The following interview is a conversation we had with Eli Wachs, CEO & Co-Founder of Footprint, on our podcast Category Visionaries. You can view the full episode here: $20 Million Raised to Build the Future of Automated Onboarding
Brett
Hey everyone, and welcome back to Category Visionaries. Today we’re speaking with Eli Wachs, CEO & Co-Founder of Footprint, an automated onboarding platform that’s raised 20 million in funding. Eli, how are you?
Eli Wachs
I’m doing well, Brett, thanks for having me.
Brett
No problem. Super excited. So as I was doing research for this interview, something on your LinkedIn caught my eye. And what caught my eye was that you’re a stand up comedian. As a side hustle, talk to us about what it’s like as a stand up comedian. Talk to us about what’s going on inside your mind right before you go on stage.
Eli Wachs
Honestly, what’s going through my mind is I’m very excited for ten minutes where I will not be checking slack notifications. It’s. I think it’s really important to carve out time to do other things than just the day job, even though probably as a Founder, you know, you work non godly amount of hours. To me, I think, like, the important thing is just you can get to a point where you’re very much tying your entire worth to the success of the company. And I think it’s silly in that companies are probably successful because of a lot of positive attributes of you and you probably could apply them to a lot of things. And I’ve always really enjoyed making people laugh. And I got into stand up officially because I deemed a comedian and he performed a show on my roof back in Covid.
Eli Wachs
I opened for him and it went pretty well. The reason I really like to keep doing it is because I like to make people laugh when I’m not just trying to sell them a B2B SaaS product. And it’s kind of a nice reminder for me that I can connect with people off Zoom. And I just think there’s something really fun and beautiful of just getting up on stage and making a room full of people who you’ve never met before. Laugh over your dumb jokes about your love life or premiere breakup spots in New York City.
Brett
Is that what you’re like? What’s your style of comedy? Would you say?
Eli Wachs
It’s probably dry. It’s probably as nerdy as you’d maybe expect. Even though I sadly had to retire, I had one bit I loved about how I kept bringing up the grand ethiopian Renaissance dam on dates and it never went well. And it’s a true story. And I realized that it also didn’t go well for stand up. So I’m still looking for my audience to talk about the grand Ethiopian Renaissance. Damn. I would say that it’s composed of like crescendoing bits. When I talk about premier breakup slots in New York City, I’m very passionate about getting people to break up on the intrepid, which, for those who don’t know, is a retired aircraft carrier that now functions as a floating museum on the Hudson river. And I have a lot of reasons.
Eli Wachs
The two I’ll give is that if you get broken up with your sad. If you get broken up with on an aircraft carrier, you’re confused. And I think confusion is better than sorrow in that moment. And to me, I now have a growing list of people who’ve gone and done it there. So I like to have niche proposals and I get a lot of joy when people take me up on my crazy ideas.
Brett
That’s awesome. I love it. Let’s switch gears now. Let’s dive into the topic at hand, which is Footprint. Everything that you’re building there, tell us, what does the company do? Footprint.
Eli Wachs
We’re an automated onboarding platform. What that means is we give companies ux components. You can think about them, kind of like a type form type activity to onward their users. That means we help them collect information, verify it. So both from a behavioral standpoint, is this information, does it one, exist in a database? Like if you’re applying to create a bank account, if you’re applying to get a credit card, that company needs to verify you. So we help them do that. And what that means is we’re saying, does the data that they presented, one, is it real? Two, it’s the person who’s presenting it, the person who should be presenting it, and three, does it make sense in this time and place? So we help them do that. We then store the information.
Eli Wachs
We verify the same person who created the account is signing back in. So the jargon is that we solve KYC, know your customer, and then more broadly for consumers, you can think about us. Like an app will pay for identity. In that when you verify with a company that uses Footprint once, you will not have to fill out a form again.
Brett
How do you uncover this problem? What were you doing before that put you in a position to say, oh, yes, this onboarding problem, it must be solved?
