#127 Nectir: The Classroom of the Future

Everything we’ve been working on for the last 9 years at The Pitch has led up to this moment. Season. 11. 

I’m so excited about this season. Everything just clicked. The VC’s? Money. The founders, also money. The live audience! Gamechanger. See you thought I was going to say money didn’t you.

Our season starts today, with a founder who’s experienced firsthand that the classroom of today doesn’t work for everyone. So Kavitta Ghai is building a better one - the classroom of the future.

But the odds are not in her favor. And she knows it. Kavitta is raising in one of the toughest fundraising markets in over a decade. And her startup is in a category a lot of VCs really don’t like.

Mac: I tend to hate ed tech. Like, with a burning passion.

But despite the odds, Kavitta chose to risk it all, and come to Miami, to pitch five VC’s in front of a live audience. 

I’m Josh Muccio, welcome to The Pitch. Where real founders pitch to real investors for real money. Let’s meet the investors.

Mac Conwell with RareBreed Ventures

Mac: As a unicorn hunter, I want to see every unicorn. 

Charles Hudson with Precursor Ventures 

Charles: I wish that had been your open. That was so good.

Elizabeth Yin with HustleFund

Elizabeth: Do you love the problem you're working on?

Paige Finn Doherty with Behind Genius Ventures

Paige: Actually I gained so much respect for her when she said that she did that.

And introducing a new investor to the show - Cyan Banister with Long Journey Ventures

Cyan: That is the definition of a dope founder.

The pitch for Nectir is coming up after this. And if you would, do me a favor and hit that subscribe button and turn on notifications for The Pitch! You don’t want to miss a single episode this season.

BREAK

Kavitta: Hey everyone.

[hellos]

Elizabeth: Elizabeth. Nice to meet you.

Charles: Hi. I'm Charles.

Kavitta: Hi Charles. Kavitta.

Charles: Nice to meet you Kavitta.

Cyan: Cyan.

Kavitta: Cyan. Hi. Kavitta. Nice to meet you.

Paige: Hi. Paige.

Kavitta: Paige. Nice to meet you. Kavitta.

Mac: Mac.

Kavitta: Mac. Nice to meet you. Kavitta. 

Kavitta: I'm excited. This is my first time in Miami and for a very good reason, too. So - happy to be here. Thank you for sharing some time with me. 

Charles: Of course. Absolutely. 

Kavitta: Wooo. Hi guys. I'm ready.

Charles: All right.

Kavitta: My name is Kavitta. I am the cofounder and CEO at Nectir and we are building the classroom of the future. Well, I think the best place to start is why I'm here. I am autistic and I have ADHD, so no classroom that I've ever been in before has felt comfortable for me or my brain to be in. And then I got to college, and I started paying $40,000 to be really uncomfortable, and that's when it became enough of a pain point that I said either I'm going to drop out or I'm going to do something about it. And I had no idea what that something was until I took a class that changed my idea of what education could look like. I took a class the summer between my sophomore and junior year taught by a grad student instructor. So we walk in on the first day and, before he says a word, he turns around and he writes the link to a Slack workspace on the board. And he turns back to us and he says, you're not gonna raise your hand in this class. You're not gonna send me or the TA a single email. You're not even gonna come into office hours. If you have any questions, whether it's in the middle of lecture or it's 3 in the morning before a midterm, your first line of action is to put it in the Slack chat, because I guarantee that one of the 149 people around you will have a better and faster answer for you than me or the TA will. And he said, on top of that, if you answer someone's question really well, I'll give you extra credit for it, because that lets me know that you understand the material so well you can then turn around and teach it to the person next to you. When he said that, the entire energy of the class shifted. It was like 150 people turned into 15, and it felt like elementary school again when you're sitting with your six table mates and you know you're going to be best friends by the end of the year. I left that class with the highest grade that I got in college and more friends than I had ever made before. And for the first time, experienced what it was like to actually be in an accessible classroom for me and everyone else. I walked away from that class and I approached UCSB and I said, somebody explain to me why, if me and 26,000 other people are paying you $40,000, why can't you put Slack in all of our classes? Why do you keep giving us technology that looks like it was built by someone who hasn't seen a classroom for the last ten years? And they very kindly sat me down and walked me through the logistical hell of putting a separate Slack workspace in 1500 classes every quarter, teaching professors who are on average 55 how to use an enterprise level tool that they haven't seen before, and then paying an enterprise level cost for 26,000 students every year. They said, it sounds good in theory. But this will never work across an entire campus because Slack isn't built for schools. And I think you could literally see a lightbulb appear above my head in that moment, and I said, then I'm going to build it. We - my cofounder and I spent the next year in that same office, asking them what would you buy? What does it have to look like for this to work across an entire campus? And we built exactly that. A year later, we got all 26,000 students at UCSB using Nectir in almost every single class, with the instructors being the champion of it. And we got UCSB to pay us $60,000 a year for it, so we got our tuition back. 

[laughter]

Kavitta: After that, we went on to raise our pre-seed round, and those same professors were our first investors. Eight months ago, we launched Nectir to the world, and since then I, as our one-woman sales and marketing team, have built a $35 million pipeline and we've already closed five campus-wide contracts from that. And now we're here to raise our $3 million seed round to help us finally build out our sales team, and partner with the right investors who can teach us how to build this into the billion dollar company that we know that it can become, and who want to be right by our side when we usher in the next iteration of teaching and learning around the world. Thank you.

