Nailing Warm Intros At Scale With David Connors

Jason Kirby: You know, anything on the record could be used, you know, for or against you. But, um, general theme that I want to cover today is one, want to talk about the raise. Like I want to understand how you guys dog food it. Yeah. How'd you guys use your own product for your own raise and your own sales efforts? Uh, cause I think that would be particularly interesting. And then the next thing I want to cover is, um, just the concept of just warm intros and the power of them and how tools like yours enable that.

David Connors: Yeah.

Jason Kirby: possibility. And then correct me on a couple things. I he has raised a total of eight, but you haven't announced all of it, right?

David Connors: Yep, I'm on it.

David Connors: Yeah, so we've raised six that we've announced and then we've got a two mil C plus round that we're just closing out at the moment that we haven't announced yet.

Jason Kirby: Just not closed yet.

David Connors: It's, mean, like, you know, the 75 % has been wired, but we haven't like announced it probably yet. So I mean, up to you. Like I'm happy to talk about it. But obviously we don't need to then.

Jason Kirby: Then so-called like eight total. And then you can dive into the specifics of what's closed or what's not closed. And we can have that discussion. as far as, like I know I was talking to Olivia earlier about kind of the API product launch and how that's kind of the big focus. But is there anything you want to share in terms of where the business is at? like when you decided to.

Jason Kirby: to raise, it because you needed money, because it was opportunistic, or because you had certain traction? So it'd be good for you to speak on those points as well. right. So let's get underway. Everyone, welcome back to Fundraising Demystified. Today, I have David Connors with us, founder and CEO of theswarm.com. Probably one of the easiest ways to figure out if you know someone that you need to get an intro to.

David Connors: Yeah, sure.

Jason Kirby: customer. And I'm excited to have you on the show, David, you raised about 8 million for the company. You've also previously sold the company to Sequoia. So I think you're just gonna have a really fun conversation today. But welcome to the show.

David Connors: Thanks, Jason. Yeah, great to be here.

Jason Kirby: So for the audience that isn't familiar with your product, just kind of give the quick elevator pitch on what the swarm is.

David Connors: Yeah, so we built a platform that helps companies to map and leverage their network. And we also have a couple of products that power other platforms with people and relationship data.

Jason Kirby: Yeah, you just recently announced your partnership with Clay for people to leverage their existing tool that they're using Clay to kind of map warm intros and shameless, know, unsponsored plug here. I'm a user of this warm and we use it for mapping warm intros to investors. we find like with Thunder, for those that don't know about Thunder, you can generate an AI generated list of relevant investors for your startup. You can then take that list, export it to something like the swarm and then you find out, okay, who do you actually know that can get you introduced to those investors? So pretty cool, convenient tool for fundraising. So I kind of want to ask, did you guys use your own product to raise your own round?

David Connors: Yeah, 100%. So maybe I can give you just a bit of like a background on where the swarm came from and then how we then use it. we, you know, sort of kicked off in 21. I was previously at Sequoia, as you mentioned, I built them almost like a proof of concept for the swarm where working with their internal product and data teams, we had mapped Sequoia's network and were then leveraging those relationships for the portfolio. Right. So founders were intros to Wells Fargo to try and close an account or to this rock star VP of engineering, right? Who does Sequoia know? How can we help?

David Connors: So when I left Sequoia, I was then looking at the market and I was like, you know, we have LinkedIn as individuals. Where's the LinkedIn for companies? There's no platform that helps you to look at the collective network of an organization.

David Connors: to just what we needed. The thinking for that amount was what do need to be able to get to our seed round, right? To be able to build a product that's in market, that's at revenue. What size of the team do we need? What sort of runway do we need? And that's always backed into with a little bit of a buffer, you know, that two mil amount. And yeah, that's, you know, we closed that I think in about three, three, four months, but it was just me at the time.

David Connors: And those just me. then actually from that point, then I went to go build the team after that. So I said, I had the idea, you know, in a Google doc, sort of wrote out my own investment memo that I would then give to the investors. I go, I was an investor trying to write a memo internally for how I would convince the, uh, the IC investment committee is going to wrap a stamp this. Here's how I put it, right. And he's like the market size. Here's the opportunity. Um, I even did a little Sequoia like, um,

David Connors: pre-parade pre pre-mortem at the end, which we were able to say if this was wildly successful, what would it look like if this was going to fail? What would it look like? And so did some of those and very loose financial milestones, which is always very hand wavy up there, you know, at that point. Yeah. But, know, as you know, at the very earliest stage, it's more like, is this team credible? Is this a market size big enough? There can be outsized returns for BC and

Jason Kirby: Loose. You're the win.

David Connors: you know, does this make sense in the macro environment and competitive landscape?

Jason Kirby: So other than being probably wildly useful for you to go through that exercise and you having the background, working at a tier one VC to kind of know what that process is, it's kind of getting out into the ethos with founders that that's something to try to do. And it's even something that at Thunder, we have a button that generates kind of a template for founders that use their data to kind of generate an investment memo they can kind of tweak and then send out to investors once they kind of secure that first meeting or second meeting.

