The Secret Science of Fundraising (Part 1 of 2)
Episode introduction
Before founding Levels, Sam Corcos was a serial entrepreneur – or at least, he had a lot of ideas. Experimenting and bouncing ideas around early in his career paid off. By the time he landed on the idea to start Levels, he had a healthy network of smart and well-connected friends in place. He also honed the skill of asking for funds and favors from investors. Today, he thinks that more people should be given the confidence to start businesses. And when it comes to Levels, he prefers to work with partners and investors who truly care about the Levels mission – making the world a healthier place. As a guest on Funded, Sam spoke to host Jason Yang in part one of a two-part podcast series.
Show Notes
Key Takeaways
04:59 – The impact of the past
Sam’s first company failed, but others took notice of his honesty and integrity, and reacted positively to his efforts. While difficult, the experience was influential.
“My first company, which I started largely just after college, effectively failed. It was in construction software and we were doing $60,000-$80,000 a year in revenue after a year of effort. We bootstrapped it so we didn’t raise any capital for it, but it was pretty clear it was not going to grow in the way that we wanted it to. And in the back of my mind was this lingering fear that everyone would perceive me as a failure. And my life would be worse. And it just wasn’t the case. When you give it your best effort and you stay a high integrity person and you don’t cheat people and you’re making an honest effort to do your best, people actually really respect it. There’s a quote that I think has a lot more to do with vulnerability in conversation generally, but I found what really resonated was what we see as courage in others, we see as a weakness in ourselves. And so when you see like, man, that was such a brave thing for that person to do, but like if I did that, everyone would see me as weak. Just being able to see yourself from a third-party perspective and having been through it and being on the other side of it, realizing like everyone was very positive as opposed to very negative. And it was mostly the emotional hurdles to overcome that were the most influential.”
07:15 – Smart people should build things
Sam realized that when smart people are given the right ecosystem, they can be inspired to start companies. He thinks the world would be a better place if more smart people explored entrepreneurship instead of going into finance and law.
“I’ve been thinking a lot about what is it that gets society to the next level. And there’s actually a great book by Andrew Yang, Smart People Should Build Things, that I wish I had read in college. It would have really helped a lot, but I remember reading it and there were moments in this book where he talks about the social pressure to go into finance or law. I felt like I lived with this, this book is describing my lived experience and how hard it is to overcome those emotional barriers of leaving a comfortable job and being judged by your parents, and taking those risks. It’s a really hard thing to do. And the thing that I liked intellectually about On Deck is that it is a program where the goal is to increase the top of the funnel of people starting companies. And they find really capable people who probably otherwise may or may not start their own company. They might also just be perfectly happy being an engineer at Google. But if you provide them an ecosystem of support where they can see other people who have done it and they think like, wow, this is actually achievable. If you can increase the number of people who are willing to take those risks, I think the world will be better. So that was really my main motivation for getting involved, just to understand how this works. I’m a huge fan of what they’re doing. If they can really scale that out, I think it will have a meaningfully positive impact on the world. I took a year off of work after CarDash and I spent the better part of that year thinking through how I wanted to spend my time. And one of the things that I found was I really wanted to work on something that was meaningful.”
09:04 – Experimenting with multiple projects
At his peak, Sam was experimenting with 16 potential business ideas simultaneously. This experience made him see the value in Levels, and appreciate the fact that his co-founder Andrew was always keeping engineering progress ahead of expectations.
“At peak, I was experimenting with something like 16 different projects. Each of which was plausible company ideas. And I would put a little bit of time into them. I do some market exploration and I would see if it really has potential. And I would call my friend, Eric. Eric’s now at Founders Fund, but he’s a friend from college and I would call him somewhat regularly and pitch him on my ideas and he would always shoot them down and he would apologize for it, saying he’s really sorry that he keeps saying no to all my ideas. And I kept telling him every time you say no to an idea it saves me five years of my life. I should be thanking you more than anything. And it’s just helpful to socialize these things and to learn from them. What I did end up getting from On Deck specifically is I met my co-founder Andrew. We have five co-founders at Levels. Andrew is one of them and he’s incredibly capable and he manages all engineering at the company. I’ve been on the technical side for basically my entire career. So I thought it would be a lot harder for me to let go of it. But Andrew is so capable that anytime I look into it, like on what engineering is up to, they’re always way further ahead than I thought we were.”
10:54 – The calling to found Levels
When he discovered the shocking insights provided by continuous glucose monitoring firsthand, Sam immediately saw the need to further the technology and fill a clear and pressing gap.
“The thing that really flipped the switch for me taking Levels more seriously was when I started using a continuous glucose monitor, really just as a novelty. And I didn’t expect that it would be interesting. And within a couple of days, I started discovering things. Things that I thought were super healthy for my entire life, like orange juice and oatmeal. And I was seeing numbers that healthy people are not supposed to be able to see. And it was when I started digging into the scope of the problem that I started to realize this is a leverage point to start to tackle metabolic dysfunction. I wrote a little bit about this in the secret master plan that we published on our blog. But the fact is that more than 10% of the United States is already diabetic, and it’s increasing at an increasing rate, the second derivative is positive when I realized how serious this problem is and that it was basically this recognition that this company needs to exist and does not exist yet. And I’m in a position to make it exist. So I felt some responsibility to do that. This is really the motivation.”
