Kaben Clauson, co-founder & CEO of Base, joins Vlad Cazacu, co-founder and CEO of Flowlie, to discuss their latest $750K Pre-Seed round.
Kaben Clauson, co-founder and CEO of Base, joins Vlad Cazacu, co-founder and CEO of Flowlie, to discuss his latest $750K Pre-Seed Round and all his learnings from the current round, past fundraising, and YC.
You can find Kaben Clauson on Twitter at https://twitter.com/kbclauson and learn more about Base at https://www.joinbase.club/
Learn more about Flowlie and how the platform helped thousands of founders from 60+ countries around the world raise hundreds of millions of dollars. Build your dream cap table with Flowlie's all-in-one Fundraising Hub at https://www.flowlie.com/
Stay up-to-date with all our episodes by checking our website at https://www.thefundraisingdebrief.com/, following us on Twitter at https://twitter.com/thefundraisingd, and on Instagram at https://www.instagram.com/thefundraisingdebrief/.
The Fundraising Debrief (Ep. 1) - Kaben Clauson (Base: $750K Pre-Seed)
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Kaben Clauson: [00:00:00] Hi, my name is Kaben Clauson. I'm the co-founder and CEO of Base. Base is a tech powered social club that makes it easy for our members to have deep, authentic connections in their cities.
Vlad Cazacu: Hey everyone. Thanks for tuning in and welcome to The Fundraising Debrief the podcast where we share the real stories behind successful founders and their recent VC financing rounds. My name is Vlad Cazacu and I'll be your host today as we interview Kaben Clauson. This is a very special episode with a good friend, fellow Miami Builder, who started several companies, went through Y Combinator, and created an incredible network of founders in every city he lived in.
Vlad Cazacu: For more information about running a successful fundraise, Including show notes, highlight clips and exclusive scenes. Follow us on Twitter and Instagram @ thefundraisingdebrief, as well as on our website at thefundraisingdebrief.com. This episode is brought to you by Flowlie, the number one choice for secure deck sharing and fundraising automation used by thousands of founders from [00:01:00] 50 plus different countries.
Vlad Cazacu: Now, let's dive right in.
Vlad Cazacu: Kaben, super excited to have you live on the podcast. You've, been a good friend so far and been really helpful in our own fundraise as well. So really excited to be here, debriefing your successful fundraise with our audience. So, just before we even begin the debrief, I just want to take some time to get a chance to know you a little bit better and know Base.
Vlad Cazacu: So can you give us a little bit of background on who Caban is and what do you do at Base?
Kaben Clauson: Yeah. So yeah, quick background on myself. I am someone who lived in very eclectic places, growing up from being a early childhood in South Africa where my sister was born and I grew up as a kid and then spending years in Alaska through high school.
Kaben Clauson: So I had this very eclectic upbringing. And actually my family's very entrepreneurial. My sister's actually a founder of a company that's post series A, kind of, you know, between series A and [00:02:00] series B today. So Entrepreneurship's kind of been in our DNA I started my first company in 2015, company called True Public.
Kaben Clauson: And I've since gone on to start two more. The most recent of which is Base. Really, base is really the modern social club. And it's needed at this time more than ever because, you know, we're living in an age where people are more socially isolated than ever before. And the reasons are, multifaceted, but a big, a big catalyst of this is remote work and people now being so siloed and even the way they work and within a city structure, there's so many things happening around you.
Kaben Clauson: Different activities, concerts, bar scenes, all types of things. But a lot of these places are places to go with the friends you already have and meet high in. At base we really make it easy for people, right? We just in, in its most basic sense, we make it really easy by putting you at the right table, with the right people, with the right conversational prompts, a phenomenal meal, maybe a little bit of surprise, and that's kind of the core of [00:03:00] what the business is.
Kaben Clauson: My role at Base is really around a few key things, right? Fundraising, something we're gonna talk about. I think that's always the role of a CEO recruiting casting an overall vision, right? But also in the early days, I'm our part-time designer. I'm our part-time HR head, I am running our growth partnerships.
Kaben Clauson: I'm in charge of member perks. I mean, early on, right? You a lot of these different hats. So I think the main way to think about my role as we. Is in a sense being the high level vision of the product, being very close to the customer. Every single day I'm trying to talk to at least one or two customers, either learning about their experience or talking to potential new customers and learning about their pain points.
Kaben Clauson: And those are some of the main areas I use my time. Increasingly though as we think about scaling and growing in other cities, we've had a phenomenal start to the business. It's gonna be a lot about recruiting and thinking about how do we take a concept that's really working in one city, Miami.
Kaben Clauson: And actually scale it to another city, which in some ways can [00:04:00] be, we think it can work and we think, you know, it's, it's gonna be easy in some sense, but in, in other senses, we need to really nail that aspect of the business for this to actually be scalable. Absolutely.
Vlad Cazacu: And can definitely attest to the value being created here in Miami as a proud paying customer of Base.
Vlad Cazacu: Whoa.
Kaben Clauson: But, uh, gotta love that. Gotta love that, right? You're, yeah. You're our favorite member, number one.
Vlad Cazacu: Okay. I really appreciate it. Especially you said it live while we're recording, so you can never take that back. But really curious to understand through your entrepreneurial journey, you found it, three companies at this point, and all of them touch in a different angle, this aspect of community.
