I love the following Nest story, courtesy of Dan Primack of Fortune and Term Sheet.
How would you pitch your company to the VC's? What's your killer line? Better have one...
Nest Labs is Silicon Valley's most recent success story, agreeing earlier this week to be acquired by Google for $3.2 billion. But it wasn't always such an obvious winner.
Back in 2010, Nest's founding team went to pitch itself to venture capital firm Kleiner Perkins Caufield & Byers. The two investors with whom they met, Randy Komisar and Trae Vassallo, were obviously impressed by the co-founders' intelligence and Apple pedigree. And the pair also was intrigued by the idea for a "smart" thermostat, particularly because it tied into an Internet-of-things investment thesis that they already were beginning to develop.
The only problem was that... well, it was a thermostat. These were the guys who were credited with developing the iPod. Was this really ambitious enough? And could Komisar and Vassallo sell it to their skeptical partners?
The key was a single line at the end of Nest's presentation: After the thermostat, we're going to reimagine every unloved product in people's lives.
"When I saw that, I looked around my office at all of the beige plastic devices that had populated my life and were trying to hide from view because they were so ugly and cheap," Komisar recalls. "At that point I had to be in, and Trae agreed."
Komisar and Vassallo then won over their partners, joining Shasta Ventures on Nest's first round of funding. According to a Kleiner Perkins investor, the firm will recognize around a 20x return on that investment, via the sale to Google.
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