- Platform: meet
- Source: Read.ai 01JAGBER56RJVR8YTMHTRGTDC9 (via Ben Ornstein’s account, imported 2026-08-06)
Transcript
Aidan McCarty: Ben, how’s it going? Aidan McCarty: Hey, Ben, how’s it going? Ben Ornstein: Hey, Aidan, can you hear me? Aidan McCarty: Yeah, you’re cutting in and out a little bit, but I can hear you okay. Can you hear me? Ben Ornstein: I think we’re good now. My computer does this very strange thing where when I’m in a Google Meet and I click a link, the whole thing just goes to shit. It’s terrible. But yeah, glad Glad we’re all set here. How are you doing today? Aidan McCarty: Doing well. Doing well. Crazy busy. Ben Ornstein: How are you? I believe it. Pretty good. Pretty good. Busy as well. Nuts, right? Always is. Love it. So what context do you have for this call? Aidan McCarty: Very little. Ben Ornstein: Very little. Okay. I will give you all of it then. So I work with this entrepreneur named Michael Houck who runs an email newsletter, Houck’s newsletter. Do you know the newsletter? Aidan McCarty: I do, yeah. Ben Ornstein: You do, okay. So that’s a lot of the context, that’s helpful. One resource that he wanted to put together for founders was a resource for helping with fundraising. And we figured what’s a better way to do that than by interviewing founders who have done it themselves. And so that’s exactly what we’re doing here. I’ve got a bunch of questions prepared for you. We’ve done this a bunch of times. It’s amazing across, You know founders from all different industries all different stages regions. It’s been a ton of fun. Every story is unique. It’s awesome That’s awesome And so yeah, this would be another you know, this conversation gets turned I have to read ai guy in here because I turn this into a text-based uh document I take the transcript from the call the video goes nowhere and um, just you know, just for us today and Yeah, you’ll get a chance to kind of review the document and before it gets kind of published behind a paywall So it’s, you know, you can be pretty candid. And the reason I mentioned that is you can be pretty candid because, you know, only founders are going to be reading this document. Aidan McCarty: Cool. UNKNOWN_SPEAKER: Awesome. Ben Ornstein: Awesome. Yes. So do you have any other questions before we get going? Aidan McCarty: I think I’m good. Let’s do it. Let’s do it. Ben Ornstein: All right, Aidan. How about you? Can you please briefly introduce yourself and your startup? Aidan McCarty: Yep. Aidan McCarty, founder, CEO at Verified. What we do is one click sign up for FinTech. Basically taking a phone number, we’ll pass back everything you need to open an account. So like Databricks, full SSN, we get it from the telco records, data bureaus, provide the fastest possible signup experience. We’ll be doing that eventually for more than just FinTech, like insurance, e-commerce, shared economy, so on. But very much inspired by one-click checkout and how easy to make checkout, we’re trying to do the same thing but for signup. Ben Ornstein: Love that. Yeah, I was working on a startup doing one-click checkout in the crypto space for a little bit. That’s awesome. A little bit about the fundraising journey. So this could be like how many rounds you’ve done, if you’re comfortable, the valuations and the amounts of the funding rounds. I’m not forcing you, obviously, only if you’re comfortable. And how long these rounds took. Aidan McCarty: Yeah, I’ll probably stay away from the valuations and so on. But we’ve done just about every kind of fundraising. So we actually started in like government political tech. So we got grants, we do equity crowdfunding. That was early on. Both small amounts. Grants are great because they’re non-dilutive. They’re not great because they take forever to apply to. And they’re not very scalable or repeatable, at least for most businesses to get. But that kind of got our start without any dilution. Raised a seed from Draper back in 2020. So that was great. That was Pricetown. First kind of delve into that, which was quite something. So I think most people understand how much work it takes to close a price round. We had to do stuff like every single open source software package that we use, we had to show what the license on that software package was to show that we owned all of our tech stack basically. Things like that took probably three, four months just to go through diligence to close that round, which is great. Before that, we also raised a pre-seed from some angel investors so we I went through that whole thing. That was actually also pretty strong, but a whole lot easier because angels don’t do as much diligence as VCs. Since then, we’ve raised a little bit on a safe, but we’re pretty much near cash flow positive at this point, so I’ve been cranking away since then. Just about every imaginable form of financing, we also went through some accelerator programs. Most are garbage, I would stay away from them. You find one that’s a really good fit for you, that’s on good terms. I wouldn’t give away any equity unless it’s like Vicey or Techstars or something like that. We made that mistake. It’s like a little bit of equity that we maybe wish we didn’t