Vlad Cazacu: Yeah. And as a person who've lived across multiple cities and countries, I'm curious, how do you approach networking and establishing new relationships in new cities, and how that gonna fine tune your fundraising strategies a result of that?
Kaben Clauson: Well, I think it starts off with a couple things.
Kaben Clauson: You know, why did I have, I, why did I get good at this? I think I had to, because [00:05:00] I didn't go to Stanford. I didn't come from a background that had any connections to technology or any connections to funding. If we're talking about funding, there was no plugged in person in my family, which in some ways was challenging, but in other ways I think was a benefit.
Kaben Clauson: I think the benefit was, When I decided and got really passionate about building and almost all building today is has some element of technology. I realized, okay, I'm gonna be in the technology industry. I had to force myself to, to get to know people in that space. And when it comes to networking though, the one thing I learned about community and the one thing I've been learning more broadly about human beings is at the end of the day, what we really want is we wanna just be, we wanna be respected, we want to be heard.
Kaben Clauson: We want to be known. There's just some key like first principle ways of thinking about this, and I think the reason so many people go around networking wrong is they go into any human interaction with this kind of idea in their mind of like, what can I get out this person? You know, is there something this person can give to me that will help me?
Kaben Clauson: And [00:06:00] what that does, you know, and we've all heard this story, we've all experienced this type of person. Maybe you've met them at a networking event or a conference. This is someone who's very clearly hoping that you can give them an intro or give them a job or give them something, something, something.
Kaben Clauson: Give, give, give.
Vlad Cazacu: It feels transactional
Kaben Clauson: at times, very transactional. That can help you in the short term. That can help you in the short term. You might get a, you might get a job, you might get a deal, you might get something, but it doesn't create any kind of, it's not a long-term game. The long-term game of relationship building is leading with a lot of authenticity.
Kaben Clauson: I. Seeing how you can help other people. If you, and there's always a way you can help someone. You think, oh, I don't have money. I can't help 'em with money. I don't have connections. I can't help with the connections. You might have ideas, you might have feedback, you might have some way, maybe just encouragement.
Kaben Clauson: That can often be a lot for an entrepreneur is, you know, absolutely. You really know when it can be very discouraging. Leading with those things is, I think that allows you to be someone that someone says, I want to. Get to know this [00:07:00] person over the long run. This is someone I might wanna do business with in the future.
Kaben Clauson: This is someone I might wanna, you know, work with in the future. So I think it's first a mindset shift and it's not going in with any objective. I think if you're going in with objectives to meeting new people, you've already lost. I think the main objective is, I want to get to know this person. What makes them tick?
Kaben Clauson: What are the unique things about this person? Because curiosity, and this is like a very Dale Carnegie.
Kaben Clauson: You every human being, there's something you can find that you can like about them. If you can figure out what that thing is and or something you can like about them or learn from them and drill on that one thing, you can find a, you can find a commonality no matter how different they are. You could be a Northerner from New York and you could be down in Mobile, Alabama, meaning with a southerner. There's some era you can find. I think the focus is on finding that versus, ooh, who do they know? Or some weird thing that a lot of people seem to do.
Vlad Cazacu: I really like this and I like what you mentioned about like the authenticity, but [00:08:00] also to some extent not leading with an objective.
Vlad Cazacu: And I'm curious, now kind of switching gears into the fundraising debrief of your race around how do you, commingle to authentic self, authentic relationships without an objective when there is a fundraising objective? And
Kaben Clauson: this is a great, yeah, the big
Vlad Cazacu: question like, How do you build those connections?
Kaben Clauson: Well, this is, this is a great great question because this is something I was very wrong on when I was younger. I mean, one of the things I sometimes go back and talk to, I've gone back, been lucky enough to go back to my university a couple times and talk with the students there, and they've been like, Hey, how do you get funding?
Kaben Clauson: You know, the big thing is when you go out to raise money and you're a first time founder, You're gonna have to do that, friends and family type round, in many cases. Well, do you have family that can help you? Okay. Do you have friends? Well, if you don't have those things to get you going, even if you do have those things, you're gonna need to meet other people that can help you.
Kaben Clauson: The key is thinking ahead now. [00:09:00] That's not the case for all of us, right? Maybe you need to close around. You don't know these investors. That's okay. But I think the first thing would be like always be thinking ahead, right? The best time to meet an investor is not when you need to raise money. That's the worst time to be an investor.
Kaben Clauson: Absolutely. You want to get to know them. You want them to get to know how you think about problems. I think it's the number one thing, right? You want them to know you're someone who likes to learn. You know, asking questions, not fake questions that make you look smart, but actual genuine questions that you actually want to know and building a relationship with them and letting them see how you think about problems months in advance of needing money.
Kaben Clauson: But let's say, okay, you have to talk to an investor today. You've never met 'em. I had to do that in many cases. In many of our investors over the years have been people we just met for the first time on. Now on the pitch, I think you can create authenticity. I screwed this up. When I was young, younger fundraiser, I was so bad at it.
Kaben Clauson: The only reason I was able to close money is from pure passion. But my technique was horrible. And the problem was I was going into my investor [00:10:00] calls, trying to make the investor like me, Kaben the person. Now, in normal life, you might want people to like you, but actually I think in both normal life and with investors, there's kind of this thing that holds true, which is.
