20VC Why Founders Should Not Always Be Raising, How To Build Relationships with VCs In A Condensed Timeframe, Why The Founder To VC Relationship Is Not Like A Marriage with Dave Vasen, Founder & CEO @ Brightwheel

In this episode of 20 Minutes VC, Harry Stebbings interviews Dave Vassen, founder and CEO of Brightwheel, a leading platform for early education management. Vassen, a first-generation American with a background in online learning and product development at companies like Amazon and alt school, shares his journey into startups and the impetus behind creating Brightwheel. He discusses the company's growth, raising over $33 million from top-tier investors, and the importance of focus, hiring, and culture in scaling a business. Vassen also touches on the challenges of entrepreneurship, the necessity of saying no, and the value of investors beyond capital. Throughout the conversation, Vassen emphasizes the role of personal priorities, such as family, in shaping his approach to company building and the broader startup ecosystem.

• Dave Vasen is the founder and CEO of Brightwheel, a leading child management software solution.
• Brightwheel has raised over $33 million from notable investors including Bessemer, GGV, Lowercase, the Chan Zuckerberg Initiative, Eniac, Mark Cuban, and Chris Zaka.
• Dave's background includes VP of Product at AltSchool and various roles at Amazon, such as head of K-12 education on Kindle and creator of the Made for Kindle licensing program.

"And so I'm thrilled to welcome Dave Vassen to the hot seat today. Now, Dave is the founder and CEO at Brightwheel, the child management software solution you need, and now the number one platform for early education to date."

This quote introduces Dave Vasen as a successful entrepreneur and the CEO of Brightwheel, emphasizing the significance of his company in early education.

• Carter offers modern fund administration software and services for VCs, simplifying equity, fund admin, and valuations.
• Brex provides a corporate card for startups with instant online signup, no founder liability, and high credit limits.
• Startengine is an equity crowdfunding site where individuals can invest in private companies at various stages.

"With Carter's new modern fund admin software and services, you get a real-time dashboard of your general ledger. You can securely share info with your lps and issue capital calls, all from the same platform."

This quote highlights Carter's role in streamlining the administrative process for venture capitalists, making it easier to manage investments and communicate with limited partners.

• Dave Vasen is a first-generation American with a strong emphasis on education from his family.
• His career path included roles in online learning at Cisco, strategic work with Teach for America, and leadership in Amazon's K-12 education.
• The birth of his daughter, Serena, brought realization of the importance of early education and the lack of connectivity for parents to their children during the day.
• Observing the challenges faced by early education providers, who also run a business, led to the creation of Brightwheel to streamline their operations.

"And so in spending time with them and seeing what they were using, a lot of spreadsheets, a lot of paper, he was thinking, why can't this all be in one place? Why can't it be easy to use? Why can't it be in the cloud?"

Dave Vasen explains his motivation for starting Brightwheel, identifying a gap in the market for a unified, cloud-based solution for early education providers.

• Startups can move quickly, but it's essential to know where to focus energy.
• Companies must define their customer, understand the problem they're solving, and focus relentlessly on that goal.
• Being willing to adjust focus as more is learned is crucial, but having a clear initial focus is necessary for determining the right path.
• Saying no is an important skill and should be practiced within a company's culture.

"I think companies, really early on in particular, but every stage, need to be able to define their customer, to understand the problem that they're solving for that customer, and then focus relentlessly on that."

Dave Vasen emphasizes the importance of focus for startups, stressing the need to be clear about the customer and the problem being solved.

• The ability to say no and having a framework for it within a company is critical.
• Understanding where to focus helps determine if you're on the right or wrong path.
• The early stage of a company involves some degree of uncertainty in determining the right focus.

"And I think when you dive in deeper, then what you have to be willing to do and be able to do is to actually say no. And I think there has to be a framework and a language within a company around no."

Dave Vasen discusses the importance of being able to say no and having a company culture that supports it, which is essential for maintaining focus during scaling.## Entrepreneurial Insight and Learning

• Entrepreneurs often focus on unexplored or uniquely approached ideas, which carry inherent risks.
• Measuring progress through identifiable milestones is crucial to track the success of solving a problem.
• Understanding the core insight of the problem and tracking unique solutions lead to a valuable learning process.

"So there is some gamble to that. I think it's then figuring out what measurement, what milestone, in what way you're going to be able to measure your progress and go against that."

This quote emphasizes the importance of setting clear metrics for progress to gauge the success of innovative ideas, acknowledging the risk involved in entrepreneurship.