give away, but it’s okay. So that’s kind of the skinny. Ben Ornstein: Amazing. Yeah, you live and you learn, right? You got to go through some of that. When you say the amounts in the funding rounds, not the valuations, but how much you raised? Aidan McCarty: Yeah. So like equity crowdfunding, it was literally like 10 grand. Okay. Um, that was really, really early on. Uh, that was like enough to support me and my brother for like six months at living as cheaply as we possibly could. Um, making fried rice every day. We found an exploit at Starbucks where you can order two shots, um, uh, of espresso and then you get it in a venti cup over ice. As for Grande cup on the side and you make two ice lattes, you poured half and half. Genius. Milk in there, like a buck 50 per latte. Ben Ornstein: Amazing. Aidan McCarty: That was great. And then the grants, we probably got like, I don’t know, grants 75,000 or something. The initial raise was like 800,000 and then the seed was about 4 million. Ben Ornstein: Awesome. Yeah, thank you. That’s helpful. So when you were raising this money, What did you plan to use the money ahead of time for? Were there milestones you wanted to achieve? Aidan McCarty: Kind of I think when we were early on, we founded it just out of college. So it’s like we were not that experienced in terms of how to plan properly as a business. And I think we more had different hires that we felt we needed to make in mind, less so than particular milestones. Because it is very, very hard early on to plan what the milestones are going to be. Frankly, if you plan more than a month out, it’s not even worth your time to do outside of the investors that will require you to do so because they’ve never founded a company before. Aidan McCarty: We didn’t really plan too much out beyond that. It was more like, what are the immediate things we need to do? Building an MVP, testing it, iterating, talking to customers. It was all about how do we get the money to do that. Ben Ornstein: Makes sense. And so when you were pitching investors, how did you decide which investors were gonna be a good fit? Aidan McCarty: Yeah, I mean, for us, it was like, for our industry, like who else is invested in this industry? So we kind of made a map of all those investors, the amounts that they have done. I think we used Crunchbase, we used like friends and connections and just kind of slowly networked our way into the space, really understood sort of who was who, what they cared about, who they co-invested with, all this kind of stuff. And you just map it out, right? And you sort of build out your list of people that you’re going to go out to. Always, even from early on, we went to school in California and kind of learned a lot about the VC process there during school. And you never want to say you’re fundraising. So you always want to make all these connections. Then eventually, when you’re really ready, you’ll tell people that you’re fundraising. Or ideally, you get preempted, and then you go praise the rest. So that was our approach always. Always remains the same now. But it’s really serendipity, so you got to get out there. For us, Draper came through a conference. We were pitching at this thing called Block Tank LA, pitching a Civic ID for the city of Los Angeles. Came second in the pitch competition, but we got Draper’s investment out of it, which was great. That was how we ended up meeting Tim. He said, hey, come meet me in my offices in San Mateo, And he was like, great, let’s do it. We learned pretty early on that the main things that investors at that stage look for are market and team. Pretty much that they know that the product is going to change. They know that the like revenue or traction, whatever you have early on is probably like a little bit vaporware in the sense that you’re going to have to change it. So it doesn’t mean a whole lot in the precede and even seed stage. And so they’re really looking at marketing team. If you have an awesome team in a huge market where they seen other companies exit or sell, then that’s all they need to see. Ben Ornstein: That’s awesome. And so you’ve obviously told me about how you got in touch with Tim. How’d you get in touch with the other investors? Aidan McCarty: The other investors through that kind of same process that I mentioned. So you are always kind of like building up your Rolodex people that you’ve met and connected with and direct outreach basically in So you got to go through people who know people, got to go to a lot of networking events, kiss a lot of frogs to build up. But almost always the money comes from places that you don’t expect. So you make a hundred connections, of those maybe like 20 of them are relevant. And then often it’s like the one you’ve never thought in a million years would invest, you didn’t even know who they were, ends up being a great fit. There’s actually a lot of small VCs that are solid. Good people to work with. For us at least, we founded the company out in California and it’s like, there’s a lot of VCs across the country that just don’t have access to the kind of deal flow. And so if you connect with those people, often they’re very willing to move fast and write