Upstock Investor & Advisor Update

March 2021

Greetings Investors & Advisors,

Once again, thanks for all your support. We’re having a good start to 2021, upgrading our software and getting new customers onboarded. Our team has been making great headway on the website, tech, legal, and marketing.

Fundraising:  Our core advisers have said that Upstock is now ready to do a seed raise of about $1.5-$3M. Eric Ries and Arjun Dev Aurora are leading the charge for investor introductions.

Arjun says, “I would say that given 100+ folks on the platform, happy customers, a bullish FinTech market, support of [your advisers] Arjun/Eric and running a tight and aggressive process we feel confident to raise.”

Also, we are open to another $100k at our previous valuation to help pay legal costs of this next financing round. We want to be sure we can do so easily, even if it takes three or four months for the entire transaction.

Please see our page for investors: https://www.upstock.io/investorsrock

Small 2020 product pivot: Our accelerator, Acceleprise.vc, helped us to find the right market fit.  In the last year we have built out our features including “Fixed Equity” similar to the option vesting model of “four years, one year cliff,” to add specific functionality in order to serve the average startup and larger companies too. This acts as a bridge to our more modern dynamic equity and directly replaces stock options.

Our vision of bringing easy to implement and affordable equity sharing is finally ready for the mass market. I’m more excited about Upstock than ever.

Here are the important updates to share:

1. The right timing = success.

2. Sales funnel: Time to increase the number of people we talk to.

3. Number of customers.

4. Runway.

5. Updated app design.

6. Adding profit sharing support.

7. Soon we will offer conversion of existing stock options into RSUs.

8. iOS & Android apps are coming.

9. Upstock will soon work in 70 countries.

10. Hired new senior developer.

11. Hiring a sales lead.

12. Website updates.

13. VC fund support.

14. Partnerships: Looking for new ones - can you make an intro?

15. What’s next for Upstock.

16. Podcast: Modern Alignment

17. How can you get more involved?

Latest materials here:

Share Upstock Documents: https://docs.upstock.io/Share

Upstock Pitch Deck:  Http://docs.upstock.io/deck

Upstock Overview Deck - For Potential Customers:  https://docs.upstock.io/Overview

Owner Onboarding: https://docs.upstock.io/Owner-Onboarding

Worker Onboarding: https://docs.upstock.io/Worker-Onboarding

RSU’s Blog post: https://docs.upstock.io/Why-RSUs

Become a Partner: https://www.upstock.io/become-a-partner

1. The right timing = success.

Years ago the Startup Genome Project released research that showed that the number one determinant of startup success is timing. For example, many startups tried to do video sharing and streaming prior to YouTube but failed. It wasn’t until around 40% of US households had broadband that the idea could succeed. Upstock is very much the same. I knew that we were early when we started experimenting with mainstream cloud based equity systems. We knew that it was a great idea because potential customers would often say, “This is such a great idea, I need this.” But, it was hard to get entrepreneurs over the line. They were paralyzed thinking about legal what if’s.

Once the pandemic hit, things really started to change and Upstock. Suddenly, our potential customers felt that using a cloud based equity system, without needing to hire a lawyer, was a very attractive and reasonable solution. Today, when I get on a Zoom call with potential customers, it only takes 5-10 minutes to hear them say, “Wow, this is really what I need. How do we get started?” We are currently onboarding 10 new companies. We need to make the system more self-serve so that we can really scale and move up market.

2. Sales Funnel: Time to increase the number of people we talk to.

Currently we are working on warm email leads from my personal address book of about 4,000 contacts. That’s led to a few customers already.

We have also gotten a good amount of deal flow using Cleverly.co (costing $300 a month with LinkedIn sales navigator) to send cold messages to 60 LinkedIn Founders and CEOs each day. 30% of my connection invites are being accepted. This has led to an average of 10 phone/zoom conversations a week with potential customers and partners.  

As I write this we are currently onboarding 10 new companies and talking to 3 - 4 leads a day. We need to dramatically increase the number of companies we talk to. To reach this goal we are optimizing our sales process, hiring a sales lead and team to find and vet leads, and continuing to network and look for partnership and up market enterprise opportunities.  This next raise will allow us to do all of this.

3. Number of customers.

It’s been a long journey for us to figure out all of the permutations that we would need to cover to allow 80% of companies (C corps, LLCs, etc.) to be able to use Upstock. When we first started there was only a narrow band of companies that would be able to use us given our feature set. Today, we have already iterated our software so that we now cover most complex scenarios.

In the past few years of testing while in restricted beta mode we have onboarded over 100 companies. 60 of those perished. That’s to be expected as 9 out of 10 startups fail in the first two years.

About 25 companies have signed up on the $2 a month demo plan. We are in the process of upselling them to the fully paid version.