16:31 – Networking your way to success
It’s one thing to be popular or well known in one social sphere. It’s another thing to have key connections who have helpful connections of their own. This type of healthy social network can help open doors that would otherwise be closed.
“There are many different types of network centrality and one is just degree centrality, which is like, it’s the more technical term of what people would just call popularity. How popular is this person? How many people do they know? But you can have a high degree of centrality if you’re the mayor of a small town. And you know everyone in the town, you have a high degree of centrality, but you probably have low eigenvector centrality because you only know people within one dense network. So eigenvector centrality is how many people do the people that you know, know. It’s like one degree beyond that. So people who are very well connected among other people who are well-connected are the kinds of people that you want to get involved with early, because networks are incredibly hard to predict and they’re very complex. So if you get somebody who is very well connected and can think in a networked way, you can start to get access to things that you would be shocked that you have access to. Like, I want to talk to this basketball player, and you just ask a group of people that have high eigenvector centrality.”
19:04 – Perfecting the art of the ask
Asking for something takes a lot of practice. Sam would send updates to investors and follow that up with a personal message with the ask. This increased conversion from 1% to 80%. What also helped is that he always asked for something concrete, targeted, and feasible.
“Knowing how to ask well is actually something that takes a lot of practice. Our asks are very specific. I’ve done a lot of A/B testing on this. I used to have our asks within our monthly investor update. And I did some testing where I removed the asks from the investor update. The next day after the update, I would just send a personal message to each of our investors that I would actually type up myself. And the conversion rate went from like 1% to about 80% on the asks just by reaching out personally. And also, because when you reach out personally, we might have eight things that we need, but I know for example like Dick Costolo is not going to convert on like seven of these, but he can totally do this one. Then I’ll just send him an email with that one thing. And like a specific thing would be that I’m looking to talk to people who understand data systems with healthcare. Can you tell me the name of one person who knows a lot about data systems, like being that specific. Or, I’m looking to connect with other health tech founders, just because I’d like to know more people in the ecosystem who are the two best health tech founders? If you give the investor enough of a lead where they can spend 10 seconds converting on your request, you’re much more likely to get those conversions. So that’s learning how to ask those questions, I think is also an important skill.”
21:49 – Not all investors are the same
When considering potential investors, Sam and his team don’t work with just anyone. They need to believe in the Levels mission, have time to participate, and exist in diverse networks that could prove helpful down the line.
“The thing that we indexed on most heavily was, do they care about what we’re doing? And I think that’s something that is often underestimated. Like we’ve turned down capital from some very brand name people because they wanted to put in capital, but they weren’t excited about what we’re doing. And I’m a believer that the world is bountiful. And you can find people who are equally notable, and who are also interested and actually care about what you’re doing. And so that was the first thing. It was just like, do they care? And oftentimes the answer was no. And if the answer’s no, it’s just like a polite pass. The second would be how willing are they to be active? And we set the expectation pretty early on, and many people opted out just saying like, look, I love what you guys are doing but I’m going to be honest. I don’t even have one hour per month that I can answer these questions. I would send them one of our most recent investor asks. And if they say that’s too much for them, it’s totally cool, really not a problem. It’s totally okay. The next thing would be, we would think through network access in terms of just the disparate networks, meaning networks of people that don’t overlap. There’s the tech VC world which is like one dense network, entertainment is a network, robotics is a network, there are so many of these networks.”
27:45 – The power of personal networks
Most of the initial investment in Levels came from people Sam knew personally. Sometimes, they would even contribute funds before knowing key details, simply because of the inherent trust.
“When it came time to raise the initial capital, it was a pretty simple process. I think the first money in was from my friend Zach, who I had known for probably a year at that point. And we really connected. He was early at Zappos and somehow over the course of a year of knowing him, we’d never talked about work. And I knew that he was really into health and wellness. He’d gone through his own health journey. And I was telling him about this idea that I had. And he was like, Oh, well, that sounds really cool. Are you guys raising capital? And I was like, yeah, I’m thinking about it. Do you know anyone? And he was like, you know I’m a professional venture capitalist, right? I was like, I did not know that. That would be great. And so I had some calls with friends that I knew had access to capital who did angel investing and who ran funds that could connect me to other angels and founders. We raised it very quickly. There were some people, one in particular comes to mind who like wired us $75,000 before even signing the documents, and didn’t even know what it is we were doing. Since I have known him for long enough, he was like, whatever it is you’re working on, I want to fund it.”
Episode Transcript
Jason Yang [00:00:00] Before we start this show, I wanted to let you all know that this conversation with Sam Corcos, the founder behind Levels, was one of our most fascinating interviews yet. We talked for over an hour and honestly I could have kept going, it was that interesting. So instead of leaving some golden moments on the cutting room floor, we decided to turn the interview into a 2 part series, starting with the episode you’re about to hear now.