checks. Ben Ornstein: That’s a great point. Absolutely. And so, okay, so you didn’t do really any cold outreach, but if you had to break it down to like Roughly how many investor conversations did you have? How many of those moved into second, third conversations, and then ultimately the subset of those that resulted in actual funding? Rough numbers, obviously. Aidan McCarty: For the initial funding, like the precede, we probably talked to like 100 investors before we raised funding. We raised funding at the last possible moment, which also, by the way, happens to be a common theme from other founders that I know, where you either get preempted and all goes swimmingly, or it’s like the last possible moment, the last investor that you’re going to try, you’re out of shots, they’re the one that gives you the funding. I think there’s a psychological element to that where you realize that death is staring you in the face as a company. Aidan McCarty: Psychologically changes in the way you present yourself that I think can lead to that outcome. So yeah, that’s what happened for us there. For the seed round, it was a lot fewer. I think we talked to maybe like investors and Tim preempted it. And that was great. But the first round was brutal. We talked to so many investors. But you always continuously, like we’ve built up now probably, I don’t know, so 300 that we know. And when we raise our next round, we got that in our pocket. Ben Ornstein: That’s huge. Yeah, setting yourself up for success in the future. And so when you were pitching, what did you emphasize in the pitch? Aidan McCarty: We emphasized, let’s see, I’m trying to think back to then. Biggest things we emphasized were, at the time, our product. We were like, oh, hey, look how cool the product is. And obviously, it’s always product problem, product, solution, market size, all the stuff. So we had all the standard bits of a pitch. But honestly, the main thing that Draper wanted to know and that at least other what I would consider good lead investors would want to know is how big is the market? Why do you know it’s that big? How are you going to get to the big opportunity? Then you have to be able to articulate really clearly a vision of where you’re going, why most people don’t see it that way, how you’re fit for the company you’re trying to create and the market you’re going after. And all the product details and so on, frankly, unless they’re specialized in your industry, they’re not going to get it anyway and they know it’s going to change. And so they don’t spend as much time as you would think at all really digging into the details of the product. If they think that you’re a great operator, that you are fit to the problem, to the market, and you have a unique insight, the market is enormous, that’s what they’re going to go for. Ben Ornstein: That’s a great way to summarize that. I completely agree. When you were fundraising, did you do anything to drive urgency among investors to close the round? Any tactics used? Aidan McCarty: We didn’t really, to be honest. I think that I’ve seen that work really well for other founders. I think it has to be done very tactfully. Tactics like that in sales, as in fundraising can either work wonders if you do it the right way or can completely blow up in your face. So if you’re gonna do it, you have to be really, you have to know what you’re doing and you have to do it the right way. Ben Ornstein: I’ve heard some hilarious stories from founders early on who tried to apply that and then they realized, oh wait, I have no leverage to try to close it. And then it blows up in their face, as you said. 100%. Aidan McCarty: just lose everything. Especially if you had a term sheet, you had a good relationship, you blew up the relationship because you tried something, that can spread and you’re done. I also don’t recommend it because I think often founders get really obsessed with whatever the terms are of their round. To be totally honest, the thing you should be going after if you’re raising VC capital is you’re going to build a billion dollar business. If you’re not going to build a billion dollar business, you shouldn’t be raising VC. And if you’re raising VC, that’s what you’re after. And if you have a few percent more dilution, who cares? Not only does it not matter, it can hurt you. I’ve seen many founder friends that raised in 2021, example, where it’s like they have these insane valuations that there’s no way in hell they’re ever going to justify. And so they’re going to have a down round, which means they’re going to lose a bunch of employees. They’re going to lose investor confidence. And they’re sitting ducks, basically. Aidan McCarty: People think of the valuation as this great metric to track and I see it totally differently. You want to raise the right amount of money at the right valuation that you think you can justify so you grow into it. That’s how you build sustainable growth so you can get to the billion-dollar valuation. Otherwise, there are so many pitfalls, but you have to build it sustainably over time. Ben Ornstein: I can’t even tell you how many founders I’ve spoken with who raised in 2020 anyone that say exactly that it’s