The Exchanges

Q So before we go any further, why don't we talk a little bit about what mode is?

A Yeah. So mode is a tool for analysts and data scientists to be able to create and share their work more easily with, with their coworkers and people around their business. So my former role was that of an analyst or a data scientist or kind of whatever you want to call it. My job was to help other people around the business make decisions and do so with data. And so the kind of problem that we saw back when I was doing that job was it wasn't easy for me to be able to create things in the tools that I wanted to create and then easily share them with folks around the So if I'm helping a product manager or an executive or someone on the marketing team, try to understand the data that they have and help them make a decision about which feature to build or which marketing campaign to focus on. I wanted to work on a set of technical tools that were designed for me, and I wanted to be able to share something with them that was, that was kind of a packaged up view of those results that I found, the charts, the graphs, the insights, whatever it was. And there wasn't a great way for me to be able to do that in an environment that felt comfortable for me, that also felt comfortable for the person who was, who was consuming. So ultimately that was kind of the, the key thing that we wanted to start building at mode was, can we create that kind of workspace for analysts and data scientists t…

AI assessment note: “mode is a tool for analysts and data scientists to be able to create and share”

Q So when you were going to do each round, did you start to prepare to update your documents when you knew you wanted to start raising, or did you just constantly review your documents and keep them updated throughout the years?

A Yes, that's a good question. So there were two big pieces to our fundraising process each of these times. And, and they try again, they transitioned more from one to the other over the course of the rounds, because it became less about the story and more about the business. But in the early rounds, the seed rounds, the A, design except the B, we did, we, we built materials for those rounds that were, this is the story. This is who we are. This is our vision for the market. This is what we want to do. Those were stories that were catered very much to where we were in that moment. So it was, okay, what have we built so far? What is on our roadmap? What proof points do we have to this point? You know, which customers have we closed right before this round? Can we, can we turn this one customer into a bigger story about the opportunity for mode? For instance, I believe this was our A round. Shortly before we closed our A round, we signed what was the time our biggest customer I have no idea what they actually paid us. I remember signing it and thinking like, oh my God, I can't believe someone's paying this as much money, but it wasn't that significant amount, but it was a healthcare company. And so I remember part of the story with the A was we just signed this healthcare company. Mode is a cloud product that sells a data product, which at the time people were pretty uncomfortable …

AI assessment note: “we built materials for those rounds that were, this is the story”

Q Looking back on your, I think it's now eight years with mode. How have you changed as a person? How have you improved or those places where you've gotten worse or gotten better? How have you changed?

A I would say there's a few things I, you know, in ways that you, you improve as you've worked on a ton of different problems. And I think you understand, like from a, from a sort of professional perspective, you understand a bunch of different things that I had no concept of whatsoever. This fundraising stuff that we've been talking about is, is a small sliver of it. I knew absolutely none of this eight years ago. And obviously like by no means I'm the expert in it. There's a hundred conversations like this that anybody who starts a company could have just because you go through things that you wouldn't experience otherwise. There's also kind of some appreciation that you develop for the complexities and the challenges of doing something that pulls in a bunch of different directions. There's a lot of times where you want to make one decision. The business sort of seems to need something else. Um, you personally like want to do a third thing, figuring out how you navigate those situations is something that changes you in ways. I think Probably some ways that are good and some ways that aren't, where the things that you kind of believe when you're in a position where you're not actually responsible for making those decisions, and then when the moment comes and you have to make those decisions, I think it's, it's a different thing. What you think you would do and what you actually …

AI assessment note: “figuring out how you navigate those situations is something that changes you in ways.”

Q Okay, so one of the things that happens when you raise enough investment is that you are forced to create a board of directors. So who should get board seats, who shouldn't get board seats, what is a good number of seats to have, and how can you make sure that these people are going to help you instead of hinder you?

A You do have to start, like, there's a point at which you have to have a board. I think a company has to have a board from the beginning, but like a lot of times it's a little bit of a It's ceremonial, essentially. Like, companies have to have boards. It's usually, I think when we first started, it was three people. The three founders essentially were on the board, and it's like, okay, this doesn't really mean anything. It's necessary for, for having sort of a voting mechanism if we wanted to vote someone off the island. That way, there is some official corporate governance for us to do it. I believe, and I think this is typically true, most companies will create a board once they hit a series A, um, like a, a sort of more material board. And that's, that's for a couple of reasons. One, it's that the people who are putting in that amount of money, once you're stopped, no longer raising sort of small checks and you're raising some, someone is leading around the expectations that person will have, not just that they will have some control of the company that comes from their shares that they bought. But it also comes from them having a board seat. And so that board seat means they have voting rights. It means that they also have sitting on, you know, there are board meetings where people talk about the company and those meetings can have all sorts of different flavors, but, but th…

AI assessment note: “most companies will create a board once they hit a series A”

Q like what we were talking about that go even deeper. I want to go and talk more about how do you know if the investor is the right one for you? How do you know that they're not selling you a story for themselves that isn't actually just a pipe dream or isn't just them lying to you? Like, how do you make sure that you're accepting the right money?

A You don't always have a choice. I mean, you always have a choice of whether to take the check or not. It's like job hunting where you may have a dream job and you may not get it. And you may have two jobs that you didn't think you were so excited about that you've got to choose from. And that's not to say that like the people that invested in motor people weren't excited about it. It's just that there are plenty of times you go out and you have 10 people you've talked to and you're not the one who's going to say which 10 of those you get to choose. Like they're going to tell you who wants to invest and you have to choose from the lot that you get. If you have a lot of options, that is a luxury in itself just because You know, good for you for building something that's very appealing. It doesn't mean it's anything bad to get one option. I know plenty of successful companies that, you know, have gone out to raise money, and they've gotten one term sheet, and that's the one they take. That's perfectly fine. Plenty of good businesses have done it that way. But suppose you're choosing that, or you have the option, you do have some, like, control over who you pitch, or, or, you know, who you actually want to talk to, and things like that. I think the things that we cared about initially in the process of figuring out who to talk to, one of the big things is, and this is a little bit …

AI assessment note: “one of the big things is... the values of the firm and the people”

Q call, you said that you've raised money based on your pitch deck before you started building, and then you got into a seed and an A and a B and a C and a D, and over all these rounds, you've raised eighty million dollars. So I guess one of the questions I'm interested in is which of those rounds was the hardest for you to run the process for?

A Me and the other two co-founders came out of Yammer. Yammer was a company that was acquired by Microsoft back in We were able to kind of ride the coattails of that acquisition to, to the first money that we raised. And this is part of the, the way that Silicon Valley works for better or for worse. We were associated with a company that had a successful exit. Um, Yammer was bought for 1.2 billion dollars, I think, um, which at the time seemed like a lot, uh, now is, you know, the, the valuations of companies in their A rounds. So, so Yammer was a company that was seen kind of around the valley as a success. And so anybody who was coming out of Yammer still had that success kind of Sheen to them, us included, whether or not that was deserved or not, whether or not we were, you know, meaningful contributors to that, to that outcome or not was, was kind of immaterial. You know, fortunately we had built some good relationships at Yammer when we were there. And so we knew some folks from, from the CEO down who were essentially, they were people who had made some money from his acquisition and much like Silicon Valley, the first thing people do when they do that is they turn around and start saying, Hey, like invest in companies that I think are built by people that I know and trust and things like that. So, so we basically raised a seed round of roughly like half a million dollars or…

AI assessment note: “We were able to kind of ride the coattails of that acquisition to, to the first money”