Sam Corcos: [00:00:29] I’ve had the quarterly goal of staying in touch with a 1000 people that I care about, and it takes a lot of time, probably 30 hours a week, but it’s also the single most valuable thing that I do.
Jason Yang: [00:00:43] This is Funded, a show where founders who raised millions in venture capital share the gritty side of what it actually took to get that money in the bank. I’m Jason Yeh, your host. Not too long ago I was trying to get my ideas funded. And back in the day I was a VC listening to founders pitch me for money. How often do you talk to your colleagues from your very first job? When was the last time you emailed your favorite professor from college? Or that person who did you a small favor five years ago? For me, and I think most people, the answer is “Those check-ins have been sitting on my to-do list for ages.”. But that isn’t the case for Sam Corcos, because what you’ll discover very soon is that Sam isn’t most people. As you heard, he keeps in touch with thousands of connections. In fact, that’s the reason he points to for how they were able to quickly launch Levels, an innovative health tech company with a cutting edge biowearable device to track metabolic health. Part 1 of our 2 part series with Sam is all about the power of relationships and networking. Because the way he talks about this fairly well covered topic is unique and special. Like with most other things in his life, for him it’s not an art, it’s a science. And one that he approaches, like everything he does, he gives it everything he’s got.
Sam Corcos: [00:02:11] I’m probably pathologically competitive. It is maybe the single greatest motivator for things that I do. I also play a lot of board games. That’s, like new, unique, and interesting strategy games are something that I really enjoy learning how to do. Really like playing board games against people who are better than me, because I always tend to learn something from them. It’s a really fun thing.
Jason Yang: [00:02:40] And it’s so tempting to start jumping to the future of the board game that you played against venture capitalists. But I don’t want to do that. I’d rather ask, if you put yourself in the seat of 13 year old Sam, would you have imagined the career for yourself and where you got to today?
Sam Corcos: [00:03:02] Not at all. When I was, is that age the thing that was most interesting to me was science. I actually worked in an oncology lab for 2 summers while I was in high school and published a paper on non-small cell lung carcinoma with a med student. And my goal was very much to go the route of basic research and science, and that was what I was most interested in. I got pretty frustrated with academic science early on, through some personal experiences through those 2 summers. And I’m fortunate that I did, because I think I have a lot of friends who ended up going that path. And it’s a little bit late, after you get your PhD, to decide that you want to do something completely different. So yeah, I would definitely say it would have been a huge surprise as this is not the path that I expected I would be on, but I’m glad that I did.
Jason Yang [00:03:59] I’ve been able to do some research around your path, it looks like after that stint in research, where you dodged a bullet, you jumped onto the entrepreneurial train. And when I look at your background, it does look like elite preparation for a startup. You’re the CTO of a couple startups, you went through 2 prestigious programs, Y Combinator, as well as the very buzzy On Deck fellowship program. So a lot of stuff went into getting you to where you are today.
As you look back on all those experiences, what do you see from each of those things that kind of drove you to, 1 starting Levels, and then to set you up for what you know? And what you executed just a few months ago?
Sam Corcos: [00:04:44] Honestly, I think the biggest ones were more like emotional hurdles to overcome. When my first company, which I started largely just after college, when my first company effectively failed, it was in construction software and we were doing, I think $60,000 to $80,000 a year in revenue after a year of effort. And it was pretty clear, we bootstrapped it, so we didn’t raise any capital for it, but it was pretty clear it was not going to grow in the way that we wanted it to. And in the back of my mind was this lingering fear that everyone would perceive me as a failure and my life would be worse. And it just wasn’t the case. When you give it your best effort and you stay a high integrity person and you don’t cheat people and you’re making an honest effort to do your best, people actually really respect it. There’s a quote, which I think has a lot more to do with vulnerability in conversation generally, but I found it really resonated was – “What we see as courage in others, we see as weakness in ourselves.”
And so when you see a man, that was such a brave thing for that person to do, but if I did that, everyone would see me as weak. And it really just, being able to see yourself from like a third-party perspective and having been through it and being on the other side of it. Realizing everyone was very positive as opposed to very negative. And it really, it was mostly the emotional hurdles to overcome that were, I think, the most influential.
Host : [00:06:16] Yeah. And it’s funny I think you describe some elements of imposter syndrome and things that I see in a lot of super elite founders, executives, etc…. and I’m actually thinking about myself here. It took way longer, deep into my thirties, to get that realization, that it sounds like your early startup experience really drove you towards, very cool to hear. The thing that I want to transition to is a little bit about On Deck and why you decided to go into On Deck and how it led you to this company in particular.
Sam Corcos: [00:06:50] Yeah, On Deck, primarily I got involved because it was just intellectually interesting to me.
Jason Yang: [00:06:54] Tell me more about that.
