The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:10:24 · Harry Stebbings, Max Freeman
[00:10:24] S1: Sixth Sense. Because they have a low NPS products, maybe not great [00:10:29] S0: Correct. [00:10:29] S1: But close good customers. [00:10:32] S0: Exactly. In fact, just yesterday, one of our top enterprise sellers sent me a email from a customer that said, this huge review that they sent internally, they wanna offer a case study, and we didn't even prompt them at all. And Alex had said, I've never seen this in my fifteen years of sales. I was like, oh, we get that 10 to 20 times a month at Ramp. You've just been selling shit products. [00:10:55] S1: When you're trying to determine greatness in a candidate in terms of where they've come from before, How do you unpick whether it was truly them or whether they were just an order taker? You you can have two different situations. One, they're just an order taker, which isn't very difficult. Or two, they're at Twilio, and they sign up Uber. And they sign Uber when it starts, and then it expands into what it becomes, and they get the credit for that. How do you determine true quality versus happen... Downs or order taking?
00:11:24 · Max Freeman
[00:11:24] S0: Yeah. You have to decompose their number. And so, okay, you did you did 2,000,000. That's that's great. How much of it was inbound? How much of it was outbound? How much of it was expansion? How much of it was sourced by your founder? How much of it was from existing opportunities that you inherited? And then you you really have to drill down such that you can spot and figure out if someone is bullshitting you. And then to get even more deep into testing their acumen around sales, it's, alright, talk talk to me about two deals. You have to make them reconstruct them chronologically. The best candidates give so much texture and, like, you're really trying to figure out, well, how did you advance this? Well, what was it? Were you articulating business value? Was it some workflow that you tied to a business outcome? They'll know that. And if they can't describe that, not a good sign. The inverse is also true. You wanna understand, talk to me about a deal that keeps you up at night. Why did you lose it? If they can't unpack why they've lost an opportunity, was it they were single threaded, they didn't build a champion, there was no business value, the product wasn't good enough, they didn't qualify well enough. Like, figuring that out and testing for it is actually incredibly important in an interview process.
00:12:31 · Harry Stebbings, Max Freeman
[00:12:31] S1: What if I said to you, hey. Yeah. I get you. One of the decision makers is friends with a competitor, and that's why. I I I kind of hate it, but I also get it. But blame deflection can also be genuine. How do you determine, like, good versus bad on on that sort [00:12:48] S0: of Totally. But you should be able to suss that out early enough in the the cycle, and you should confront it head on. Hey, Harry. I know you're evaluating us and another competitor. I see you have a shared board member with that competitor. Is that gonna get in the way of this decision? Like, how are you actually evaluating it? Is it on its merits or is it not? A seller should be able to articulate and communicate that to me. They shouldn't find out about that at the final second after they've rallied all of these internal resources to take a deal through a cycle. [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?
00:13:15 · 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.