The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
00:06:18 · Harry Stebbings, Carles Reina
[00:06:18] S1: Tell me, how did you first come to meet Matti? Because you invested as well. You're the, like, first round investor. [00:06:24] S0: Yes. At 5,000,000 valuation, pre seed. So I met Matti through a common friend, Paolo. We used to work together at Tractable AI back in the day. He messaged me one day being like, Hey, have this friend. We used to work together at BlackRock. He's thinking something about AI voices and so on. I have no idea, but you've been in that space. Do you want to talk to him? I was like, Absolutely. And then that's when I met Matti, and within thirty minutes of the first conversation, I was like, I'm all in. How much money do you want? And I will introduce you to my friends. And that was pretty much it. [00:06:54] S1: How much did you put in? [00:06:55] S0: I put in 20 k. 20 k? [00:06:58] S1: Yes. Have you kept it all? [00:06:59] S0: I sort of a tiny, tiny portion through one of the secondaries, but it's that tiny portion. [00:07:05] S1: What is 20 k worth now? [00:07:07] S0: It's probably like... It's it's like 800 k in returns. So that's probably like, what, $616,000,000, something like that? Not bad. Oh. But you've done much better. So... No. I haven't [00:07:19] S1: had that multiple. I haven't had that multiple. That is fucking phenomenal. [00:07:23] S0: It's good. But, like, it's it's it's been good. [00:07:25] S1: When was that moment when you're like, holy shit. I've just gotta join this rocket ship?
00:07:25 · Harry Stebbings, Carles Reina
[00:07:25] S1: When was that moment when you're like, holy shit. I've just gotta join this rocket ship? [00:07:29] S0: I've always been willing to actually leave everything and join one of my portfolio companies. Like, one of my key things is, like, I would not invest in a company if I'm not 100% convinced. Like, if there is a time that I need to join, I will join them. And I think ElevenLabs was one of those ones. They were like the first off-site that we were doing, it was in Portugal, and then Matti called me one day saying, We're doing this. Do you want to join us? It would be great to have you there. And we're doing it in one of our investors' houses in Portugal. And then I went there literally for twenty four hours, met the team, And towards the end of the mini ops side, Matti was like, Well, maybe we should talk about you joining us. And then that's when we started talking. Was like, I'm all in. Like, you tell me. I've done it before. I know the space because we sold Sonantic to Spotify, so I knew the type of customers, the pitch, the way of doing it. Like, I'm 100% in. And I kind of felt inside of me, like, there was, like, something that was not fully closed in the AI voices space, and it was like, it was absolutely no brainer for me to join Eleven. [00:08:26] S1: What revenue were you at when you joined? [00:08:28] S0: Zero. You were at zero? Yeah. Like, we had, like, the company launched literally a week before I joined. So we launched at the end of January twenty twenty three, and then within a month or so, we had over a million users.
00:08:28 · Carles Reina, Harry Stebbings
[00:08:28] S0: Zero. You were at zero? Yeah. Like, we had, like, the company launched literally a week before I joined. So we launched at the end of January twenty twenty three, and then within a month or so, we had over a million users. [00:08:40] S1: And so for you, it was like, Hey, you need to build out the sales team. What was Matti's job description for you that you have [00:08:46] S0: to do? Objective role number one. So the idea was to actually build the entire enterprise site, and that's how we timed it, like the entire go to market. But the company ended up growing so quickly that we ended up switching it towards being, Let's do it on the enterprise side. And the way we put it, it was like, Now you think it makes sense, but the compensation was based milestones. And essentially, like, we ended up deciding, together with Matti and Pierre, it's like, Okay, if we reach a certain level of revenues within twenty four months, then my equity compensation goes up, so I unlock additional portion of equity. And to the point that I was like, it seemed like so silly, the number that we had put in there. [00:09:24] S1: What number did you put in there?
00:09:24 · Harry Stebbings, Carles Reina
[00:09:24] S1: What number did you put in there? [00:09:25] S0: It was a very silly number. Like, very high. But it seemed so silly that, like, Matthew even told me, like, Okay, so what we'll do is, like, we will put a check-in at twelve months mark. So whatever you've accrued up until that point, we'll just give you the proportional basis, right? It was so funny because we hit that revenue milestone within less than twelve months of actually starting everything. But actually, back in the day when we were thinking about it, like when we were negotiating it, it seemed like no one had done that. [00:09:53] S1: Right? When you are with the GTM that you have, it's a PLG motion largely. Yes. Are you not just an order taker as an enterprise sales team? Can you help me understand how to think through how PLG converts successfully to enterprise without it being an order taker?
00:10:09 · Carles Reina
[00:10:09] S0: So the way we did it is like the PLG motion gave us a ton of like volume of leads, which 90 plus percent of those were extremely bad. But the interesting portion is you started seeing some patterns where people were finding interest and where you essentially were having meaningful conversation. So that for me was instrumental to understand later on in building name account lists and going after specific accounts from an outbound basis because I was seeing some level of traction. And investors were telling us, God, you have product market fit because you're doing all of these millions. And I was telling them, No, no, no. We don't have it. I don't believe in product market fit until in one single ICP you've made more than $10,000,000 right? So you keep experimenting and you build list. And then one week you tackle a specific persona. And another week you tackle a completely different vertical to actually understand what moves quicker, is what the pitch that actually resonates better, and so on. That's how we essentially started doing it. And I remember the first two deals that we did within thirty days of launching the first product. It was a company that was doing a chatbot based in Germany. They paid us $12,000 and we thought, is super good. We could start doing things. Second company was a media company that was doing automated radio stations that we signed a two year deal, dollars 36,000 per year. Those two companies, we still have them as customers. They've skyrocketed in value, both of them. But, like, that was only the beginning. It's like, okay, we can start doing it. We know how to actually generate this motion. Now we need to go
00:11:38 · Harry Stebbings, Carles Reina
[00:11:38] S1: much deeper. How do you advise founders then in the early days when they're in this kind of... Again, we have so many founders that listen to of pens and paper. When they're looking at it and going, do I go horizontal? And let everyone try it and really kind of let the market decide. Or do we go very vertically focused and go, okay, chatbots, we've got one customer. Let's just put all the sales team on all the chatbot partners. How do you advise founders on which one's the right one? [00:12:01] S0: Depends on the product that you're building, right? If you're building something in the healthcare space, it's an absolute no brainer, need to actually go to healthcare. But you can still take a very broad approach within the healthcare space, right? So you can actually target hospitals, can target like clinics, you can target bigger ones and smaller ones, you can target like practitioners. You can target across the entire spectrum of your vertical. Target as many people as possible because truly, you might have a guess or you might have an intuition of what's going to be performing, but the best companies in reality started in one end, ended up winning really good traction in a completely different end that they were not expecting, right? So if you can target as many people as possible, you will understand what resonates, what doesn't resonate, how quickly they're moving, and essentially then you can fine tune your pitch and your name account list in that area.