Mac: Amazing.

Paige: That was - yeah, that was great.

Kavitta: Thank you.

Mac: So - I - tend to hate ed tech. Like, with a passion.

Kavitta: Understandable.

Mac: With a burning passion.

Kavitta: Yep.

Mac: And a lot of it's around the sales cycle.

Kavitta: Totally.

Mac: Most ed tech companies fall apart because they run out of capital before they can figure out the sales cycle to be sustainable. You said you've been doing this for eight months and you got five campuses? Walk me through your sales process, please. 

Kavitta: Yeah. Absolutely. So I think the first thing that I want to get out of the way is we have two very distinct sales cycles. For contracts that are under 20k, that's a four to six week sales cycle. If it's within the 20 to 100k, it's gonna take three to six months. If it's over 100k, that's the typical nine to 12 month sales cycle that everyone hates, but we have gone through it before, and we're going through it right now with four different schools that have contracts over 100k, and we're already at the contract negotiation point with them. But - I've actually been working on this for five years. Two and a-half of those were when we were in school, and we made sure that we did not go raise money until we actually knew what we were doing. So the number one thing that I think people don't realize about ed tech is, there is one evergreen tool that every single school must have. It's the LMS. The learning management system. So that is where you're registering for your classes, you have your grades, all that good stuff. When you bring a tool to a campus, as good as it may be, if it doesn't integrate with that LMS, they won't use it. And so what we did was we took that LMS integration a level deeper. We made an iframe integration. Seems like it's a simple thing to do, but nobody else has done it. So what we've built, essentially Slack for schools, it sits actually housed inside of the LMS, and we see 79% of our usage come directly through that. 

Mac: One follow up: like when you go to a new campus. Who do you talk to? Who's the champion? Who's the decision maker and who has to say yes?

Kavitta: Yeah. So easy first answer off the bat - the CIO and the Vice Provost are the person in higher education who are usually making that decision, if it is a campus-wide contract. If we're doing a department contract, then it's the Dean. The way that we were able to get a 34% reply rate, 17% meeting booked rate on our first cold outreach ever, was we decided to go the hyper personalized route. So we built a scraper that found any article that mentioned ChatGPT that had dot edu at the end of it, and that meant that a school was already talking about ChatGPT. And then we found the author of the article, and whoever they mentioned in it, and we emailed both of those people and asked for a user interview. And that is pretty much how we built the entire pipeline and the product itself. 

Mac: And tell me a little bit about the activity level of - for the schools that are currently using it. So this is in every class. Every class has it. But then like what percentage of the classes are actually using it? What percentage of students use it? Like, do you have any information on the activity level? 

Kavitta: UCSB's probably the best example, because we've been there the longest. Every year, UCSB has 6500 new students, so those are freshmen and transfers. For the last three years that we've been on that campus, we get all 6500 new students to sign up with no more marketing whatsoever. And that's how we know the network effect is working. But what we realized very quickly is that vanity metrics are just that. They don't actually care about how many messages are sent or who's going on there. They care about: does it have pedagogical effects? That's what they're buying it for. And so we actually just did our second renewal last week. And we doubled the price of that contract because they were so happy with the results of it. So the school was Arkansas State University Mid-South. It is a tiny little campus in the middle of nowhere. And it's one of those schools where they just see so many students dropping out. They are not able to get students to actually get to the finish line. And they said, we need to be building a sense of belonging amongst them, because that's what's going to save them from dropping out, and we totally agreed. And we said, okay, let's stay there for a year and see what results we get if every single student on campus uses this. We just got the results last week: every single class that used Nectir was able to increase the class average by a full letter grade. That is the usage metric that we're looking at.

Mac: Fair enough.

Charles: When people don't buy, why do they not buy? It sounds like you've had a great experience with conversion, but when they don't?

Kavitta: The soft no's that we've gotten, and we have not gotten a hard no yet, which is nice, but it's because they don't have an AI sort of committee yet. I think that's the main thing that's stopping a lot of larger campuses, is they want to make sure that they have guidelines in place for bringing on AI technology. So what we've done with Nectir is every single class channel comes built in with SOMA, which is your AI teaching assistant. And essentially, we have created AI infrastructure where the school gets to choose the LLM that they use, so schools like Stanford, Harvey Mudd, they're actually using this with their own LLM. And then the teacher in that channel gets to upload the data of their choice, their syllabus, their lecture notes, whatever they like, and that sets the parameters for what SOMA is able to answer for the students in that channel. And so we can give you a way where you know your content is the only thing that's being fed back to your students, they still get the advantage of being able to use AI and get an instant answer, but then you have visibility into how your students are using it. But for the schools that have said no, it's because they're just not ready to bring on AI yet.

Mac: Is - is there a way for you to help them with that? Or help them through that?

