The Hyde Park Angels “New Investment Series” profiles our most recent investments by examining the investment process and the individual company’s future trajectory from two perspectives: the portfolio company’s CEO and the HPA leader who made the deal happen. This edition focuses on TransparentCareer.
We recently led an investment in TransparentCareer, a career management platform collecting the most robust compensation and career path dataset to facilitate better career planning, in a seed round featuring participation from Pritzker Group and many other VCs around town. HPA member Joe LaManna led our investment efforts. We spoke with Joe and TransparentCareer’s Founder and CEO, Mitch Kirby, to learn more about how the investment process worked, and how early-stage entrepreneurs can make the right decisions when fundraising.
Mitch, why did you start Transparent Career?
M: Initially, TransparentCareer was started to solve a problem I had myself. I had just started my second year of business school and was trying to figure out what to do with my life. I wanted to better understand fair pay and how different jobs would impact my long career prospects.
To understand career options, the majority of people cobble together anecdotes from friends, rely on blogs, or get generalized data from sites like Glassdoor or Payscale. Strangely, there is a massive dearth of quality data on our careers. TransparentCareer is about giving students and professionals much better data.
Building on that, when you first conceived of the idea, did you automatically think you’d seek venture capital funding?
M: When I first had the idea, venture capital wasn’t on my mind at all. The only thing I was concerned with was validating the need as quickly and cheaply as possible. It wasn’t until we launched our MVP and saw massive adoption in the MBA space that venture capital began to seem like a good option.
The inbound interest from students and professionals outside of our core market highlighted that this problem extends well beyond MBAs. In order to rapidly scale the product and go-to-market strategy we knew we would need additional capital. The close relationships we had built with VCs around Chicago, and in particular HPA, made us comfortable that we had the right partners to help us build a successful company.
Joe, switching over to you, why did TransparentCareer appeal to you as an investor?
J: What impressed me the most was how quickly and easily TransparentCareer generated significant usage without spending much, if anything, on marketing. Within the first several months of launching its product, TransparentCareer had over 5,000 users and a dozen industry partners.
So you saw the market potential, but you could also recognize something unique about the company. Is that why you decided to serve as the Deal Champion at HPA?
J: I decided to serve as champion because I felt that TransparentCareer was not only an outstanding idea that had tremendous growth potential, but it also had superior leadership. In the angel investing community, it is often debated whether the long term success of a startup depends more on the jockey or the horse. I think the odds of long-term success are greatest when you have both a great jockey and a great horse, and with TransparentCareer, I believe you have both.
How did you navigate the investment process? What did you do to prepare?
M: Luckily for us, we were competing in Booth’s New Venture Challenge just before seeking capital. It pushed us to validate our hypotheses as quickly as possible. Additionally, it forced us to hone our pitch and messaging, which made the discussions with investors more productive.
Before officially raising, we also met with investors to familiarize them with our vision. This helped them get comfortable with the company and allowed them to watch our rapid progress during New Venture Challenge. Once we went out to actively raise, the process was significantly smoother as the conversations could be much deeper and the investors already had time to think through our business for a period of time.
What has the process been like working together? How do you see your relationship evolving over time?
M: From day one, Joe has been a great listener, mentor, and coach. Joe provides praise for our accomplishments, but more importantly provides constructive criticism so that we can make everything we do better.
J: Mitch has a clear strategy and vision for TransparentCareer, but he also recognizes that he will need help and guidance from others to make it a very large and successful company. He has not hesitated to reach out to me and to others for input on matters in which he does not have the experience or expertise.
What is your biggest piece of advice for entrepreneurs looking to develop relationships with investors at the very beginning stages of their companies?
M: My perspective on building relationships with investors has always related closely to our business philosophy as a whole which is centered on transparency. It is important for investors to not only know about our wins, but also the challenges we are facing and the hardest problems we are tackling. Building a relationship with an investor is about honesty, open communication, and trust.
J: Do not hesitate to approach investors who you think could have an interest in investing in your company down the road. Many angel investors like to hear about early-stage companies before they actually begin fundraising.