation. You shouldn't feel like you
were cheated out of a good valuation but also set realistic goals and most importantly work with people who are good
partners as opposed to like some investors might give you a really high valuation but their support is not gonna be
adequate for your company in which case like don't go for the higher valuation, go for someone who really can support
your business. Okay. A little bit about what a seed round entails. There are different ways to do a seed round and all of
these are maybe better suited for offline or some resources that we can send your way but I'll just go over it at a high
level. The seed round is usually pretty small. A priced round versus SAFE is the first option that you're gonna have to
discuss with a potential investor. A price round is where you actually set a price on your company. So set a valuation
that's kind of set in stone and then you compute the equity that you have, co-founders have and investors have, based
on that price. Instead, SAFE is a much easier way to get the money in the bank and get rolling. That's what a lot of the
accelerators like YC does. It's also very common at the seed stage. What SAFE means is that you're promising a piece of
the equity to this investor at the time when you have a price drown. So right now maybe the investor has put in $1
million but there is no price associated with that round. But when you go off and raise your next round of funding then
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

that 1 million would turn into equity for that investor. The thing that's associated with safes is usually a discount and a
cap. Because safe is not a priced round, the investors want to know that you know their 1 million is gonna account for a
significant portion of your equity. So there's usually a cap on the valuation of your company. So if they invested 1 million
they might put a cap of 5 million saying even if your ultimate valuation goes to 10 million we as the early investors are
gonna convert at a valuation of 5 million and that helps, like they're gonna put in a lot of time and effort that helps
safeguard their interests. And that's not unusual at all. Discounts is another thing. What discounts does is it provides a
mark down on the price of your stock when you go and raise a priced round. Again, this is to safeguard interest of early
investors who are taking a big risk. Both of these are not unusual. It's definitely a negotiation with your investors to
figure out a good cap, a good discount and make sure you ended up with something that you personally feel
comfortable with. So that's about the mechanics. Who do you raise from? There's a lot of different kinds of investors.
There's angels, institutional accelerators and so on. Angels are usually folks who will write smaller checks and they will
you know have 25k, 50k. They're usually the people who have maybe been entrepreneurs before and want to help pay it
forward essentially. They're really great for their advice and the fact that they're personally invested in helping your
business succeed. The institutional investors are the ones who can write you the big checks. So like the million dollar
check is unlikely to come from angels. It's gonna come from larger investors. And if you're a building a labor intensive
business then institutional is something that you have to consider. If you're looking to bootstrap get the first you know
like 200k or something maybe you can get together some angels or friends and family and make that happen. Finally
accelerators right? The Hubspot accelerators is one of them. I don't think they take equity but there are other
accelerators like YC that will and that's a different tradeoff again. So the thing is accelerators can really help you in the
early stages when you're figuring out what your business is and help you get on the path of becoming a large and
successful company. So a lot of times that type of equity, so parting with some equity in return for that can make sense
but you should really assess that for whether you are gonna get more out of an accelerator that's taking equity versus
just going to an institutional investor and getting more money as well as resources to help you along. And then there's
like usually seed rounds can be a single investor putting in a large check. It can be a few different investors like splitting
the check two or three ways syndicates and so on. I'm happy to answer more questions about that offline. And the last
point I want to make here which is related to that quote there is investors like people come in all shapes and sizes. So
like what they're interested in the way that they work. A lot of people here probably worked in multiple companies. So
think about your boss. Every boss is unique. They have a unique working style. There are things that they're super good
at and then there are things that are not their expertise. So really understand whether what this particular investor is
offering is what you need and whether their way of working is gonna be a match. So what I mean is is this person gonna
be available for say monthly meetings if you need them to do an introduction for you are they gonna be willing to do
that? Determine what's most important for your team and yourself and then pick an investor who matches it. It's really
not about, it's not a numbers game. You want to find a good fit here. Cool. All right, so I'm gonna transition now into
crafting the deck itself as well as how do you create a narrative that can help get investors as well as other team
members along on this journey. Give me one sec. Okay. So fundraising is all about telling a good story and a good
narrative. You also need to really believe in that narrative because you're taking someone else, you're asking them to
take a really big risk on you. And that means that you should really believe in what you are selling to them. Usually
fundraising is like you have a pitch deck that you will present to investors. There's usually a few early conversations,
coffees, getting to know the vertical or partners or associates or principles that you'll be working with. And if there is a
good set then you'll be asked to come in to present your deck to a bunch of the VC members there and they will
ultimately decide whether you're a good fit for their firm. The key part about creating the stack is to note that it's an
iterative process. So I say there that my deck went through three iterations that is not small changes to the deck. The
small changes to the deck must have been in the hundreds. This is more about three distinct storylines. So each time
you're trying to find a more effective way of framing the problem framing the solution and the market opportunity and
it's gonna take a lot of iteration. so like dedicate enough time to it and don't be afraid to throw away a previous
narrative that was not as strong. Highly recommend talking through your deck with friends and colleagues who are not
in VC as well. They are just any smart friend can give you feedback at the early stages. If you do know someone who
works in VC then running the deck by them is super helpful because they've seen a lot of pitches and they can tell you
what's missing what you can add and so on. I'll go through a particular outline that I think works really well but the key
point here is figure out a story. You're gonna have to iterate over it a lot. In my case it was really around the ModelDB
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