Kavitta: Absolutely. So before we even built SOMA, we did a thousand user interviews with faculty, staff, admin and students, anyone who would take our call, and we said, what scares you the most about AI? What excites you the most about it? And for teachers we said if you had a magic wand and you could take one thing off of your plate forever, what would it be? And the consistent answers that we heard across the board were: I'm scared that my students are going to go to ChatGPT and get information that isn't correct, and I won't be able to catch it in time. Once it's in their brain, it's there, and I can't correct it. And when they said what they never wanted to do again, they said, I never want to answer a stupid question again, because I get dozens of emails asking me about something that is in the syllabus, and I have to just sit there and keep answering it. And we said, we can fix both of those. 

Mac: So I hate to be monopolizing the mic, but two questions for you. The first one is, talk to me about your pricing strategy. You know, what is your pricing model and how much are you making in revenue with your current five customers? 

Kavitta: Nectir is a dollar per student per month. So $12 per student per year. So we're at 80k in revenue, and that is four contracts that are under 20k, and then UCSB is at 60k.

Mac: Got it. And my second question was - you said you're raising a $3 million seed round. How much of that do you have committed, if any at all? And what is the valuation you're looking for for this round?

Kavitta: Yeah. So we actually started this round mid-October, which, I know, wonderful timing right before the holidays. I just love to challenge myself. We have out of that three, a million circled, and we're saving one and a-half for our lead, and so we have 500,000 still open right now. And I am in the middle of diligence with 11 funds, one where I'm in confirmatory diligence for our lead. And now it's time for us to bring on one of the major ed tech VCs, because that puts a lot of firepower behind the name for other schools. And so it's a bit more of a strategic round, in my opinion, obviously other than needing that capital infusion.

Paige: And - sorry - what was the valuation on the round? 

Kavitta: Yeah. So our pre-seed round, we did two and a-quarter at an eight post. And to be honest, I'm really not looking for a huge bump in valuation. I know it might be foolish to say, but in this market, I'm willing to do a flat round because I know that based on our projections, that $35 million pipeline, worst case scenario, gets us to 2 million ARR by Q4 of 2025, at which point I know I'll have the leverage for a really good series A. And so I want to keep the valuation to a conservative place at this round. 

Paige: Wait, can I stop you right there. So you've raised 2.25 on eight?

Kavitta: Yes.

Paige: Okay. And then I guess like I would - I want to like I guess take off my investor hat for a little bit and just like push you on like why you want to raise on the same valuation.

This was shocking to the room of extremely interested VC’s. Kavitta just said she’d be willing to do a flat round. Which means, raising at the same valuation as her last round, from 3 years ago. That’s a red flag! It’s one thing to be willing to do a flat round if a VC asks, it’s another thing entirely for the founder to suggest it.

Is this a sign that there are problems in the hive, or is Kavitta just selling herself short?

That’s coming up after this

BREAK

Welcome back to the classroom of the future. 

Kavitta was acing this exam. The investors, even those in the room that hate edtech, were bought in to her every word. Except for two. FLAT. ROUND. Can Kavitta turn things around in the room? Here’s Paige.

Paige: I want to like I guess take off my investor hat for a little bit and just like push you on like why you want to raise on the same valuation. like - I'm cognizant of the dilution that you're taking on as a founder, and like for a founder in our portfolio that would be more dilution than I'd be comfortable with them taking on. So have you thought about raising at a higher valuation? Obviously, it's like contingent on the investors that you're working with, but for me that would be like one of my hesitations. 

Kavitta: Absolutely. I think, if I'm being very self-aware about it, there's definitely a part of this of being a female founder. You go out and take what you can get. And so being in such a terrible market, I know that I'm going up against all of the challenges. The sales cycle, the market itself. And so I'm at a place where I know that this company will thrive. I know I can build this into a billion dollar company and change the world. I just need to find the right people early on who believe in me to do that. If it comes down to it, I think that we would do it, because I want to have the extra capital. So my previous investors did let us know -

Mac: So let's .. 

Cyan: Don’t negotiate against yourself.

Kavitta: Yeah.

Mac: Let's - let me ask a different question. What valuation would you like to see for this round?

Cyan: There you go.

Kavitta: Okay. Good question.

Paige: Yeah. Good question.

Kavitta: I went into this with the hope of 12 pre, 15 post. And that to me feels fair, because I know what we've been able to achieve that other companies in our space have not in a much longer time than we've been around.

Mac: It's always better to start a little higher -

Kavitta: Okay.

Mac: - to give room for negotiation.

Kavitta: Okay.

Mac: Eight's your floor. Fifteen's where you want to be.

Kavitta: Okay.

Mac: Start with the 15 -

Kavitta: Got ya.

Mac: Let em talk you down to 12 to 11 or 10, but

Elizabeth: You should definitely not negotiate with yourself.

Mac: Yes.

Kavitta: Thank you. 

Elizabeth: Kavitta, I really like your tenacity and your sales. I feel like at Hustle Fund, we're probably just not the right fit. We're investing in much smaller rounds, much earlier. We also don't really invest in a lot of ed tech. On 500 investments, I think we have one ed tech company, so it's not a space I really know a whole lot about, nor really have honestly a passion for. So I think unfortunately I'm out. But I've absolutely loved, you know, getting to know you in this conversation.

Kavitta: Thank you. And I totally understand. I have been following you and Mac on Twitter for years -

Elizabeth: Thank you.

Kavitta: And you guys have taught me so much. So I feel like I've already gotten so much value from you.

