For Ethic, the feeling of true product-market fit wasn't just hitting metrics, but the moment they helped an advisor win a major new client. The founder realized this success was a replicable playbook that could be repeated, creating a flywheel for growth. The metrics then followed this initial breakthrough.
Instead of asking advisors to move sticky, existing assets, Ethic's platform helped them convert new prospects. This unique value proposition overcame the trust deficit for a new AUM platform and was the key to landing their first major clients, creating a powerful unlock for growth.
During Ethic's long build phase before traction, the founder found it crucial to ignore external validation signals like other companies' funding announcements. The key to surviving this lonely period is a relentless daily focus on execution and solving customer problems, not chasing industry hype.
Driven by a "regret minimization" framework, the founder took the extreme step of quitting his job and moving from Australia to the Bay Area with only the goal of starting a company, not a specific plan. The idea for Ethic emerged later through networking and intellectual curiosity, proving conviction can precede the idea.
Raise capital when you can clearly see upcoming growth and need resources to service it. Tying your timeline to operational milestones, like onboarding new customers, creates genuine urgency and momentum. This drives investor FOMO and helps close deals more effectively than an arbitrary deadline.
Ethic's unique, consultative sales process didn't fit traditional molds. They couldn't hire typical SaaS salespeople or financial wholesalers. This created a talent challenge, forcing them to invent a new playbook and hire for a hybrid role combining technology setup and deep client discovery.
Value-add isn't a pitch deck slide. Truly helpful investors are either former operators who can empathize with the 0-to-1 struggle, or they actively help you get your first customers. They are the first call in a crisis or the ones who will vouch for you on a reference call when you have no other credibility.
Ethic's founder found fundraising challenging because many VCs don't understand or favor Assets Under Management (AUM) models. Unlike SaaS, AUM revenue takes a long time to scale and is difficult to get off the ground, filtering out many traditional software investors and requiring a different fundraising strategy.