Choosing Your Cap Table: In Conversation with Sean Thorne

Choosing Your Cap Table: In Conversation with Sean Thorne
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Published on
June 14, 2023
June 14, 2023
Choosing Your Cap Table: In Conversation with Sean Thorne
“With a VC firm that is like Flex— that is founders— you get the most aligned people possible to you.”

When Sean Thorne, the CEO of People Data Labs, walked into Auren Hoffman’s office, he didn’t know that Auren was a VC— he just wanted to make the connection with a like minded founder running a similar data startup.

People Data Labs is a leading data as a service company, offering information on over three billion unique people and companies. Since founding in 2015, they’ve built an unmatched database with global coverage, all accessible via developer APIs. 

Sean was right— Auren (as CEO of SafeGraph) has unique insight into selling data. Beyond that, People Data Labs is highly aligned with Flex’s investment thesis around data companies, middleware, and dual threat CEOs. We invested in their Series B in 2021. (You can see our whole portfolio here)

In 2022, Auren caught up with Sean to discuss data businesses, getting advice from founders, and the nuances of working with different VC firms. 

The Takeaways: 

  • Tech changes fast. Having investors with on-the-ground experience is a major asset.
  • Building a company is hard. Choose your cap table wisely. 
  • Founders who are well known in the founder community get the best deal flow.

Sean Thorne Interview 

Summer 2022 (edited for clarity)

What does your company do?

People Data Labs, or PDL as we refer to ourselves, is a data as a service company. We provide best in class data on people and companies–primarily business information on these people and companies. We have a database of around one billion unique people. And we have information on who they are professionally and who they are personally, with about over 150 data fields on each person. We keep that up to date on a monthly basis. We also have a company database of high level identifying fields on companies. Our go to market is that we have a suite of developer APIs.

Our customers are developers and data scientists who are either building some type of product, like a web application or vertical SaaS companies, or a development team within an enterprise who's building a better way to go to market. We have a lot of use cases. We're kind of like Twilio for data as a service on people and companies.

How did Flex meet you?

I think I just reached out to Auren on LinkedIn and said, "Hey." This was when we were a seed stage company. I remember I came by your SafeGraph office and we just had a casual chat. My takeaway was that you are a founder who has built very similar companies to us with similar business models. I didn't even know you were a VC. I didn't come to your office for money. I just thought you'd be a great person to know and have as an ally.

What is the difference between working with a traditional VC and Flex? 

The difference between Craft or Founder's Fund is that they're just a little bit more of a traditional VC firm. I think the difference at Flex is we work with people who are in the trenches today. Auren and Tod are building companies today. And I think that makes a big difference. I mean, if you had not started another company since 2015, you would have never had to operate remotely.

What are the types of questions that you feel more comfortable bringing to Flex?

There is a comfort level where I can call you and you're never going to judge me for what has happened because you're a founder too. And, shit sometimes happens in your company. I think with you, Auren, I'm able to just call you. Yes, you have a significant stake in the company, but I just feel very comfortable that I can call you and just say, "Well, X happened. Shit happened."

What would you tell another founder who is considering bringing on a traditional VC versus Flex?

With a VC firm that is like Flex–that is founders–you get the most aligned people possible to you. 

I think one thing we have done well is that we have a lot of people on our cap table who are good allies. They generally fall into these two buckets. Either it's sort of a traditional firm that provides resources, or it's someone who is like an Auren Hoffman that is just like you. You just want people like that on your team. Building a company is very hard, so having allies is key. I think with our series B, there is nothing I regret about how we structured it.

I think one thing we did about the round is that there were a lot of other firms that had interest in the round. For example, we could have just taken Craft and then we could have, just for the sake of argument, we could have not had Flex. But when we looked at it, most of them fell into the category of they were just more of an MBA. And, nothing against MBAs, but just for us, we don't necessarily need more people with that background on our cap table. We want more people who are in the trenches and more operators. Looking back, it was the perfect round.

Is there anything else that you think would be helpful for a potential LP to know about Flex while they are considering investing?

Flex will always have a very strong deal flow because guys like Auren and Tod are extremely well known in the founder community and respected. I just saw yesterday Tod's company raised a series A $20 million round. They are respected because they're operators.

Auren is one of the most knowledgeable people on the world when it comes to running data companies, so if you’re interested in reading more about DaaS, check out his blog posts:

Data-As-A-Service Bible: Everything You Wanted To Know About Running DaaS Companies (The most widely read piece on the business of selling data)  

DaaS Bible 2.0 - How Standards Increase Data Flow And Benefit Everyone