Eli Wachs
Yeah, it’s the dream of all kids, right? I was a student at Stanford during an interesting time for tech. My freshman year, GDPR went into effect, and CCPA, I believe, got ratified towards the end of my freshman year. And I, for some reason started taking law school classes about data privacy because I found it interesting. Economics classes about data privacy. And I just didn’t think that I came to this weird conclusion that I didn’t think the laws were doing anything all that helpful. I think that data is very valuable. Targeted ads could become pernicious, but in general, I actually don’t think they were as bad as made out to be. I think Apple’s just really good at marketing and Facebook is really bad at defending their marketing.
Eli Wachs
I just started getting really interested in this broad space of what would it mean if people own their data? And spent the rest of my time in school researching that. I graduated when I worked at a venture capital fund called General Atlantic, and I got to a lot of our work there across security, privacy, identity, and came to see a couple of things. One was that for people to own their data, they had to own their identity. But two, I kept speaking to companies, rebuilding, onboarding. So stitching together four or five different solutions, and more broadly, every time a consumer would go and get a Robinhood account, a Coinbase account, rent an apartment, rent a car, they had to refill out this form. And that’s annoying for people. There’s friction involved. But I promise you, it’s a lot more annoying for companies than that.
Eli Wachs
The drop off impacts their unit economics, and then it’s really bad for both people and companies. And that fraud becomes much more rampant in a world where everybody’s doing this in a vacuum. And just started to come to this conclusion that there are an infinite amount of bad actors in the world. And by that, I mean, you know, me and you could take the rest of this podcast and just generate millions of fake identities, but there’s a finite amount of people on this call, too, and kind of said, you know, there’s so many companies trying to find the needle in the haystack. What if we can build the company to harvest the hay? To me, that sounded a lot more achievable. And that’s what we set out to do.
Brett
As you set out to do that, talk to us about the first three to six months. What was going on? What were those conversations like?
Eli Wachs
Yeah, and after, you know, after fundraise, we’re a seed company. That fun little stanza?
Brett
Yes.
Eli Wachs
Yeah. In hindsight, when I go back and audit my calendar, mine looks a lot less productive than my Co-Founder Alex’s. I often tell people that, I think at the beginning, the CTO just is going to have a more important role, in a way, than the CEO, in that they’re building the core product and you’re out there trying to sell people something that just doesn’t exist. I think the productive things were. Look, I think enterprise sales takes time, and talking about a vision takes time, and you never know who’s going to go where. I remember speaking probably eight months into the company, so I’m a bit out of your time zone time range. But eight months in, were pitching a company and it really struck a chord and they weren’t looking to change their vendor.
Eli Wachs
But then one of the people at that company, he became the head of risk at an even bigger company four months after that. So when were about a year old and messaged me on LinkedIn saying, hey, I haven’t forgot about Footprint. Just started a new job, I’d love to use you. Could we set up some time to talk? So I do think the early moments as a CEO can feel frustrating in that you will look back and say, wow, I had 40 meetings this week and nothing actually came from it. But I think you’ll see in time that’s not really true, and that you’re slowly planting seeds, some of which will grow. And for early stage companies, you don’t need to get 100 customers your first year. You’re trying to prove you can get ten.
Eli Wachs
And that kind of changes maybe how you think about how well you spent the time.
Brett
How long did it take you to get your first paying customer?
Eli Wachs
So a year. We started the company February 2022. I feel old now, and it took essentially a year to build v one of the product. So we say that went live with our first customer. I would say maybe in the third possible day we could have had a live customer. In that we have a pretty complex product and we think that it wouldn’t. There wasn’t a lighter weight version of the van one. I kind of push back on lean startup, ship something and you’ll figure it out. Maybe that’s fair in some industries. I don’t think you can do that with personal information. As we’re seeing right now with bank data breaches, you just can’t pivot with PII. But yeah, to answer your question, it took a year.
Brett
And was the value prop that you started with the same value prop that you have today or what? Was that early value prop?
Eli Wachs
Yeah, so the value prop we started with was very much the reason we got our first couple of customers, and it continues to be why we get a meaningful contingent of customers. I would say at this point we have a couple of different value props that will resonate differently. The initial one was really, if you read my initial business plan back from before we started the company, it was all about bringing security and identity together. The simplified version of Footprint was, if you are onboarding people, you need to store their data. And if we want to make identity portable, we need to have strong security. So it was a very oversimplified version of the pitch, but the idea was companies are onboarding people, and then they have to figure out how to vault the data. So we’ll do both in one.