Elizabeth: Thank you.

Kavitta: So I really appreciate it. Thank you.

Elizabeth: Thank you.

Charles: How many people are in the company right now?

Kavitta: Six including my cofounder. Four engineers, one head of community that manages the active schools, and then I am all of sales and marketing. 

Charles: What kind of sales people - I'm just thinking about the three buckets of sales you have. Like, where do you think you could get the most leverage with more people?

Kavitta: Ah. Okay. So the issue that we're running into is because I am the only person who's on the actual sales calls, it's limited to my schedule. And so I need to bring someone in who is able to manage the under 20k contracts, because I know how to do those longer contracts.

Charles: Like a BDR?

Kavitta: Exactly. And I have the relationships with those schools, so I know that I will always be the closer. So I need someone who can come in and those two to four week contracts, they take two meetings to close. They can handle those.

Charles: And you haven't seen any movement from Slack on like educational pricing or? 

Kavitta: Slack, before Covid, had 6% of higher ed institutions using them. That number has not increased much after Covid. If you have a Slack contract, it's $15 per student per month, which is impossible to pay.

Charles: Yeah. You can't pay that.

Kavitta: And then it requires the teachers themselves to create a brand new workspace every quarter. So it's just not feasible. And actually we have three schools in the pipeline that have Slack right now, and have come to us in order to convert. 

Mac: In your contacts with these schools, how long are they? 

Kavitta: So schools usually come a year earlier and start looking for the tools and setting it all up, because in January is when they start writing those items into the budget for that following school year.

Mac: What I meant was, when you sell this product into those schools, you should start thinking about how to set it up so that the contracts are three and five year lifetime -

Kavitta: Ah, got ya.

Mac: Three to five years in length, with non-competes added in.

Kavitta: Mhm.

Mac: Or even if at some point you start to have a competitor come into the market, legally they can't even play with it.

Kavitta: Right. 

Mac: Just an idea.

Kavitta: Thank you. Yeah. UCSB is on a ten-year contract right now.

[laughter] 

Paige: I have like a good amount of context for this space. So like one of my favorite portfolio companies, a company called Prof Jim, and they take text book texts and build it into basically like 3D avatars and like interactive lessons within the school, and they're growing super fast. um I really like this space. I also teach a class at SDSU. We use Slack for our students. I ran into the same problem of like having to do a new workspace for our class this year. I also like graduated college during Covid, so I was like in that very messy transition to online learning. umm So I'm very interested in investing. The check size that I would be looking at is around 250k. My one contingency is like I definitely don't want to see you raise a flat round. somewhere between 11 and 12 pre, based on what you're looking to raise, would work for me. But like you said, lead sets the valuation terms. but yeah, I'm definitely interested.

Kavitta: Thank you. That's awesome. And I love that you have that experience of not only teaching a class yourself and using it and seeing the problem, but then being on the student side yourself.

Paige: Yeah.

Kavitta: Because I think that is exactly what we're looking for in this round, is those partners who are going to come in and be just as angry as we are that for some reason we're still using a 400-year-old classroom model.

Paige: Yeah.

Kavitta: And be the ones to really help us change that.

Paige: Cool. 

Kavitta: And I will say, nobody mentioned flat round, and I always do this to myself. I - okay -

Paige: Don't say it!

Kavitta: I don't know why no one said it to me, and I was like, I'll do it! And I keep getting this reaction of like, you don't have to. And I'm like, no, it's okay, I'll do it.

Cyan: Well, a lot of investors will just take it.

[crosstalk]

Kavitta: I know.

Elizabeth: Yeah.

Kavitta: And I'm lucky that I haven't -

Cyan: We're trying to like protect you here.

Kavitta: Thank you.

Cyan: Don't say it ever again.

Kavitta: I will never say it again.

Mac: A hundred percent.

Kavitta: Yeah. 

Paige: Cyan, you want to go?

Cyan: Yeah. So our firm can lead a round like this, but we um are not ed tech investors. So we have Descomplica and Wonderschool. But I don't know if that's enough. So I don't know what you're looking for, because we're generalists. But I love you.

Kavitta: Thank you.

Cyan: And I love this company. And so I would like to participate, but I can't just write a check -

Kavitta: No.

Cyan: - of this amount without talking to one other partner.

Kavitta: Okay.

Cyan: But if we're not a fit, then I would like to help fill out the rest of the 500k.

Kavitta: Awesome. Thank you. 

Kavitta: And on the lead, the main thing that I'm looking for is help with hiring, because this is my first job ever, and that is definitely the hardest part, because I know that I'm gonna need good people in early to help me build this. I think that if you don't have the ed tech experience, but you are willing to teach me everything that you know and help me with hiring, then this could be a fit.

Cyan: Okay. I think that would be tough. I'll tell you why. We can help only to a certain point. Obviously, I kind of think of our founders, we have a bat phone and you can call us.

Kavitta: Right.

Cyan: And you can ask for whatever you want and we'll try to give it to you. But we have 100 plus companies that we oversee -

Kavitta: Right.

Cyan: And so I never like to overpromise, because there's a lot of funds that'll do that. They'll say, we're value add, you know. But I think if you're open to a meeting after this just to see if we're a fit, that'd be great.

