From NFL to Startup COO to Congressman Regulating Crypto (with Rep. Anthony Gonzalez)

1. BGBen Gilbert0:00

   I wonder if I can make it so you can't see her if I just hold her? [laughing] She's all wound up right now.

2. DRDavid Rosenthal0:06

   I love it. We've got all the creatures here. I got the baby on the monitor.

3. BGBen Gilbert0:09

   [laughing]

4. DRDavid Rosenthal0:09

   I got my fluffy dog, you've got your fluffy dog.

5. BGBen Gilbert0:12

   Keep her off camera and think it never happened.

6. DRDavid Rosenthal0:14

   [laughing] Yeah.

7. SPSpeaker0:15

   Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Is it you? Is it you? Is it you? Sit me down, say it straight, another story on the way. Who got the truth?

8. BGBen Gilbert0:32

   Welcome to this special episode of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle-based Pioneer Square Labs, and our venture fund, PSL Ventures.

9. DRDavid Rosenthal0:46

   And I'm David Rosenthal, and I am an angel investor based in San Francisco.

10. BGBen Gilbert0:51

    And we are your hosts. Today, we have a first ever for Acquired. Our guest is a United States Congressman serving from my home state of Ohio, Representative Anthony Gonzalez. David, Anthony has an incredible story.

11. DRDavid Rosenthal1:08

    An incredible story. The original motivation was Anthony's on the House Financial Services Committee, and is probably one of, if not the foremost member of Congress working on understanding and regulating Web3, crypto, everything that's happening. You know, and beyond that too, the broader economy, [chuckles] the Fed, GameStop, Robinhood, we get into all of it.

12. BGBen Gilbert1:31

    Yes, the House Financial Services Committee had a broad mandate well before crypto came around.

13. DRDavid Rosenthal1:35

    And Anthony is one of the handful of folks, as we talk about, that really actually use and understand this stuff in Congress. [chuckles]

14. BGBen Gilbert1:43

    Yeah, and, and not just because he's actually played around with it himself, but he ran a venture-backed start-up before serving in Congress. He went to Stanford GSB for grad school with David.

15. DRDavid Rosenthal1:55

    That's where Anthony and I first intersected, and, you know, that's the... We talk about it all through this episode. His story is just incredible. His family immigrated from Cuba after the revolution. His dad was a steel entrepreneur [chuckles] in Cleveland, and, uh, Anthony ended up playing football at Ohio State.

16. BGBen Gilbert2:13

    I remember in high school watching him on TV.

17. DRDavid Rosenthal2:15

    He went to the NFL, he played for the Colts, he caught touchdowns from Peyton Manning, then he went to business school, and now is a U.S. Congressman. It's just incredible.

18. BGBen Gilbert2:24

    Yep. All right, excited to get into it. Listeners, if you wanna discuss this episode after we, uh, we wrap up here, join us in the Acquired Slack at acquired.fm/slack. Now, we are very excited to welcome back to Acquired, our presenting sponsor, Vanta, the leader in automated security and compliance. We are huge fans of Vanta and their approach to the whole compliance process, SOC 2, HIPAA, GDPR, and more, and we've got CEO and co-founder Christina Cacioppo back with us today.

19. DRDavid Rosenthal2:54

    Christina, a lot has happened since we last recorded, right?

20. SPSpeaker2:59

    A lot has. Thank you so much for having me back.

21. DRDavid Rosenthal3:02

    One of the biggest things is you have raised probably the best round of twenty twenty-two so far, a hundred and ten million dollar Series B at a one point six billion dollar valuation from Craft, Sequoia, and a whole host of other great folks, including Ben and myself. Tell us about what raising this round in this environment was like.

22. SPSpeaker3:23

    Right. So this round raised it at the end of April twenty twenty-two, which was different than the [chuckles] last round, which was raised in, call it, like, January, February twenty twenty-one. To go back a little bit to April, ice was definitely melting. People were starting to get real skittish, and you would see that because all of the questions were around the efficiency of growth, and so it was very clear the bar had changed. If you had to pick one metric for this round, it was burn multiple. So for every dollar of revenue you earn, uh, what did you spend to get that dollar? And I think twenty twenty-one, right, it was all just revenue growth. It was like, "Where does that compounded growth rate go?" I think that actually, those two metrics sort of speak to just what a different funding environment it was, what a differences there were in diligence, what investors really wanted to see, and what they would kind of stomach and not stomach.

23. DRDavid Rosenthal4:20

    So obviously, you navigated that incredibly well. What about how you had set up the company, going back to the very beginning, kind of allowed you to be so successful in both of these two very different environments?

24. SPSpeaker4:34

    We got to basically ten million dollars of revenue on, you know, a couple million dollar seed round, and that was by sort of just doing the basics well, charging annual contracts, doing so upfront, having something people wanted and were willing to pay for annually upfront, and I think that installed a lot of discipline early on. To this day, actually, I still get the cash balance in my inbox every single Monday. You see the impact of your decisions on a, on a weekly basis. Having worked in VCs, your actually best bet for getting venture funding is to have a business that doesn't need venture funding, and it was [chuckles] sort of that playbook, and then realizing we could pull it off, and then honestly, a little bit of, like, "Oh, huh, wonder how long we can push this? Like, can we get to two million dollars in revenue? What about five?" And you're like, "Well, ten?" That kind of DNA was set really early on, and culture, too. And then actually the adjustment for us more was twenty twenty-one, when it was like, "Okay, does not matter, like, spend market share, revenue growth, go." And so we did, you know, kind of like everyone else, step up and change pretty quickly, and I think that actually helped us, you know, kind of shift again in twenty twenty-two, and it was, for us, it was like shifting back to a motion we knew, whereas I don't know if that was particularly true across the board.

25. DRDavid Rosenthal5:52

    Obviously, one of the great benefits of now having raised this round in twenty twenty-two is you are now a highly resilient company, and of course, the DNA that you've had all along. How has that shown up so far this year in your interactions with customers?

26. SPSpeaker6:08

    ... because we serve other technology companies and often high-growth companies, right? So they're facing the same stuff. They're playing the same game on the field, and so they can sort of appreciate it, and they're like, "Oh, you guys will be around for a while," right? And not just kind of the business continuity thing, but given what you've raised, you're able to make decisions for the long term. And it's funny, I think it's just 'cause the customers are from, you know, the same milieu as we are. They get it. They appreciate it. We often don't even need to say it. They'll say it to us.

27. DRDavid Rosenthal6:36

    Our thanks to Vanta, the leader in automated security compliance software. If you're looking to join Vanta's 3,000, now 3,000-

28. SPSpeaker6:44

    Ooh

29. DRDavid Rosenthal6:44

    ... plus customers to get compliance certified in weeks instead of months and build deeper, trusted relationships with your customers and partners, you can click the link in the show notes or go to vanta.com/acquired to get a 10% discount.

30. BGBen Gilbert6:59

    Now, on to our interview with Congressman Anthony Gonzalez. And remember, this show is not investment advice. David, myself, and any guests may have investments in the companies we discuss, and this show is for informational and entertainment purposes.

Episode duration: 2:01:15