Sam Corcos: [00:06:56] Yeah. I’ve been thinking a lot about – what is it that gets society to the next level. And there’s actually a great book by Andrew Yang, Smart People Should Build Things, that I wish I had read it in college. It would have really helped a lot. But I remember reading it and there were moments in this book where he talks about the social pressure to go into finance or law. If I’m just like, I lived, this book is describing my lived experience. And how hard it is to overcome those emotional barriers of leaving a comfortable job and being judged by your parents and taking those risks. It’s a really hard thing to do. And the thing that I liked intellectually about On Deck, is that it is a program that the goal is to increase top of funnel of people starting companies. And they find really capable people, who probably otherwise may or may not start their own company. They might also just be perfectly happy being an engineer at Google.
But if you provide them an ecosystem of support where they can see other people who have done it and they think ” Wow, this is actually achievable!”. If you can increase the number of people who are willing to take those risks, I think the world will be better. So that was really my main motivation for getting involved, was just to understand how this works. I’m a huge fan of what they’re doing, if they can really scale that up I think it will have a meaningfully positive impact on the world.
I took a year off work after CarDash and I spent the better part of that year thinking through how I wanted to spend my time. And one of the things that I found, was I really wanted to work on something that was meaningful. And I think at peak, I was experimenting with something like 16 different projects. Each of which were like plausible company ideas. And I would put a little bit of time into them, I’d some market exploration, and I would see does this really have potential? And I would call my friend Eric’s, now at Founders Fund, but he’s a friend from college, and I would call him somewhat regularly and pitch him on my ideas and he would always shoot them down and he would apologize for it.
Something like, “I’m really sorry that I keep saying no to all your ideas.”. And I kept telling him like, “Every time you say no to an idea saves me like 5 years of my life.” I should be thanking you, more than anything. And it’s just helpful to socialize these things and to learn from it. And what I did end up getting from On Deck specifically, I met my co-founder Andrew. We have five co-founders at Levels, Andrew is one of them and he’s incredibly capable and he manages all engineering at the company. I’ve been on the technical side for basically my entire career ,so I thought it would be a lot harder for me to let go of it. But Andrew is so capable that anytime I look into it, like on what engineering is up to, they’re always way further ahead than I thought we were.
Jason Yang: [00:09:48] You’re like, “Wow, this guy is way better than I was!”, which is what you want in a co-founder right?
Sam Corcos: [00:09:53] Exactly.
Jason Yang: [00:09:54] So, what about the very specific topic around high-level health and optimization of health? And what sort of drove that for you? And is that a passion of yours or is it more something you took off the shelf?
Sam Corcos: [00:10:06] I would say less of a personal motivation of like my own health and a lot more to do with solving global scale problems. The thing that really flipped the switch for me taking Levels more seriously was when I started using a continuous glucose monitor, really just as a novelty. And I didn’t expect that it would be interesting. And within a couple of days I started discovering things. Things that I thought were super healthy for my entire life, like orange juice and oatmeal. And I was seeing numbers that healthy people are not supposed to be able to see. And it was when I started digging into the scope of the problem that I started to realize – this is a leverage point to start to tackle metabolic dysfunction. I wrote a little bit about this in the Secret Master Plan that we published on our blog. But the fact that more than 10% of the United States is already diabetic and it’s increasing at an increasing rate, the second derivative is positive! When I realized how serious this problem is and that, it was basically this recognition that this company needs to exist and does not exist yet. And I’m in a position to make it exist. So I felt some responsibility to do that is really the motivation.
Jason Yang: [00:11:24] We’d love to transition to what we love talking about here at Funded and a little bit more about fundraising. I want to ask you what your experience level with fundraising was before? I noticed that you have been a founder, co-founder in the past, but you may or may not have been the point person on fundraising.
Sam Corcos: [00:11:44] Yeah, I’ve always been on the technical side, so this is definitely my first time leading a fundraising effort or being involved in any meaningful capacity. I have, in the past, been in the room during pitch meetings, mostly to answer technical questions that people have then.. We bootstrapped my first company, we largely bootstrapped the second one. And then at CarDash, we raised from Index and Felicis and a few others. But my involvement in that process was really sitting in and answering questions much more than it was being active in the process.
Jason Yang: [00:12:19] After the break, Sam goes from watching from the sidelines to being in the action, calling the plays.
I spend most of my days, one-on-one with founders, helping them understand strategies that make a difference in fundraising. One super important tip I always stress with founders is to make sure they send their decks and materials using a document sharing tool. And for that, I always recommend DocSend. DocSend lets what’s happening with your deck after you send it along with real-time analytics and notifications. Did the VCs actually open it? What slides did they spend the most time on? And if you think it got shared with the wrong people, or maybe you made a mistake and sent it too quickly, DocSend lets you control access and make updates to content even after sending. Sign up for a free 2 week trial at Docsend.com/funded that’s D O C S E N D.com/funded.