Kaben Clauson: If you come on trying to make someone like you, it can feel a little like you're being sold in a sense, right? The investors are not looking for a friend. If they were, they'd join base, right? They're looking for. A great investment opportunity and they're really looking for a CEO and a team that they can partner with their capital and your effort.
Kaben Clauson: And really I think you don't want to come across like this chummy style, you know, I killed that style. My style and our most recent raise, which is the style I'll always use is radical authenticity. 'cause what I'm trying to form here is a business partnership. You know, and I think when you come in with that college kid mentality of, I'm gonna impress this investor.
Kaben Clauson: With my fancy answers and I'm gonna have an answer for everything they ask. I think that's a huge mistake. Right? Or I'm gonna make [00:11:00] them really like me, or I'm gonna, oh, you were, oh Bob, you're a, you weren't fishing in Colorado. Well, I went fishing there too. Like people try to find those commonalities with people in real life, but like in investor conversation, not so much.
Kaben Clauson: I think what they wanna know is they're sitting across from someone they can partner with, and the number one way to feel like you can partner with someone is you can trust them. How can they trust you on a pitch? A couple ways I learned was. Tell them what you're actually worried about with the business too.
Kaben Clauson: A good investor will hear the good and the potential in the business, hear also the concerns and the challenges, and they can rightsize them. You know, I think it's a flaw. A lot of founders are like, I'm only gonna tell 'em the good stuff. Well, guess what? Every business has bad stuff. Including yours, including mine.
Kaben Clauson: Every business has bad things, has big challenges, has monsters you have to kill. Let them know the monsters you're about to face. Hey, Bob, here's why we think this could be a billion dollar type of business. Here's the big scary thing we have to destroy. Now, if you tell them what that thing is now, Bob, the [00:12:00] investor can go.
Kaben Clauson: Okay. Is that something flawed and his team can overcome? Is that something that Ca and his team can overcome? That monster, if you don't tell them the monster, they come up with their own monster in their own head. And they think you don't know about it. So they think you're actually kind of stupid 'cause you don't even know the big, you don't even know the big problems with your business. So that's that au It's that authentic approach, not trying to be light. You know, just be, and it doesn't mean be, rude or anything, right? Of course, you're friendly, you're gracious, you're humble, but you are presenting them a business opportunity.
Kaben Clauson: This is not a prize where they're giving you money for some prize contestant. It's a business proposition between two parties. Absolutely.
Vlad Cazacu: And I think it's a very fine line to walk between, radical candor, authenticity, and you said, towards the end, accidentally or willfully being, rude or quote unquote an asshole.
Vlad Cazacu: I'm not sure if we're allowed to say this or not on, on live, but it's we've seen this before. We've definitely seen this before with founders who are coming in, quote unquote full of themself, cocky, We're as [00:13:00] founders, much more than the investors, and we're on the in ral which we've been until a few months ago, right there on the other side, sometimes be those founders, which are like, why am I even meeting with you?
Vlad Cazacu: Right? I'm curious, how are you approaching that? And may, maybe the answer is, radical candor and authenticity. Of establishing and maybe moving away from this dynamic of power, right? Like who actually has power in that conversation? Is it you, is it the investor? Are you trying to speak as an equal?
Vlad Cazacu: Are they're trying to do the same? Where do you see that interplay work out?
Kaben Clauson: It's a great question actually. I see it work out in the sense of. The wrong way to do it is to think of the investors as your boss, right? They're a business partner, which is a different way, right?
Kaben Clauson: They're probably more senior than you, right? They've probably seen more things. They've certainly seen more companies, they've certainly seen more battles, as it were, right? So there's a lot to learn there. My hunch based on the real world feedback I've received is the best way to deal with the candor in this case [00:14:00] is to.
Kaben Clauson: Let them into your thinking and your problem solving a little bit more. You know, and I think the problem is a lot of people talk about the solution and not like the thinking around the solution, which I think can help accelerate a conversation with an investor. That's basically, instead of saying like, You know, this is our plan and this is the thing we're gonna do.
Kaben Clauson: It's letting them into your process, I think can help them make a faster decision around you and understanding how you think. And then the other thing on are we on equal terms or not, is a lot of founders I know have this fear of these investors. Will they pick me? Will they pick me?
Kaben Clauson: Will they pick me? If you really believe in your business, And it's hard to do this at times. You need to get to a, we all believe in our businesses, but we all have doubts as founders. But when you talk to an investor, I think that belief side has to come out more. And you have to remember, you're giving them potentially the deal of their lifetime.
Kaben Clauson: Okay. It's not just like they're helping, like I think a lot of [00:15:00] founders think oh, the investor needs to pick me. It's like, no, no, no. That investor picking our company, I certainly believe this to the right now with this business, they made a great decision and we actually gave them an incredible offer.
Kaben Clauson: So the investors, yes, they might have more experience than you, things like that. They need founders as much as we need them. You know, it's a very symbiotic ecosystem. So in a sense, I do think it's equal, but different.
Vlad Cazacu: Well equal, but different. I think it's maybe the subtitle of this episode.
Vlad Cazacu: Just wanna bring it down for a second. Yeah. To the process. I wanna talk some numbers because I think a lot of people are curious, especially first time founders getting on this journey. Getting a little bit more details about how the round actually came together. So first of all, You raised a pre-seed round for Base.
Vlad Cazacu: This is the first round of
Kaben Clauson: outside capital.
