The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:13:15 · Harry Stebbings, Max Freeman
[00:13:15] S1: So I... I've done pretty well in this set of questions. I'm running through this hypothetical interview process with you. Next step, do I need to do a demo? Do I need to do some form of case study with you? What happens next in our process? [00:13:27] S0: Yeah. So you definitely have to do what we call a business case, which is assuming the role of a seller at Ramp, and you have to go through a discovery call. We'll give a prompt in advance, and we really test for three things. Those three things are: ramp as a business and as a product. Two, the prospective company in question. Are you doing your research? Do you know what's going on? Have you read their 10 ks? Things of that sort. And then the third is just selling fundamentals. Do they have executive presence? Can they get second and third level discovery questions? Can they quantify pain? Can they articulate the value? And then more than anything, not to oversimplify: would I buy a product from this person? If I can't say that with conviction, I'm not going to hire them. I feel the same way about hiring leaders. If I'm trying to hire a leader and I don't think I would work for that person, I wouldn't make the call. [00:14:16] S1: And so you sit down with me and you realize that you would buy from me and you do wanna work with me. What does the offer stage look like? What do you look for in how I respond to equity versus title versus comp?
00:14:16 · Harry Stebbings, Max Freeman
[00:14:16] S1: And so you sit down with me and you realize that you would buy from me and you do wanna work with me. What does the offer stage look like? What do you look for in how I respond to equity versus title versus comp? [00:14:28] S0: I have so many thoughts on this. It it so depends on where you are in your career. If you're a seller looking to join an early stage company, thinking about equity, cash and comp is actually the wrong the wrong thing to index on. The right thing to index on is the market, the talent density, the business, and the founders. [00:14:50] S1: Why the market?
00:14:50 · Harry Stebbings, Max Freeman
[00:14:50] S1: Why the market? [00:14:52] S0: Because there's structural advantages if you pick a business that can continue to find growth vectors. Right? In my Ramp story, I was a mid market account executive. I quit my job to become an SDR all over again at Ramp, and people looked at me like I had 20 heads. The reason why I did it, though, is the market had unfair structural advantages. The card business, that's a trillion dollar plus a year market. Expense, same thing. Bill payments, multi trillion dollar a year market. Travel, multi trillion dollar a year market. Banking, multi trillion dollar a year market. You So don't even have to be a good business to find a way to grow just given those dynamics. The fact that you have the market leading product, you have the most talent dense engineering roster that looks more akin to that of a lab, that of a SpaceX, you're gonna win. And so because of that, that's where you get the career acceleration. Like, you care about, oh, I want the VP title and I want a ton of equity, but you're gonna go work at a mediocre business that might grow 20, 30% a year, who cares? You're making the wrong trade. [00:15:52] S1: So with the greatest of respect is for people that, like, go and work in my AI sales tools. I'm like, really? You're doing, like, AI revenue forecasting. I'm not being a dick, but I'm just being honest. [00:16:05] S0: I feel the same way because exact... Yes. That's exactly my point.
00:16:05 · Max Freeman, Harry Stebbings
[00:16:05] S0: I feel the same way because exact... Yes. That's exactly my point. [00:16:09] S1: Yeah. It... It's like the John Scully, you know, the apple moment. You're really gonna spend the rest of your life selling flavored water. [00:16:16] S0: That's it. Unless you have the belief and the conviction that this could turn into something that rivals Salesforce, sure, by all means, go swing for the fences, but that's hard. [00:16:27] S1: Totally get you. So sorry. Number one was market. What was number two and number three? [00:16:30] S0: Talent density [00:16:32] S1: Talent density. Mhmm. [00:16:33] S0: On the current roster. And then third, founders. [00:16:36] S1: Okay. And so talent density, if we just unpack that, is that just how good the team is? What does that actually mean? [00:16:41] S0: You know, working in sales, you wanna be the beneficiary of having killer engineers. And so first engineers that I met at Ramp were otherworldly. Like the youngest person to ever graduate from MIT, someone that had already built and sold a business to Apple in his dorm room at Stanford. You know, the the IOI gold medal Olympic track, that... That's what you wanna underwrite. And then the fact that Eric and Karim had already built and sold a business to Capital One, that doesn't happen by accident. [00:17:09] S1: That's a pretty solid engineering team to start, isn't it? Youngest kid to ever graduate from MIT? Gosh. Gosh. Okay. Fine. My four weeks at university are really making me feel guilty now. That's why we're sellers, Max. Okay?
00:17:09 · Harry Stebbings, Max Freeman
[00:17:09] S1: That's a pretty solid engineering team to start, isn't it? Youngest kid to ever graduate from MIT? Gosh. Gosh. Okay. Fine. My four weeks at university are really making me feel guilty now. That's why we're sellers, Max. Okay? [00:17:26] S0: That's right. That's right. I went to state school, baby. [00:17:29] S1: Yeah. There we go. Okay. So that's talent density. I get that. And then the third is founders. And when we say founders, like, can we unpack that a little bit? Because we see a rise of engineering led founders who suck at sales, definitely haven't built out a sales playbook, definitely don't have really much clue about sales. How would you think about that as a potential founding team to join?
00:17:29 · Harry Stebbings, Max Freeman
[00:17:29] S1: Yeah. There we go. Okay. So that's talent density. I get that. And then the third is founders. And when we say founders, like, can we unpack that a little bit? Because we see a rise of engineering led founders who suck at sales, definitely haven't built out a sales playbook, definitely don't have really much clue about sales. How would you think about that as a potential founding team to join? [00:17:49] S0: That's totally fine. I think we're gonna see more and more of that as a lot of engineers are looking to go start their own AI native businesses. I think you need to test for a few things. Are they seller friendly? And I'll explain an example of what that might mean. And then two, their willingness to engage and be involved in taking feedback such that the product can mature and become sophisticated enough to meet the demanding needs that sales will face. I'll go deep on the first example. Being seller friendly, what does that mean? Will your technical co founder give you engineering resources to help build the machine? Sales is very much an engineering problem when you break it down. It's a data infrastructure problem. It's a math problem. And so you need to build the systems to help give you leverage and automate such that you can create a ton of capacity. And I give a lot of credit to Kareem early on with providing engineering resources to myself to build out our OATS program super early on in the business.