Clockwise CEO Matt Martin: How we closed an $18M Series B during a pandemic

It all started with an email from a customer: “Do you know why Bain Capital Ventures is reaching out to me about Clockwise?”

That email would mark the beginning of a journey toward closing $18 million in new funding that will dramatically accelerate my company, Clockwise. It would require getting to know a partner in lockdown, long nights assembling a pitch deck and many bleary-eyed Zoom calls with some of the best VCs in the world.

Here’s how Ajay Agarwal from Bain Capital Ventures and I established trust online, how I made high-stakes decisions in extreme economic uncertainty and how we were able to turn the pandemic’s constraints into opportunities.

Let’s start at the beginning.

Building momentum: 2016 to 2020

Clockwise was founded in late fall of 2016. We realized that, as personal as time is, our schedules inside modern work environments are intertwined by a network of calendar events and attendees. People schedule meetings without considering the preferences of colleagues by simply hunting for any available “white space” (read: time to do real work). The net effect is that our most valuable resource, time, is easy to take and almost impossible to protect.

More than two years later, in June of 2019, we launched Clockwise to the public. After years of experimentation and refinement, we delivered to the world an intelligent calendar assistant that frees up your time so you can focus on what matters. Workers soon confirmed our hunch that they’re hungry for a tool that gives them more productive hours in their day. Our rapid user growth carried throughout 2019.

By January of 2020, we were on fire. Since January 1, our user base has grown by more than 90%, expanding at a clip of well over 5% week-over-week. As people sought remote tools during shelter-in-place, our rate of growth accelerated even further.

Our growth, incredible team, top-tier existing investors (Accel and Greylock) and strong cash position meant we didn’t need to raise additional capital until the fall of 2020. While COVID-19 certainly sent shock waves through the community, I was in regular communication with a few highly engaged investors who still seemed eager to invest in the future of productivity. I felt cautiously confident more capital could wait.

But, you know, best-laid plans.

Establishing trust while sheltering in place

It’s easy to get caught up in the competition of a raise. You see the headlines that so-and-so raised X million dollars and you start to measure success in valuations. But you have to remember that you’re recruiting at the highest levels. You’re adding a board member that will have a substantial impact on the long-term trajectory of the company. If things go well, this person will be at the New York Stock Exchange ringing the bell with you.

A lot of people asked, and I wondered as well, how I could trust somebody to join our board without meeting them in person. We’ve learned over the last month that deals are getting done — people are adjusting. It just takes a bit more work and some meaningful demonstrations of mutual trust.

A few lessons:

1. Put in the work. The Bain Capital Ventures (BCV) team impressed me even before I met them by conducting proactive due diligence with our customers. After all, sending out emails is easy, but an investor going directly to customers for the truth is next-level. It’s evidence of a thoughtful, customer-centric investor with a demonstrable degree of conviction. In many ways, this put BCV in the lead before the formal fundraising process even began.
2. Invest time in the relationship. Even as the world turned upside down, we continued to invest time in getting to know one another. My first meeting with Ajay was in person, the day we shut down our offices in San Francisco. It was a fantastic meeting, but it was also the first and last time that I met Ajay in person. Many more meetings followed, they were just all over Zoom: product roadmap reviews, data dives, discussions of values. As much as we both would have preferred in-person touchpoints, the remote toolkit really did work.
3. Build trust early. Founders have to be careful with sharing too much information too soon, because you can lose control of the narrative, and possibly, the deal. But BCV’s thoughtfulness built trust from the start. So, when they made data requests, I chose to not just fulfill the requests, but put together information they didn’t even ask for. This tone of mutual respect and trust is a foundation that we’ll build on for years to come.

Decision-making during extreme economic uncertainty

Just as things started getting serious with Ajay, San Francisco enacted its shelter-in-place ordinance. There was a lot of doom and gloom in the air. Very smart people were telling me to get more capital at all costs; “it’s insurance and it’s going to be essential to survive.” On the flip side, if investors are in that mindset, they might be shopping around for discounts. So, active engagement in the fundraising process could require a big decision: how much of a hit on valuation and terms would we be willing to take?

