Connecting OthersideAI With Their First Investor | Seedscout Case Study
I have a few gripes with how universities position entrepreneurship within their programs. I personally think they sell the wrong product. They sell “education” but in reality, they should be selling “network”. I think there is one massive edge to schools that rarely gets talked about and this is how it brings a lot of smart and ambitious people together. And when ambitious people come together, anything can happen. And this is exactly where our case study starts.
Today, Matt Shumer is a venture backed startup founder building a cutting edge company on top of OpenAI’s GPT-3 technology. It feels like so much has changed in a year in a half, because when we first met, he was working on a VisosVR, a startup that he was presenting at an ASU pitch competition called ASU.io. ASU.io is the countries largest university backed pitch competition. Student teams from all over the world fly over to Tempe Arizona to take part in this massive event in the largest suite Sun Devil Stadium has to offer. In this suite, our path’s would intertwine for the first time.
Jamming Over VR
I attended ASU.io in hopes that I could meet some really great teams and help them by having them on my podcast or even connecting them to seed capital. I’ll spare the details of the actual event but what I will say is that there is one person at that whole event of maybe 100 founders that I still stay in touch with and, you guessed it, his name is Matt Shumer. His VR exhibit caught my attention and we immediately hit it off. We chatted for a while. Although quite young, Matt was clearly extremely articulate and also was an impressive operator, as Visos wasn’t his first company. As someone who just got my own VR Quest headset recently, we bonded over VR too. I knew I wanted to get involved and help with this company.
We talked for maybe an hour until the event ended, and we went our separate ways. But I knew that I was going to build a relationship with him. He was onto big things and I wanted to help him get there. After the event, I sent him this email:
On his response, I sent Matt’s deck to investors that I was vaguely acquainted with but didn’t know me fairly well yet. I did this in an effort to help him raise capital.
From these intros, I did get Turner a meeting with Matt which was one of my early signals I was on to something with my scouting career.
At the end of the day (and intros), no investor wanted to take the risk on VR. This makes sense, as many firms have lost money on VR in the past. I was still bullish though and wanted to help. I really loved VR and wanted to see Matt succeed. We kept up the relationship via VR, naturally.
We played RacketNX again in a few months later…
The Failure and The Start
If you look in our email threads, there is a major gap in between May and August of 2020. What happened during this time? In short, COVID made Visos really hard to grow/raise money for. He was trying to fight light through the darkness but it wasn’t happening.
In addition, during this period, OpenAI released their beta of GPT-3. GPT-3, for lack of a better word, is the smartest AI even created for written communication. And soon after their launch, Matt got access to the technology. This is the tweet that made me realize Matt had moved on from Visos and I needed to see how i can help with this new thing.
This is all I need to see in order to know that a genius like Matt is up to something. I shoot him a DM to see what’s going on via Twitter.
There it is. A super smart founder noticed a trend in the industry, noticed a new technology, and pounced on it. And I knew about it arguably before almost anyone because we had the pre-existing relationship. The brand name was OthersideAI. I knew this was going to be huge and I wanted to help. Naturally, the next step was to record another podcast.
In the next week, we did the podcast but also talked a lot about round dynamics, how much they wanted to raise, at what valuation, etc. At the moment of this conversation, the OthersideAI team were still outsiders. Matt was a Syracuse dropout with few connections to tier one firms in the Bay. Due to this, I was worried when he said a non coastal investor wanted in at abnormal terms at a post money valuation far below market rate.
It was important to me that truly great investors get involved with OthersideAI, so I knew they were in great hands so they could takeoff. Naturally, I shared the opportunity with Elizabeth Yin of Hustle Fund. I knew that if she was involved, she would help guide them down the right path. So, I sent the deal her way.
Soon after, I got the magic reply from her.
Two week later, I check in with Matt to see where everything is at with the raise and this is his reply.
Elizabeth was OthersideAI’s first check, and that came from an intro I made. With Elizabeth involved, the signal of the deal shot up and not too long after, OthersideAI closed their $2.6M seed round a couple of months later.
OthersideAI Was Inevitable
From the moment Matt shared OthersideAI to the public, it took off the wildfire. The waitlist grew rapidly and very shortly after I introduced Elizabeth to the team, other tier one firms like Chapter One and Active Capital got wind of the company and got involved. This company was born to fly, and I am very happy I was able to play a small part in helping it take off. But in reality, this isn’t a story about OthersideAI at all. This is a story about Matt Shumer.
Matt Shumer Was Inevitable
If you think back to the circumstances when we met, it is insane to think how much in the world changed from February to August of 2020. We met in Sun Devil Stadium while he was working on a different company and I was employed by a different company, and COVID had not hit the country yet. Yet somehow, he did what great founders do. He persisted. He saw the facts about his old company and instead of trying to make it work for 5 years, he leaped into a an industry that gives him a shot to win and solve problems in the world. Great founders aren’t single minded. They are agile. They read markets like most people read books and when they see an opening, they pounce and simply make it happen. Matt’s going to the moon and I am excited to see it happen and be in eachother’s journeys for a long time :)