project and my PhD work the changes that I had seen happening in the marketplace or the five years of my PhD where I
saw the market moving and how my team was uniquely positioned to address these challenges and take feedback.
People are gonna give you feedback. Not all of it is gonna be useful. So like you need to filter it and that applies to my
thoughts or advice here too, always filter. That's what another founder told me and I've taken that to heart. Okay. So
what can you do or how do you make a compelling pitch deck? There is really a standard format and it's not always
obvious what it is but here's one that I've seen work really well and I would highly recommend folks use this at least for
their first cut if you find that doesn't work for you revisit but start from here. So first one is like what has changed in the
world? Unless there's some change there is no new opportunity. So maybe it is that the gig economy has become really
big. In my case, it was the fact that AI and ML was changing every business and yet they didn't have the tools to do that
all. Whenever there's a change there's a few challenges that are created or opportunities. So again, I'll go back to the
example of Verta. The change was that we're moving from a static view of data science to a dynamic view for companies
to stay competitive in their particular, marketing, HR, banking space they need to incorporate AI and ML. The challenge
is that they don't have the tools or talent to make that happen and therefore the opportunity it presents is for experts in
this space to build tools that can as they say it democratize the access to AI and ML. So that was our opportunity. The
next thing is how can you address this challenge? For me it was via ModelDB had built this product that started
addressing these challenges and we knew how to take that forward from one sort of smaller system to an entire
platform. So then you'd go into solution is like my solution is to start with a system. The system does ABC, that solves
these particular problems. In the future we can do all this host of operations on functions within the system. Once you
present a solution then you can talk about traction is what success have you seen so far. Maybe you have pilots maybe
you have early users. Maybe there are people who can vouch for you saying, Hey these guys have the early stages of
something, but it is exceptional. Something that shows that people other than yourself believe in what you're building
and that you have iterated on your ideas already. Once you focus on the solution then you go to traction, team and then
visions for three years. So team is like why are you uniquely positioned to do this? Why is it your team? What about your
background makes you special? And then where do you see this business going for the next few years? Again, the last
bullet is you're not gonna know on day one where you want to be in three years. You're gonna have kind of a north star.
You're not gonna have all the steps but an investor wants to see what are your ambitions? If all goes well, where do you
want to be in three years? So that's generally how you craft a pitch deck. And then a pitch deck is not everything. A pitch
deck is maybe 10 slides. It clearly doesn't capture the entire story. So you always want to compliment that with your
own narrative or story. In my case I focused on what I thought was unique about me and its relation to the company. It
was the fact that I was a subject matter expert, I had written a PhD thesis on it. I had built a similar product before. I'd
worked in large companies building AI and ML. So I knew why I was the right person and I also had answers for my
weaknesses. This is a very competitive space. So every investor would ask okay what do you think about Google and
Amazon? If you're gonna build a big business here you can't sort of stick your head in the sand. You need to take it head
on. and you need to have some answers for how you can mitigate those risks. And then you also tell people how you're
gonna use that money that they'll give you. So how are you gonna hire people? How are you gonna attract the best of
the best? How's your marketing and sales gonna work? So the key point here is you have your pitch deck and then you
have your narrative and of course yourself and those three things together are gonna make a really powerful case for an
investor to fund you. Okay. So in the last part I'm gonna go through how to run a pitch process and how do you select
investors? What are the mechanics of raising money? I have a few slides here. I'll start off with just a few tips which are
the pitching and raising money is a process and you should approach it as that like you can't be fundraising one day and
not fundraising another day. So when you say that all right I'm gonna go raise a seed round, know that you're gonna
spend a month or two really talking to a lot of investors, pitching, getting feedback, getting nos. And you need to kind of
have that mindset that all right the next few months I'm gonna do what it takes to raise money. Note that the two
months are usually at the end. You hopefully have developed some connections with investors previously that you can
tap into when you're ready to actually fundraise. And the way that I would recommend doing this process is start off by
building your wishlist. So imagine it's very similar to when you're planning a trip somewhere right? You have a lot of stuff
I want to do ABC here are the kinds of things that I want to do. Similarly, raising money is a really big deal. So think
through what is your wishlist? What kind of investors do you need? Do you want investors focused on a particular type
of business? What kind of background do you want them to have? Are there particular partners that are particularly well
suited to fund your business? So note that investors I'm sure this was covered earlier. Investment firms have multiple
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