• Being direct and transparent is key when declining opportunities in order to maintain relationships.
• Soft yeses or postponements can be problematic; a firm no is often more appreciated for its clarity.
• Practicing and getting accustomed to saying no is important for personal and professional growth.

"And so if I'm saying no to somebody, hopefully usually I have some good reason. And so if I can offer advice, it would be just to help the other side understand that."

Dave Vasen highlights the importance of providing a rationale when declining, which helps the other party understand and respect the decision.

• Initially, culture was thought to be an organic mix of early employees' contributions but was later understood to require prescriptive measures.
• Defining and implementing company values and behaviors is important for consistency and measurement in hiring and reviews.
• Culture should evolve and be challenged, but with a clear starting point based on foundational values.

"I think one of the biggest lessons that I've learned is that need to actually be prescriptive about culture."

Dave Vasen explains that actively shaping company culture is more effective than allowing it to form spontaneously.

• Understanding a company's unique values and behaviors is essential before incorporating them into hiring processes.
• Using a scorecard with specific criteria during interviews helps assess potential cultural fit.
• Acknowledging and rewarding employees who embody the company culture reinforces its importance.

"We have the scorecard that we are rating against and we have specific areas to focus on, specific questions against that."

Dave Vasen describes the practical approach to evaluating candidates for cultural fit through structured interviews.

• Fundraising should be viewed as an instrument for growth, not an end in itself.
• Founders should consider the implications, timing, and necessity of fundraising, and manage post-raise expectations.
• Maintaining a business-as-usual approach post-funding can prevent unnecessary spending and promote stability.

"I've actually asked the team essentially to operate as business as usual for the remainder of 2018."

Dave Vasen advises against radical changes in operations or spending following a funding round, advocating for a steady approach.

• Resource constraints can be beneficial as they foster creativity, prioritization, and tough decision-making.
• Discussions about capital expenditure should be open and focused on long-term strategies.
• The right time to accelerate spending is when there is a clear plan for growth and when bets on certain opportunities are paying off.

"I fundamentally believe that resource constraints are a good thing. They force creativity. They force teams to prioritize. They force tough decisions."

Dave Vasen expresses his belief in the positive aspects of limited resources, encouraging strategic thinking and innovation.## Fundraising as a Tactical Component

• Fundraising is an important but tactical aspect of building a company.
• It should be condensed to minimize distraction from the product and business.
• Planning ahead for future fundraising is crucial, including understanding required milestones.
• The CEO's role is to focus on building the business, not just fundraising.

"I think fundraising is a tactical component of building a company." "What I try to do is condense it as much as possible."

Dave Vasen emphasizes that fundraising, while important, is not the sole focus of a CEO's role. It should be approached tactically, with an effort to minimize the time spent away from core business activities.

• Building relationships with VCs is important, but time is limited.
• Prioritizing business needs over casual meetings with VCs when not actively raising funds.
• Being polite and clear about time limitations, suggesting future windows for discussions.

"I think it's hard because you want to build relationships, you want to be respectful." "What I try to convey is, and what I advise is just the limitations on time and what that means."

Dave Vasen advises founders to manage their time effectively by prioritizing business commitments over informal VC meetings, especially when not in a fundraising phase.

• The VC-founder relationship is crucial and requires alignment with the company's vision and values.
• This relationship is likened to a marriage but with differences in the process of getting to know each other.
• Due diligence and backchanneling are important when establishing VC relationships.

"Your investors are people you're going to lean on, that you're going to rely on." "I just think you can condense it more when it comes to an investing relationship."

Dave Vasen acknowledges the importance of the VC-founder relationship, likening it to a marriage in terms of its significance, but notes differences in how these relationships are formed and maintained.

• Clearing one's calendar and dedicating time to get to know VCs when fundraising.
• Importance of both formal and informal interactions.
• Backchanneling to learn about VCs' behavior in challenging situations is crucial.

"The biggest advice that I get is time, time." "Being able to go about finding out other folks who have worked with that VC."

Dave Vasen suggests that when it's time to fundraise, founders should focus intensively on building relationships with VCs, utilizing both formal pitches and informal personal interactions.

• The startup ecosystem often glorifies founding and scaling companies without acknowledging the challenges.
• Founding a company is difficult and requires sacrifices in personal life.
• There is a need for more discussion on failures and day-to-day challenges rather than just celebrating visible wins.

