Welcome, welcome to the second episode of dead cat.
I'm Eric, newcomer, the newsletter writer who named his
newsletter after himself. I'm here with Tom, Tom, and
Katie, Benner. You guys just want to say hello.
Hey, Hey hey hey hey newcomer and we're here with Christina
cacioppo. Did I get that right?
You got that right? Thank you about our seven second
episode and sort of I was talking to Katie, you know, who
used to cover the tech industry is now covering the justice
department. And she was like, oh, you know
what? What are the cool startups,
these days? And, you know, I sort of
struggled because it is sort of amazing how we write about the
same. You know, companies over and
over again. It's, you know, it's Will I
still write a ton about Uber and you know stripe is still cool
after all these years. But then you know, I thought
about Christina's company which you know what we talked vanta
was clearly about to raise like a cool series a and she'd been
very sort of withholding on taking Venture money and raised
a 50 million dollar, quote-unquote series a a 500
million dollar valuation. So Christina.
I mean how Tell us a little bit about that story.
How are you? Is that really a series a round?
And what sensor, how did that? Just tells us we're a little and
a little bit about what your company does this well, for
sure. So, vanta automates security and
compliance for other startups, starting with sort of, with a
sock to certification, and Now, cover ISO, and HIPAA, and a
whole alphabet soup of things. But basically helping other
startups, get secure, and then demonstrate that they're secured
other people. Often their buyers.
So the series a / are legal documents, which is probably the
most legalese answer. I could give you, like, use the
first Equity round into the company, so technically yes,
doesn't look like your standard series a even in the, you know,
2021 tiger era but it is technically our series a, I
mean, you'd been in Venture sort of briefly what Union Square
Ventures. Right?
But were yeah, I mean how How did that shape sort of how you
thought about sort of building the cap table for the company?
A ton, you just kind of being exposed to some of these
decisions and this was like a decade ago, you realize are
really hard to change when someone's on your cap table,
it's near impossible to get them off if you ever wanted to do
that. And so they're kind of one-way
door decisions like in start-up parlance.
So some of trying to be thoughtful In that sense.
And then the other part was, I think we talked about this and
March or whatever that was, but trying to be thoughtful about
how, you know, money might be important to grow the business,
but it is not the point of the company and and, you know, these
can be helpful but they're not, they're not kind of the Arbiters
of the gov Company. Success.
How much leverage did you feel like you had just with a series
a to be able to hand pick the people that you could bring onto
your cap table? I mean it's so interesting
talking to The founders who will say, I mean, you know, there's
almost like a, I don't want to say desperation to it.
But, you know, you don't feel like you really have a ton of
Leverage in that first round to be able to say you're in.
You're out and I can call the shots in a way that sets me up
for not getting fucked over by these guys later on.
Yeah yeah so look I mean I think if we'd raised you know whatever
two years before at the standard like million dollars in Revenue,
we would have been like cast a wide net and get the best person
you can and like hold on to your hats whatever.
Having waited a while and having a like cash flow Breakeven
business. I was 10 million dollars in
revenue and nearly 1,000 customers and all, you know, and
like be like oh you know, usually in a series a it does
don't you have product Market fit, you know.
And we don't we don't think about customer acquisition and
then you show up in your like, I've acquired a thousand
customers that like, really good economics.
So, definitely felt you know, much more confident there.
I will also say though, I don't know, like anything else you
have these moments where you're like, oh I'm on top of the
world's like I get to choose. Is everything.
And then you know, four hours later you're like who would want
to fund this business? Why are we working got it right
into that roller? Coaster is still there.
It's just even it just divorced from reality which is, of course
in between but to pulse and was wondering if you could talk a
little about some of the specifics of fundraising in this
era, particularly fundraising as a female founder.
I I remember when I was a reporter hating hating hating
getting pitched on companies, only because the founder was
female, which happened all the time, And it was, I found it
really offensive and terrible. That was an actual pitch that
was going out at the same time. In my colleague, Aaron Griffith.
Just wrote a story about women, trying to raise money being
often compared to Elizabeth Holmes, the founder of their
nose. And as we all know, there are
knows flamed out under a lot of accusations of Fraud and
wrongdoing, and that homes is going to be making an appearance
in federal court soon over this disaster.
So I was wondering If you felt that story was accurate.
