Sep 21, 2021 • 26M

Andy Su, Pry CEO, Talks About Fundraising Dynamics During YC batches

Irene Mingozzi interviewed Pry CEO to go deeper into the fundraising process while attending a YC batch. Andy did it twice: in 2010 and 2021. What's changed?

 
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Welcome back to The Valley’s interviews. This time, Irene Mingozzi, spent some time with Andy, CEO at Pry, and a second-time founder.

We met Andy at the Y Combinator demo day, in March 2021. He was one of 319 founders on stage and had a minute to pitch his company to an audience of thousands of investors. He presented Pry: an intuitive and intelligent tool to manage the finances of a startup (instead of Excel sheets).

We liked it, we talked to him again, and during the first call, he definitively convinced us: he as a founder, his path, the metrics of Pry, his vision for this product that — in our opinion — has enormous potential. But above all him: clear, decisive, assertive, and with a clear plan in mind. After our due diligence and some mail exchanges with Andy, we decided to invest.

In this interview, we chatted with Andy for half an hour about his experiences in Y Combinator — in 2010 with InDinero and then in 2021 with Pry —, his point of view on fundraising — which he has done several times, with and without YC —, and the role of Silicon Valley in its path. It was a good chat, I hope that his experience and his point of view will be useful to many of you too.

Here you find the audio and video interview, plus the complete transcript of our conversation.

Irene: “Hi Andy, thank you for taking the time to chat with me today.

As I already mentioned to you, this interview will be published in our newsletter where thousands of Italian startup founders will be reading us. Can you introduce yourself and your company, with a special focus on how Pry could help these founders?”

Andy: “Yes! So, my name is Andy Su, I'm one of the co-founders and CEO of Pry.

Pry is a financial planning tool for startups: we've replaced spreadsheets for managing your cash, managing your runway, and really understanding how every new hire impacts your runway and your business. We're based in America, in San Francisco, but we have several European customers using Pry, many of them in the UK: we support multiple currencies and we can probably better support the Italian community once we get more customers in the region - since we are a startup. But even without the integrations you can actually log into Pry, create a demo account or just use Pry for financial planning, and that's something I think every founder should have. If you're a founder and you're managing your finances off a spreadsheet, try our tool, we've put a lot of thought into it.”

Irene: “Yeah, we thought it was great when we saw it, it was really interesting for us and we decided right away to invest in Pry, so absolutely great product. This is not your first startup and not your first time in YC: in 2010 you co-founded InDinero, another fintech company that grew very quickly and was very successful. How different was your experience as a founder back then compared to now? Can you give us these different views of how it was being a founder in 2010 and then again in 2021?”

Andy: “The scene is much bigger now. In our batch, there were over 300 companies and I think in the summer 2021 batch it'll be something around the same size, if not bigger. But in 2010 when we joined YC with InDinero there were 36 companies. The types of investors were different too: we had one of the biggest raises back then, which was about $1.2 Million, and now 1.2 is - for the Silicon Valley area - relatively low. So there's more money, there are way more companies, (back then) it did feel like a little bit more like the startup community was full of professors and just random people you probably never heard of - but very smart - and now there are Directors of Apple, of Google, Intel, all these tech companies, people who have moved up the executives, they all have funds, they all have money. And then American Express has a venture arm, and all these larger companies all have venture arms now, so it's a different scene, it's definitely matured.”

Irene: “Yeah, I saw that change as well, it has been very interesting to live through that great shift that has been happening in the last years, especially in the Valley, but I think quite all over the world. So again with this comparison between your experience back then and your experience now: is there anything you're doing differently this time around? What would you say are the most important lesson that you learned in the last 10 years that made you the entrepreneur that you are today with Pry?”

Andy: “I feel like I learned a lot. Probably one of the biggest things is how important it is to work with good people and to be a good judge of character, whereas ten years ago we meet someone who doesn't work out it's like “oh, we couldn't have known that upfront”, whereas now you have this intuition where it's like “oh, you know, something's a little off, maybe we can wait for the right person, we don't have to rush when it comes to people”. 

So that's a huge piece of it. There's another one, that I think comes with experience, and that's just knowing the pace that you have to work at. It's kind of like working out: you're running a marathon, but you need to know how fast you should be going, you don't want to burn out, you don't want to go too quickly and then burn out, and you also don't want to go too slow so you never finish.

And then also just knowing the community: everyone in the startup community is more or less in the same situations and overcoming the same challenges, it's difficult for everyone.

Those are a few lessons, and I guess how that's translated is: I'm working with a smaller team and I'm making sure that every person we work with has value add, and also to not rush, to be able to plan things out ahead of time. 

We're building a financial planning company, so it's very much in our nature to think through our steps before just leaping forward and creating chaos.”

Irene: “Great advice, thank you! So, I would like to ask you something about your fundraising experience. As you know in our Silicon Valley Dojo blog we recently interviewed Abel from FlutterFlow - you are both from the same YC batch and part of our portfolio - and we had a deep dive on his experience during YC: how was the batch, how was the community. Today I would like to explore with you another aspect of the YC experience: the fundraising process, which is - I think - one of the most interesting parts of being part of YC. Can you share with us how it looked like for Pry to fundraise and what was the role of YC throughout this fundraising process? I know that with InDinero you went through YC as well, and you did like fundraising as well. Can you show us what was the role of YC, what is the real difference between being inside the batch or not? What was your experience?”