When you’re fundraising for the first time, it can feel a lot like you’re winging it. Because while on the surface asking investors for money seems pretty straight forward, once you start digging in you’ll find a convoluted mess of hard to access networks, frustrating power dynamics, and make your head spin processes. On top of that, no matter how much you Google or endlessly scroll on Twitter, you’ll be hard pressed to find a definitive guide. What you find online from one expert will oftentimes completely contradict another expert. But Sam, he took a different path and the results were nothing short of amazing. What you’re about to hear is not unlike a mad scientist testing ingredients to come up with the perfect potion for fundraising. It blew me away because these are things I had never thought of before and I think about this space a lot.
I wouldn’t jump to this conclusion with all founders, but given your scientific background and everything you’ve told me, it sounds, and correct me if I’m wrong, that there probably wasn’t a preparation process. So how did you decide what you were going to do? Did you have mentors, people that whose brands you picked, books, we’d love to kinda hear your process around that?
Sam Corcos: [00:14:44] Yeah, totally. It was basically just thinking about the fundraising process from first principles. And understanding how it works and how information is distributed through venture networks. During my year off I actually spent, probably a good 3 months, deeply studying network and graph theory, just to better understand how networks work. And one of my biggest conclusions was that, in my next company I wanted to build an early cap table of really well connected angels and founders, specifically people with high eigenvector centrality, who can give me access to other disparate networks that I otherwise would not be able to reach.
Jason Yang: [00:15:28] Is that the definition of eigenvector centrality? Or can you give us a couple more words?
Sam Corcos: [00:15:32] Yeah, you can think of it as like second order centrality. There are many different types of networks centrality, one is just degree centrality, which is the more technical term of what people would just call popularity. How popular is this person, how many people do they know? But you can be, you can have high degree centrality, if you’re like the mayor of a small town and know everyone in the town, you have high degree centrality. But you probably have low eigenvector centrality, because you only know people within one dense network. So eigenvector centrality is how many people do the people that you know know. . Yeah, it’s one degree beyond that. So people who are very well connected among other people who are well-connected are the kinds of people that you want to get involved early. Because networks are incredibly hard to predict and they’re very complex.
So if you get somebody who is very well connected and can think in a network to way you can you can start to get access to things that you would be shocked that you have access to. I want to talk to this basketball player and you just ask a group of people that have high eigenvector centrality.
They’re like, “I don’t know him personally, but my friend Mark grew up with him.”. How did that happen?
Jason Yang: [00:16:42] You would never have guessed it, but yeah, it’s there.
Sam Corcos: [00:16:47] Yeah. And this is proven to be an incredibly bountiful source of value for our company. I don’t know if you’ve talked to any of our investors, but I’m pretty aggressive in asking for things. I probably send an ask once a week to each of our investors of something that we need as a company, somebody we need to be connected to. And it’s been a huge source of value for us.
Jason Yang: [00:17:05] I’ll pause you right there and we’ll transition into picking apart of this, but you’ve already said 2 things that I’m like very fond of encouraging founders around. And the second one is not being shy about asking for help. I think there are a couple of problems that I see with founders a lot, one of them has to do with, maybe a little bit of that imposter syndrome or a little bit of that hero’s journey. Like I am the founder CEO, I have to fix every problem. And I’m like no like you’ve helped people all the way to where you are today It’s now your time to start Asking for help because this is a really difficult journey And if you don’t ask for help it’s going to be very tough So I’m glad that you’re able to put that out there and how much you ask for help. I think, funny enough investors want to see their founders be the squeaky wheel. Cause they want their best companies to do well but they won’t think about the help that they can give unless it’s asked to them. So kudos to you for that.
Sam Corcos: [00:17:59] Yeah. I would actually, I would add to that, knowing how to ask is actually something that takes a lot of practice. Our asks are very specific. I’ve done a lot of AB testing on this. I used to have our asks within our monthly investor update. And I did some testing where I removed the asks from the investor update. And then, the next day after the update, I would just send a personal message to each of our investors that I would actually type up myself. And the conversion rate went from 1% to about 80% on the asks, just by reaching out personally. And also, because when you reach out personally, we might have 8 things that we need. But I know, for example, Dick Costolo is not going to convert on 7 of these but he can totally do this 1. Then I’ll just send him an email with that 1 thing.
And a specific thing would be – I’m looking to talk to people who understand data systems with healthcare. “Can you tell me the name of 1 person who knows a lot about data systems?”. Like being that specific. Or I’m looking to connect with other health tech founders, just because I’d like to know more people in the ecosystem. ‘Who are the 2 best health tech founders?”. If you give the investor enough of a lead, where they can spend 10 seconds converting on your request, you’re much more likely to get those conversions. So learning how to ask those questions, I think is also an important skill.