Kaben Clauson: First round. First round half a million dollars. Fantastic. That's all we, that's all we needed. We had a couple interesting dynamics that are, I think are useful to know. We were raising this [00:16:00] round in early 2023. This was and remains still a very challenging fundraising environment on a macro level. Our business Base also faced a lot of skepticism from investors in general. Another thing I think founders should know is if investors don't like your business, you cannot take that personally, right?
Kaben Clauson: They, you have to also have the empathy for the other side of the coin. I think it helps you process things better. You gotta understand a lot of founders, I think, think of the investors like, They have this tons of money. Mm-hmm. And they have money to display with, well, in many cases, in most cases, it's not their money, it's the LPs money.
Kaben Clauson: They have investors. And they have stakeholders. So first having that, that empathy can be really important.
Vlad Cazacu: Four. And there's a legal fiduciary duty to those LPs to make sure they're returning their money and their livelihood depends on returning that money and hopefully more. Because if that doesn't work in four or five years, when the next fund is about [00:17:00] to be raised that money's not gonna be there.
Vlad Cazacu: I love this whole idea of having the empathy for the
Kaben Clauson: other side as well.
Kaben Clauson: You, you, you have to have the empathy for the other side in all aspects of business. And I think a lot of people forget it with investors because they just think, oh, this is this person that said no to me and told me my idea sucks.
Kaben Clauson: And that can be emotional. 'cause mind you, the tough thing about an investor rejection is not that some dumb guy you ran into at the bar thinks your idea is stupid. The problem with an investor rejection, not all of 'em, there's some investors, I don't respect their opinion, but there's many investors who think my company is not going to work the way I told them it's gonna work.
Kaben Clauson: And I respect them and now I respect them. I still think they're wrong. Right. And it's a weird. Kind of mental place you can have to get to where you can still respect and empathize with the other side, but still think they're wrong. Right. I think that's pretty important. How our round came together though is important because we had a business with a lot of skepticism and it's not the answer most founders would wanna hear, but I don't know if we can plead a round in that environment in.[00:18:00]
Kaben Clauson: Actually getting customers using our product and loving it. Mm-hmm. I mean, the way we got around on is we had people using our products, revenue was growing and people freaking loved it. And that seems rather obvious, but a lot of times it's like, let's go out and raise. You almost want to be, you wanna be very.
Kaben Clauson: Targeted in how you spend time. Usually you want to be fundraising all out, right? Like a lot of recommendations that I subscribe to are like, block, block a month, block two weeks, like get all these meetings stacked up and then try to get this thing closed. You know, create some fomo, bring, these are all just like good mechanical things of a great fundraise, but really making the business better, having some key learning, having some key revenue insight, having some key customer.
Kaben Clauson: Prove it more along the way is one, two. Then what we did was we ran a really tight CRM process, so like we built ours in Notion, we put a lot of [00:19:00] names in there. Mm-hmm. It wasn't a one, one man effort. Both Natalia, my co-founder, my other co-founder, Ricardo, although I was the one doing all the pitching of the business.
Kaben Clauson: Natalia did join me for a few pitches. They were also assisting in the fundraise. You know, by debriefing with me, by being an emotional support, and if you are the one as a founder who's fundraising, you should be looking to your co-founders to support you in that raise, even if they're not the person who's actually pitching themselves.
Kaben Clauson: Absolutely. Once we got that lead, everything came together really quick lot. It was like they took up most of the round and really what it really, what it took here was, if I think back to our raise. It was on the first call sharing a lot of passion and a lot of vision. And I think no matter what, when you first interact with an investor, you have to make an impression on that call.
Kaben Clauson: You have to cast a big vision if they're, if you believe it, right? Mm-hmm. If you believe the big vision, you gotta go for it. You gotta risk even [00:20:00] sounding silly at times, telling 'em what you want to do. One then what we talked about earlier, that authenticity. Showing them some areas where you're not confident.
Kaben Clauson: Don't have an answer for every question. You know, my, something my sister I think is good at is sometimes she'll just say in a fundraising pitch. Actually, I don't know the answer to that. And she might respond with, I don't even think it's the right thing to know the answer to. Okay, that's a little risky to say.
Kaben Clauson: Or, you know, I, I'll get that answer to you and get back to you on that. Those are a couple ways to think about it. So getting that investor who had the big vision. Then creating the authenticity with him of okay, this is someone I can trust. And then really updating that person with our progress was what allowed us to get it done in this round.
Kaben Clauson: Mm-hmm. I do notice that my worst fundraising round was my first company, and it was hell. This fundraising round was like, I pitched 113 people, many of them multiple times. Endless nos. Some nodes that aren't even like just nos. They're like, not only no, but [00:21:00] like definitely no, like they really don't like it and it's so emotionally trying.
Kaben Clauson: And I think the problem I did then was I didn't run as good of a process and target.
Vlad Cazacu: Hold on a second. Was 113 for Base or was 113
Kaben Clauson: for the first startup?
Kaben Clauson: This is a previous company. After, this is the second fundraise. We're going out to raise our kind of Seed + that stage. Okay. 2 million round.
Kaben Clauson: And just a slog. And the reason was is although the market was good, our business was not hitting numbers how we wanted to, we had some cool signs. We were able to raise that round, but we wasn't hitting things like we wanted to. The process was not ran well. I cannot stress enough. Pitching is exhausting.