Andy: “It's very different from back then, I think even from the early days there was like Paul Graham who was personally trying to get his friends to invest in Airbnb and all these companies. Even back then in 2010, there could be some warm intros from the partners, but now it's more the Demo Day event. 

You don't really get intros from any of the group partners, there isn't that personal element, but it still works. It works because of the sheer number of investors, the sheer amount of capital that comes together for us one day. Demo day one-minute pitch is pretty fast, when you're doing it it's like bam! you're over, there are 300 companies also pitching, and I think the investors all say “There's so many, it's kind of hard to pick out”. And what many of them do is go to the website and look at the things you've written, the type of company you're in, and send out a message without even watching some of the videos. So the video itself, sure, was important but on that day we got anywhere between 50 to 150 pings from investors - I think we got 80 to 100, or something like that, I have to check the numbers - they all just came from different areas, and they said they're interested and they wanted to talk. Very quickly I responded to all of them, we started a process, and it was fast. 

Before raising at Y Combinator I actually raised on my own without it, and that was like a three-month process, investors would always ask us to push back the time, learn a little bit more, see more traction. But during Y Combinator it's a different environment, investors are kind of competing, because a lot of the best companies close the rounds within a few days or a week. So everything's happening quickly. It was very hectic, very exciting, I had a good experience of fundraising from YC, but experiences do vary, depending on their market, depending on their traction, and how far they've gotten. But my personal experience is that it was definitely worth it and value-add.”

Irene: “Yeah, I've never seen anything that hectic in my life, it was so fast and some companies asked us “Did you have time to watch our pitch?” and we were like “Of course”,  “Oh because a lot of investors just reached out without even looking at it”. We were actually watching the whole thing, it was, I have to say, very tiring, 350 in a day.

Andy: “Honestly, I don't think any less of investors who didn't watch a pitch because there are so many and every company is a big idea, you have to really understand, to spend a lot of time and thought, to really realize what the people and what the company vision is. There's just too much for a single person to get through in that amount of time.”

Irene: “ The experience on this side of the table of investing in YC companies is completely different from the experience of investing in other startups that are not going through the YC Demo Day. Even the whole hecticness, the whole rush: with YC sometimes we had like an hour to decide on a deal, and the type of due diligence has to be much faster, it has to be still deep, but much faster. So definitely a pretty intense experience, interesting but intense.”

Andy: “Yeah, it's very interesting, and it feels very real too because a lot of the YC founders want investors to reply in an hour, and there’s no way, they don't reply, and then two days later they're on Techcrunch and they raised five millions or something, so they're really in the thick of it, it's really happening, it’s not just talk.”

Irene: “Usually YC companies come out and they're raising their pre-seed or seed round, that's the YC sweet spot where it’s really effective, but I'm interested in seeing if the YC effect actually helps also later in the fundraising process. With InDinero you raised up to Series B: did you have that kind of YC effect helping, especially given the previous YC way where it was much more based on one-on-one intros with the partners involved. How was the whole fundraising process?”

Andy: “The thing about YC - and is definitely the case now - is that you don't really have much time with the people there after the batch, because it's the same people working with the current batch, and they have to handle 300-400 companies. Even back in the day, we didn't really get that many warm intros. If we had a warm intro, it wouldn't be because we sent the email and said “hey, intro me to someone who thinks we're interesting”, no, has to be very direct, we need to research them, know them, look on LinkedIn or somewhere that our only connection is through a group partner, and then we send out that email, so it's very high intentional. You have to do the work to get that lead. But really the benefit of YC over time is the community: it's when we go to a community event, or we meet our other fellow batchmates, and we ask them “hey, how are things?” and they tell us “we just raised money from this guy, he's really cool”, and then that's how we get the network, how we get the intro for the future investors. In fact, I did this just a couple of weeks ago, I was talking to a fellow batchmate and they were telling me about one of their investors and now I'm very interested in pursuing a conversation with him. Not anytime soon, because we're not raising right now, but he's on my list now.

It's part of the ongoing community, and you have to do the work, to go out and meet the other founders, your batchmates, they're your greatest source of leads. They're in the same situation as you, they want to help you, and just getting coffee every now and then could lead to a lot of opportunities.”

Irene: “Actually you anticipated my next question because I'm very interested in understanding more about this community. We talked about this with Abel from Flutterflow in the previous interview, about how strategic and important the YC community was for him. He said that one of the main perks of being part of YC was to have access to Bookface and to the whole network. You have been part of Bookface actually since 2010, from the first experience, how did that impact your company, especially maybe at the beginning? Did you reach out to specific founders? How did Bookface and the network really help you with your companies?”