partners there and it might be that one person is well suited, so do your research. For me, I wanted to focus on investors
who had worked with AI and had that open source because that's where we started. So someone who had that
knowledge and could leverage it and helping us was the ideal candidate for Verta. This requires a lot of researching, just
looking at the top venture firms, googling around, also ask people for recommendations. I cannot recommend this
enough. If you know founders ask them who are the people who you highly trust in this business, who was an expert in
the space and founders having gone through this rather brutal journey will be very honest about telling you who's the
best and who you should work with. I was lucky in that I had worked with a few investors before including GC and they
really helped me navigate the process. And before you pitch, before you get to the one or two months where you're
heads down pitching you need to make those intros or have those coffees and get a sense for whether the person on
the other side of the table is someone you would enjoy working with for multiple years. And if that's not the case just
like investors can say no, as a founder you can also say no. Like you really want to find that good fit. This is not just about
money. This is a very difficult journey and it's a long journey. So make sure you are working with someone who you trust
and you would like to have by your side. So this is some of the wishlist stuff that I'd worked with Natalie actually. It's like
who do I want to work with? Why are we interested in them? What are the relevant portfolio companies, who can
introduce me there and status. So like really run those as you would run a sales process. It's like where are we in the
process? What are our next steps? Do we have the materials necessary? Build your investor wish list. Once you have
that it's all about finding a lead. So if you are raising a seed round usually when you get one investor to say yes others
will more easily say yes. It's a risky business. As an investor, when you see someone else willing to take a bat you're
more encouraged to take the bat too. So just keep in mind that once you find a lead, it's gonna be a lot easier to get
other people to fill in the round. And finding the lead which is similar to find investors, coordinate the outreach and
introductions. Tap into your network of founders in particular. Keep track of next steps, deadline you know and keep
refining your a deck. I don't think the same ... The deck you show for the first investor is not gonna be the same deck for
the last investor that you pitch and it's gonna improve and it should. So feel free to keep iterating on it. Don't expect
that you're gonna have the perfect thing for your first pitch. So just keep that in mind and continue iterating. When I was
finalizing the lead I really wanted to work with someone who was technical, someone who understood open source and
really would support me in building this business. And I really wanted someone who trusted me to make the right
decisions and would also kind of drive me to be my best self. I was fortunate to have the option of working with multiple
investors and got favorable terms and ultimately for me it was like, okay, who do I trust to help me make this into a big
business, who understands my business, who understand ML and open source and in each one of your cases there are
gonna be other criteria that you should apply very diligently. The final thing I want to highlight here is if you are raising a
seed round, you're gonna need a lot of mentorship or help early on. So you should look for investors who are willing to
do that with you. So like you don't want someone who's gonna give you money and then disappear. You want someone
who is going to make connections, who is gonna introduce you to potential customers and is also gonna help you raise
the next round. This is different from later stages where your company is at a more stable state, you have a great team,
have figured out a lot of things like bias towards folks who will help you in a very hands on fashion. All right. Now you
have an investor what is involved in dotting the i's and crossing the t's? What does that involve? The last few weeks of
closing funding can be very stressful. If you haven't negotiated before, it's gonna ... You haven't been in this sort of
situation and it can be stressful where you're afraid of you know, will someone walk away? It's like your, it's a very
delicate balance. Know that investors are interested in working with you just like you want to get the best deal, they
want to get the best deal as well. So just push through. It helps to have a previous founder or just a friend by your side
who is telling you all right you got this. Just keep going and you'll figure it out. Before you end up picking a particular VC
to work with, make sure you've talked to other founders that they have funded. It's very typical for a VC to do diligence
on founders. So they all talk to folks that you have worked with in the past and they'll ask those people hey what do you
think of this person their product and so on. And you should definitely do the same for VCs. Talk to founders that they
have funded, ask them what they're super good at. Ask them what might be gaps in their expertise, because to build a
business you need to have experts on all sides. And if one VC doesn't have a particular expertise you can find other
people to supplement that. But if you never asked that question you'll never find out. Note that visas can be really really
iffy. We ran into a bunch of these things early on and now about like a year later we have kind of figured those things
out. But it can take a while particularly if you have a cofounder who's on a visa have those conversations early because
fundraising is a time when push comes to shove when people have to say yay or nay. And that's a time when you're
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Casestudy on ‘Present’ with Manasi Vartak