If you know there were things about raising money as of women
that have changed from a few years ago that haven't changed
or if people are thinking less about gender today.
Yeah a few but I did read the article, I laughed because I
think that was the only reasonable reaction.
I have been everything else. Would just not have been good.
I have been jokingly compared to Elizabeth Holmes, right?
And you're like B2B SAS security startup right?
But it's like, oh Stan. And female entrepreneur.
Like I know one of those and you're like, oh right?
Anyway, moving on, that's really how it goes.
I mean, the depth of thought that VC's have when a company
comes in at the female founder like oh, like Elizabeth Holmes.
Yeah. This was an especially
connection that they'll make this wasn't a professional VC
but like, yes, it was one of those where you're like, I'm
glad I'm not blond, like I'm not quite sure what to say.
Next time, eat more mature wear a turtleneck to the no I'll
speak at a high, you know, High tone of voice.
People who naturally speak in a low tone of voice.
Exactly. That is the way some people
speak. I don't know, the people who
likes like terrible acts, like they're the ones who are
suffering here. Yeah, it's a Real Fashion.
Yeah, but jokes aside, so yeah, let me think those are like
offhand comments. That.
I mean when one hand actually for me like they get said and
it's like I don't even know how to respond.
So we're just going to move past that and then, you know, of
course, several hours later you come up with Good and Starkey.
That it's much too late to use, but I don't think they're, I
mean, they're the most striking /.
Damning part is like, I don't think they're met with malice or
people like art of Being, you know, like trying to find common
ground and similarity and sort of Allied over the Also may
have, you know, defrauded, 10 million, people fact.
And like that's not something that it's nice to compare
someone to but I don't truly don't think that's top of mind.
I think it's just a little bit of kind of speaks to how A few
female Founders, there still are.
Right? Where the top of Mind One is
someone who is now on trial for fraud and you're like, well, we
need some more here for and so his currently he's quite old to
you know, I do wonder if a young founder coming in, you know, who
had worked, as a venture capitalist.
Who had a resume similar to yours but who was a man?
If in meetings somebody would say, well you really remind me
of Brian chesky. I mean, I think old, that's
that's wrong time. They love.
They love you know, pattern matching Arie, I can see I'm not
defending it anyway but it's such a yeah they can't help
themselves would say, oh, you fit the profile of this and then
when but if that's the only pattern matching you can do, it
means you do not know enough women.
If the only running you know, is Elizabeth Holmes?
I think there's some of that I think so.
Fundraising this time, I mean, it is really different.
Some of it was business results and some of it just was all over
exhume, right? I did this then, Kind of early
2021. And so everyone was said, on
zoom, and I mean one effect of it at just sped everything up
and I'm not, you know what I saw, you know the industry saw
but there was just, it sort of turned everything into the days
after iyc demo day, we sort of know the company is like running
around and having 47 meetings a day, right?
Like that became everybody's financing process because he
could just sit on Zoom for 14 hours straight and they didn't
have to like drive down this anthill and schedule.
Admin and like oh the person, you know, whatever and that just
sped everything up hugely because you could credibly say,
like hi I'm having meetings from this day to this day.
I'm looking forward to term sheets on this day and I'll make
a decision by this and people would be like, oh there, that's
probably true. So we have to follow the
timeline which again, and I like non Zoom world people to be
like, oh it's going to slip you know like oh she really going to
fly out to New York and back you know, blah blah blah blah blah.
So just because it better, was it easier?
To raise money over resume, totally.
Yeah, nine thousand percent. Yeah, what specifically about
it? I mean, obviously you can
probably knock out more meetings and day because you don't have
to, you know, slap your ass up around Sand Hill Road.
But like, is there anything specific to the dynamic there
that you think is, you know, could foundationally different
to how it was done previously, especially as a VC and like
having these people come in and Pitch?
You. Yeah.
And I mean, that power Dynamic, right?
Because like as an entrepreneur and we would do like you'd come
in and they try to be like oh where do I sit.
And then they sort of like sit at the end of your chair and be
my like all the PCP Like sitting in their normal chairs, like
taking up a lot of space on their chairs, just because
that's your chair, you know. Be like you have your, like
glass of water that you're like, balancing your laptop with and
then you like don't know if you can put the water on the table,
you know? Just like all of that nonsense,
right? Or like unfamiliar environment,
like what if I spill my water around here?