Kaben Clauson: Do not count a 30 minute pitch call with a vc the same as you would count 30 minutes of knocking out email or 30 minutes of working on design or 30 minutes of doing something else at your startup or talking to a customer. It's a performance in a sense. 'cause your adrenaline will be higher. You are, you have a [00:22:00] moment in time to give some information to someone.
Kaben Clauson: It's, it is a more intense moment. And if you take meetings with people have that, have a very, very low probability of investing too much. You do two things. You exhaust yourself and you potentially discourage yourself and your team because you'll get more nos. I do recommend early on Blood that people go out and do some crappy pitches.
Kaben Clauson: Mm-hmm. What's a crappy pitch? You pitch A real investor. Maybe someone you know, maybe someone you don't know. Someone who's willing to hear your pitch, who you think is a low probability. Of saying yes. And you learn. 'cause they're probably gonna tell you no. And they're probably gonna tell you why. And then you get very targeted on picking a few select firms, getting them in your C R M, researching them closely.
Kaben Clauson: And when you hit them, you need to be dead set on why us? Why now? And also why you, why, why are you the investor, the right investor that we want, which is the other one to think about.
Vlad Cazacu: [00:23:00] So I know there's never a magical number, right? But I like to also put a little bit of nuance on the actual numbers behind the successful fundraise, right?
Vlad Cazacu: So, first company, second fundraise, 113 different calls and a lot of rejection.
Kaben Clauson: Lot of rejection. Right. We
Vlad Cazacu: we're, we're already gonna assume that a lot of people are gonna say, no, fundraising is hard. Right? Yep. Now, coming into base, what was your, initial pull? What did you start with top of the funnel?
Kaben Clauson: Top of the funnel? We started with 25 firms that we believe would write a pre-seed lead check. Okay. And we're interested in consumer. We then we first went after those firms. And I think the way to do this is this just. My gut on it is you pick some target firms and then you pick some people that you might not be target firms, but you might be a good angel check or someone you know can get the ball rolling for you is a good way to think about this.
Kaben Clauson: You know, maybe you have a connection or two that can write small checks. It's good to [00:24:00] get the momentum going. You pick those 20 firms. What you'll find though, is through the process, run this process.
Kaben Clauson: Investors and other founders, you'll learn of new names you hadn't heard of. You'll start adding those to your C R M. The big key is who's introing you, right? I think at least I've heard it. VLA maybe. Maybe you have better updated information. I think the best intro is a portco of that investor who's kicking ass and has been a huge winner.
Kaben Clauson: That's probably the best intro, right? Mm-hmm. Founder intros are generally pretty good if the founder's respected by those investors, so we would. Get the target firm and we try to figure out who do we know who knows someone at that firm. So we'd add in names to the C R M and this was more of running that process.
Kaben Clauson: And what that allowed us to do from a process standpoint was keep everything organized, stay on top of leads, always look for good ends to certain co certain venture funds. But also it kept us from [00:25:00] getting discouraged in a weird way. 'cause you want to feel, you wanna get this list built out 'cause you're gonna get a lot of nos, especially early on.
Kaben Clauson: You know, you'd be surprised how crappy your pitch is, even when you think it's good starting point A versus two months later, ending point B, it, it does get a lot better. I think it's also important to realize that as part of your, you know, your target as well.
Vlad Cazacu: Absolutely. I feel like for, in our experience was at the end of the fundraising process, like this is the deck and the pitch should started with, and I like, it's always just that way.
Vlad Cazacu: Now we're not pitching anymore, right? So like, what are, what are, what are
Kaben Clauson: we doing?
Kaben Clauson: And I've had some bad decks, man, right? I've made some of the worst decks like. I think I'm actually, look, I, I don't think I'm the worst communicator in the world verbally from deck, but decks are a different medium. It's like a different art.
Kaben Clauson: You know, if a founder's not phenomenal at building a deck, definitely outsource the design and structure of that. And I. That's one area where I [00:26:00] think a lot of people, including myself, have bombed by making it mm-hmm. Overly complicated by focusing on design and not message. A deck is a teaser document, you know, we use notion we use notion for our investor memo, this raise for the first time.
Kaben Clauson: Mm-hmm. I've never done that before. I like that because it shows the investor deeper thoughtfulness about your problem, especially at the pre-seed. Also, even if the investors don't fully read it it's good for them to see that, wow, this team has put in a lot of thought to this problem. And a lot of thought to their solution, to the competition.
Kaben Clauson: And I think if I was an investor, I'd want to, I would definitely wanna see a i, an investment memo. Absolutely.
Vlad Cazacu: I can definitely confirm that from both sides of the equation. Obviously as an investor receiving investment memos. So, such a ideally depth of vision and clarity of thought, right, about what they're building sometimes doesn't.
Vlad Cazacu: But that's also a great sign, right? It, it gives you another data [00:27:00] point and as a, as a
Kaben Clauson: data point to say no,
Vlad Cazacu: but again, you kind of have to shoot your shot, right? Like you can't, you know, fake what you're not, right? So like it's better to do it than just offer an additional data point of what you can do.
Vlad Cazacu: And as a founder, we did write an investment memo this this round and it actually did create wonders, not just for the investor, but also for us. Yes. 'cause we forced ourselves to ask the question that all the investors were asking, and in return, getting the answers that we're gonna need when we go live, maybe in the first pitch, maybe in the second pitch before we even send the memo to prepare for that.