About 25 companies from our initial beta were allowed to be grandfathered in with free plans. We will try to upsell some of them in the future. We are extremely thankful to these companies for helping us figure out all of the features that our future customers need to scale their companies.

Recently we have brought on a few companies so now we currently have 6 companies paying $10 per month/per worker!

Today we are onboarding 10 new paying companies.  

In the past couple years we have tested with over 100 companies, 100,000’s of hours of worker time and we have helped startups extend their runway, sometimes as much as 3x, helping companies to retain key talent longer than they would have imagined.

Example customers we are onboarding now

  • Maya Health - 10 workers
  • Rise Kombucha - 15 workers
  • Aware Healthcare - 10 workers
  • Main Event Digital - 20 workers
  • Give Nation - 5 workers
  • Lisa’s Clarinet Shop - 2 workers
  • Etc.

4. Runway.

We have three months of runway.

Currently we are trying to keep our monthly expenses to under 8k, mostly focusing on sales and changes to the product which allow us to serve more customers. We are starting to pitch VCs this week. If you know of someone who you think we should pitch, please let me know ASAP.

5. Updated app design.

We recently finished giving the Upstock app a sleeker, more polished look. Here’s a screenshot of our demo account:


6. Adding profit sharing support.

Due to the requests of both current customers and potential customers, our development team is working on adding profit sharing support to the Upstock platform. We are almost finished with the documents.

This is important to prioritize as we are currently in talks with the #1 Indiegogo marketing firm to supply them with a way to incentivize their sales teams with profits. This is a company that has consistently brought on $200k indiegogo campaigns and blown them up to $2M in 30 days. They have successfully magnified 7 of the top 20 indiegogo campaigns of all time. Rainfactory.com

Also, today I spoke with another company who needs to split profits immediately with 10-20 content creators. They are being onboarded next week.

7. Soon we will offer conversion of existing stock options into RSUs.

We are currently working on a way for companies to convert their existing worker stock options into RSUs. We have the documents written and are excited to get the functionality coded up and into the platform because many potential customers have requested this feature. This will also allow us to move up market.

8. iOS & Android apps are coming.

We are working with a developer to build a simple app that will allow workers to see their equity and how it changes over time. Workers will also be notified when their equity changes. This furthers our goal to gamify equity. Next week I will have two quotes for this work.


9. Upstock will soon work in 70+ countries.


Thanks to the work of Renata and our legal team, we will be able to serve customers in around 70 countries very soon. We currently support 63 countries.

10. Hired new senior developer.


We brought on a new senior developer recently and he is off to the races. He is about to deploy a page that allows workers to model different exit scenarios to see what their equity could be worth. The page allows the worker to select the exit multiple which defaults to 10x, and the future dilution which defaults to 30%.

11. Hiring a sales lead.


With this new raise, we are hiring a sales lead to help us go up market and sell to larger clients. We will also hire a team of business development reps (BDRs) to generate more leads.

12. Website updates.


We have really done a lot of work to upgrade our website. It is a lot more robust.


Pages added:


Check it out and let me know what you think. http://upstock.io

13. VC fund support.

Lately we have begun to receive questions about if we can provide some gamification for a fund’s carry. The answer is yes, we could indeed add something like this on to Upstock. That would be a year or more down the road. If you have ideas on this functionality, I’d love to hear them.

14. Partnerships: Looking for new ones - can you make an intro?

We need help bringing on more partners and would greatly appreciate any introductions you can make. We’re a great fit for financial services, VC firms, and some law firms.  

Example of how to make an intro: Upstock Helps Financial Service Firms - email template

15. What’s next for Upstock.

Next up we are focused on fundraising so that we can expand our reach and enhance our customer support and onboarding processes. We are adding videos for potential customers so they can understand how Upstock will benefit their company. We are also shooting ‘how to’ videos that will appear inside the app to help users understand how to use each piece of functionality. This helps us toward our goal of making it possible for smaller companies to self serve and require little or no support.

We will continue to make tweaks and improvements to our product and website as well.  

16. Podcast: Modern Alignment

We are getting ready to launch a podcast where I interview equity experts and customers. We will be speaking about their experiences motivating workers to do the best work of their lives. I’m hoping our adviser, Eric Ries, will be one of the early folks to come on. Who else should I interview? Please intro.

17. How can you get more involved?

Know of a company that Upstock can help? Our ideal customers are start-ups and any company between seed and Series A funding. We are a perfect fit for companies that have already issued founder equity.

Please feel free to contact me directly or use the following link to schedule a meeting:  docs.upstok.io/calendar.

Looking forward to connecting with you!

Cheers,

Casey


CASEY FENTON

+1.415.786.4546

casey@upstock.io