Nice carpet. Yeah, better for the PCS though.
I mean, don't they appreciate that?
Sort of power Dynamic, don't really put you at unease and I
know like from covering the, the entertainment industry.
Three, and maybe another episode, I can share my story of
like meeting with a very high level agent, who played all
kinds of bullshit power games with me, making me sit in
different shares through, humiliate me.
And I'm not saying these do that intentionally but like, you
know, part of the Mystique of being a venture capitalist is
that they're in charge and like them.
Owning the room is probably a part of that.
No, I think it like maybe somewhat like unintentionally,
but like, they don't, you know, it's just part of life, right?
It's not really thought that through.
There was one firm in New York that shall remain nameless that.
I remember a Go going into like I was a PC associate met.
Another VC associate. It's like, oh, let's go into
this room where we meet entrepreneurs, literally a desk
with two chairs and one was like a giant, you know, like leather
worked are the other was like a folding chair.
Cool, right. Never coming back here.
I'm curious. Your, I mean, your experience
with the media so far. I mean, I sort of talked about,
you know, the glut of of just a tension on these same Brands.
I'm curious how you experience that, or what your experience of
sort of, like, working with the Press has been so far.
Yeah, it's interesting. I think the primary.
So, we did. We kind of did some presser on
the financing and y'all know this better than I do.
But just being like, hi. We have some numbers to share
and you know big beefy for like, would you like to write about
that? I think since it's been
interesting and that you know, my perspective Go out and say,
hey the ant is launching this new product.
That happens to be a security or compliance product.
So it's not something that we find Tech reporters.
Super enthralled about writing about getting some funny looks
hip. I don't know what you do love
hip-hop, who's joke that even in Bloomberg, we never wrote about
companies. Proportional to the market cap,
right? Even the most business, you have
business places the amount of money.
It generates, they don't, they don't necessarily Were it that
way? It needs to be a good story.
Yeah. And I mean, the feedback I've
gotten a little bit is like, oh, well, why don't you go tell your
story. Christina and sort of looping
back to the female founder piece like, oh, you know, why don't?
I don't do no one actually ask this.
But like, what about this female founder profiles from three
years ago and you're sort of like, what about that?
You know, that feels like a little bit of a Minefield but
generously, I mean, you kind of gestured to the fact that a lot
of those female founder profiles didn't turn out well in the end
because it The ark was, they Rose very high and then they
came down really hard. So, you know, do you feel like
that was something that was unique to those profiles?
Or do you feel like that is something that goes hand in
glove with whenever there's a lot of hype around the personal
story of a founder? I mean, I think, yeah, a lot of
I do feel a little bit like, inviting hyper on the personal
story and to some extent making the story about in my case
myself and not the company is sort of like inviting bad things
to happen in the future. Like it is just not, you know,
not something, we've done, not something I'm excited about
doing at all. Yeah, it's sort of like you're
just kind of asking for the subsequent wave of.
You know, here's all the terrible broken things at the
company and I think kind of thinking about the stories like
that, that have been written about some of these companies.
There were some terrible, broken things at them.
I think the the next question is like, is that how true was that
of, you know, other other quickly growing growth, stage
companies, were these actually outliers not to say the things
that were happening were good or to condone them or anything like
that. But I think that's just like a
wider awareness of how isolated or not some of these behaviors
may have been what sticks out to me on this.
I'd be interested in Thoughts. Here is that a lot of these
stories about female founded companies that end up, you know?
Going the other direction is that is very you.
The Mystic of you there. Yeah.
Is that they line up spectacularly, right?
Yes, it but also like very personally, right?
There's always like an extreme personal element to do stories
that drives the narrative. It's like this person was a
maniac. This person was a slack
terrorists and they were, you know, getting into fights with
co-founders or it just seems like it's less about, you know,
this business maybe wasn't very well-run.
Or, you know, at the fundamentals were week.
It's like, no, they were an asshole.
And but, I mean, that's good storytelling.
That's what we were just saying about Parker though, how people
love the condoms in the stairwells, you know not the
actually the revenues of lipped you do are weighed out and
beaten the Parker case. I mean that was like you know,
there was allegations of flouting, you know, Insurance
rules and stuff is totally incompetent.