Kaben Clauson: So yes, definitely, absolutely it great for internals doing the Y Combinator applications the same way. Like some of these things are just good for you internally. Mm-hmm. We do monthly investor updates that are actually quite in depth, much more in depth than our investors would expect. They're not for our investors, primarily, they're for us.
Kaben Clauson: It's great accountability. These are things I learned later on, not with my first company. My first company investor updates, they were crap because I was [00:28:00] thinking more like, okay, these people are watching us. Let's give 'em enough information to like let 'em know what's going good and bad. But the truth is it was a lot of fear.
Kaben Clauson: I think the best standard is to be like, we're sending a monthly update. Super metrics heavy, no BS. If things are going bad, you'll know if things are going good, you'll know because look, the truth is the company's not going well. Better just to have it out there, you know? No. The uncertainty of like, Ooh, let's not tell 'em everything that's going bad, that is a bad instinct for founders.
Kaben Clauson: Not just for the investor, but for the founder themselves. Like, don't carry that stress internally. Get it out there. You know, I know that's not on the fundraising topic, that's more on like, you know, post fundraising, but I think it's important. It, it
Vlad Cazacu: is. And actually had a question prepared for you writing investor updates.
Vlad Cazacu: So let's run with it now because I think maybe very relevant for a lot of people, which is. Who is really on the investor update? Are you leveraging that as an internal tool, as an update tool or as a fundraising tool for your next [00:29:00] round for people who have not invested in your current round? Like what's your tactic around the investor update?
Kaben Clauson: There's two different investor updates. One is only people that have invested. It's metrics heavy. It's how much cash we have. It's revenue, it's every metric. It's good, bad, and ugly. It's a lot of bullet point responses, and then it talks about new initiatives and it talks about customer learnings. I think it's really important to, like, early stage of the company.
Kaben Clauson: The most important thing is like, not just even revenue. It's almost like how fast are you learning? What are you learning? So we share all those internally, we wanna want those things out publicly. There's a second update, which we haven't launched yet, so we're thinking of a 2024 seed raise.
Kaben Clauson: That's what we're gonna do. Mm-hmm. Probably raise it this fall, but we're gonna like push a, that's what decided. We are going to approach that a little differently. This time we're gonna have earlier conversations with investors we really like, some of which who know us. And we're gonna start to release not a [00:30:00] monthly, but a quarterly kind of for people outside or a periodic.
Kaben Clauson: It might not even be quarterly, it might be, two months from now and then every month for a while. I don't know. We'll see. But I absolutely think there should be two, one that's internal. That's very much nitty and grid of the business and the second one that's external, that's giving them a taste of what's going on.
Kaben Clauson: But I'm not sure lot. I mean I think that's one area that I'd be curious to learn from Future Podcast and yourself and 'cause I do like the idea instead of just a big investor update to a ton of people being hyper targeted, even ahead of the round and trying to investors like six months.
Kaben Clauson: Here's where we're at, here's what we're learning, here's what's working. How are you thinking about the space? I think those calls are very fruitful.
Vlad Cazacu: And I think there's two sides of that coin. And unfortunately both sides, high positive and high negative on the side of being more transparent with prospective investors after the first round can give them that additional data point and continuously, right?
Vlad Cazacu: Like we. Everybody says [00:31:00] investors are investing in line. It's not in dots, right? So they're trying to connect those dots and make a story around you between this round and the next round. But at the same time, there's enough rotten apples in the VC ecosystem that may take that information, send it to a portfolio company, a competitor, et cetera.
Vlad Cazacu: So there's, that's a concern. Right, that, that barrier between how much you share that's beneficial to you and how much you share, that's actually completely detrimental to you. So, you
Kaben Clauson: know, I like sharing to investors only. I mean, if my gut is, it's sharing metrics to investors only if you're doing something more outwardly facing, and I think it's more of a stakeholder's message that's talking less about metrics, more about features that have been leased.
Kaben Clauson: City expansion would be a great example of something we could share, right? It's not sharing our metrics with our competitors, but it is sharing a significant business progress and in a lot of things like that. It's an open question. I think it's a good one because, you know, you'd hope that most people wouldn't be disingenuous like that.
Kaben Clauson: But we see those things all the time. I mean, it happens. It's, it's, we're in a capitalistic [00:32:00] society. I mean, it's, it's the arena in a way.
Vlad Cazacu: Indeed. And I think the T L D R there is. Be comfortable with whatever's, more open in terms of an investor update to become a PR release and be put on LinkedIn.
Vlad Cazacu: Right? And if you write it in a way where you're okay with that being out in the wild, you're never gonna be caught off guard with with what's inside it.
Kaben Clauson: That's a good instinct for everything. I mean, any email I write, I would be okay with having it in the New York Times. Just as a general rule, you wanna be thoughtful about communication.
Kaben Clauson: There's obviously some sensitive things that you have to talk about, but absolutely, as far as that we're quite careful. I will say it creates a lot of trust with your investors when they know you're consistent with updates and you're consistent with good and with bad 'cause. Then what happens is you're gonna go raise again.