Kavitta: Absolutely. Totally.

Cyan: Because I do want you to be obviously really excited about whoever your partner is, but I never try to say that I can do all those things. We try our best, but you can always talk to Chris from Wonderschool and from some of the other companies that we've worked with and see for yourself.

Kavitta: Awesome. I think the relationship is the most important part, so. 

Cyan: Cool. No, I'm excited. 

Charles: I actually have a lot of ed tech in our portfolio.

Kavitta: Awesome.

Charles: Like, Clever, Wonderschool, Top Hat, Knack.

Kavitta: Very cool.

Charles: Ribbon. The one thing I have to -

Elizabeth: Nicely done.

Charles: Well, you know. There'll be some others that, you know, didn't work out. We have those. So I have - I'm interested in participating. I have one caveat. We are investors in a company called Campus. This was like a part of their legacy business. It is not, as far as I know, well, I have high confidence this is not an essential part of the product anymore, but I think it might be a part of the product, and so I would be interested in being a part of the round but given that that’s one of the largest positions in our firm, I'd want to just make sure that there's no conflict. But provided that there's no conflict, I would love to be a part of the round at the sort of 50 to 100k range.

Kavitta: Awesome. Thank you. 

Mac: You're incredible.

Kavitta: Thank you. 

Mac: You had me when you started going through how you do the sales. I also appreciate how much you've been able to do in eight months. It's very impressive.

Kavitta: Thank you.

Mac: I like everything about this except for the fact it's in ed tech, I could get over myself on that. My hang up, similar to Charles, is not a company I've invested in, but I'm an advisor to a company called MyQVO.

Kavitta: Okay. 

Mac: I would love to find a way to participate. I just don't know if I can from ethical standpoint. But I will say this, even if I can't, before you leave here today, you will get my cellphone number.

Kavitta: Thank you.

Mac: And if you ever need anything, you can reach out to me. I want to find a way to support you in one - in any way I can.

Kavitta: Thank you so much.

Mac: Yes.

Kavitta: It's funny because, years ago, when I followed both of you on Twitter, I remember saying to myself, I'm going to find a way to get in front of them one day. I don't know how I'm going to do it, but I'm gonna do it -

Cyan: So you manifested this.

Kavitta: 100% we did. It was like four years ago, but - thank you. That means so much to me.

Paige: I love that.

Mac: Absolutely.

Elizabeth: I love that.

Mac: Thank you.

Josh: So - this is a little weird. But The Pitch, the listeners of the show, would love some allocation in this deal, but it sounds like it's pretty competitive, so... You have 500 left? Paige is putting in 250. Where are you at, Cyan?

Cyan: Whatever Charles and I, I guess -

Charles: Yeah.

Cyan: - and then if you - kind of whatever's left.

Josh: So do we arm wrestle for it, or what?

Cyan: Also, also I possibly could lead. So.

Charles: We'll make some space. We'll make some space. How much did you have in mind, Josh?

Josh: Well, our check sizes at this valuation would be 100,000.

Kavitta: Wow.

Josh: We also -

Kavitta: Definitely not a flat round.

Josh: Yeah. Definitely not a flat round. We also have a syndicate. So there's potentially more money here as well, but it depends on how you wanna play it. 

Elizabeth: Good problems to have.

Mac: Good problems to have.

Kavitta: Exactly. Thank you. I actually would be very curious to get all of your advice on this. On the last pre-seed round, we got offered 3 million at 15. And we turned it down because we said it's 2021 and this is crazy, the valuations people are getting, and I don't want to set myself up for a down round. So we said no and we took the eight, and it was the best thing that I've done in this history of this company.

Elizabeth: Yeah. Yeah. I think that was smart, actually.

Charles: Yeah.

Paige: Yeah, me too.

Kavitta: And so with this round, based on just what you know from today, what would be your advice to make sure that I don't set myself up for a down round in the future? What are your thoughts? 

Elizabeth: So I think just to sort of rough rules of thumb that, honestly, who knows where they came from, but just kind of what VCs think about, is every round you want to somewhat double your valuation. It's not a hard and fast rule. But I think even if you were around the 15 plus or minus, then you're talking about the next round, the series A would be like 30 maybe 40 post, which is a pretty common series A -

Kavitta: Okay.

Elizabeth: - as the valuation. And so what do you need to do to hit series A metrics? You're talking, you know, I think people like traction closer to call it 3 million revenue run rate. And so if you think with this amount of funding, like, can you help go through some of the pipeline to hit these milestones that we're talking about, roughly speaking, does this make sense? 

Kavitta: Yeah That makes me feel a lot better. 

Elizabeth: But you know I think as the non biased party in the room, my unsolicited advice here would be: you are in a very good position right now. Like, you're talking about being oversubscribed here, and once everybody learns that you're basically oversubscribed, that will make people even more excited, and you'll have even more demand, right. 

Kavitta: Right.

Mac: And I will say, um When you have this much interest, that means you can now dictate who you take money from and at what valuation. So be very clear about that.

Kavitta: Okay. 

Cyan: You also don't have to give up a board seat.

Kavitta: Okay. 

Elizabeth: There are other things besides valuation that's important. And make sure to do your due diligence once an investor says, hey, we want to invest. Like, to make sure you want to work with them.