All right, it was personal, did you ask if a man is accused of
being an asshole of that really a criticism?
But if a man is accused of being incompetent, that is a real
criticism. And if a woman comes to being an
asshole, I mean, one of the reasons why Christine Quinn did
not become mayor of New York is because there was a big story
saying she was a jerk and what's so crazy about that is that one
could argue, she might have been a better measure than Bill de
Blasio very controversial. Do you feel that at all?
I mean, you know, I guess you're you run a great company and this
will never happen to you. But definitely this is the
stories that get written seem to be so much more personal.
And I guess, you know, there's a smaller number to pull from
because they're just fewer companies that do have female
Founders, but I just think it's a journalist its glaring to me.
Yeah, I mean, I think, you know, you can well as someone, someone
actually shouldn't do this because it'll probably be
depressing, but like, if you go back and look at like, at the
coverage of Facebook, The 2000s, right?
Like there's a lot of like, management turnover but I think
a lot of those stories ended up being like they didn't align or
I mean co-founder turn over whatever but it was a lot like,
oh well they didn't get in line with sucks vision and so they
were out clearly because that's what you would do, right?
Where that's not how we write about, I don't know, outdoor
voices or whomever, right? It's like this founder of the
Tyrant and needs to, you know, be removed.
I mean I do think it's just this complicated consumer Brands
helped fuel. It, there are a lot of prominent
female lead Were brand companies but also the whole female
founder sort of persona issue the Katie talk about.
So, yeah, it's hard to like separate.
The companies themselves were selling an image of a certain
kind of person, which is also very tricky, you know, so if in
your branding and your marketing for your project, you're
celebrating a, you know, this 21st century woman who is You
know, socially conscious and values, equality and values,
respect for others. And then the personality, the
founder seems to run counter to that.
That's also an added layer of complication that you probably
aren't going to have. If your company is making You
know if your compliance Enterprises or it won't be such
a hypocrite, she said that everybody who used her software
was going to run around in size to leggings and look hot while
also fighting for equality and look what happened.
I mean as I like it just sort of a different know I wish I was
not your I pitch it sort of glassy I felt like I did.
I'm not that person. I just I just follow her on
Instagram. By the way, I love Emily Weiss
and everything better. This is a true actually
financing story. There was one term sheet.
I negotiated while wearing a glossy a sweatshirt, no one else
cared but I was so perfect. I think what I love is that I
read the gloss for so long before she started glossy a.
I just I loved everything about that block.
I don't wear any makeup. I don't really own anything but
I really liked her blog and she understands the media really
well. She understands like, why
consumers Like products sort of this idea.
They provide magic. And so, you know, she I just
thought it was. That was very cool.
So if somebody writes a glossy a takedown story, I'm going to be
real sad, real sad. Like, what do you do you think
there's any benefit than to? I mean again you run a company
that has a solid business. I don't really know what value
there is to, you know, spending a ton of time pitching media on
on more publicity on your company other than maybe, you
know, getting more customers or something.
But Crude ain't right? Yeah, these are kind of the
things we sell to startups. And so there is just a bit of
like, how do you? I mean, we like to take a very
large and if anyone's listening it we're very large and
competent. But no, like kind of like
playing bigger than we are and like, aren't we mentioned in the
same sentence? As, you know, Uber, even though
you're like cuz kind of hilarious and ridiculous.
Right. Anyway.
So there's like, I mean, that part of like, the Silicon Valley
play bigger pieces is it's real cause it does matter so much
whether or not it should. It definitely does.
They're recruiting piece. I am here is just quickly, I
know, you know, on that. I mean, it's always so front of
mind for Founders and just what the environment is right now,
when you're trying to hire people and there are so many
companies with such high valuations and what that
experience has been, it's clearly like it's a new normal.
I mean, I think all the reasons that like the rapid financing
are great for entrepreneurs. They're also great for people
for job Searchers, right? Because you can have 14
interviews a day and you can get your offers in three days and
then you're, you know, you can bake off companies.
However, you want, and like, it's all true and like, as much
as it, you know, not super helpful to Fanta, like candidate
should do that, and I think that it's their new it.
So there's that Dynamic like the Zoom Zoom speed, things up
Dynamic applies in recruiting. The other dynamic as you know,
everyone is Tiger funded and a unicorn.
