2022 — A Reflection on 3 Years of Equal
by Rick Zullo, Co-Founder & GP @ Equal Ventures
2021 was a big one for Equal Ventures. We started to see our earliest companies achieve breakthrough velocity and are excited about the progress of both our portfolio and the broader firm. We’ve now had 6 of our first 7 investments raise their Series B from top firms and feel that the best days are yet to come for many of these companies.
One of those earliest investments was ThreeFlow, a SaaS-enabled marketplace in the benefits industry that recently announced a $45m round from Accel. The story with ThreeFlow takes us back nearly 3 years and warrants some reflection given how far our fledgling firm has come during that time.
While venture often looks easy and/or lavish to outsiders, such was not the case for Rich and I back in 2019. We hadn’t made much progress on the Equal 1 fundraise and there were real doubts as to whether we would be able to raise a viable fund. Neither of us had taken paychecks in a year and my daughter was about to be born. We had gotten to know the founding team at ThreeFlow (fka WatchTower Benefits) and the deal wasn’t a consensus pick. It was a space we knew well, we had the opportunity to get to know the team over many months, and felt that we were seeing something special that others couldn’t see. That said, investing in ThreeFlow would very much be a “bet the farm” investment for us. At the time, we were not only betting on the company (which was amidst a major pivot), but also that we were going to be able to raise a viable fund. Just to lead the seed round, Rich and I would have to put up a significant portion of our personal net worth at a time where we were literally splitting rooms in hostels to reduce our fundraising expenses. When we visited the company in Chicago, Rich and I stayed in rooms so small that our beds were stacked up against each other with our feet touching (see below).
My daughter was born on a Friday night and I was back in the office first thing Monday morning for a LP meeting. We needed them and it was the only slot we could get (they didn’t invest). It was a tough time. We did our first close on the fund, funded ThreeFlow and fortunately received several commitments in the next month that brought us much closer to our target. We kept raising, reached and exceeded our target. Separately, our bet on ThreeFlow is proving to be a good one, as the company is quickly becoming the system of record for the benefits industry and shaping up to what we think will be a category-defining company.
As we look back on those times, Rich and I weren’t the only ones taking big bets. Our spouses (Eva and Lauren) were our biggest supporters and Equal would not exist without their immeasurable contributions. To the rest of the startup universe, we were far less obvious and wouldn’t have been able to get in business without the early support of founders, friends and early LPs that believed in us. To many, our strategy, story and firm made no sense. Those early believers (including the employees who joined us) had to take an immense leap of faith and we’re extremely grateful they did. As they say, “It takes a village…” and we’re really thankful to have our village.
Three years later, the world is very different. The venture market is as buoyant as ever, we have a team that we are extremely proud of and we feel our firm positioning is resonating in the market. Our team retains that gritty, scrappy culture that Rich and I developed on our fundraising path and is pressing to be the hardest working firm in the venture business. Knowing where we have come from, is the best way to know where we are going. Remembering how hard those early days were continues to drive what we do today. We’re delighted to work alongside incredible founders that are transforming their markets and to uncover the underdogs before they’re obvious. We think we’ve found a product opportunity that much needed in the venture community and are having a lot of fun executing on it.
At the start of the year, I would normally write a post on predictions or set goals, but felt the greatest pull toward reflection given everything that has happened over the last year. 2022 is shaping up to be a wild one, but I’m confident it will be a banner year for Equal. We’ve come a long way in 3 years, but there is so much more to go. We’re excited to continue that journey with the many supporters in our village and looking forward to seeing more join.
We’re always looking to add to our village (founders, operators, investors and industry leaders), so please reach out to join us in bridging the digital divide.
If you enjoyed this post, we recommend you sign up for our Substack here.