Kaben Clauson: People are gonna do due diligence on you, and they're gonna say, Hey, what's the deal with VLAs updates or ban's updates? Or, what have you been learning about this company? And they're gonna say, Hey, these guys or these girls, they're doing a great job. They keep us posted, [00:33:00] good, bad, and ugly. There's no, these people shoot straight that's gonna go, I think a long way when you go to that next relationship, if there's that context.
Vlad Cazacu: Absolutely. And I don't want to make too big of a pivot. But I do want to touch upon two topics before we wrap up the podcast on the fundraising debrief. One of them, which is really important, pretty much top of mind for everybody since 2020. You know, in-person versus virtual, during the fundraising process, the ability to actually build a relationship with someone and explain your vision, your point of thought, et cetera.
Vlad Cazacu: In a digital setting versus being able to have a handshake in person and a PowerPoint presentation in someone's office. How have you seen that dynamic play out in your fundraise? And most important, right? How did the story of your lead come together? Was it virtual? Was it in person? Was it a web intro?
Vlad Cazacu: Was it a portfolio founder? How did you find that? You know, uh, golden Egg.
Kaben Clauson: Yeah. It was actually a friend of mine on Twitter who makes a lot of intros for consumer [00:34:00] companies. Alex Kwan he's a great founder of a company called Pearl. He made the intro, so it was through another founder. Mm-hmm. Um, he had to personally jive with the idea.
Kaben Clauson: So along the way you're gonna be selling people who then go risk their social capital. Social capital is an interesting concept for everyone to be aware of, which is like this idea of like, if Vlad wants me, you know, if I want Vlad to introduce me to, you know, Sarah Vlad is, you know, taking some of his social capital.
Kaben Clauson: He's spending it, on me in a sense, and that's something you're gonna learn. And that's another good quick aside, Vlad, is we need, we need, people like founders need to know each other in a fundraising process. I think the big thing a lot of founders miss is you knowing a lot of founders is secretly one of the best ways to get a fundraiser round done.
Kaben Clauson: Like that is something that's I see time and time again. We got introed through the friend through [00:35:00] Twitter. It was all over Zoom. You know what, I had my mind changed on this. I really did think in-person was gonna be the best way. And actually on company building, I'm more of an in-person person than a remote person.
Kaben Clauson: Frankly. I probably lean that way, especially early stage. Frankly, I think you can build a lot of rapport on Zoom. I think you can then move from Zoom to phone calls and text. I think moving down the communication chain is always a good move with anyone getting them off email to text or to calls, you know, get off zooms to calls, get off calls to texts.
Kaben Clauson: That was one way it formed with our lead was me. Chatting Async. Mm-hmm. Quick talk. Oh, he then he felt like he could hit me up async, you know, and we kind of form that remotely. And I think you can form it remotely. I think remotely actually can work really well. I think the one key is how you behave on a zoom.
Kaben Clauson: I [00:36:00] know this is a weird thing for me to say, but like, I think a lot of people behave on Zoom like this. They're like, hello, I'm here, you know, I'm ready for the meeting, ready for my pitch. It's like Zoom. You would never act like that in person. You know what I mean? So in a sense, I think one of the main ways is make Zooms more casual with ambassador.
Kaben Clauson: Like lean away, like look at something like show them, you know, show them something from the company, like make it more interactive. Like I think that creates more rapport than like the very like formal setting. Right. So that's a small aside on just like zoom etiquette. I think we can fix or improve. No, I mean, right.
Kaben Clauson: It's, it's
Vlad Cazacu: the breaking the ice, but in a digital context,
Kaben Clauson: right? Yeah, exactly. I mean being,
Vlad Cazacu: being comfortable creating a space where the other person also feels comfortable and at ease. Because when we let our guards down, information can actually share between the two individuals and hopefully your message is gonna be better.
Vlad Cazacu: Listen, understood. On the other side. Yeah.
Kaben Clauson: [00:37:00] And, you know, be concise. I went through why comment on a previous company and the biggest thing they would hammer, hammer in our heads was like, this has to be explained simply. And this has to be explained in a way where it's not like a lot of people try to explain things in fancier ways to make them seem more valuable, but the best ideas in the world are simple ideas, you know?
Kaben Clauson: So I think like simplifying what you're doing is something that when I've helped a lot of friends on pitches, you know, they've helped me, we've always, the area we always help each other more is like, Hey, this is too complicated. Like, This has gotta be simple. Imagine explaining your idea to someone at a bar who doesn't work in tech.
Kaben Clauson: You know, can that person understand the general. Sense of the value you're creating. I think it's a fun exercise to actually try on a stranger too.
Vlad Cazacu: Absolutely. It's the adult version of the mom test, right. You just have a beer in your hand. So, uh, and I think the real test [00:38:00] is the more beers you have in your hand, if we can, we can still maintain the same level of consistency.
Vlad Cazacu: But that's for another podcast.
Kaben Clauson: Um, yeah. That's really
Vlad Cazacu: appreciate you. Really appreciate you sharing all the, all these thoughts. I wanna move into a really quick, you know, five minute fireside ending of the podcast with a few things, not fundraising related to get a chance for people to learn more about Kaben Clauson, not just, base and the fundraise.
Vlad Cazacu: What is one of the things that people don't know about you? That they should, something that maybe has not been incredibly public yet, or no one has written about it.
Kaben Clauson: If I lived in a world where I didn't care about, you know, being a founder, if it wasn't my first love as an entrepreneur, I, one of my friends asked me, what would you do?