been nuts. That’s for sure. Aidan McCarty: Yeah, like you don’t realize most people don’t realize I wouldn’t have realized when I started that it kills you like it’s so counterintuitive. It seems like it’d be the greatest thing in the world raise the highest valuation possible. It’s like, not really not unless you’re just about to exit your share of it. You know, it’s kind of like a stock price. Ben Ornstein: Yeah, yeah, exactly. I wouldn’t have known either. And now I’ve learned, you know, raise the exact amount of money you need to get to the next round. Yeah, and it’s ideal. Obviously, you’re never going to hit exactly correctly, but that’s ideal. Aidan McCarty: No, and actually, I encourage people to over-raise. Raise money, but spend little of it. And it’s going to take longer than you think for most companies. And the biggest thing that you can do for your success is by extending the amount of time that you have. Almost always, there’s a great podcast, How I Built This with Guy Raz. My favorite. Ben Ornstein: I’m a huge podcast guy. Aidan McCarty: Yeah, awesome. Biggest lesson I’ve taken away from that is the number one commonality is persistence. It’s like the people that stay around the longest have the best odds of success. It’s like not rocket science, but a lot of people burn way too fast, raise way too much money. And it’s just like, that’s very few of the great businesses that you look at went that way. Ben Ornstein: Yeah. No, a hundred percent. Yeah. There’s this, Oh God, I guess it’s great. One of my favorites. Um, what was the biggest challenge that came up during fundraising for It depends on the round. Aidan McCarty: I would say the first round was honestly just getting enough meetings with relevant investors and then knowing how to pitch them. If you’re first time raising venture money, it’s a new thing, right? It’s a skill to learn. So that was hard the first time. The second time around, it was more like the diligence. We just did not expect that it was going to be so much stuff. You know, to be totally honest, we were not buttoned up enough to do that quickly. We didn’t realize we’d have to have all these things in a row in the way that they expected. And so we had to get that in line. So I think those were probably the two biggest ones each time. Honestly, there was some back and forth on terms in, I think, basically every one of our rounds. Because if you’re not negotiating a little bit, you’re probably leaving something on the table. But nothing crazy. Honestly, if you’re working with great investors, there shouldn’t be anything super red flag in your terms. If there is, you probably shouldn’t take their money if you can help it. Ben Ornstein: That’s a great call out. That’s so true. Absolutely. Because it’s a marriage, just like your co-founder, right? I mean, you’re going to be not working as closely, but closely for sure. 100%. Aidan McCarty: Yeah, we actually have most of our investors we love. There are a couple of them that are a little bit more And you just have to realize, yeah, it’s a marriage. It really is. Everyone tells you and I don’t think most people really take it to heart, especially with your lead investor. Because your lead investor is going to… Draper, I will call out, we love Tim. Tim is the greatest lead we could ask for. He’s super supportive. He’s there anytime. He answers emails within 10 minutes. He introduces us to all kinds of his portfolio companies. He’s just an exceptionally great lead investor to have. Behind you and we knew that going in because we did a bunch of interviews with other founders He had funded before we took his money smart I would highly highly recommend whoever your lead is do that that like side investors matters less But whoever your lead is it really matters that you have somebody that’s like gonna go to bat for you over and over and over again So do that Yeah, that’s that’s really smart. Ben Ornstein: Absolutely. Yeah, we’ve I have a couple questions in the next and final session section on that. So you can maybe talk a little bit more about that. But last question here, like, are there any other unique or interesting fundraising stories that maybe haven’t mentioned yet? Aidan McCarty: Unique or interesting? Aidan McCarty: Yeah, honestly, nothing too crazy. Nothing too crazy. Yeah, I mean, I think most people that like have that I know that have raised capital, It’s always a similar process. You talk to a bunch of VCs, you do your best to position the story. If you don’t know how to position the story, or it’s your first time doing it, talk to somebody who’s done it. They’ll help you to position it the right way, frame things the correct way, and so on. But honestly, the only other biggest piece of advice I give people is, I know some founder acquaintances, let’s say, that have stretched the boundaries of things. Saying you’re way oversubscribed when you’re not or whatever, don’t do it. Just stay away from that. There’s so much risk associated with it, not just for your company, but for you personally and your reputation and so on. There’s no reason to do that. It seems like it’s going to be this great thing, it’s going to help you out so much. Long