I’ll be frank; the historic levels of uncertainty in the macroeconomic environment made a lot of decision-making feel like guesswork. That said, here are a few principles I used to sift through the chaos:

1. Focus on the variables. If you abstract away the complexity, what key variables will impact your runway and how dramatically do you have to move those variables to make a meaningful difference? Fortunately, we’d been efficient with our burn to date, but that also meant there was little obvious fat to trim. So to really move the needle on our cash position, we’d have to start with drastic measures, like dramatically cutting salaries and/or staff.
2. Plan for success. As Reid Hoffman famously put it, “An entrepreneur is someone who will jump off a cliff and assemble an airplane on the way down.” In other words, entrepreneurship requires extreme optimism. But COVID-19 meant smart people were telling us not to plan for success, but for survival. That framing, I think, is a trap. Being conservative and buying time may be the correct strategy, but the question still has to be: Will this put us in a better position to win?
3. One size doesn’t fit all. In times of rapid upheaval, there’s no shortage of opinions. Listen carefully, but keep in mind how unique your business is and be willing to trust your instincts (and that of your team) on the right decisions for your situation. There are thousands of enterprise software startups, but there’s only one startup with this leadership team, with these amazing teammates, at this stage — there’s only one Clockwise.

Applying the above principles, I felt that a fundraise in the near-term would dramatically increase our odds of success, but that our fundamentals enabled us to wait if the terms weren’t reasonable. Drastic measures would threaten our longer term odds of success and, as a SaaS software company with no physical inventory or field sales, our exposure to the most severe risks of the changing economy were limited. (I very easily could have been wrong.)

Fortunately, the question turned out to be merely hypothetical: When we did begin talking terms, it was clear that Ajay was coming to it in good faith. He presented terms that were compelling regardless of the environment.

Finding opportunities in the pandemic

While COVID-19 and shelter-in-place provided a tumultuous backdrop for our fundraising process, it wasn’t without a few advantages:

1. Partner meetings on demand. Most of the time a partner meeting — the meeting — is going to be on a Monday when all the partners are already together. But with everyone available over Zoom, I found that most firms were willing to schedule a meeting with the partnership any day of the week. When Ajay offered scheduling options for a partner meeting, we decided to move as quickly as possible and targeted the coming Friday.
2. No travel time. With BCV leading the pack, I had six days (!) to schedule up meetings with all other potential investors. Here again, shelter-in-place offered an unexpected benefit. If people wanted to move on a deal, we could get on a Zoom call quickly. I had a bunch of back-to-back meetings with different investment partners that just wouldn’t have worked out if I’d had to run around Sand Hill Road.
3. A focused team. This was a hundred-hour workweek. We had to get the Series B deck and a product demo together and spin up all the investor meetings. I don’t say this lightly, but being sheltered-in-place helped me and my whole team focus on making this all happen. That week was a fun, mad dash. It was late nights, but we got it together.

Then at the end of the day on Friday, after a full partnership meeting with BCV that morning, we had a term sheet. And I have to say, we were even more excited about working with BCV after that partner meeting. It was an easy decision to end the process with other investors and embrace Ajay and the entire BCV team as the newest members of the Clockwise team.

Going forward

While I was nervous to start fundraising in the middle of a looming recession and global pandemic, Ajay and I were able to establish trust online with a thoughtful approach, a little vulnerability and plenty of Zoom time that wasn’t all business. I was also able to use the shelter-in-place to quickly schedule meetings and get a deal done quickly.

I’m excited about how this new capital will accelerate our path toward optimizing the world’s time. First up, we’re launching Clockwise for Teams, which creates and populates a team availability calendar effortlessly, offers an automatically protected no-meeting day to create more Focus Time and surfaces real-time analytics on team bandwidth. We’re also working on making Clockwise available wherever you work, building out Clockwise’s paid offering and growing our team.