asking people to take a big risk and sign on the bottom line saying okay I'm gonna do this with you for the next x years.
Like have those hard conversations. It can be very uncomfortable but have them hopefully before you go out to
fundraise. In terms of documents, this is a very large financial transaction so there's gonna be a lot of documentation
involved. A lot of it has to do with formation of the company. So like where have you incorporated, certificate of
incorporation, bylaws, minute book, how is the equity divided, who owns IP? If you have any employees and what are
the agreements around employees, proprietary invention agreements, and so on. This is pretty standard. Even if you
don't know what all of these things mean that's okay. You have to be working with a reasonable lawyer so that they can
explain these things to you. But nothing here is out of the ordinary. When you register a company, you are gonna get
almost like templates of these things and the investors want to make sure that everything is in order before they hand
off a bunch of money to you. So that's the documentation process. And there's a lot of paperwork. Just know that that's
gonna be involved. Make sure that your documents are in the order so like don't go and start incorporating after you
have a lead. Incorporate before so that you can, once someone's ready to sign a check, you have everything in order for
you to accept that money. Cool. Okay. So I went over a lot of material starting with like when to fundraise, how to look
for investors how to craft a pitch deck and then the logistics of raising money. I will stop here and take questions. Feel
free to throw out any questions that you might have. Happy to answer them to the best of my ability. Some of the things
might be better answered offline or via our resources and the awesome Hubspot GC team can take care of that. All right
let's go.

- [Questioner] Awesome. Thanks so much for that talk. And then we'll dive into some questions now. So this one's from
Lucila. When you said gaining positive feedback from early pilots, in concrete terms, what kind of feedbacks are you
talking about?

- Yeah that's a great question. So in my particular case we had an open source project. For us feedback was how many
stars were on GitHub or how many people had downloaded our software. We had worked one on one with a few large
banks to deploy our product within their company. So that was positive feedback which is our right people are using this
thing. If it's a product and someone is using it daily that's a pretty good sign. If you can get them to say good things
about your product that's even better. But just some loop that's as you have built this you've put it in the hands of user
and they're using it or it's solving a problem for them. That's the kind of feedback investors are looking for.

- [Questioner] Alright great. This is a question from Stuart. It looks like you may be a solo founder. If so how do you
overcome the VC bias against solo entrepreneurs to get the funding so you could build out your team?