Jason Yang: [00:19:22] So many helpful tidbits around this. I could riff forever on these things with you, it’s fascinating. So I wanted to go back to that other thing, which is a thing that I love sharing, but you’ve broken down, essentially the science behind it. I’ve always talked about this idea, and it’s not for everyone, but I call it an Angel Army strategy. And it’s when you’re going out to raise, you think about – I know I want to raise, call it X million dollars, let’s call it $2 million. But the raising of that $2 million will probably go much faster if I can, essentially pull together an Angel Army, right? So it can be a small amount, it can be a $100,000, the capital that you’re raising is less about the dollars for operations and more about bringing what you called, I’ve already forgotten the term, people with high degree of network. So, you talked a little bit about knowing that when you did raise money, that you knew you wanted to bring on a bunch of people like that under a cap table first. So as you’re thinking about executing that step of the process, tell me a little bit about how much you had when you were going to talk to these people.
Sam Corcos: [00:20:32] Yeah, the thing that we indexed on most heavily was do they care about what we’re doing? And I think that’s something that is often underestimated. Like we’ve turned down capital from some very brand name people because they wanted to put in capital, but they just weren’t excited about what we’re doing. And I’m a believer that the world is bountiful and you can find people who are equally notable, but who are also interested, who actually care about what you’re doing. And so that was the first thing. It was just like, do they care? And oftentimes the answer was no. And if the answer’s no, it’s just a polite pass.
The second would be, how willing are they to be active? And we set the expectation pretty early on and many people opted out, just saying ” Look, I love what you guys are doing, but I’m going to be honest, I don’t even have 1 hour per month that I can answer these questions.”. Like, I would send them one of our most recent investor asks and if they say, that’s too much for me, it’s like totally cool. Really not a problem, it’s totally okay. The next thing would be, we would think through network access in terms of just the disparate networks. Meaning networks of people that don’t overlap. So the tech VC world is like one dense network. Entertainment is a network. Robotics is a network. Like you can think of, there are so many of these networks. Fabric manufacturers is a network. You can think of a nearly infinite number of these, and do they give us access to a new network that we otherwise would not have access to?
And what’s interesting is that it’s often hard to predict in advance how useful disparate network access will be. Hypothetically, you have somebody in the fabric industry in your network who does apparel. And you’re like, we’re in health tech, why on earth would we need that person? And then 6 months later you’re like, “Man, we really need some expertise on something related to fabric.”. And we’re like, “Oh wait, we have a guy who knows everything there is to know about this already.”. You can just get that information. It’s really hard to know.
Jason Yang: [00:22:42] When we come back I look at how Sam built the network that would get him funded.
Nine months ago, a zoom fitness community I help run, wanted to make a group donation to support Feeding America. That’s when I discovered both the excitement and the complexity of group giving. On one hand, our community was thrilled by the prospect of doing good together, but on the other, the complexity of organizing individual donations, sending communications, and providing tax receipts almost kept us from getting started. Luckily we discovered an amazing group giving platform called Grapevine, which takes care of all those challenges for free. If you already run a group that donates to charity together, or if you run a startup or any sort of organization looking for a way to bring your team closer together, I highly recommend starting a giving circle at Grapevine.org. And if you do start one in January, send it my way and I’ll personally donate to your cause. Okay, back to the show.
Have you ever heard the saying, “It’s not what you know, it’s who.”? Sam would agree with that. If you’ve ever slept on networking or thought it was a dirty word, what you’re about to hear is motivation to open up that email app and reconnect with people. Sam says that perspective is one of the keys to his success.
Sam Corcos: [00:24:22] We started the company, we incorporated, I think June 26th of 2019. So a little over a year ago. We started the company by basically just raising a million dollars from other friends of mine. I came to this realization, maybe five years ago, that I was doing one of these, I guess you could call a gratitude exercise, of just writing down all of the good things that have happened to me in my life and trying to think about them.
And I realized that, maybe 98% of those things were all because of somebody that I knew and really not because of something that I did. Which is a weird recognition, that just being present and being a high integrity person that other people trust, is like 98% of the battle of all of the good things that have happened to me. And so I really started emphasizing personal relationships after that. I’ve had the, I’ve had the quarterly goal of staying in touch with a 1000 people that I care about, for several years now.
Jason Yang: [00:25:23] Oh my gosh, I love that.
Sam Corcos: [00:25:25] And it takes a lot of time, probably 30 hours a week, but it’s also the single most valuable thing that I do. My co-founders, Josh I’ve known for 4 or 5 years and he’s somebody that I stayed in touch with. David I’ve known for probably 6 or 7 years. Casey is the only person I didn’t know beforehand, but she’s also the exception that proves the rule, because her brother is somebody that I’ve stayed in touch with for years. And so when I was telling him about it, he was like, “You have to talk to my sister, this is what she has been talking about for years.”. So even that is just through networks and maintaining contact with people that I care about. It’s beyond just professional, it’s also personal happiness really comes from this as well. When it came time to raise the initial capital, it was a pretty simple process.
In fact, I think the first money in was my friend, Zach. Who I had known for probably a year at that point, and we really connected. And he was early at Zappos, and somehow over the course of a year of knowing him, we’d never talked about work. And I knew that he was really into health and wellness, he’d gone through his own health journey. And I was telling him about this idea that I had and he was like, “Oh that sounds really cool. Are you guys raising capital?”, and I was like, “Yeah, I’m thinking about it. Do you know anyone?”. He’s like, “I’m a professional venture capitalist. Did you know that?”, I did not know that.
