Tom Livne’s latest startup has raised tens of millions of dollars to transform the world of transcriptions.
From the rise of podcasts to the legal industry, medical, education, media and academics and journalism it is obvious that transcriptions are becoming more important and are growing in volume.
If you’ve ever tried to get something transcribed, you already know the challenges. On one hand, you have AI and automated transcriptions that can churn out pretty raw and awkward text. Often too raw to be published online without tanking your credibility.
On the other hand, you can find an amazing human who does a beautiful job with accurate and polished transcriptions. They won’t be cheap, and if they have a family emergency or a storm blows through their town they can be disconnected for weeks. Your whole business can suffer from this choke point.
Tom Livne seems to have discovered a new hybrid approach to solving these issues. In our time together on the DealMakers Podcast, he shared his journey to launching this startup, the most important qualities of successful founders, and how to navigate different stages of fundraising.
Listen to the full podcast episode and review the transcript here.
Born in Startup Nation
Livne was born in Israel, the ‘Startup Nation’. There he went into mandatory military service. There you find the typical entrepreneur ending up in some type of intelligence work. Tom ended up in the paratroopers and special forces.
The Ultimate Guide To Pitch Decks
While many are not a fan of this type of service Livne says he found it very valuable for becoming an entrepreneur and founder. Behind all the glamor in the media, startups are chaotic. There are highs and many challenging days in between.
Tom says he learned resilience. The ability to be strong in tough times. To stay motivated, energized and focused on the big picture. Though not forgetting the importance of celebrating the good moments too.
Tom comes from a family of lawyers. His sister is a lawyer. His brother and father are lawyers. Yet, he was also personally drawn to business. He went off to study and did a combination of law and business administration.
The Fundamentals Of A Successful Startup
After his studies, Tom Livne started out investing in startups with LeumiTech. There he learned a lot about what founders and startups worked out well, and those that didn’t.
As an investor, what made him excited to invest was:
- A strong team that you would like to work with over the long run
- Big markets
- Reasonable expectations of good returns on the investment
- A sustainable and competitive edge
- Multi-founder startups
- Resilient founders
Perhaps above all, beyond just being passionate, it is entrepreneurs who are obsessed with their business idea. It is always on their mind.
One day a single founder approached him. He told this entrepreneur it would be difficult to raise as a single founder. He was invited to become the co-founder. He did.
AppInsight took off. They offered automated penetration testing for mobile apps.
Tom found he really loved being in the trenches and handling real problems. He still makes small investments as an angel. Yet, he says he spends 200% of his time in the mix with his current startup.
He also learned the value of having real revenues from day one. Then he discovered no matter how prepared you think you are, that startup life will always surprise you with something new.
His cofounder got cancer. They had already built a team. They had already raised money.
Tom decided the best thing he could do was to return that cash to the investors and shut things down. He still feels it was a great decision.
Many entrepreneurs may have been beaten down and considering going back to a job at this point. Instead, he decided to go at it again and launched Verbit just a few months later.
Verbit blends AI and human transcriptionists for affordable and precise transcriptions. An idea born out of his own pain in the legal business. Today, they are three co-founders and 15,000 freelancers working all over the globe and could be on track to go public in five years from now.
The Art Of Fundraising
Verbit has already raised $65M through a Series B round. Storytelling is everything which is something that Tom was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) where the most critical slides are highlighted.
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Livne says they got off to a strong start because they began with acquiring paying customers even before going out to raise money. Then they were in a position of power. They were able to say to investors “why should we take the money from you?” They’ve enjoyed multiple offers at every fundraising round. That also gave them the ability to be more selective in the partners they brought on their board.
During the podcast, Tom gave us his breakdown of the differences between funding rounds.
The Seed round is all about selling the dream, having a compelling story and a big market.
At the Series A investors want to see that you were actually able to build the product and achieve product-market fit.
The Series B is about showing the growth and traction you’ve achieved, and how much more you can grow together with more capital. In terms of his other tips for raising money, he recommends:
- Doing your own due diligence on investors
- Being able to convey all the reasons they should invest in you with the first hour of meeting them
Funnily enough, Livne says he never uses a pitch deck. He only sits there and tells his story. He maybe gives a demo, if there is something to show.
Listen in to the full podcast episode to find out more, including:
- Culture and articulating your core values
- His approach to hiring
- How to breakthrough when you breakdown