Eli Wachs
What we learned is that, does that resonate with every company? No. Some don’t care as much about security. In that security, you know, you have to verify your consumers. Some companies will say, we think our encryption at rest is fine. We think that there keep being enough examples showing that it’s not the case. But regardless, what we learned is that the companies that did take that seriously, one tended to be, I would argue, smarter companies. I’m biased, but I think that they were willing to work with startups, too. So whether it’s companies like Yieldstreet or grid that we began working with, I think they really saw that value prop of the combination of security and identity. And that’s what we really continue to.
Eli Wachs
When you look at how the product evolved, that’s the core of it, because we wanted to vault data, we cared a lot about front end, because our pitch was, if you use the Footprint front end, you’re never touching a Social Security number. So we’re verifying it and restoring it. What that evolved into is us becoming by far the most focused company on the front end experience of onboarding. Onboarding is the term that I used when you asked me what we did at the start. I said, we’re an onboarding company. You would not have found that in a Footprint pitch. At the beginning, I think we became an onboarding company because our desire to solve security led us to solve the front end of onboarding.
Brett
Now, just to tie this into news that’s happening right now. So we’re recording this on July 2. I think it was the last few days, maybe it was a week ago, that there was a big data breach with maybe we don’t want to mention their name, or if you want to mention them, you can do so. If that bank were using a tool like Footprint or a platform like Footprint, would their users have been safe from this data breach that occurred?
Eli Wachs
Yes, but simply, I spoke a little bit ago about encryption at rest, and it’s what most companies use, and the problem is that encryption at rest. My Co-Founder gives analogy that’s the equivalent of, you go home, like, you leave an office at night, and you turn like a key to lock it and you put the key under a doormat. And that’s just not, you know, most modern databases, without getting too technical, they support basic encryption at rest, where you could enable, you know, this in postgres, Mysql, what have you. And we really think that’s checkbox security in that it means that when the data is at rest, when it’s not in use, it’s encrypted. You would be covered if something broke into the data center and stole the database drive right out of the machine when data wasn’t being used.
Eli Wachs
The problem is that as soon as any part of your perimeter or any part of your outside is compromised, the encryption at rest becomes useless because the data is already decrypted. That means that if somebody is able to get into a third party application, maybe a dashboard of yours that you’re running analytics on through retool. We use retool, not letting ritual just as an example or anything else that they have a backdoor in. We also see this a lot with account recovery where BetMGM, they were kind of the like a lot of the sports funding companies had data breaches back last fall and a lot of the home loan companies had breaches this January and healthcare companies in March.
Eli Wachs
And now banks fraudsters tend to move at segments at a time, but the issue here is that they’re able to compromise these in more simple ways than you’d think. The analogy we give about nitro enclaves, which is what Footprint uses, is that it’s a much more secure environment whereby one only registered people can access the enclave. So it’s much more part of this is a permissioning process then from a security standpoint it’s understanding essentially that data will often be in use all the time. So it’s making sure that the data essentially, even when it’s in use, is almost encrypted, that you’re doing most functions on it when it’s encrypted.
Eli Wachs
The analogy that we would give is that if encryption at rest is putting a door key under a doormat, footprints, nitro enclaves are, you take the key and then you go inside a moated castle, but then you need to bring the initial home inside the modded castle to use the key. To us, it’s kind of breaking apart that key from where the data is. That’s really important. So yes, we think that we could have prevented that. We think part of this also comes from the fact that data sharing to me really ties back to the initial thesis and why there’s so much identity theft. Quite frankly, too many people have your data that don’t need your data. If you onboard to a fintech, three different, four different partners may have your data that you don’t even know about.
Eli Wachs
The fintech, their KYC provider, their partner bank, and maybe the bas provider that works with the partner bank, and maybe a fifth of a regulator comes in. The way Footprint sees the world is the user essentially owns the data, and those are permissioned parties who may have access to the data for specific reasons. But oftentimes, because we’re connecting as ecosystems, they don’t need to see it. So the fintech doesn’t need to see your Social Security number, because we’re taking the job of proxying it to the bank. Same thing with the bas provider. They don’t need to see it because we’re taking that job of proxy into the bank. So we think some of this comes to the idea of, can we simplify the ecosystem of how many people need to actually touch this data? And part of it’s technology problems.