term, think long term. If you’re building a business backed by VC, you should not be trying to get an exit in a year. At 10-year time horizon of how do I build this into a long-term sustainable billion-dollar company. Ben Ornstein: Yeah, no, that’s amazing advice. And that really was the next question. So that in tandem with the other advice you’ve already given, I think is really great. Is there anything else you’d want to mention? Aidan McCarty: I think the only other thing I would mention is that it’s very easy to get founder envy. So especially in times like 2021, when people are raising these insane valuations, You should be running your own race. So whatever is right for your business is the right thing to do. You need to be aware of what the market trends are because you should be aware of what VCs are funding, what they’re not, what the valuations roughly are. All this stuff is important. You should look at it as fact finding for what’s right for your business, not at, oh, wow, these guys did this thing. That’s so crazy. That might be more relevant. If they’re your competition, right? And it’s a direct competitor that happened to us. Some direct competitors got crazy funding rounds in 2021. And that’s relevant to understand and know what the dynamic is going to be and how it’s going to change and how to position yourself and blah, blah, right? But outside of that, don’t worry about it. Don’t worry about it. Run your own race and that’s how you’re going to build a great company. Ben Ornstein: That’s smart. That’s a great approach. How can I… We just recently launched a podcast and one of those companies that we launched with was we spoke with the Cameo founder. They were a billion dollar company in 2020. And they had a lot of problems and there were hundreds and hundreds of companies like that. Aidan McCarty: 100%, yeah. It’s never a straight path, which is why you have to be completely bought in. And also why it’s like any of these like sort of short-term comparisons are just complete. It’s bandwidth on your brainwaves that you don’t need. Ben Ornstein: That’s a great way of phrasing that. I like that. So you mentioned Tim as an investor that you would recommend other founders work with. I’ll definitely put who kind of answered there. Any other investors that you’d want to call out or recommend? Aidan McCarty: We have a lot of niche investors. Honestly, we’ve had mostly really good investor experiences with a lot of people. One of our other leads is Outliers Fund. So for crypto, I think they do an awesome job and make a lot of really high-level connections there. So that’s run by Poseidon Hose, a friend, and does a great job. 1414 Ventures is based here in Boston where I’m based. They invest just in digital identity. So if you’re doing digital identity, they’re exceptional. They know everybody. Really great people to work with. We have a lot of great angel investors, but that’s probably more niche. Aidan McCarty: Franklin Templeton’s been a good investor for us. Samsung Next was really helpful. They’re kind of like a point-in-time investor where they’ll bring you into the fold and you kind of make the most of the time. But they hosted us in their SF office for a little while and that was sweet. Like the people over there, they’re great. Honestly, most of the people on our cap table I think are really, really good, but Tim stands out as exceptional. Of support, the constancy of that support, the willingness to just take calls and meetings anytime, is just everything you can ask for. There’s a reason that he’s as good at what he does as he is. Ben Ornstein: 100%. He’s awesome. Are there any resources that you’d recommend to other founders? This could be podcasts, books, newsletters, anything. Aidan McCarty: Loads. Yeah, loads. I think all that So I would say two things about one is it depends. What is relevant to your immediate next step success is probably what you should be focused on consuming if you’re really just trying to optimize purely for you as a founder, not you as like a well-rounded human being, which is arguably more important, but I’ll leave it there. But I think what’s helped me as a founder has varied a lot depending on just what it is that I’m facing right then. And it’s actually less like I would not recommend as a general founder resource, like a lot of this sort of standard podcasts, I would say, like how I built this or a founder’s podcast or acquired or whatever. Like, those are great. I love them all. They’re awesome and they’re inspirational. And I think, I mean, I listened to them, right. But the, the ones that really helped me at various points in time were like, I am having a sales problem and I would binge like sales podcasts or sales leaders doing, or I would like, we’d have a fundraising problem. And actually, instead of even listening to fundraising podcasts, I don’t think I’ve found any that I think are really good. It’s like read books, pick up books, watch YouTube videos, look up old slide decks of other people that have done great slide decks in the past, and build based off of that. Find friends that can review the thing with you. So it’s honestly, to me, I think there’s an easy trap to get