Kavitta: Okay. 

Mac: Here is a secret for all of the founders out there. Don't ask the investors for references to founders. Go to their portfolio list on their website and find a company that's no longer in existence, and reach out to that founder on LinkedIn. A founder of a failed company's going to give you a lot more information on an investor than a founder of a company that's doing well.

Paige: Totally.

Elizabeth: How an investor acts during a bad situation is probably more telling than anything.

Paige: Yeah.

Kavitta: Thank you. Yeah That's actually really good. I'm gonna do that. 

Paige: Cool.

Charles: Thank you so much.

[thank yous etc]

Kavitta: This was awesome.

Cyan: Right. Well, you're awesome.

Kavitta: Thank you. Very excited to work with you all.

Paige: Likewise. 

Kavitta: All right. I'll talk to you guys -

[byes and thanks]

[applause]

Mac: Play the clap track. 

Elizabeth: It's like a football game 

Paige: I love that.

Cyan: I love that too.

Charles: Yeah.

Josh: You guys were like waiting on bated breath for her to say - finish every single answer to your questions.

Mac: Because she had good answers. 

Josh: We've only ever had ed tech companies come on the show and completely fail. So we were psyched when we met her. We were like, there's something different about this one.

Paige: It's cool. I - one of the things that like really stood out for me was I worked at a company before called Work West* and it's like a compliance API, basically. They do like SSO and directory sync and like the integrations she's talking about with the learning management systems that she's built were like super impressive. Like, those are so hard to build. And learning management systems in specific are like very challenging to integrate with, so the fact that she could go through like all the compliance, she did a thousand customer interviews, like she really knew what product to build and sounds like built it well and proved efficacy, so.

Cyan: Very crafty lead gen. Very crafty.

Josh: Yeah. 

Mac: And also, the only time I ever get interested in ed tech is if I ask you, tell me about your sales cycle and you can tell me [snaps] - she knew it right off the bat. She knew all her numbers, she knew where to start, she knew how to sell, she knew why they would like it, she knew why they wouldn't like it. You don't see that every day in founders.

Josh: Yeah.

Mac: And the interesting part is when she started her story, she started her story saying I'm somebody who struggles learning. Like, she was vulnerable and she led with I struggle with learning. And then knocked our socks off with all the things she's done and learned.

[agreeing laughter]

Mac: Right. She's worked harder than your average person, and this means so much to her that she was going to put in that work.

Josh: Yeah. 

Mac: I invest in dope founders. That is a dope founder.

Cyan: That is a dope founder.

Paige: That is a dope founder.

Cyan: That is the definition of a dope founder.

Dope founder indeed. Not only does Kavitta have 11 funds interested in leading the round, now she has The Pitch Fund AND four VCs on our show fighting for the last $500k. 

It sounds like Kavitta is in a really good spot, but until she has an actual term sheet from an actual VC, it’s all just theoretical.

But Kavitta was ready to celebrate early. That night, she treated herself to a courtside seat to watch her favorite basketball team, the Miami Heat. They won, of course.

But as soon as she got home, it was game time, for Nectir. Kavitta needed to close her round. Quickly. The search for a lead, coming up after the break.

BREAK

Welcome back. Kavitta left the pitch room with a bunch of investors scrambling for a spot in her round. We caught up a month later to see how it all shook out. But first - 

Josh: Tell me about your experience pitching on the show. 

Kavitta: I remember booking the flight to Miami and thinking, what the hell am I getting myself into? I have never done anything like this before And, God, I remember walking into that studio, feeling so much calmer than I expected to be, and Josh, you had told me, You were like, don't practice, just go in, just send it. Tell the story, do exactly what you do. 

Josh: Did I really say that?

Kavitta: Yeah, you literally told me, you're like, don't even practice, just go talk. Just go speak, you'll be fine. 

Josh: For the record, I don't tell everyone that. There are certain founders where I'm like, I think that I just need to let them loose in the room.

Kavitta: Yep.

Josh: And you were one.

Kavitta: And I remember the second that I started talking. everyone in that room just locked in and I was like, Oh my God, is this working? This is going really well, right? Is it just me? I think it's going really well. 

Josh: Yeah I'm so glad you actually took the risk and came out. 

Kavitta: Me too 

Josh: So let's get into what happened after the show. 

Kavitta: Yeah. 

Josh: In the room, Paige, Cyan, Charles, Mac, they were all interested in investing in your company. But you didn't have a lead yet. You said you were in diligence with 11 funds

Kavitta: mhm

Josh: But like, the vibe in the room was that you had all the leverage. So what did you do After that? 

Kavitta: Walking out of that room, the first thing I thought was, okay, I need to update my investors and I need to have a game plan 

Josh: Yeah

Kavitta: because that was insane. And if I could potentially get Cyan to lead this round, I think that's what I want. /I know that Long Journey is not an edtech focused fund, and that was what we wanted. But I don't know, sometimes you just have this gut instinct when you meet someone. And so I walked away from that knowing I'm about to have some really interesting conversations with my investors and somehow convince them that this person that I met in 30 minutes, I just really feel like she's the one. 

Josh: How did that conversation go?