Brett
Do you ever have days where you just think, maybe this, there’s no way to solve it because all of the data is out there? Like, when I put my own information into how I’ve been pwned, I have indeed been pwned, like, 15 times. So now I’m kind of numb to this idea of, yep, my driver’s luck, my driver’s license is out there, my Social Security is out there. I don’t even want to think about whatever else is out there. Like, is it too late for some people, or what are your views there?
Eli Wachs
No, you’re spot on. I like to say we try to operate in the world of zero trust fraud, which is exactly what you said. Your identity is out there. That’s why I think it’s really important to not find the person in a vacuum who has your identity, because there could be infinite amount of people not to be scary who have your identity. It’s why I think it’s more important to build the database of deduplicated identity. So what we mean by that is when the moment a second Brett shows up with your information on a different device, we know one of you has to be lying. And we can start stepping, both of you up to submit the utility bill for your address to submit your w two.
Eli Wachs
I call it a duel, jokingly, not to bring it back to colonial America, but to me, it’s like, duels serve the purpose, and we’re not going to give you an old musket and go to Weehawke in New Jersey and take 30 paces. But to me, the way we think about is that if I. We know they’re going to only be one brand. We know there can only be 300 million people of a certain age in America. We’ve shrunk the pool of who we’re evaluating. So that’s what we, that’s how we think about that. There’s ten to $15 billion a year about anything Internet. And to me it’s tragic that, as you just said, people have accepted that as part of the social contract to the Internet, that there’s just a risk there, identities out there.
Eli Wachs
Or you can pay dollar 300 a year for lifeblock. I think that’s outrageous. And if we’re successful, you should be paying $0 for that. That should come with the Internet.
Brett
What about the markets that you focus on? So it sounds like there’s a lot of different markets that you could go after. I see on the website there’s four core markets listed out there. How did you decide initially which market to focus on? Talk to us about that decision making. And the reason I ask is I think it’s always hard for founders to decide where to focus and where to put time and energy.
Eli Wachs
That’s a great question. So the four markets on our website, one is banks, one is fintechs, one is real estate, and one is car, auto. And how we got to those, each is maybe a bit unique. And I guess that’s why possibly it’s hopefully an interesting answer. Some of them seemed very obvious. If we are going to build a big company, we need to be in the banks. And there were incumbents. There was one incumbent that did a really good job with banks and we’re proud now we’re two and a half years old. And if you go to different partner banks, different bas platforms, we’re pretty much not the only other KYC tool approved. And that was very intentioned by us, which was this is going to take time. Our first customer in no world is going to be a bank.
Eli Wachs
There is no chance that the first customer for KYC tool is a bank. It was never going to happen. But there was no world which we would be successful if our first hundred customers were only fintech. And I think that’s part of the balance that you have to think about from your go to market at the beginning, which is, yes, you’re solving for your problem of can I get customers? But not all customers are created equal and not all pipelines created equal. So we’re now starting to see two and a half years in that pay off in a very big way with banks. That was not the case at the beginning.
Eli Wachs
It was still conversations that we really sought out and we really wanted to learn you, even if you’re not going to be our customer for a year, what could we build so that in a year you want to be our customer? Probably a nice transition into category two of fintechs, which was one, yes, a bank is not going to be our first customer, but a YC company probably will be in that we’re going to work really quickly and solve problems for them. We think fintechs also the companies that work with banks. So the best way for us to get into banks was we working with fintechs who worked with those banks and told those banks that they should work with Footprint. So to us, that was a very symbiotic relationship. Those were the early companies we really went after.
Eli Wachs
To us, whether it’s investment platforms like composer or bloom that we thought we worked really well with, or fintechs, like I talked about YC companies like Trade and Coba, which were in the batch the first summer Footprint, those all seemed like companies that really wanted to work with us and we could learn from now, the last two buckets, real estate and auto, I would not have had those on a map when we started the company. And the reason why is that when I looked at our competitors, they didn’t have logos on their website from those areas. I think what we started to see is that those were areas that did not legally have to do KYC. So if you’re a bank, you need to verify somebody. If you’re a apartment building and you’re renting an apartment, it’s at your discretion.