Jason Yang: [00:26:47] Very endearing.
Sam Corcos: [00:26:48] Yeah! That would be great. And so I basically just had some calls with friends that I knew had access to capital who did angel investing or who ran funds that could connect me to other angels and founders. And we raised it very quickly. Like, there were some people, one in particular comes to mind, who like wired us $75,000 before even signing the documents. And didn’t even know what it is we were doing, but because I known him for long enough, he was like, “Whatever it is you’re working on, I want to fund it.”.
Jason Yang: [00:27:18] That’s great. I think, and I’ll just say that it’s something I encourage young entrepreneurs around, everything you’re doing today builds into what you’re going to be doing in the future and the things that you’ll be able to accomplish with the people around you. Because just telling that story shows how high integrity you are and that people have been waiting for you to do this. People have been waiting for you to be the man that they could back. So that’s exciting to hear.
That was the first half of my conversation with Sam Corcos, founder and CEO of Levels. As always, my producer Olivia was listening and we were both excited to get to the de-brief and unpack all the remarkable things Sam shared with me.
What were your quick, first reactions on everything?
Jason Yang: [00:28:09] So interesting. In some ways he seems like the quintessential guy, I’m not in the startup world, but he seems like the quintessential startup guy. In that he is so data-driven, from what he eats to who he talks to, to what he talks to people about when he does talk to them. That was a super interesting perspective to hear.
Jason Yang: [00:28:33] I think that is such a good point because there are a ton of people whose first exposure to the startup world was HBO’s Silicon Valley. I imagine Sam being in an episode of Silicon Valley because he is very extreme when it comes to data-driven approaches and how he thinks about those things. But I honestly took so many things away from that conversation, things that I would love to bring to other founders, things that I want to bring to my own personal life. He has such a wealth of experience and takes such a scientific approach to improving things that where he’s landed has really, obviously generated some really great results. Especially in the initial part of the conversation, was there anything that stood out to you as being fascinating or something that we should discuss??
Jason Yang: [00:29:23]
Definitely his approach to networking. That was one place where his data-centered approach really shined. Like he talked about this thing called the eigenvector centrality.
Jason Yang: [00:29:36] Yeah, of course I knew what that was obviously, but did you know what that was before?
Jason Yang: [00:29:42] No, and seeing the way that it’s spelled, like Google obviously had to correct it for me.
Jason Yang: [00:29:48] Yeah, he brought out the terminology that totally blew my mind, but once he explained it, it was like, “Ah, that makes so much sense.”. I think there is so much done within fundraising and within networking that is so feel-based. But to have someone who is a scientist by trade, explain the inner workings of how networking works, or what the most powerful forms of networking are, was such an interesting thing to hear. I talk a little bit about this in the interview and with other founders, but this idea of creating an Angel Army. Which is essentially what he did, but in a much more detailed and scientific approach, I think is so interesting for people to hear. It’s You want people that support you, but people that have high degrees of eigenvector centrality, or in lay terms, people that know people, are the most powerful ones that can support you in a fundraise But honestly, like we talk a lot about in these debriefs, can support you in life and it’s great life advice. was just really interesting to think about. I love this idea that knowing people that know people, can be such a powerful tool within fundraising. Have you ever thought about that degree of specificity when meeting friends or networking in your own life?
No. No, I have it It is advice that someone one time gave me. This mentor in the journalism space one time gave me and I am embarrassed to say that I didn’t really use it, I think because it felt uncomfortable to me to ask people. I was so early on in my career. Like, to ask people who I already hardly knew, that’s something that I found really hard to pull off at the beginning of my career, when I didn’t really have solidified connections.
Yeah, and I actually wanted to bring this up too, because I think we have listeners of all ages and experiences within the startup world or within fundraising. And one thing I did want to To point out, is that a lot of what Sam talks about is extremely sophisticated levels of thinking. And so for you to even say, ” Oh yeah, I get it. But I think that would have been really hard for me to do at the start of my career even to a certain extent now.”. You and others shouldn’t feel anxiety around that. It’s fair to point out that Sam has been a co-founder or a founder and a startup CTO multiple times. He’s gone through two incredibly elite programs, in Y Combinator, as well as the On-Deck Fellowship. And his ability to say, “Look, you should cherry pick who you bring into your network and on your cap table. And only bring people that have high degrees of eigenvector centrality.”, is something that he is able to do because he has such a wealth of experience. And it has already built up credibility and a network where he can start cherry picking. And so, if I were to point out something as it relates to networking or building that part of your career that is maybe more generally . , Something that someone can take back with them at an earlier stage of their career, it is what he talked about in terms of living a life of integrity, where people respect you and want to support you. I would say, when he was first graduating from college, he probably couldn’t lean on a bunch of different networks. But knowing that like everything you’re doing today is setting yourself up for something bigger in the future, is like a really important mindset is hard to pinpoint where the value Yeah if you’re really rational about things, where’s the value in me being a good person today? He describes it perfectly. He kept working on small projects, things that weren’t exploding, things that never like never really went anywhere until Levels. And so when he went to go raise that first round of capital, this is his opportunity to really cash in on all of the integrity that he’s built up. So I thought that was something that was Oh One thing that interested me, is that he said that he wants to tap into different networks. So he wants people from like a diversity of backgrounds.
