The Exchanges

Q Like how much did you have in savings and how much did you put in? Like, I mean, were you literally at the brink?

A Well, so when I left McKinsey, I had 25,000 dollars in savings, and, um, I was thinking about possibly starting a business, but I didn't have an idea I was in love with yet, and so I got this offer to move to Rwanda and work for the Clinton Health Access Initiative on vaccine introduction, and that was essentially a net neutral offer. So what they said was, um, we'll give you the flexibility of only working for us for six months, And we will give you this incredible, incredible experience, but they said, as a result, um, we'll pay all of your expenses, fly you there, housing, food, et cetera, but we're not going to pay you a proper salary above and beyond that. Um, it'll just be sort of net neutral. And they were a nonprofit and I said, that sounds great. I would much prefer to have the flexibility and not have the cash.

AI assessment note: “when I left McKinsey, I had 25,000 dollars in savings”

Q That's great. We have, Catherine, we have a few minutes left. So again, equity, there's someone that was early with you, have a very small portion, and then you guys basically split the rest, basically equal with some tweaks to make it fair. Talk to me about funding. You raised capital. How much?

A Yeah. So we raised, uh, gosh, we raised about a hundred K in January of, um, plus we got into Y Combinator. So that came with about a 170,000 dollars. That was our first seed funding. It was very hard one. Uh, we ended up over the last couple of years raising over twenty million dollars. So we've had a little better luck with, uh, fundraising, but the sort of first Three and a half years of the Muse's life were, um, were pretty lean. It was seed funding, bootstrapping, making revenue here and there. Our, our product we've charged for, for employers from the very beginning, because we didn't feel like we had a choice to go with a freemium model. That said, we always wanted it to be free to individual users, so that was really important to us. And then we raised a ten million dollar series A in, um, spring of 2015, and then a sixteen million dollar series B last spring slash summer.

AI assessment note: “we ended up over the last couple of years raising over twenty million dollars.”

Q So she's still, like, still on the cap table then?

A Yes. Exactly. Yeah. Um, and then Alex and I, we had gone full time and taken on risk in slightly different ways. So, I mean, it's a tough conversation. Anytime you're talking about equity, um, it's not something I would do for fun ever, but at the same time, um, you know, we both, uh, we both came to it with, we want to work together. Um, we want to make this happen. We want to get somewhere that feels fair to both of us. And I was never going to feel perfect to both of us. Right. Right. But it needs to feel tolerable to both of us. Um, and so it's, it's close, um, to be even, but there was small differences based on, again, how much risk, how long each of us had been sort of without another full-time job, um, because we left our roles at different times. And I think we got to a place that we felt pretty good about.

AI assessment note: “Yes. Exactly. Yeah.”

Q Um, you say active that I'm either, I'm going to read into that and say either some people have started and then stopped, uh, or they're just, it's a seasonal business. Uh, uh, if they've stopped, why have they stopped the ones that weren't happy? Yeah.

A So, um, companies that have stopped, sometimes they go out of business. We actually, we joke that we should, um, we would never do this by the way, but we joke that we, we basically know sometimes when somebody is getting acquired, um, Um, we didn't realize this pattern at the beginning, but we will regularly have companies, especially, again, tech companies, up-and-coming companies, that will suddenly email out of the blue. We think that they're very happy, and they'll email out of the blue and say, uh, I need my profile to come down. And we used to just freak out because we thought, what's wrong? They love the service. Turn. Um, and inevitably, you know, four to 12 weeks later, they get acquired. Um, so that's the reason.

AI assessment note: “companies that have stopped, sometimes they go out of business... they get acquired.”

Q How much of that 25 K did you put in the business?

A Um, so I spent about. I spent a lot of money on living expenses, um, with the first company, which was effectively research in some senses. And I didn't spend it on research. I spent it on rent and food and, um, paying for a Metro card to get around New York. But, um, I had about five K left. And to make a long story short, we had, there were four of us that started that first kind of project slash business. It started as a project, became a business. Um, we had two very different visions. And so Alex and I, my current co-founder to this day, Sort of split off. The other two took that and made it, um, kind of something different, took it in a different direction, and we started the muse. And I had about five K left, which frankly was terrifying because firstly, um, I was spending, my living expenses were as cheap as I could possibly get them. I had moved out to Brooklyn.

AI assessment note: “I spent a lot of money on living expenses... I had about five K left.”

Q And so for those that are not familiar with a SaaS-enabled marketplace, right, help us understand and give examples in specific in your business, right? What part is the marketplace and what part is the SaaS component?

A Yeah, so most companies sign up for an annual subscription to the Muse, and that can be anything from, um, you know, four to five figures for an S&B or a small mid-market company, all the way up to six figures for a major Fortune 1000. What's the average, Catherine? Um, That's a good question. So right now the average is between 20 and 30 K. Um, but the, uh, the enterprise number of enterprise deals is rising quite a bit more quickly than our mid-market business. So I think you'll continue to see that go up. We're also, we look at sort of average by category. Um, in that case, you obviously see very different things based on the employee count.

AI assessment note: “right now the average is between 20 and 30 K.”