Jason Kirby: What are you kind of seeing? Like how useful was that in your discussions? Did you see that kind of get across the finish line and, or did people just be like, okay, thanks. But didn't actually use it.

David Connors: In terms of the, the, the event, yeah, I mean, I think I, you never really know. Okay. It was kind of like, all right, thanks. You know, from, from my subsequent rounds of, of fundraising, found that once you have a really strong investor come on board, who, even if they're not leading the round, but just a very well respected, if you can ask.

Jason Kirby: investment memo.

David Connors: to get their memo and then circulate that with other investors, that works really well. So it's like, I've sort of often provided some material that goes into that memo, but then it's wrapped up. Typically this was like, especially for folks who have an angel-less syndicate, this works really well, where they have to provide this memo that's then publicly shared with all their hundreds of thousands of LPs. And then you say, all right, here's the memo that this investor just circulated for this round.

David Connors: and it's, you know, the, the kind of, line by line that obviously works better than if you just write yourself. But either way, with this, you know, with anything to do with the fundraising, making the investors life easier and providing them with as much, you know, collateral to persuade the other internal folks is always a good, good idea. It's the same with your running an enterprise sales process, right? The more you can be.

David Connors: arming your internal champion with what they need and making their life easier, then it's just going to be lot easier for you as the founder to raise.

Jason Kirby: Yeah, I completely agree. think it's whether it's like copied and pasted by an associate to go to IC probably unlikely, but it does reduce a lot of the back and forth and DD. So it's like, okay, they got a lot of the answer. The deck is nice. That's more of like, you know, the appetite get me interested. And then like the investment memo is showing your homework and showing all the work that got to the deck and being able to provide that I think is valuable to.

Jason Kirby: streamline the DD process so that if you've got the opportunity to go to IC, but like IC might be a week or two weeks or a month, you you don't know exactly what it is. So, you know, if it's going to be a month long wait and it's next week, you at least have everything that needs to be ready and doesn't have to take a lot of back and forth. So you can a little bit quicker and not lose momentum. I think it's worth as a founder to go through the exercise, have it ready, despite it maybe not being as meaningful as say the lead investor doing it.

David Connors: I think there's a benefit to that long form approach as well. So for each round of, always done a long form memo, even if I haven't necessarily shared it, which is sort of your distilled thinking at that point in time of what's going on in the market. Why do we have this opportunity? And then, you know, here's our strategy for what we're doing. It's also interesting to kind of reflect back on that. And we've wildly changed since that first memo of the product, but the... and the opportunities, you know, remain largely the same.

Jason Kirby: Can I put you on the spot and I'm just, you you could say no, but would you be willing to share the, that pre-seed memo that you drafted with the audience? All right.

David Connors: sure. Yeah, it's very different. But yeah, happy to.

Jason Kirby: Yeah, I I guess I figured it's slightly inspirational but irrelevant to maybe what exactly the business is today or to maybe not giving away any secrets. But I think for founders at a similar stage that precede Angel around, it could be helpful for them to understand what a solo founder did at the time of creating that document that went on to go raise $8 million. So, all right, we'll include that in the show notes below. Don't miss out. So...

Jason Kirby: Yeah, I think that, it was an interesting transition point to be like, okay, so you raised 2 million pre-seed. You went through that process. You've since raised an additional six and a couple of different tranches. I guess kind of walk us through the decision to go out and raise more money and kind what your, your go-to-market strategy now was after you kind of built the product and got some momentum.

David Connors: Yeah. So we had the initial two mil. Um, so we started then building out a team...

David Connors: ...and we now make a 95% of our revenue on the data products versus the SaaS products.

Jason Kirby: Is it 95% of revenue is now coming from the data?

David Connors: Yeah, data products and partnerships with Clay and these other platforms like, know, soon to be HubSpot and their 240,000 customers.

Jason Kirby: That's a much bigger concentration of revenue than I thought it was. That's impressive on the data front. I guess, you know, kind of speaking to that, because everyone talks about SaaS, SaaS, SaaS...

David Connors: ...especially in today's market where proprietary data matters so much. What would be generally some advice for founders that we maybe haven't covered around being able to build a network? So it's not just about accessing warm intros, but what's the human element that founders can implement that you've seen work for yourself?

Jason Kirby: Yeah, I can brutally agree with that sentiment. Like building a personal brand is so powerful for founders in today's world...

David Connors: ...and put yourself out there. So it's a bit uncomfortable often, but just getting out there, putting yourself out there, and you'll find, I think pretty quickly, that there's a lot of like-minded people who want to support you.

Jason Kirby: David, it's been a pleasure having you on the show. What's the best way for people to learn more about you or The Swarm?

David Connors: Yeah, I think on LinkedIn is try and post there pretty regularly and feel free to follow or connect with me on there. And then otherwise our website, theswarm.com.

Jason Kirby: Beautiful. Thanks for coming on the show, David.

David Connors: Thanks again, Jason. Enjoyed it.