- It's challenging. And it was challenging. So like visa things was one of the reasons why we couldn't have multiple people
on the team 'cause it was gonna take, before we had funding we couldn't get some of the early team members so I
started off this company based on my PhD work. There were a few people I really wanted to work with and I wanted to
bring on as cofounders except they were on visas and we could not get them onboard soon enough. So it was hard. It
was not my ideal case to go out and raise money as a solo founder. There is a bias I think, and the reason is just that this
is so hard that you do need people by your side who are gonna help you through the ups and downs. It's very realistic
and if you have an opportunity to work with early team members or founders do that. I think it makes a lot of things
downstream easier. But if you are a solo founder as I was it comes down to a couple of things. The first one is do the
investors trust that you are gonna be able to see this through? Like do you have enough grit, determination to be like
come hell or high water, I am gonna make this business successful, because now they're taking a risk on one person as
opposed to like a group of three, suppose. The second one is do you have the expertise it takes? So if suppose you're
working on autonomous vehicles and you have built two of these companies or cars before then they know you are the
expert and you can hire the right people. The third thing which goes through hiring is they need to see that you will be
able to hire the right early team members. And that can be demonstrated by you know maybe what is your background
academic or professional, what do other people who watch for you say? So like if they say something like, Oh yeah if she
raised money I would totally go and work with her. Now, that's a very strong sign that you're gonna be able to hire the
right team. So there are ways to circumvent that. It is gonna be harder but just sort of put your deck in order. They're
gonna bring up that question. So then have your answers ready for how are you gonna hire the first few people and who
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

are they gonna be? Why are you the right person to lead that company? So this is I would say when you're pitching
these are your battle cards that are like okay I'm gonna get these hard questions and this is how I'm gonna address
them. So doable, just put in the effort and make a very strong case for why you can do it alone.

- [Questioner] All right. This is a question from Jeffery. What was the biggest surprise and or the biggest headache when
raising your seed round?

- It takes a while. I kind of thought that it was gonna, it would be a lot shorter. It turns out there was a lot of paperwork.
There's a lot of diligence and you're talking to multiple investors. And if you haven't been in sort of a intense negotiating
situation then it can be stressful. So just keep in mind that that's just normal. It's such a big transaction that you want to
make sure that you are prepared to just sort of stick through that process. And even if it gets tough at times just
remember why you're doing this and push through because there will be tough times. There will be investors who don't
want to work with you or there will be investors who want more of an equity stake than you're willing to give them. Just
keep in mind that it is a partnership. So you need to be happy with what you're getting and the investor needs to be
happy too. So until you find that happy medium, you're gonna have to keep going through this process.

- [Questioner] All right. This is a question from Diane. When you mentioned doing research on investors where do you
actually look to find the investors?

- Yeah. So two places I would say. One is founder friends. If you have started, if you know people who started companies
the best ways to ask them hey who do you respect in this business or are there other founders or VCs that you can
connect me to? And those are the strongest introductions. If a founder introduces you to other VCs than the VCs will
definitely listen to what you have to say. The other one is just Google around. It sounds really obvious but look at
investors like top investment firms or investors focusing on say IoT or investors focusing on e-commerce. You will find a
list of those investors with googling. There's also like top investor lists that you can look at. I think I would rather bias
towards getting referrals versus these lists because you have more trust in your friend or founder as opposed to a list
that you don't know how it came to be.

- [Questioner] All right. This is a follow up to the solo founder question. How is it affecting the progress in the day to day
of your company?

- For me it was easier because I was able to hire really well so it's I think the first few hires can be challenging because
you're a solo founder and that's where having a product that I had built in the past and demonstrating that I knew what I
was doing I was supported by some of the top people in the business really helped. Because it's AI and ML it's also a very
interesting space where lots of people want to build cool stuff here. So I think that was a bit easier for me but it's gonna
be challenging for the first few. After that it's gonna get easier. So yes you take ahead but if you want to do something
badly enough you'll figure out a way. So I don't think it has materially affected us. And because I have the funding I can
now get the people I really want on board. Sorry about those reminders if you can see them.

- [Questioner] All right. This is from Karen. What was the best way to approach and acquire mentors and advisors? Was
it Twitter, intros or other meetings?

