Facet founder Anders Jones didn't have a grand plan. He found his $158M-funded startup idea by identifying a market failure when the financial industry claimed it couldn't afford to serve normal people. His story provides a playbook for manufacturing serendipity, choosing the right investors, and building a business model on trust.
Key takeaways
- Go to the physical places where your future investors and partners gather.
- Look for startup ideas where incumbents say 'we can’t afford to.'
- Align your pricing model with the trust you need to build with customers.
- Optimize for patient capital that shares your vision, not just the highest valuation.
- Frame your venture's story around a market's villains and victims.
- A financial crisis or industry downturn can be a career opportunity in disguise.
Your Career Path Won’t Be a Straight Line
Anders Jones graduated from Stanford in 2009, smack in the middle of a global financial meltdown. His original plan to pursue a traditional finance career on the East Coast evaporated overnight. This forced a pivot. Instead of Wall Street, he took a job with a small, unknown startup that would eventually become LiveRamp.
The lesson here isn’t just about resilience. It’s that the moments of greatest macro-economic turmoil often create the biggest career opportunities. When established industries freeze, new paths open up. Don’t just survive a downturn; look for the openings it creates.
Lesson 1: Engineer Serendipity
Jones didn't get his break by sending out resumes. He got it by frequenting the bar at the Rosewood hotel on Sand Hill Road—a known watering hole for the venture capitalists he wanted to meet. He went there consistently, not to pitch, but to be present and available for conversations. Eventually, he met Richard Ling, a VC partner who made the introduction to LiveRamp.
Common Mistake: "Networking" Online
Sending cold DMs and LinkedIn requests is low-leverage. The people you want to meet are inundated with them. Your goal is to move from a digital annoyance to a real-world human connection.
How to Do It Right
Identify the watering holes. Where do the investors, partners, and key hires in your industry physically gather? It might be a specific coffee shop, a conference bar, or a niche meetup. Be there. · Have a warm opener, not a hard pitch. You’re not there to ask for a job or funding on the spot. Your only goal is to start a conversation that can lead to a formal meeting later.
"Hi [Name], I'm [Your Name]. Big admirer of your firm's work with [Portfolio Company]. I'm not looking to pitch you at the bar, but I'm building something in the [Sector] space and would value your perspective for 15 minutes next week, if you're open to it."
Lesson 2: Find the Billion-Dollar Market Failure
After a successful exit at LiveRamp, Jones and his co-founder, Patrick McKenna, began investing in startups outside Silicon Valley. They kept coming back to financial services, but the breakthrough idea for Facet came from a specific political event: the failure of the fiduciary rule in 2015.
The proposed rule would have required all financial advisors to act in their clients' best interests. The industry's public argument against it was the tell: they claimed they couldn’t afford to serve mass-market households if they were forced to be fiduciaries.
The Non-Obvious Insight
When an entire industry tells the government, "We literally cannot afford to do the right thing for our customers," you have found a massive opportunity. The industry wasn't just resisting regulation; they were admitting their business model was broken for millions of people. They were actively excluding a giant customer segment.
This is the core of Facet: providing fiduciary financial advice to the very people the industry said it couldn’t serve. They don't just have a product; they have a clear enemy (conflicted advice) and a clear hero (the underserved client).
How to Find Your Market Failure
Listen for "can't." What do incumbents claim is impossible or unprofitable? Who are they actively ignoring? That’s your entry point. · Follow regulatory battles. Where are incumbents spending millions to lobby against consumer-friendly changes? That friction is a map to disruption. · Look for misaligned pricing. The traditional AUM (assets under management) fee model works for the wealthy. For someone with a smaller portfolio, it creates a conflict of interest. Facet’s flat-fee subscription aligns their success with the client’s long-term well-being, not the size of their assets.
Lesson 3: Raise Capital That Aligns With Your Mission
Facet has raised $158 million. Critically, their Series A was preempted by Warburg Pincus, a private equity firm known for making long-term, patient investments.
A "preempted round" means the investor makes a strong, aggressive offer to lead the round before the founder officially goes out to fundraise. It’s a massive vote of confidence. But it’s also a risk. Taking a preemptive offer means you stop shopping around and commit to that partner.
Common Mistake: Optimizing for Valuation Alone
Chasing the highest valuation or the biggest name brand can be fatal. A disruptive, long-term business like Facet needs investors who won't panic during downturns or push for a premature exit. A typical VC fund with a 10-year lifecycle might not have the patience for a company fundamentally changing a legacy industry.
How to Choose the Right Investors
Ask about their timeline. "What does a successful outcome look like for you, and in what timeframe?" Their answer will tell you if they are aligned with your decade-long vision or looking for a 3-5 year flip. · Check their track record. Have they held investments through market cycles? Have they backed other companies with non-traditional business models? · Signal your intent. When Jones got the offer from Warburg Pincus, he was choosing a partner who understood the long, hard road of disrupting wealth management. The signal goes both ways.
Lesson 4: Your Story Is Your Strategy
Fundraising is storytelling. You must be able to capture the essence of your vision in a compelling narrative. The best stories have a villain and a victim. For Facet, the villain is a financial system that profits from conflicted advice. The victim is the everyday family trying to build wealth. Facet is the hero that gives them a fighting chance.
This isn't just marketing. This framework forces you to clarify your mission, your customer, and your reason for existing. A strong narrative makes it easier to raise money, hire talent, and build a loyal customer base.
How to Apply This This Week
Map your local "watering holes." Identify one physical location where your potential investors or key partners congregate. Make a plan to go this month. · Write down the "can'ts" of your industry. What do the big, lazy incumbents claim is impossible or too expensive? Your startup idea might be in that list. · Review your pricing model. Does it truly align with your customer's success? Or is it a holdover from a previous era? Brainstorm one alternative pricing model based on value, not convention. · Define the villain of your story. Who or what are you fighting against? A clear enemy clarifies your mission and makes your pitch 10x more compelling.
Frequently asked questions
- What is the main lesson from the Facet founding story?
- The biggest startup opportunities often hide in plain sight, disguised as market failures or regulatory gaps. When incumbents fight a pro-consumer change, it's a powerful signal of a massive business opportunity.
- How did Anders Jones get his first job in startups?
- He consistently networked at a hotel bar on Sand Hill Road known to be a hotspot for venture capitalists. This 'manufactured serendipity' led to an introduction from a VC partner and his first job at LiveRamp.
- What is a 'preempted' funding round?
- This is when an investor makes an aggressive offer to lead a funding round *before* the company officially starts its fundraising process. It's a strong sign of investor conviction but requires you to be certain they are the right long-term partner.
- What is Facet's business model?
- Facet uses a flat-fee subscription, not a percentage of assets under management (AUM). This model aligns their incentives with their target clients, who are often underserved by the traditional wealth management industry.
