In just a few short years, Vise has gone from launching on the Disrupt Battlefield stage to unicorn. Co-founders Samir Vasavada and Runik Mehrotra met Sequoia’s Shaun Maguire at an afterparty at the event, and Maguire ended up leading a seed and Series A round while Sequoia led the Series B. Last week, Vise raised its Series C of $65 million and was officially valued at $1 billion post-money.
We sat down with Vasavada and Maguire to talk about the early fundraising process for Vise, specifically the seed round, and get a look at the startup’s first pitch deck. We discussed what Vasavada has learned about delivering a good fundraising pitch, and what stood out about the pitch and the product for Maguire.
Simplicity is key
Vasavada says he’s made dozens of pitch decks since starting Vise and that this early deck was not his best because it was trying to do too much.
“A good pitch deck is short and simple, and covers the key points in less than 12 words a slide,” said Vasavada, adding that many founders think they need to show investors every part of their business.
“The deck has to show that you’re solving an important problem, that you’ve got the path to an important solution, that there is a big market opportunity, and that your team is positioned to execute,” he said. “Those are the only four things that matter. Everything else can be discussed in the Q&A.”
The goal of a pitch meeting is not to get the “yes” instantly, and satisfy every curiosity, but rather to give the investor something to think about and a reason to want another conversation.
Vasavada explained to the audience that this early seed deck certainly went into too much detail and was too text-heavy. (You can check out the full deck below.)
Why will this product be successful right now?
Beyond the problem, solution, market and team, there is an additional X factor that makes a difference in pitching for fundraising.
Timing can make or break a startup. Incredible ideas, ones that have gone on to be some of the biggest businesses in the world, have fizzled out and died for being too early.
Maguire told TechCrunch that Vise had an incredible answer, backed by data, to why this product would be successful right now.
“One of the big trends in the wealth management industry has been breakaway advisors, or advisors leaving big institutional firms and joining or starting their own small firms,” said Maguire. “That’s been one of the dominant trends in the industry for 10 years.”
Vise tapped into the fact that independent financial advisors and small firms don’t have the same resources as the big incumbents to build out their own portfolio customization algorithms, much less the ability to contextualize those customizations and let the adviser explain why a portfolio was compiled the way it was.
Vise Seed Pitch Deck Presentation by Jordan Crook on Scribd
“To displace existing technologies at big incumbents is a much harder sale than when you’re going into a totally greenfield opportunity,” said Maguire. “Independent advisors didn’t have that software. They might have had a few different tools, but not one central repository. The insight that this was a new market was a powerful one, and it allowed for a much easier sale than going up market.”
Another big “why now” factor for Vise was the switch to zero commission trading. Vasavada explained that, from a unit economics standpoint, the biggest cost associated with the business was trading cost.
The “why now” of a pitch plays directly into TAM. When a founder can prove there’s a huge market, and an underlying shift that gives the startup a clearcut path to that total addressable market, it sparks an investor’s interest.
“Every investor has to have this kind of imagination around how big a market could be,” said Vasavada. By focusing on the growing segment of independent financial advisors, Vise was able to tickle the imagination of investors around the entire market (which is massive) by showing a path that is very much tied to reality.
“We don’t always trust what founders say”
Vise is a great example of a very technical platform. The startup uses machine learning algorithms to customize investment portfolios and explain the “why” behind what choices were made by those algorithms. According to Vasavada, VCs differ a bit when it comes to understanding the nitty gritty of how it works.
“Investors usually look at it from two perspectives: the financial science and the quantum model you’re working on, including the AI, integrations, infrastructure,” said Vasavada. “Different investors had a myriad different questions across different areas. Basically, you need a lot of answers. And our technology slide wasn’t well positioned to answer all of that so a lot had to be done on phone calls and over a number of discussions.”
Vasavada added that sometimes, VCs can be satisfied by trusting the pedigree and expertise of the technical team, rather than diligencing the technology itself.
For Maguire, who has a technical background, it was important for him to get into the weeds. But it wasn’t just about the technology; Maguire wanted to truly understand the end user.
“I feel bad saying this, but we don’t always trust what founders say,” said Maguire. “When we did our diligence calls, we learned that there is this incredible value proposition where advisers as individuals could make more money using Vise, buyers could make more money and the end client could save money. It’s just very, very valuable when everyone’s winning, except for maybe the legacy player. That was really confirmed when we talked to independent advisers.”
Maguire added that the ability to calibrate the narrative of the company and answers to questions based on the recipient of that information is a key quality that Sequoia looks for in a founder. In fact, like many firms, Sequoia decides on investments as a team, meaning that each partner, with their different areas of expertise, are looking to have a well-rounded discussion based around those specialties.
“It’s something that we look for in founders,” said Maguire. “That ability, that dynamic range, the ability to tailor to your audience, to be a clear communicator … that correlates with being able to be a good salesman to your customers, with being able to hire well, with being an empathetic leader. It’s exhausting, but it’s an essential skill for founders.”
Vasavada and Maguire also spent time listening to elevator pitches from the audience and gave their live feedback during the Extra Crunch Live Pitch-Off. You can check out the complete conversation, and the Pitch-Off, in the video below.
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