"It is really hard. It takes a toll on family, on friendships, on health." "Startups are, in my opinion, much more about the climb than the peaks."

Dave Vasen reflects on the hardships of starting and scaling a company, critiquing the tendency of the startup ecosystem to focus on and glorify only the successes, rather than the entire journey, including the struggles.

• Pattern recognition can lead to success but also introduce biases and intellectual laziness.
• Personal experiences where pattern recognition worked against the speaker.
• The desire to fit founders into patterns can lead to overlooking potential.

"I would tend to agree with Finn. I would say it can really work and I imagine it can help lead to success in many situations." "I can't tell you how many people dismissed me early on because they couldn't grok the word childcare."

Dave Vasen agrees with the criticism of pattern recognition in VC, sharing his experiences of being underestimated due to not fitting the expected patterns, and how such biases can be limiting and dismissive.## Diversity and Inclusion

• Emphasis on diversity and inclusion is increasing, but there is still a significant journey ahead.
• Women, minorities, and diversity of thought are areas that particularly need more focus.
• Brightwill is committed to high standards in hiring and operations regarding diversity and inclusion, though acknowledges they have not yet achieved their goals.
• It is important to explore beyond familiar territories and experiences.

"I'm glad sees there's more emphasis on diversity, inclusion. I just think we have a long, long way to go, especially when it comes to women, to minorities, to diversity of thought, I'd say at Brightwill, we watch this closely."

This quote indicates that while the speaker is pleased with the increased attention to diversity and inclusion, they recognize the need for substantial progress, particularly concerning underrepresented groups.

• Being an older founder and a parent leads to stricter time management and prioritization.
• Parenthood provides grounding and a shift in perspective after challenging workdays.
• The speaker values spending time with children and integrates family into daily routines.

"I think it just means I'm going to be more stringent on my time because I have more demands on it."

The speaker reflects on how parenthood necessitates efficient time management due to the additional responsibilities it brings.

• The speaker struggles to find time for reading due to the demands of being a founder, husband, and father.
• Recommends "The Five Dysfunctions of a Team" for its practical framework to assess team health.

"One book I would recommend is called the five dysfunctions of a team."

The speaker suggests this book as a valuable resource for understanding and improving team dynamics, despite their limited reading time.

• Embracing distributed teams is essential, especially for companies in the tech industry.
• Brightwill has team members across multiple states and invests in resources to ensure a cohesive team experience.
• Importance is placed on maintaining company culture and ensuring it is felt by all team members, regardless of location.

"We're investing a lot in things like video conferencing and travel and just ensuring that the things that originated with Brightwill in our first office and our small group, that the culture that we talked about, that we are instrumenting it throughout."

This quote highlights the company's efforts to invest in technology and practices that unify distributed teams and preserve company culture.

• The speaker references the Jeff Bezos "regret minimization framework" as an influence on starting the company.
• A frequently used phrase is "so it goes," from Kurt Vonnegut's "Slaughterhouse-Five," which helps in maintaining perspective during tough times.

"I kind of often lean on at times, but I'd say actually more frequently now, I guess maybe humorously catch myself saying, so it goes."

The speaker finds comfort and perspective in this phrase, especially when facing challenges.

• Early life experiences of backpacking and mountain climbing taught resilience and the ability to push beyond comfort zones.
• Marriage and parenthood have been significant inflection points, providing support, grounding, and joy.

"I did a bunch of backpacking on my own, internationally, even climbed a few mountains."

This quote illustrates how formative experiences in the speaker's youth have influenced their resilience and approach to challenges.

• The speaker views Jeff Bezos as a successful figure due to high expectations and results at Amazon.
• Success is also associated with innovation, customer experience, and the ability to meet high standards.

"For me, it's Bezos."

The speaker cites Jeff Bezos as a personal example of success, reflecting on their own experience working at Amazon.

• The most valuable contribution from investors, beyond capital, is being a thought partner.
• The speaker values constructive collaboration and different perspectives from investors.

"I'd say thought partner, and I would say our investors have been super strong on this dimension."

The speaker emphasizes the importance of investors who engage as partners in the thought process and strategy of the company.

• Brightwill aims to be the leading brand in early education, with a wide-reaching and trusted network.
• The company plans to build on its foundations to revolutionize the industry and serve in new ways over the next five years.

"We get to serve schools and parents in all kinds of new ways and ultimately help revolutionize this industry."

The speaker expresses ambition for Brightwill's future impact on early education and its potential growth and innovation in the coming years.