And so it is harder to stand out even if you're like No we
actually have a good business like we're the real ones and
there's a sense they chase high valuations or how much do you
think that's true? I mean we're there.
Yeah I mean I think we talked about this with Parker.
I mean just assessing comp based on the valuation times their
shares versus yeah. The potential upside I guess.
Yeah. I think it's very true.
I mean I was I am you know kind of to this day staunchly like
you know, bant has the same company.
I mean yesterday and today, the day before For this cookware,
for your dancing and the day after like and candidates, do
not see that this way. Like, recruiting got
incrementally, you do to us after that round same company,
but it matters and so like, I'm just pulling that forward.
You're like, what? A billion dollars matter like
probably. Do I hate that.
Yeah, definitely. Just, I'm sorry.
Just just having the Sequoia like imprimatur on the business
made recruiting easier. Yep.
More more inbound candidates and incrementally easier to close
because they felt like it was a More Direct business because
they felt that there was support support from a firm that they
believed would be there when times got rough support from us.
And that's one of the, that's one of the fascinating things
because the idea of the role that VCS play, you know, when we
spoke with Parker last week, he very much put forward the thesis
that when times are good VC's are there for you.
When times are bad, they kick you out, obviously that comes
from a very personal experience, but it is interesting that for
prospective job candidate. They would see VC uses this on
balanced force for good. Oh yeah.
The kingmakers. They've the Magic Touch.
I wanted to get to vent a little bit and sort of the business and
understanding it. Well, I guess you'll give your
22nd description better than I will.
So will you just quickly sort of describe the business as is
today? I guess that's your first 30
seconds and then sort of the broader aspirations of it.
Just so we have that for. Yeah, for sure.
So today we work with generally startups, helping them, and
generally be to be ABS. So some tool they're selling to
other businesses as some part of that sales process they get
asked like hey are you secure? If we give you a bunch of data,
you going to leak it on the internet.
So we help those businesses kind of shore up their security
initially and then get some sort of compliance certification,
probably a sock to that sort of says yes someone looked at us we
are reasonably secure. You can buy us in the incentive
is basically because there Customers will want them to have
this and so in pitching, big customers you're giving them
this signal? Yes, exactly.
So, like the big customer is going to say, Hey, you know,
love your product, but, you know, you're ten people, you
know, on a couch. Basically, how can we trust you
enter your? Like, I've gone through this
process, I had someone look at all these things.
They wrote up this long report like we're very reasonable over
here. Couch, you could trust us but
then the long ERM the goal is to come up with your own standard,
or what can you say about it? I mean, it's not like, I don't
know. Sock to doesn't sound like most
thought through standard ever not being an expert in it or
yes, suck to his incredible product Market fit.
I can say that I'm going to just use by Everman.
Everyone else about it, right? And including people who don't
kind of know precisely what it is but it sort of doesn't
matter, it is just like the imprimatur of the first way you
say like I'm Baseline reasonable.
So yeah, one thing we think a lot about is, you know, there's
some good parts and some less all three parts.
Like how can we kind of work with Security leaders to design
something that actually thinks about you know, the true
security and a 2021 sense and all that it takes to keep a
company secure in 2021 and applies that on a continuous
basis to that. The other thing about these
reports is our sort of done point in time, someone comes in
last, like, on Tuesday asks you a bunch of questions, write the
report you're Good for a year and that's not how software
works. So, we're working on that.
What would incentivize companies to want to participate in a
harder standard early? Why would the market ever
incentivize? You know, business has to be
sort of self-regulating and that way without the government,
requiring it, yes, to sort of twofold.
I think the boogeyman answer which is I think the less strong
one is like at some point the government will care.
And so can the industry sort of get it to act?
Gather ahead of time. So this happened with credit
cards like PCI DSS, if those letters sound Vaguely Familiar,
vaguely, vaguely. Basically they came out of like
early credit cards. The banks were male and credit
like five credit cards to everyone, no matter who they
were some point. The government was like this is
extending this much credit to everyone.
Willy-nilly is probably not what you want to be doing.
If you guys don't fix this, we're going to come in anyway so
that kind of got that ball rolling.