- Interesting. I haven't done the Twitter route so I don't know if you meant Twitter as the company or the social media
network. I think it's best to like think about who's gonna be a mentor, someone who thinks that there is something
special about you, whether it's you guys are interested in the same types of problems or maybe your backgrounds are
similar. And then they have some interest in helping you grow and through introductions I think is the best way to do
this. So one of the earliest mentors for me was a professor at school. Right. They know you. They think that you're a
smart, they want to help you along. Once you start a company then the people who will serve as mentors are gonna be
those who maybe see you pitch or see your product and see some sort of spark and they want to help grow that spark
into something really big. Those are the people who are going to be invested in helping you. So you should, that's gonna
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Casestudy on ‘Present’ with Manasi Vartak

happen inbound to you. If you want do it outbound, I would say if you have investors already you can ask investors for
people who will be good advisors for a particular thing. So like don't ask someone, I want advisors. Instead ask them I am
looking for advisors who can help me with marketing and then they can tap into their networks and make a few
connections. But note that it's gonna take a while to develop that relationship and just give a time because that person
needs to get to know you. You need to get to know them too. And then that can be a fruitful longer term relationship.

- [Questioner] All right great. This is a question from Phil. Can you talk more about the team you built and what the
timing of having your team in place was during the fundraise process? How did you overcome the chicken and egg issues
of can't raise money without a team, can't build a team without money?

- This is 100% spot on I have to say, that is a chicken and egg that everyone runs into. My case is a little bit unusual so I
would take it with a little grain of salt. I had built an open source project. So in that case I was going to market so to
speak with an existing product. That team however was a team of students at MIT and they were not onboard when I
started the company. So when I hired the first few engineers it was after I raised money. So I raised money as a solo
founder. I did not have a team then I did have a product and people trusted that I could build a team and take the
product to the next level. So here I hope you can see how much trust the investors are putting into you personally to be
able to like use this large sum of money to do something meaningful. So started with zero team and now we're at seven
and those are some of the top engineers that I know. So it's not gonna be easy to hire the right people because the best
people are gainfully employed elsewhere. So it's gonna take a while. If you want to bootstrap I would highly recommend
also looking at outsourcing some of the early development. Like if you have to build an app or something you know pay
a few grand, get a prototype built out particularly if you're not technical. In my case I am technical I code so I could do a
bunch of these things. But if you're not in a place to be able to do that go spend some of your money in order to have an
offshore team. Because now you can say all right I have a set of people or who are going to help me build out the
product for the first three months as I hire the first engineers. And to be clear like we closed funding late last year and in
less than a month I had the first team on board. So like start raising money and also hiring team members in parallel if
you can because once you have the money it's all go, go, go, and you don't want to start recruiting after you get money.

- [Questioner] All right, great. This is another one. How does raising venture funding change the culture of the company?

- So I think it really depends on the VCs that you work with. I know there are some not so great stories about venture
funding out there where it really makes a culture toxic and so on. I think it really depends on the VCs that you work with
and whether you and the investor are aligned on what you want to get out of the seed round. So if at the outset you set
clear expectations on this is a seed round at the end of the year or two years whatever your runway is we are gonna
have accomplished these things. We're gonna have so many users, we're gonna have so many paying customers. This is
what my team is gonna look like. Then those become pretty objective criteria that both of you have agreed on. And then
if you are to change your mind then you're also going back on your word. Similarly, if the VC suddenly decides to change
their mind and ask for something different than they're going back on their words. So you can be like, hey, we agreed to
doing these few things and that's what I am focusing on. So in our case I don't think it has changed the culture. I actually
appreciate this being venture funded because it gives you pretty tight timelines and when you're working in a
competitive space, speed is everything. And I think venture funding actually helps you keep that pace and make sure
you're moving fast enough.

- [Questioner] All right. We're almost out of time. So this'll be our last question but this is from Shelly. This was a super
helpful presentation. I love the content that was presented and the way it was presented. Are there any other ventures
like rough draft ventures that provide a small amount of funding, or do you have any other recommendations on how to
handle pre-seed funding?

- I think there's a whole lot and this might be a place where the Hubspot and GC folks can chime in. If you're a student,
there are multiple firms that can give small amount of money. There's also smaller, like if you're doing open source stuff
there are these AI grants that are like 5k to 10k that can help you get started. Accelerators usually also have some
ELEVATE: The Growth Accelerator
Casestudy on ‘Present’ with Manasi Vartak

amount of funding associated with them. I think the organizers might be in a better situation to send a more a sort of
thorough list.

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