Vanta emerged to tackle the critical issue of data security and compliance for companies handling vast amounts of customer information. With increasing scrutiny from the public and high-profile data breaches, Vanta offers an automated compliance platform designed to streamline processes and ensure robust security. This approach helps businesses safeguard their data and demonstrate their reliability to customers, which is essential for building trust and facilitating growth in the tech world.

Founded by Christina, the company chose a unique route in financing, initially delaying substantial funding rounds to establish a strong revenue base and sustainable business practices. By focusing on product success over mere fundraising achievements, Vanta demonstrated significant discipline, growing its annual recurring revenue before pursuing big investments. This funding strategy enabled the company to command substantial valuations and invest wisely in its own growth.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. compliance [kəmˈplaɪəns] - (noun) - Conformity in fulfilling official requirements. - Synonyms: (obedience, adherence, conformity)

So when Vanta launched in 2018, we launched this category of automated compliance.

2. scrutiny [ˈskruːtɪni] - (noun) - Critical observation or examination. - Synonyms: (inspection, examination, review)

there's just so much scrutiny on whether companies are kind of doing the right thing

3. venture [ˈventʃər] - (noun) - A business enterprise or speculation in which something is risked in the hope of profit. - Synonyms: (enterprise, project, endeavor)

The notable thing about Vanta's investment strategy was Christina, the founder and CEO, worked in venture as her first institutional drop out of college basically

4. institutional [ˌɪnstɪˈtjuːʃənəl] - (adjective) - Relating to a large organization, especially a financial organization. - Synonyms: (formal, established, systemic)

Christina, the founder and CEO, worked in venture as her first institutional drop out of college basically.

5. onerous [ˈəʊnərəs] - (adjective) - (of a task or responsibility) involving a great deal of effort, trouble, or difficulty. - Synonyms: (burdensome, arduous, demanding)

then go through these pretty onerous processes to prove they have good security practices, right.

6. instilled [ɪnˈstɪld] - (verb) - To gradually but firmly establish an idea or attitude in a person's mind. - Synonyms: (imbue, inculcate, implant)

I think waiting until we were 10 million in ARR raise our Series A instilled a lot of discipline in the company.

7. resilience [rɪˈzɪljəns] - (noun) - The capacity to recover quickly from difficulties; mental toughness. - Synonyms: (flexibility, toughness, adaptability)

and I think, you know, breed some amount of resilience.

8. curiosity [ˌkjʊriˈɑːsəti] - (noun) - A strong desire to know or learn something. - Synonyms: (inquisitiveness, interest, intrigue)

One thing from when I was a kid to now is kind of a deep curiosity and I really do like to learn things for the sake of learning things sometimes to a fault.

9. insular [ˈɪnsjələr] - (adjective) - Ignorant of or uninterested in cultures, ideas, or peoples outside one's own experience. - Synonyms: (narrow-minded, restricted, limited)

It made it more insular in a helpful way there.

10. automated [ˈɔːtəˌmeɪtɪd] - (adjective) - Made to operate by machines or computers in order to reduce the amount of work done by humans. - Synonyms: (mechanized, computerized, programmed)

When Vanta launched in 2018, we launched this category of automated compliance.

Vanta - The $1.6 Billion Unicorn Automating Complicated Security Compliance For Businesses

Vanta is a company that basically automates other companies security and compliance processes. So the security part is like making sure a company is managing and storing customer data in a way that's like safe. So a lot of the software we use, right, has all this customer data. It knows so much about us. And we sort of found that when there's a data breach or there's a security hack, right. And that data is everywhere. It has like real content for people, I feel like Equifax or Target or these big breaches. And so there's just so much scrutiny on whether companies are kind of doing the right thing and securing the customer data they have. And there's kind of rightly a lot of scrutiny on that.

The notable thing about Vanta's investment strategy was Christina, the founder and CEO, worked in venture as her first institutional drop out of college basically. And from that there are two I guess, lessons that she likes to talk about. One is that companies are the best at like raising money when they don't need it. And the other is that it's like easy to confuse fundraising success with like company product success. And I think she's been really conscious about trying like not to fall into those traps. Christina actually waited until Vanta reached 10 million in annual recurring revenue, which is like the way Vanta measures revenue because it's a subscription based company to raise its first like big institutional funding round at series A.

Most companies usually try to raise a series A when it's like 1 million at that metric. So Vanta waited until much later. So that was in May of 2021. They raised 50 million in a series A led by Sequoia. And then a year later they announced the Series B in June of 2022. It was an 110 million round led by Kraft Ventures. And that round valued the company at 1.6 billion dol. So when Vanta launched in 2018, we launched this category of automated compliance. So helping companies get compliant and secure quickly. Since then we've grown with our customers and now offer a broader trust management platform, but still staying core to helping technology companies secure the customer data they have and then go demonstrate and prove that they have reasonable security to their customers so they can go grow their business.

