Apr 17, 2020 · 38m · 20vc
20VC: Notion's Fundraise with Index: The Most Anticipated Deal in The Valley: How It Came To Be | The Future of Remote Work |How Notion Approach The Balance of Growth and Profitability
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gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
This episode of The 20 Minute VC features host Harry Stebbings interviewing Notion COO Akshay Kothari and Index Ventures Partner Sarah Cannon to explore the story behind Notion's $50 million fundraising round, the dynamics of building software for remote collaboration, and the balance between rapid growth and operational efficiency.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 28.5% of the talking time here. How this is scored →
Harry as informed peer 3.6 Guest teaching 3.1 Guest disagreement 0.8 Harry pushing back 1.4
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 34:18 Sarah breaks quick-fire rule constraints
When host Harry Stebbings asks Sarah to pick just one single element that excites her about Notion, Sarah directly rejects the premise constraint by stating she will break the rule to list three people plus product scope.
Hardest push from Harry ▶ 28:55 Harry pushes Sarah on $2B valuation economicsHarry explicitly puts on an LP hat to challenge Sarah on how a $50M check at a $2B valuation can generate the required 40x fund returns for a $2B venture fund.
Biggest teaching moment ▶ 13:44 Akshay's historical analysis of tool bundling cyclesAkshay educates the audience and host on the decades-long pendulum shift from paper to floppy disks, Microsoft Office suite bundling, internet unbundling, and the return to unified workspaces.
Harry holds his own ▶ 28:55 Harry demonstrates precise LP return mechanicsHarry showcases sharp domain expertise by performing real-time venture fund return calculations and pressing the guest on realistic valuation targets required for LP returns.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Guest Backgrounds and Early Days at Notion | 2 | 1 | 0 | 0 | The conversation opens with warm pleasantries and routine background questions about career origins. Both guests express excitement about being on the podcast, maintaining a polite and collaborative tone. | |
| The Story Behind Index's Deal with Notion | 2 | 2 | 1 | 1 | Sarah recounts her persistent pursuit of Notion, including showing up at their office in socks with a Marcel Duchamp postcard. Harry interjects briefly to ask about her email approach, but mostly listens to the narrative. | |
| Strategic Decision to Fundraise Amid Macro Uncertainty | 4 | 5 | 1 | 1 | Harry asks intelligent structural questions about platform migration and software bundling. Akshay provides a comprehensive historical framing tracing productivity tools from paper to floppy disks, Microsoft Office, and web unbundling. | |
| Remote Work Dynamics and Asynchronous Collaboration | 3 | 3 | 0 | 0 | The discussion focuses on remote work shifts during the pandemic and how asynchronous collaboration differs from synchronous video/chat. Akshay shares product features built to support distributed workflows without host resistance. | |
| Macro Trends and Lasting Post-Pandemic Behavior Shifts | 3 | 3 | 0 | 0 | Sarah details macro behavior shifts post-COVID, highlighting digital collaboration, reduced travel, and increased empathy in business settings. Harry poses the high-level question and lets Sarah outline her thesis uninterrupted. | |
| Lean Team Philosophy, Efficiency, and Growth vs. Profitability | 5 | 4 | 1 | 2 | Harry queries why Notion stayed lean at 40 people and probes the relationship between venture capital, growth, and profitability. Sarah articulates why growth equity exists even for profitable businesses. | |
| Valuation Mechanics, Fund Returns, and Market Size | 7 | 5 | 2 | 6 | Harry pushes on deal economics, challenging Sarah on how a $50M check at a $2B valuation can generate expected fund returns for a $2B fund. Sarah defends the valuation using market size and fund structure distinctions between Index's venture and growth funds. | |
| Quick Fire Round and Notion's Five-Year Vision | 3 | 2 | 1 | 1 | The interview concludes with a fast-paced quick-fire round covering books, policy, personal weaknesses, and company vision. The dynamic remains lighthearted, with Sarah playfully breaking the single-answer rule to compliment the team. |
Statements from this episode (18)
Kothari: Notion Did Not Launch Its Product For Four Years
“And for many years, I thought I lost all my money in Notion because it hadn't launched a product for, I think, four years. And then when it did in 2017, it took off.”
Cannon: Slack Is Synchronous Flow, Notion Is Asynchronous Stock
“If Slack was the flow of information, Notion was the stock, or if Slack was kind of synchronous communication, then Notion was the place for asynchronous communication.”
Kothari: Notion Pulled Fundraise Forward Five Months Due To COVID
“We were thinking about maybe raising a small round in the summer, and we just pulled it up about four or five months earlier, tried to get ahead of the macro.”
Kothari: Notion Spent 18 Months Recruiting Executive Hire Christina
“Christina's an example of, like, someone we've been trying to hire for 18 months, and it finally came together in the last month”
Cannon: Notion Is The Third Great Collaboration Platform
“And our view is that notion is really the third great collaboration platform.”
Kothari: A 30-Person Startup Was Using 75 Different Software Tools
“I recently talked to a 30 person startup that was already using 75 different pieces of software to do their work.”
Kothari: API Is The Most Requested Notion Feature Across Users
“Interestingly, the number one thing that individual users ask, the personal users ask, And the number one thing that large enterprise asks right now for notion is our API.”
Kothari: Notion Had 40 Employees And Zero Remote Experience Pre-Pandemic
“Notion as a company, we're only 40 people, so we very much focused on building this small team in our small office in San Francisco, and we had never really worked distributedly before.”
Kothari: Notion Reallocated Half Its Team To Build Remote Features
“Because we're a small team, we actually put almost half of our team working on features that allows people to be more productive in this unique environment.”
Cannon: Post-COVID Societal Behavior Will Return To 80% Of Pre-Pandemic Baseline
“And my hypothesis is that we will go back to kind of 80% of what we were doing beforehand.”
Kothari: Most Of Notion Was Built By Just Three Engineers
“When I joined, I think a lot of Notion that you and I play with today was built by just three engineers on the team.”
Kothari: Notion Was Profitable For Two Years Prior To $50M Raise
“It's allowed as a company to be profitable over the last two years.”
Kothari: Notion Signups Tripled In China And South Korea In One Week
“I think signups in China are up three X. Signups in Korea is up two, three X in just in the last week.”
Kothari: Notion Has A 10-Year Runway Even At Zero Revenue
“Even if our business were to go to zero tomorrow, we now have about a ten-year runway to kind of continue Building notion.”
Cannon: Over One Billion People Use Microsoft Office Daily
“There are more than a billion people who use Microsoft Office every day, and if they pay a hundred dollars a year, that's a hundred billion in revenue just for Office, not to mention the potential to expand in a lot of ways that Akshay outlined earlier.”
Cannon: Stimulus Should Prioritize Direct Cash Transfers Over Business Loans
“I would do far more for individuals. So I think we've seen a lot on the macro level, interest rates. We have seen loans for small businesses, but I would be far more aggressive on cash transfers to individuals, paid sick leave, And giving people benefits that …”