Few companies have it Better than Scale, discovering the need for the AI gold rush early and closing the gap. The startup has rightly identified that one of the most important tasks of building an effective AI at scale – the tedious exercise of tagging data sets to make them usable in properly training new AI agents – is that companies focusing on this area of technology will also have more. Willing to outsource. CEO and co-founder Alex Wang credits their success since inception, which includes raising more than $ 277 million and breaking even in revenue, to early support from investors including Dan Levine of Accel.
Accel Haș participated in four funding rounds of Scale, all of which did not include the funding from YC that the company took in as part of a group in 2016. In fact, Levine wrote one of the company’s first checks. So on last week’s episode of Extra Crunch Live, we chatted with Levine and Wang about how they consolidated this first deal, and what their working relationship was like in the years that followed.
Scale’s story starts with a pivot, and with a little bit of breaking the rules too – Wang walked out of the typical YC book by speaking to investors before show day when Levine emailed him after seeing Scale on Product Hunt. The Product Hunt wasn’t planned either – Wang was just as surprised to see his company there as everyone else. But Levine saw the kernel of something with enormous potential, and although he was relatively unknown in VC at the time, he didn’t want to let the opportunity miss him or Wang.
Wang and Levine also managed to make some great comments on decks that were sent to the regular Pitch Deck Teardown section, despite the fact that Levine hadn’t actually seen a bunch of Wang’s presentations before investing (more on that later). If you wish to review a planned presentation by experienced founders and investors in a future episode, You can present your group here.
Knowing when to bend the bases
As mentioned, Levine and Accel’s initial investment in Scale came from a cool email sent after the company appeared on Product Hunt. Wang said the team had just put together an early version of Scale, and then noticed that it ran into Product Hunt – it was sent in by someone else. The community response was encouraging, and it also led to Levine email communication.
He said, “One of the side effects of that, and one of the results, is that we got this cold email from Dan.” “We didn’t know anything about Dan until his cold email. Like many cool stories that started with a bold and cool email. And we got very nervous about it at the time, because at YC they categorically tell you, ‘Hey, don’t talk to VC. During the batch, “we were in the middle of the group.”
Wang and his team were so nervous that they contemplated Dan’s “ghost” despite his apparent interest and Accel’s status as an investment firm. Ultimately, they decide to “go rogue” and respond, leading to a meeting at Accel’s offices in Palo Alto.