When I was a product manager at Dropbox trying to take a new product to market and we were really excited about giving the product to big companies enterprise customers and then the legal team kind of correctly told us we couldn't do that, we couldn't show that the product was secure and compliant. We Thought we had reasonable practices, but we couldn't demonstrate them in the way these enterprises expected. And I didn't know anything about the space, but as more and more I learned, the process itself or the goal made sense. It's like, of course we should show we're trustworthy to big customers and do the right thing. What that scrutiny ends up meaning is these companies have to one, have reasonable practices and two, then go through these pretty onerous processes to prove they have good security practices, right.

And they're actually securing the data. And historically that was like spreadsheets and manual audits and like everything was one off which both took a ton of time and effort and also was like pretty inefficient because we were like talking about software and we're taking it into know pieces of paper almost literally. But companies would still go through it because it was so important to them to show that they were a good stewards of customer data and their customers wanted that, you know, almost before they'd make the purchase. Right? So it's like such an important thing to prove and felt, you know, kind of a, like a large problem and an important one to solve because as someone who builds software, I actually do believe, I still believe in the transformative power of software. But you know, we can't do that if we don't trust it.

I think in the beginning, because we created the category, because we created the product, we didn't have software competition. We truly were the only thing. And so the trick in the kind of sales or go to market processes was convincing someone they could rely on software for something. They had a bunch of manual processes before, as 2020 and 2021 went on and just more startups got funded, there were more entrants into the space. People copied what we did, took it to market and I think, you know, breed some amount of resilience. It deeply shows that in software you're sort of only as good as your last release in a lot of ways. And you may have created the category and brought this new product to market and done this innovation, but if that happened two years ago, right, it's much more about, well, what are you doing this quarter, next quarter, how are you continuing to show that you're useful to customers and not sort of resting on the laurels of a prior success?

I think waiting until we were 10 million in ARR raise our Series A instilled a lot of discipline in the company. It forced us to think about are we doing the right thing? Do we have a good business? Not does Some VC think we have a good business, right? It made it more insular in a helpful way there. I also think it forced some discipline around practices like we charge customers annually upfront and these cash flow things that actually helped us not need funding for longer. And in those ways, those sort of smaller decisions helped us build a stronger, more resilient business. And I think finally the answer was like, we didn't need the cash. And again, some of it was things like charging annually upfront. But we certainly had problems to solve.

But they weren't problems where it felt like it was more money would solve them and felt like more money actually might make it more complicated or raise the stakes or do other things. And so why don't we solve those problems first and then when we get to the problems where it seems like money can solve them, go pursue investment. Two things came across really clearly when I was talking to Christina and her former and current business partners and investors. One is that she's like super scrappy and really prioritizes product over ego. When I was asking her, oh, was Fanta the category creator? She was visibly uncomfortable. I don't want to claim credit for this kind of thing. And that's definitely something that carries into how she runs a business.

The other thing is that she's clearly someone who will learn anything for the sake of learning it. So prior to Vanta, I worked at an early stage investment firm VC firm in New York, Union Square Ventures. I think working at the early stage VC firm and interacting with like Seed Stage founders, I very much wanted to be one of them and start a company. I didn't quite know in what yet. I got into Beanie Babies when I was like in fourth grade because my mom's family lived in Chicago and they found out about them a little earlier than everyone else and collected Beanie Babies. Still have hundreds of them in my mom's basement, much to her chagrin, and then got to like buying and selling them on ebay, like early ebay, and putting them together in different like groupings and trying to sell them that way and riding my bike to Kroger, which is like the local grocery store, to get money orders because this was before there were many credit cards in the Internet and I definitely didn't have a credit card at this stage.

So I'd like go to Kroger and like slide quarters across the counter and get a money order basically to go pay for them. I think one thing from when I was a kid to now is kind of a deep curiosity and I really do like to learn things for the sake of learning things sometimes to a fault. As a college student it meant I changed my major like 12 times. I couldn't really settle on something so there's definitely too much. But I think in this role it's been really helpful because for the first couple years of a quickly growing company you're sort of doing all of the different roles in a company company until you can sort of do them well enough to convince someone who is much more experienced and much better than you to come in and do it better than you were.

And going into each of those new roles and being like well you know I don't, I didn't know what customer success is but I'm going to go talk to the people and do the things and learn about it and figuring out how to have joy in that versus just feeling like it's another hill to climb. I think that curiosity piece has been helping forth.

Technology, Entrepreneurship, Innovation, Security Compliance, Automated Solutions, Business Strategy, Forbes