Kaben Clauson: And I think I'd be a history professor. You know, I, I love history more broadly. I love to read. So that's how I spend most of my free time. I'm a hardball compared to my friends. I'd rather read a fancy novel or a sci-fi novel than watch. Typically, although I do watch some things, so [00:39:00] reading's really one of my passions.
Kaben Clauson: I started a book club in Miami called The Big Ideas Mastermind. We read Exer excerpts of books and we debate them, left and right. So in addition to reading and learning a lot, which has been something I've loved from a being a kid, I grew up in a very bipartisan world. You know, I, I grew up in time.
Kaben Clauson: I spent time in Africa, Alaska. I went to American University in dc. I've been around a lot of, Far left liberal, you know, from a political persuasion. And I think it's been a great thing. 'cause I always seek out the opposite of consensus. I find it so interesting to bring people together with different opposing views, whether it's at our book club or through a conversation with a friend and try to test our thing, test each other a little bit, steal, manage each other's arguments, learn.
Kaben Clauson: So that's probably one of the unique things about me is I really. That's something I geek out on is reading and, but also challenging those ideas with friends is something, I have a few other weirdos that like this too. So we just get on the phone every night and we're like, let's debate this issue and we'll go into it for like 45 minutes, [00:40:00] the
Vlad Cazacu: great answer.
Vlad Cazacu: So I'm really curious for your answer to the next question, which is like, who do you look up to the most?
Kaben Clauson: Uh, a couple people. Naval Ravikant is one. He's an investor Silicon Valley veteran. I think his views on life are very balanced. You know, he's someone who's not saying, Hey, go be a monk, you know, in India to find happiness.
Kaben Clauson: And he is also not saying chase the hedonistic. You know, what do they call the hedonistic turnstile of. Always looking for more the next and the next and next. I think he has a great balance on what it might look like to not just have a successful life in a monetary perspective, but have a successful life in a more holistic perspective as a human being.
Kaben Clauson: So I really re recommend the Almanac of Naval Ravikant. That is a book you can buy. It's really interesting. I'm also inspired, By rags to riches stories. I'm reading Martin Luther King Jr's biography right now, and I, I find a lot of inspiration in communities that have been, [00:41:00] you know, that had more of a struggle, you know?
Kaben Clauson: 'cause I think as entrepreneurs we're so against the odds on things, I think there's some, you know, that can be in a more inspiring story. Oprah, Oprah comes to mind. Mm-hmm. She, picked herself up from such humble beginnings. Then became such a master of her craft under such triumph circumstances.
Kaben Clauson: And she has her, she's dipped into so many areas and aspects of the world. I find her to be one of the most interesting people out there in addition to Naval. And I'm sure there's a number of others I could think of. But those two come to mind. Awesome.
Vlad Cazacu: And last but not least, who are you grateful for?
Vlad Cazacu: Who'd you want to tell A public Thank you. At the end, the end of this podcast, fundraise related or not fundraising related?
Kaben Clauson: Well, fundraise related. I'm really grateful for my co-founders first because fundraising is trying on the person pitching, but it's, there's a different kind of challenge to your co-founders who are not pitching, which is [00:42:00] holy crap.
Kaben Clauson: Are we actually gonna get the money or not? You know, they don't know. I mean, so I think that they were incredibly supportive. That's awesome. Number two, my parents raised two kids. Both of us are entrepreneurs. I think that came from the fact that they, they didn't say like, they didn't put us in this ego state, like, you're the best, you're the smartest, or anything like that.
Kaben Clauson: In fact, quite the opposite. What they did do is they said, look, if you put in the hard work and if you get better, You learn from failure, you can do anything. So I think they gave us that courage to go try and potentially fail, you know, which as entrepreneurs, we're all facing the real possibility that what we're dreaming about might not work out.
Kaben Clauson: Which is, I think what holds back, you know, tens if not hundreds of thousands of more people that wish they could be an entrepreneur, but never have the courage to kind of make the leap. So I'm grateful for them for helping me. Beyond that, I'm not grateful for a person. I'm grateful for a city. I really think Miami is one of the most phenomenal cities in the country.
Kaben Clauson: It's, I think it's, I think when we look back on [00:43:00] American history, the 2020s will be defined by Miami disproportionately so to any other city, and I think that's for a few reasons. There's just. The enthusiasm and optimism of new people coming to a city, the intellectual diversity we have, and being a purple city in a country that's very blue and red, a city that has Latin culture, European culture, southern culture, all colliding.
Kaben Clauson: I think that's pretty interesting. So I'm grateful I'm here and and not elsewhere. So that'd be my last one.
Vlad Cazacu: Fantastic. What a great way to, to end the podcast. Kaben, this has been an amazing pleasure. Generally, really, really much appreciate you joining us and I know that the people listening to this are gonna get a lot of value out of this conversation.
Vlad Cazacu: So generally thank you so much for joining us.
Kaben Clauson: Thank you, brother. This was fun.
Vlad Cazacu: What a great conversation. If you enjoyed it, make sure to like and subscribe to our podcast and be on the lookout for a new episode in two weeks as we interview another amazing startup founder and debrief their [00:44:00] successful fundraising story. This podcast was made possible by Flowlie.
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Vlad Cazacu: That's it for today's episode. See you next time.