This first bit, I think when we think about like the B
administration's priorities software security, force a
offenders, as, you know, probably probably below the cut
line currently at least to say, I think the better answer really
is because the customers get hurt, right?
So, like if declares his like totally hypothetical but like,
you know, if it's a good example in the Sony hack it's like so
nice, you know. Doc's gets breached.
Its the headline might be Sony gets breached, the headline.
Might be Google gets breached and either way it's a bad look
for both of them and so they're actually kind of
organizationally pretty incented to make sure like those
headlines. Don't get written and so when
you know schmancy industry terms this is like third-party risk
management. But it's basically just when you
use software if it gets breached it looks like you get breached.
No one wants that headline? How do you make sure it doesn't
happen. Have you been able to come up
with ways to get around the media for things like
recruiting? You know, so it in a world where
the media is not the best fit in some ways for you to tell your
story. You know what other tools you
have at your disposal? When it comes to recruiting,
when it comes to raising awareness, customer acquisition,
doesn't seem to be a problem for you at all.
You certainly don't need. I don't, I don't think that a
bit. I don't think that, in your
cover. Everybody wants more customers.
It's true to everyone's more
customers, but you know, it's there.
The Wall Street Journal is probably better than the New
York Times in some ways, if that's what you're looking for.
I should though the New York Times is wonderful for so many
other things, you know. So what other tools do you have?
Other than the media? Yeah, I mean media Jason but I
think just the last few years the rise of subject and podcasts
and like I'm, you know, talking to study, right?
But like truly are, it feels Is different than the media.
Some of them are certainly friendlier.
Like we sort of did this of like where did the glowing founder
profiles from the media, five years ago?
Go. And like now their podcast
interviews. And so I think we're, you know,
like paint like promoted some paid for some Stacks but I think
those are real and you know will just get bigger what else?
I mean there's like the recruiting stuff is Always a
slog, right? And so that's actually a place
where I think the best companies figure out word of mouth with
recruiting, which is just a say, have employees recruit other
employees and that's sort of the only thing, did you buy the
argument that bubbles up from time to time, that there is a
real option for Founder's to completely obviate the media and
just go through whether it's podcasts or I don't know.
Cool retweets from from guys, with 100,000 followers music, a
boat's, It's promoting the company and there is like kind
of an internal less public facing Network that you could
use. That just doesn't require you to
waste your time with idiots like us.
You're telling me to channel my inner Elon, Yuan Bao zhi, you
know, any of the guys who decided to make it their life's
calling to, I don't know, make the media irrelevant.
Yeah, I mean less Fair like anti-media screeds but more just
the reach. Those people have like I do
actually think there's something there and like I wish I were
better at Twitter that I am like actually think it would help
Santa you know I do actually think there is something real
there, I think most people don't do.
Well, or don't do it but yeah, the people who do it.
Well, actually have a Founder friend, I'm Judd Mossad from
replicate, he's actually really good at this.
He's quieted down a little bit in the last few months but he's
really good at this like he he can he can like everything is
about the company but it is funny and fun and like clearly
at the sense of humor and just totally and you think that that
helps him with recruiting I mean there's a direct connection
between that and interesting. Yeah.
Yeah, you had 55 employees when we spoke, how many do you have
now? 110 house managing that?
Well, I've never seen them all in person, so, you know, still
TVD we're planning for that, but it hasn't happened yet so I
don't know if they all exist. No, every day is a new every
week. There's a new week.
Advanta promotes a good reasons. If you're growing this quickly,
every week is a new week you could probably I would say get 5
to 10 new employees. Out of this podcast interview,
you know, people come in and say like, oh, you heard you on this
podcast, blah, blah, blah. Yeah.
If you apply for a job advancing, use a promo code dead
cat. Yeah, that's fine.
Yeah, we get them to actually get like a small we'd like a
lamb to school situation of avidya and shared.
What do they call those shared Revenue in shared income
agreements. Yeah, Yeah, we gotta get one of
those set up. That sounds like a great deal.
Cool, thanks so much. Thanks Christina.
So goodbye, goodbye, goodbye, goodbye.
Goodbye, goodbye. Goodbye.
Yeah, we gotta get one of those set up.
That sounds like a great deal. Cool, thanks so much.
Thanks Christina. So goodbye, goodbye, goodbye,
goodbye. Goodbye, goodbye.
Goodbye.