Eli Wachs
Now, we’ve seen a huge rise of fraud in those areas because real estate companies, auto companies haven’t invested the same that banks have to try to solve these issues. And we started to see it as a very opportunistic space and that these were companies willing to also take a chance on us because were became pretty focused on solving specifically the issues just facing identity verification, but identity verification for cars, for apartments, because we saw it was a pretty greenfield space. In a broader space where KYC is a bloodbath, there are so many companies trying to do this, so many. Maybe an exaggeration, but there are dozen versus the amount that we’re trying to solve it for those areas where maybe three or four, we saw those as really good opportunities.
Brett
What did you do? Or what are you doing to build trust with your customers? And you know what I see as a consumer? Every now and then I’ll sign up for something and it’ll say, text this link here and take a picture of your driver’s license. And I swear like 50% of the time it doesn’t work and I just end up frustrated. I get a random error message and I’ve walked away from companies that I was going to use and not use them because of that problem. And I’m sure these organizations are very aware of that too. It’s high stakes. If they have a bad onboarding experience where they can’t even get in, they’re obviously never going to be a customer.
Brett
So as a startup that’s three years old now, what are you doing to build that trust with customers so that they know that when the consumer gets to that screen or that page, it’s going to work?
Eli Wachs
Great question. There are a couple answers. I’d say there from a pure product perspective, it goes back to a lot of what I maybe said at the beginning here about how did we get to our product. We focus so much on the front end and what you just described is the experience that companies really want to avoid. It was a bad doc scan. It kept crashing. The form didn’t work. And to me, I’m not surprised by that because it’s tough to build good onboarding. It’s tough to build good doc scanning. As weird as it sounds, it’s tough to build the form to collect information. If you have a PO box, you can’t pass KyC. So companies should not let you move forward there.
Eli Wachs
To me, if you study the companies that came before us, really, none of them, maybe one or two add front ends. None of them had front ends. As customizable as Footprint. There was always a trade off between fraud and friction, or trade off between design and external tooling. And we’ve essentially built what we call components which really eradicate this. They are invisible boxes that can overlay over the design you want, but then really control the user journey. So from a pure conversion friction standpoint, that’s how we solve that. And then from a trust standpoint, part of that to me comes from our background in security. We are a security company.
Eli Wachs
So if you’re going to be scanning a driver’s license, we do think people feel a bit better knowing that if they click the pop up to learn more, they’ll say that we’re first and foremost a security company. And that was always in our roots. With that said, I think trust takes time with both customers and consumers. Really good advice that I was given by Star Duel, who led our seed rounded index, was that your first customer is probably not going to the one that says, how can I trust you? You’re so early because there’s not a good answer. You can say you’re charming, you can invite them to a stand up show. You can set up a slack channel and give them your phone number.
Eli Wachs
But if this is somebody who doesn’t want to trust that type of company, it’s not really going to work. So that’s the first thing that we would say. The next thing that I would say is trust with. I think end users takes time. We even see that with plaid, they’re much older, and I take for granted because I’m in fintech and think about plaid a lot of days. But if I ask people who are not as familiar, it may take a bit of jogging for them to remember that they’ve definitely gone through a plot flow at some point in their life. I think you can’t be naive and you can’t take customer trust for granted. And what I will say is, I don’t know how long it takes to build it, but I know you can lose it really quickly.
Eli Wachs
And that’s, once again why we care so much about things like security.
Brett
Preston, what about the go to market strategy? What does that look like today.
Eli Wachs
In terms of. And I guess maybe to zero in, you’re saying, how do we think about who we targeted? How do we, how do we bring people through? What would best there more on.
Brett
Like, the go to market motion side. So is it top down sales, what that looks like? And then. Yeah, the other part of that is, who are you targeting?
Eli Wachs
Yeah, we’re interesting in that we are predominantly top down outbound, but the inbound we’ve gotten are our biggest customers at a point, which I don’t really say with pride, but I say with, you know, if we’re having public companies come inbound to us having open sandbox accounts and really liking the product, we’ve somewhat failed in not having gotten in front of them. That said, it’s probably good that our products ahead of sales, given that it’s a much bigger team. But to date, it has mostly result been, you know, I think the early it is, there’s no formula. It’s your scrappiness of getting in front of companies and delivering. I don’t think as you start to get to that phase of go to market fit, it’s product market fit.