Andy: “ There are so many things that make the community great. First of all, obviously the people. One of the first things is that when you reach out to somebody and say that you're part of the community, it becomes not a cold email anymore. Usually, you see the CEO somewhere, they're building a big company, and you email them, you're not going to get anything. But through YC it just feels like we all kind of know where our roots are, so you're more likely to get Think of Bookface as a forum: people are posting their side projects, people are posting their new launches and new projects. You see a lot of activity twice a year because the new companies come in, and they launch on Bookface: and some of it helps you stay current with what's getting built, and they’re also kind of inspirational. I started Pry, my second company, and much of that is really because I'm in Silicon Valley and I'm talking to my friends and people in the area, and I see all these launches on Bookface, and it really motivates me to build more in technology and start a new company. There's that aspect that keeps you going, it's very different to be building by yourself and it's very lonely a lot of times. This is really helpful to founders like us.

More strategically, I think the most value-added thing about Bookface is that there's an investor network and an investor database, and YC founders can rate investors and give them good scores or bad scores about experiences -  Lombardstreet is great by the way. And it's actually very valuable because, especially in the early stage of funding, there are a lot of investors that have taken advantage of founders, there are definitely these horror stories that you can look up - I was reading Jessica Livingston's Founders at work and there are a few things in there that are quite interesting. Through my InDinero journey, I've actually met with a lot of founders and friends, and in some of the things we talked about behind closed doors, there are really two main struggles I hope I never have to deal with: one is founders trouble, when founders are splitting up, or a high important employee leaves, and there's massive friction there of course, and the other is a cap table trouble with the investor.

For the founder ones and the employee ones, the founder at least has a plan, there's a termination agreement in California, they're going to get it done, it's messy, but they can get it done.

The investor’s one is really difficult, because getting somebody off the cap table is very difficult, and many of these investors are more sophisticated at dealing with these types of things because they're usually the ones to get themselves into this type of situation. So I'm very aware of picking out investors, which is why the investor database is very important for YC and it's highly protected, and people feel very confident posting on there, which is really important.”

Irene: “That's extremely helpful for a founder in his/her fundraising process. Again about fundraising then: you did it twice, and you learned a lot from probably hundreds or thousands of meetings you had with investors. In our audience, we have a lot of founders that are trying to fundraise: what is the best advice you can give them? What is the best practical advice? Because a lot of times they get stuck in the actual execution of the fundraising, like how do I actually do that? How do I get out and start talking to these people?”

Andy: “I'll give some advice, I don't know if it's the usual, but I would say: first of all, founders should really understand how investments work, how venture capital investments works.

One thing you can do is ask would you invest in your own company? and for many founders - if you're engineers - you'll probably be like no, I wouldn't, I don't know why anyone would invest. But if you look at how the investment ecosystem works, you look at how people place bets in the companies that look like yours, and eventually, an Airbnb pops up and gives few thousand nice returns, you start to see that investors are just rational actors, they're just people who are following a good set of rules, just like yourself. So when you talk to a hundred people and they tell you no, it's not personal, it's that you don't look like a good investment at the moment, so maybe if you think with that mindset, you can start improving upon it.

What looks like a great investment? Number one is metrics: if your metrics are going up, and the numbers are there, it can't be faked, and nothing else matters. You're automatically a good investment. But many of us don't have that, so at the very early stage it really is the team. Because no matter how you spin the market, how you spin your idea, other people could come up with your idea, a lot of people are aware of the market, but what's unique about you at your stage is your team.

That's why in the seed funding stages, if you don't have metrics investors put a high priority on the team, and you should as well. That's probably what I got for you for now.”

Irene: “That's great, that's actually exactly what we usually say to the founders we talk to: that the most important thing for us are the team and the metrics. So you definitely said exactly on point what we usually say. 

Last question, let's talk about Silicon Valley. We're both based here, you have been living here at least for the last - 15 years?”

Andy: “10 years now.”

Irene: “Okay, so how did Silicon Valley and being here impacted on your companies and on the fundraising process? Do you think it has been different being here rather than being in Los Angeles or Chicago or somewhere else? Did it change from 2010? As a founder how did Silicon Valley change from 2010 to today? Is being here still important? Is this still valuable? Do you still have the same type of relationship with the network here?”

Andy: “What's really interesting about Silicon Valley is the community, the people. You walk down the coffee shop and someone's talking about startups, someone's pitching a VC. I'm in SOMA and every time I grab coffee someone's talking about a startup. 

It just reminds you what you're supposed to do, what you're supposed to become. I think for starting a company, Silicon Valley is still the best place. If you're more established, you move to Los Angeles or a hub with plenty of people, it's still good. But even on Bookface, the YC community, there are events in Silicon Valley every now and then. There are also events in New York that I'm seeing, but if you're living in Texas or in the Midwest or sometimes even in Seattle, you don't see as many meetups and the community isn't as strong. So I think when you're starting a company it's great to be in Silicon Valley. 

Over the last 12 years it's gotten way more expensive - it felt expensive 12 years ago and now it's more. So I do think that the founder should be here, not just for investment money, but for the community, to meet other founders, and really get a sense of it. You're getting coffee at the same place as all these unicorn founder billionaire people, you're in the same spot, you can be one of them, that's really powerful.”

Irene: “Thank you Andy, that was extremely interesting. Thank you for your time.”

Andy: “Of course, thanks for having me. Bye!”