by Pete Flint (@PeteFlint). Pete is a Managing Partner at NFX, a seed and series A venture firm based in San Francisco
“3 Reasons Why” is a new approach to VC funding announcements. We’re making what happens behind the scenes of VC decisions public so the Founder community can benefit. As Founders ourselves, we always wanted to get an inside view of the process. Now as VCs, we are committed to bringing this transparency to Founders everywhere.
NFX investor: Pete Flint
Industry: Real estate tech / home services
What they do: Setter is your personal home manager: a one-stop home maintenance and repair service that allows homeowners to focus on living.
Round & Size: $10 million Series A
Co-Investors: Jess Lee (Partner - Sequoia Capital), Hustle Fund
I first met the founders of Setter at Sequoia Base Camp over 18 months ago. I was there because Sequoia had invested in Trulia back in 2007 when I was Founder/CEO, allowing me to meet the Setter team long before we invested.
NFX had looked at similar companies in the past, and the space seemed to be approaching a technological inflection point. While consumers want the confidence and security of home ownership, in today’s tech-forward world they are frustrated by the expense and hassle of maintaining their home. As we outlined in our recent article on PropTech, this is one reason why we see massive opportunities in real estate.
But the fact that Setter was addressing a promising market wasn’t enough. In all early-stage companies, founder:market fit is just as important. With Setter, David Steckel brings 10+ years of experience in the contracting world. He deeply understands the nuances of how it functions that could easily trip up someone without that experience. In addition, co-founder Guillaume Laliberte is a world-class engineer. That’s a powerful combination.
There were 3 core questions I worked through:
Using the Ladder of Proof, a guide we published so Founders know how VCs weigh investment decisions, I’d say we met with Setter initially because they identified a 1) customer need, in 2) a big market, while building 3) a great team. What moved us up to the top of the Ladder of Proof were: 4) Defensibilities, 5) High LTV, and 6) Strong ability to build product.
We said yes to the first meeting because we were already intrigued by the company after our initial connection through Jess Lee at Sequoia. We were persuaded to take a second meeting after that not only because they answered the main three questions above, but also was because we loved the team, we were fascinated by the market, and we thought the product had the potential to be truly exceptional.