Yeah, I think there are a couple of reactions I have to that. So, one is this realization that he has a specific product, but there are a diverse set of challenges that the company is going to run into. So yes, it is a healthcare product, but they are a technology company. They are a consumer good, to a certain extent they’re a brand. And not knowing that in the future they would do something around fabrics and clothing is just a realization that startups and businesses are highly unpredictable. So one, knowing that you should surround yourself with a diverse set of talents to help you solve any problem, I think is a really good thing to think through. And then secondly, he talked a little bit about friends that would challenge his thinking. And people that helped him refine what he should be doing. And I think this idea of diverse voices in a room it’s something that, honestly, in the last couple of years in the startup world has been brought to the forefront. This idea that boards need to have more diversity. Group think can be very penalizing to the progress of a company and knowing that 50% of the population is male and 50% is female and if you don’t get both perspectives and how you think about solving problems, you’re not really considering all the different solutions or the approaches to things. This idea that diversity and networks can be a very powerful thing I think it was a great takeaway.
Yeah, another cool thing is that he believes that there are enough investors out there who will be interested in his product and will meet all of these criteria he’s laid out, that he can find the people he’s looking.
There is so much in what Sam talked about in this episode that blows my mind. His thinking around life and startups, he’s an impressive guy. That comment in general is so tied to this abundance thinking that he brings to the table, which I think is hard for a lot of founders when they’re thinking about fundraising. That they have the 10 investors that they That they think they have a shot at pitching, and so each one is just so precious. “If I mess up on this one I might not get funded.”. Whereas Sam is, there are thousands in his head and he’s he’s ready to pitch an investor knowing that he’s going to mess up in order to learn. he’s That’s the type of guy he is. In order to get to the next one, to be better, and he almost doesn’t care because he just knows that there are more out there and that there are investors that will understand his perspective and what he’s trying to do. And it leads me to thinking about the conversation around networks. I loved his cataloging of all the good things that have happened to him in his life. And his saying, essentially, almost every one of them, 98, 99% of them, weren’t because of anything that I did, but just more because of who I knew. And with that realization in mind, he was like, man, I really need to prioritize my personal relationships.
I think he said he has a goal to keep in touch with thousands of people. I forget the exact number.
of two 3000 people every year and he spends hours and hours a week dedicated to that practice, knowing that it has brought him so much of his own success. And for my own self, I heard that and it it made me, Mixture of embarrassed ashamed And Because I know how bad I am at keeping in touch with friends and colleagues, et cetera and it really did make me want to be better on that. One, because I think 2020 has shown me that even as an introvert, my my personal relationships and seeing people are super important but now like hearing, again, Sam breakdown what I instinctually knew into something much more scientific makes me really realize that I need to be focusing on my relationships and networking Yeah no you brought up 2020 I’m going to bring up 20 21 I think he gave us so many New Years’ goals or resolutions, whatever you want to call it. I am going to channel my inner Sam during 2021 and reach out to people that I’ve been meaning to check in with. people Because I totally believe in what he’s saying, it will pay off. And it also just would be nice in this time of the pandemic too I should invest in those connections, just to feel more connected.
I love that and I think I’ll probably do something similar. A Sam, from Levels, themed a set of 2021 goals and aspirations, between concentrating on my network, staying in touch with people, and then living a life of integrity. I go back to that one that we can all kind of embrace.
We all remember the first time it’s something special to us was exposed as a fraud For me it was finding out singers Weren’t actually singing in music videos I couldn’t believe the first time my sister told me they were lip-syncing Sam said that’s happened to him many times with some of his favorite when I connected the dots for the first time that a lot of these things like green juices Oftentimes they’re like 50 grams of liquid sugar They’re not actually great for you Thanks a bunch for listening If you have any questions about today’s show or maybe you’re raising money yourself and want some help problem-solving if so shoot me an [email protected] I’d love to hear from you Find us on social where we share fun behind the scenes content The show is at funded pod and I’m at J Ja That’s J a Y E H.
This week. I’d love listeners to be inspired by Sam and reach out to someone new you’ve wanted to meet or reconnect with an old contact. Then tell us how it went. I’ll do the same and share on Twitter. This episode was produced by Olivia Rheingold.
Hello.
Thanks also to Jordan pass gaseo from adamant ventures Hey guys and thanks so much to Sam core coasts probably the best connected person I know in terms of Asian vez egg and Vargo I can Bendel vector… you know what I mean. And of course, one last thanks to our sponsor. DocSend, the most trusted document sharing platform.