Kavitta: That was, it was a, it was first of all, weeks of conversations. It was very interesting. They were like, okay, we trust you, but are you sure? Cause you literally are in diligence with all of these other people that you've been talking to for months. The round was basically done. All through January, we're running on like the last bit of runway that we have. And Cyan was traveling for like two weeks after we got back. And so it wasn't until February that we could get a meeting on the books with her. And so this was the first time that I'm even talking to her. It's almost a month after we get back, I have just kept everyone. Sitting on the sidelines waiting somehow this entire time. And I know that probably during those three weeks, I should have had a lot of anxiety. I should have been sitting there being like, oh my God, am I giving up on this lead for no reason?

Josh: yeah you run the risk of losing 

Kavitta: Everyone else! And I literally just somehow kept myself calm and had this thought the entire time. It's gonna work out. And if it all falls apart, I will somehow pick up the pieces. I always do. We have been in cockroach mode before. I'll do it again. It's fine. And that was just my thought process going into it. And I just sort of crossed my fingers and just kept going. And then. The call came and she said

Cyan: Now, if you want us to lead, which, I am interested in doing, I do need to get in and play with the product, um, because I can't write a check of this size without, you know, kind of seeing a demo. 

Kavitta: I've spoken to hundreds of VCs and maybe like five of them have ever asked to see the product itself. And so For that being. Her deciding factor to actually see what we had built, which is like my pride and joy. That's the whole point of this. Right? 

Josh: Yeah. 

Kavitta: That really was confirmation for me that this is exactly the type of person that I want to be working with. walked her through the product, did the demo, And the first thing she said, she was like, I'm in, that was it, that was all I needed to see. 

Cyan: Well, I'm sold, Kavita. I, uh, I would like to take a run at doing 1 million. Um, and lead your round. 

Kavitta: Awesome

Cyan: You are phenomenal. I just want you to know that.

Kavitta: Thank you, thank you so much

Cyan: I don't know if you understand that yourself, but I pitched get a lot and you are probably one of the most succinct speakers who can distill your product down to where people can really understand it, that I have ever met And I just have a very strong feeling you're going to dominate. 

Kavitta: Long journey ventures and cyan. She's putting in her own personal check as well. They are going to be leading the round at a million dollars. 

Josh: [claps ] That's awesome. 

Josh: Where did the terms come in at? I assume not a flat round.

Kavitta: Not a flat round. And that actually, oh man. What? I'm a little bit embarrassed to watch that part back. But I don't even know why I went in offering that. that was one of the most pivotal learning experiences, not just for a company, but in life in general. That was a very good life moment of, Don't cut your own legs off if you don't need to. 

Josh: Yeah.

Kavitta: If nobody is selling you short, don't be the one to short yourself. And so, um, when we were in that call with Cyan, she asked me, what terms do you want? And I said the same thing that I did on the show. And I said, I want 12 pre, 15 post, and I'm going to stand by that. And she said, okay. She said, let's do it. 12 pre. 

Josh: Well that’s awesome. So you, there were three other investors. Uh, Paige, Charles, and Mac. Where did they land? 

Kavitta: So, Paige was like the first one. I got home and she immediately was like, I'm in, send me the wire info whenever you're ready. I want 250,000 for sure. She was just so on top of it immediately. 

Josh: No discussion about terms or anything? It was just like, whatever it lands on? 

Kavitta: Nope, she was like, doesn't matter what happens, I'm in. 

Josh: Oh, that's cool. 

Kavitta: With Mac he did his due diligence, you know, went and asked that founder exactly like he said that he would and got back to me. And like he said on the show with or without me being able to make an investment. I want to be an advisor to you and that is exactly what he offered.

Josh: That's awesome. Did he give you his phone number like he promised? 

Kavitta: He did. So very, very excited for that, and also very excited to have Charles on board as well. That was so funny, we got home and I'm like sending my follow up emails to everyone and Charles just sends me the post diligence form. He's like, I don't even need to meet with you. I don't even need to talk. He just was like, here's the form. You're good. And I was like, all right, great 

Josh: What? Wait, and he's I know he had a potential conflict. He's good with that? 

Kavitta: Yeah, yeah 

Kavitta: And so, with all of the checks that we got from the pitch and from our previous follow on, without even those now 13 funds that we have interested, we are fully subscribed at 3 million.

Josh: Oh my gosh. 

Kavitta: Yeah. 

Josh: That's incredible! 

Kavitta: On top of that, We are now going to be oversubscribing the round to four million because we have so much interest.

Josh: What? 

Kavitta: I know. And so I now need to like be picky and choose exactly which checks I'm taking because we have way more interest than even four million. 

Josh: Where are you at, like with the VCs in the room, just from the show, how much do you think you'll raise?

Kavitta: We are at 1.4 million just from the pitch. 

Josh: That’s awesome!

Kavitta: Yeah. I don't think that I could have raised that much money in 30 minutes anywhere else in the world. we got a lead in 30 minutes on a pitch show. Like, how does that even happen? I just, I can't, how does that happen? What an insane process. And so I just, I can't thank you guys enough for letting me be a part of this and giving me that stage because it's been a month and it has completely changed my life.

Josh: You're welcome. I don't know how much credit we can take for it, but you're welcome. 

Kavitta: A lot. I give you guys a lot. 

