“This interview first ran in Inside Venture Capital – a 3x/week newsletter tracking venture deals and interesting startups”
Today’s Goldilocks features Entrupy CEO and co-founder Vidyuth Srinivasan, who spoke to us about his company’s niche in authenticating high-value goods and raising a $2.6M Series A round in July 2017.
What was the inspiration for Entrupy? Were there any personal situations you encountered that gave you the idea, or was the reasoning something you saw in the market?
We started out with the mission of tackling counterfeit goods of all types because we saw that it was a massive, unsolved problem. After doing this for a few years, we’re even more convinced of this today. All of Entrupy’s founders had grown up around fakes, and it was something that had personally affected us at different points in our lives. But, we also know the problem we are tackling is massive, so we set out to find a scalable and versatile solution to combat it. That’s how Entrupy started – In search of building the right technology to combat counterfeits and build trust in commerce.
You raised a series A funding round in July 2017, what were you looking for with your new funding? How has your business plan changed with the fresh capital?
Our goal was to scale up operations and continue building our product. We’re now on our way to supporting bigger customers and building a global team.
Did you find the investors you were looking for, or did you find funding in an unexpected place?
We knew our lead investors through our existing angels. It helped that our story and our path forward was clear and positive and that our early investors had a lot of trust in us. When we finally met our lead, it was a quick conversation and the process took off. Finding the right investors is usually tough, but we were lucky to have a great set of early angel investors who forged those connections for us. This created a trustworthy relationship and a ‘getting to know each other’ process that was actually organic.
How did you pitch your company? – What were the metrics you were most inclined to put forward, which did you think didn’t show you in such a good light?
Since we were already a revenue-making business, and this was our first institutional round, the conversation was two-fold. One stream was around the best version of this company and where we, the founders, planned on taking it. This helped investors understand how big Entrupy could become, how we planned to create our place, and what we would do to win the market. The second was breaking down our immediate plan for the next 12-24 months. This helped us put a stick in the mud and measure progress.
Metrics-wise, we had healthy numbers to share. Since we are a technology company, the major focus was on product. There were gaps that would take time to fill, and that’s something we were always transparent about. I think this helped build trust in us since we weren’t hand-waving anything.
I truly believe that a CEO being open really helps investors understand where the company can go. It also demonstrates the CEO’s confidence level. If both parties have priorities that are aligned, the conversation is simple. If they don’t, then we talk can talk it out and figure out where the gaps are. If that doesn’t work, it becomes clear that the relationship is not a fit because the investors don’t view the world the way founders do.
Were there any ‘I can’t believe that just happened’ moments during your pitches? Was there a moment when you knew that an investor was going to make an offer?
Of course! Our round was over-subscribed and we had some international investors who were keen. At this point, I knew odds were in my favor. But after making a specific statement around 10 minutes into a meeting, I felt a long, pregnant pause in the room. The investor nodded, said, “Ok, this is good, can I call you tomorrow about this?” and left our office. Even though it was an abrupt end, I was convinced that he was going to put an offer on the table. He did the same day. I then decided not to take it. The key was to do it enough times to know how to read the room and how to present the opportunity.
What are Entrupy’s expansion plans? What sort of projections do you have for the short and long terms, both in terms of team building and services?
We have grown from 11 to 19 employees this year, so part of our efforts are directed towards building more structure into our internal processes.
Our other plans are to expand the technology to cover multiple types of products, and we have made significant progress. At the moment, we are growing at a healthy speed and have a deep sales pipeline, so our focus is on improving product and ensuring that same pipeline continues to grow.
What do you feel like your competition is? What sort of plans do you have to further distinguish yourself from other startups?
Right now, we don’t have any direct competitors – there are no companies that do the same as what we do. We tackle a unique problem that has many other solutions, including human agents. We are in a category of our own in that no other company, or even research group, has come close to achieving our levels of accuracy. But It’s important to acknowledge that we are always one day closer to having competition that might be better than us, so we have to keep improving and progressing every day!