Eli Wachs
I’m sorry, it becomes more around just can we generate the opportunities knowing that you’re not going to generate every opportunity back to the idea that you don’t need to win every customer at the beginning, you maybe have to win ten. It’s kind of true for you’re one of them, maybe you’re two, you need to win 30 and keep the ten from the first year. So that game keeps advancing a bit. We’re constantly trying to get more mature. Whether it was moving off of Founder led sales and bringing on people to the team, moving off my notion to rules like Apollo and HubSpot, to now beginning to invest in marketing channels like LinkedIn or Google. From an advertising standpoint, really trying to get more and more scientific of okay, we now have enough brand recognition.
Eli Wachs
Where can we start to understand if we invest a dollar in one of these four channels, which one will have the highest payback? And if we know each of these channels will take x amount of time to lead to a meeting, how long does it take for one meeting to convert and what would the average deal size really trying to get out of pure Founder hand in the wind. This is where I think one that you’re at to okay, this is what we need to do to actually hit that goal. So that’s kind of been a bit of the evolution, especially in year three.
Brett
What marketing channel are you most excited about?
Eli Wachs
I would say I’m optimistic about Google Ads. It’s not really the sexiest answer, but people go there for answers. So I do think that we’ve just never really spent money, that KyC is a competitive search term. But I do think that there’s a reason search terms are competitive and that people are searching for them. And I say that there will never be a better use of money than the day we’re in. There will be a time when that’s not true. But for early stage startups, we have a lean team. We try to be very responsible with Runway. But even with all that said, if you can spend $1,000 to get a $50,000 customer, pick your multiple, whether it’s 2024, 2022, the good use of money.
Eli Wachs
So I am excited there in that, something I’ve just always shied away from because I didn’t want to do the experiments and I’m excited to see how that turns out.
Brett
Robert, who’s that Persona that you’re typically targeting? I would guess that if it’s a financial institution, then they have a head of KYC or someone responsible for compliance. Is that the Persona when you’re selling to financial institutions, or is it someone else?
Eli Wachs
It’s typically a product leader who sits in fraud risk identity. That’s what it typically is in that product is very closely tied in here in that you could argue that KYC is the first part of your product that a consumer interacts with. If you want to trade stocks on Robinhood, you need to verify yourself first. That’s why it really becomes, as strangely sounds, a product decision. But in Footprint, because of all that we do, people get looped in who would not have been looped in the past. Historically, you would not bring your CISO to a meeting with your Kyc tool. In Footprint you will, because we’re also your security tool.
Brett
Got it. Makes a lot of sense. To date, what do you think has been the most important go to market decision that you’ve made?
Eli Wachs
I’m a huge fan of Slack connect and I create Slack connect channels after every first call. And I add, depending on the reception, I’ll just start adding people from our engineering team and we will start essentially async integrating you. Sounds small, but big companies don’t do that. And the co-founders of big companies will not reply to messages every hour of the day. And I think those are the things that you do to gain trust. So I’m a huge fan of Slack connect and I do think it is the best tool.
Brett
What does your slack look like? Is it like 400 channels? What does it look like?
Eli Wachs
It’s mayhem. Yeah, I mean, it’s grouped into customers. Even now that our customers have really grown, I’m beginning to even like sub bucket those and in different tiers of kind of prospects in terms of what stage they’re at. And then I do have a dormant channel and then I have essentially recurring calendar invites to myself to go through each bucket and message them at different cadences. So there’s actually a process to it. The other thing I’ll say is I turn on LinkedIn notifications for most prospects and I like and comment on all of your stuff. And that also adds up in my opinion.
Brett
Yeah. I need to figure out something to tame my slack chaos. We have about 50 clients, so we have an internal channel for all clients. And then we also do a slack connect with the clients. So just there we’re at like over 100 channels and that’s, you’re not counting and all the other internal ones. So gotta figure out something there. It doesn’t seem sustainable. So if you do figure out a good way to tame that, please let me know.
Eli Wachs
I’m taking a call next week with the company that claims they help you like sift through your slack support. So I’ll email you if it’s good.