Josh: I mean, you, you blew all the records. like we're honestly thrilled with this outcome. 

Kavitta: me too 

Josh: It sounds like you get to go build now. How does that feel? 

Kavitta: I am so ready to be done with this round and just get back to selling this and building my company and hiring an incredible team around me. I have known since the day that we started building this product that this is exactly what students and teachers need. This is how we build the classroom of the future, and I have no doubt about that. I was so mad. I have been so angry for so long at how the education system has made me feel. It is still difficult for me even today to say that I am intelligent because the education system taught me otherwise.

Josh: what did the education system teach you, about yourself?

Kavitta: that the number on a piece of paper meant that I was not intelligent that I did not have What it takes to be someone who changes the world.

Josh: hmm 

Kavitta: I think really the, the person that I have the most to thank for why the education system did not break my spirit is my dad. My dad talks about it all the time that when I was five years old, I made him buy me these Vista Print. I remember, do you remember back then Vista Print had those like free 200 business cards, like 

Josh: Yes. 

Kavitta: Like 20 years ago. Exactly. And I made my dad buy me business cards that said I was a CEO on it and the com. My company at the time was called Lavender Girls. No idea where that name came from.

Josh: Cute! 

Kavitta: And I still have those business cards today. He held onto them because I told him 

Josh: at five years old. 

Kavitta: At five years old. I told him by the time I'm 25 I'm gonna be CEO of my own company. When a five year old says that to you, not only that, an autistic five year old says that to you, that's an insane claim to make. Even I know that now. But that man looked at me and he said, okay, a hundred percent. I believe you. Let's do it. And that belief became my own. and one of the things that I'm most thankful for in this experience is that I got to bet on myself when nobody else did, and that is exactly why, when I'm in rooms like this, There is nothing and no one that can shake me. 

Josh: You know, Mac highlighted that after you left the room. He was just like, Kavitta came in here talking about how she struggled with a learning disability and struggled in school and you were vulnerable in that way. And then you wowed all of them with all of the things that you've done and learned along the way. And like you've had to work harder than the average person to get to that point. And I think what he was just saying is just like, let's just reflect on how incredible it is what you've done already. 

Kavitta: I didn't actually realize that until hearing that. I, that was never really something that crossed my mind, that because of my autism or my ADHD, that this was harder for me than it would have been for, you know, a neurotypical or a normal person. And even now thinking about it. To me those are my superpowers. I actually believe that that's the reason I've been able to do this entirely I don't think that I would have been able to take this company to this point without my autism and ADHD.

Josh: Hmm yeah.

And I truly, truly encourage anyone else who is neurodivergent, has these learning disabilities. I think that it is the perfect storm to be able to start your own company. Because our brains are built to do what has never been done before, to think in a way that no one has ever thought before. It is a perfect opportunity to utilize those skills to create a world that doesn't exist.

I’m with Kavitta! The Pitch Fund, our fund, backed fully by the listeners of this show, invested $100k in Nectir. If you would like to join our fund and invest with us, go to thepitch.fund

And if you’re a founder, looking for a cool podcast to partner with on your next fundraise! Hit us up. We’re already talking to founders for our next season. Our next big pitch event will be recorded in June. No intro required, just go to pitch.show/apply

And I’m excited to announce that we’re doing something a little crazy this season. We are releasing completely unedited, uncut versions of every pitch! You all LOVED The Uncut Pitch on episode 126, so we decided to make it a thing. 

To celebrate the launch, we’ve dropped all 10 uncut episodes early, so you can binge them right now. We’ll also drop ad-free versions of the main show as they come out. You can sign up on Patreon but you can listen anywhere! Check us out on patreon.com/thepitch 

But my favorite part of The Pitch Uncut, is the brand new community group chat. Where free and paid members alike can discuss the show, your favorite investors, maybe the they got it wrong, etc. etc. should be fun! Go check it out at patreon.com/thepitch 

All these links are in the show notes as well. 

Next week, The Pitch… goes to church.

Emmanuel: church real estate is the largest untapped and most unexpected commercial real estate supply source in this country. the average church is empty 70% of the week. 

Beck: So which religions encompass this? Christian, Catholic?

Emmanuel: Yeah. So right now we're focusing on Christianity. 

Jillian: So correct me if I'm wrong but, the church congregations are shrinking exponentially. 

Emmanuel: Statistically, there are more Gen Zs that have converted to Christianity than there have been millennials and the prior generation.

Jillian: Oh! 

Beck: God is up and to the right.

Mac: Interesting business model, really smart How you make this a billion dollar business? 

The Airbnb for churches. That’s next week on The Pitch. Hit that subscribe button and turn on notifications so you don’t miss out.

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This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, Jackie Papanier and Alma Langshaw. With casting help from Peter Liu and John Alvarez.

Music in this episode is by Onders, Parachute 317, FYRSTX, GuessT, Joya, Imagined Nostalgia, The Muse Maker, and Breakmaster Cylinder

The Pitch is made in partnership with the Vox Media Podcast Network.

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The Pitch, Inc. and their respective employees and affiliates do not provide investment advice or make investment recommendations. The information provided on this show should not be used as the basis for making investment decisions. Listeners should conduct their own research and consult with their own investment advisors before making any investment decisions.