into of like, oh, I need to be constantly consuming content to be great at being a founder, whatever that means. Being a founder means whatever your job is right now. Your job is going to be changing constantly over the first three years especially, but then continuously as you keep growing. You should be constantly, from a founder-only perspective, optimizing the stuff that you’re taking in and what you’re trying to learn based off of what you need right now and what you’re going to need in the next three to six months. Aidan McCarty: Like if you’re going to put your hours somewhere, that’s where I put them. Ben Ornstein: I love that framing. That’s so important because you’re right. There’s different things for different stages. The most important thing is what’s right in front of you. And of course, planning for the future, but can’t plan that far ahead. So yeah, I love that answer. That’s a great one. Aidan McCarty: Yeah, I also think like, so the last thing I’ll say on this is a lot of people will listen to these podcasts about like great companies or great founders throughout history. And that’s awesome. And again, I want to re-emphasize that I love doing that. I’m not bragging on it at all. I think it’s really valuable. I just think in and of itself, it’s not the answer that most people are looking for. What you need to think is one step beyond that, which is what was that person doing? If that person were me, what would they be doing? And the answer is probably not binging that podcast. They’d probably be focusing on the things that are immediately relevant to their business. Ben Ornstein: That sounds like a great call out. Absolutely. And the last question is, do you have any high regarding the fundraising process? Aidan McCarty: I don’t know if any of my takes are that hot, to be honest. I think most things that can be said about it probably have been said. My only big takeaway is there’s a huge, huge, huge difference between VCs that have run companies and founded companies in the past and VCs that have not. You can take money from both. Actually, both can be great. There’s no reason you can’t be a great VC without running a company before. But as a founder, I would highly suggest looking for first VCs that have because they will understand and empathize with where you’re at much more deeply. A lot of VCs that have not done that before think that they know all of this stuff that is relevant to you because they’ve read a lot of content and they’re smart people. Most VCs are very impressive people. If you look at their backgrounds, it’s not that they’re dumb or misintentioned or anything. It’s just that they like haven’t done the thing, right? And so they don’t understand that your specific situation is unlike any other in a lot of respects and like a lot of things that they’ve probably never done. So I would look for people that have founded companies before, ideally have founded companies similar to yours is the best possible thing and index on that. And I personally can’t stand VCs that talk like they know a lot about creating companies when they’ve never created a company. And I think the really great ones either have done that before or don’t pretend like they have. Ben Ornstein: Yeah, absolutely. That’s so smart. And just a question on, just out of interest. So how long have you been in Boston? Aidan McCarty: About three years. Ben Ornstein: And the company’s how old? Aidan McCarty: About four and a half. Ben Ornstein: Okay. So you didn’t start it in Boston. How has, how has been the, cause I know the Boston ecosystem a little through a friend of mine. How has that startup ecosystem, how has it increased over time? Has it increased? Has it gotten better? Aidan McCarty: It’s been okay. I think it’s growing is how I’d frame it. I did a fun experiment. I used to live in Palo Alto. And so I did an experiment before I left. I left with my now wife to come here to Boston during the pandemic because we were remote. So I moved over here. But we did an experiment where it’s like, how many VCs were within a three-block radius of our apartment in Palo Alto. It was like 120. Ben Ornstein: That’s unbelievable. Aidan McCarty: Which is hard to believe. You realize it until you look for the signs and count them. Here in Cambridge, it’s exactly zero, probably within a nine-block radius. Obviously, it’s unique in the world in terms of its density of tech and VC and all that. So I’m very lucky that I used to be out there because I have a lot of connections. I’m out there pretty frequently My family is out there. So That’s great. But definitely like if you’re just starting out you probably have to go there Just being honest. Ben Ornstein: Yeah. No, absolutely. Maybe I’ll include that. That’s an interesting anecdote And thank you so much for the time. This has been awesome Yeah, so I may take like a week or so to kind of turn this into a case study. You’ll have a chance to review view it, of course, and edit as you please before it goes live. Yeah, no, thanks so much for the time. I really enjoyed it. Aidan McCarty: Yeah, appreciate it. Nice to meet you, Ben. Ben Ornstein: Nice to meet you as well. Have a good one. Aidan McCarty: Later.