Brett
Perfect. Now let’s talk a little bit about fundraising. So as I mentioned there, 20 million to date has been raised. What have you learned about fundraising throughout this journey?
Eli Wachs
Biggest thing I say is if you don’t believe in yourself, nobody will. It’s why I really hate the idea of encouraging people just to start a company. Because I don’t think that’s true belief in an idea and it will get tested. And if your initial reason for starting the company was that a bunch of VC’s told you to start a company, figure stuff out, I don’t think it’s going to go well. So that’s probably my controversial opinion on starting companies to begin with. But I really stand by it. And that VC’s have a diversified portfolio and you are not a diversified portfolio. So your life is more valuable than that tonight in terms of fundraising. I think it’s true. You’re painting a picture. You are and you can’t.
Eli Wachs
You have to accept that not everybody has the context you have and that nobody has spent the amount of time you’ve spent with this idea and with this company. And thats your problem to overcome. You cannot expect VC’s to figure it out. VC’s are really smart, they spend a lot of time in a lot more spaces than you are operating. But as a result you need to accept that theyre not going to have the depth that you have in your space now. I think we saw for both our seed and series a that the investors who let it were people who were spending time in the spaces Sharduld index had deep background in security and deep background in security being used in kind of newer spaces and really connected with the idea of identity and security coming together.
Eli Wachs
Amayas and Adams at QED Amayas jokingly wrote in his blog post when they announced the raise that he had written an internal paper a couple years ago about how he never thought hed invest in a KYC company because he just couldnt find one with a vision that he really clicked with. And then conversely, Adams came from plaid who is doing really interesting things in the identity space. So there are people who scarily understood the space were operating. But I think that is somewhat what you need of if you have an idea, often it’s going to be like Founder VC Fit. I’m a fan of taking VC meetings. Don’t get on calls every week. I think the proper cadence in between rounds is two, maybe three times a year. I think if it’s just one, it’s not enough.
Eli Wachs
I think anything more than three, you are somewhat wasting both of your times. You can ask VC’s to make intros. If they don’t, you don’t have to take another meeting, but it’s not the worst use of your time. And yeah, at the end of the day, I think you also kind of know of how ready you are to raise. And, you know, sometimes the timing isn’t always perfect, but you need to really understand when that’s going to be and you have to. Fundraising, in a weird way will remind you of why you started the company, even if it’s not going well.
Eli Wachs
During a moment, you will feel so backed against the wall and you will feel so strong in your conviction, because that’s where you need to get others to believe that it is this strange personal journey that I think will get you to reflect on. You will get past imposter syndrome even by doing it. If you really are doing an idea that you believe in, because you’re going to remember that this is an idea that you’ve been so passionate about and that you really believe in.
Brett
Final question, let’s zoom out three to five years into the future. What’s the big picture vision look like?
Eli Wachs
We want to be the identity layer to the Internet. What does that mean? I say two buckets. One is, I said earlier, there’s ten to $15 billion identity theft a year. If we’re successful, numbers should go down meaningfully. The second is stripe, one of the all time fintechs. Their mission is to grow the gdp of the Internet. My belief is that about 3% of the Internet’s fraud. That’s not just my belief. That’s a lot of studies. If we’re successful, that number should go down. So eventually, Footprint should essentially be like a blanket insurance policy against fraud on the Internet. If that number goes down, that creates a lot of mobility. And then lastly, if you then go five to ten years, it’s back to the initial. Really believe that.
Eli Wachs
I think data, there’s a lot of good that can be done with it if it’s in the right hands and really putting that back in control of people.
Brett
Amazing. Love it. All right, man, we’re up on time, so we’re going to have to wrap here before we do. If there’s any founders that are listening in, they feel inspired, they want to follow along with your journey. Where should we send them?
Eli Wachs
Yeah, we’re on LinkedIn, Footprint and Twitter. I post on both. I’m Eli Wachs. Feel free to add me. Follow me. Follow the company. And, yeah, I hope this was a lot of fun. Thanks for having me on, Brett.
Brett
No problem at all.
Eli Wachs
Cheers.
Brett
All right. That was awesome, man. You’re a great guest. Really enjoyed that. Thanks.
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