toast is raised Over $900 billion and reportedly valued at over $5 billion. But back in 2011, no one knew this startup would have such meteoric success. It had a few things going for it, of course — founder Aman Narang was from Andeka, where he was a software engineer and product lead, who was able to ship a lot of software quickly.
But the ambition behind Toast was big and complex, and enough to give any investor pause. Kent Bennett was one such VC, and while he had a strong belief in the founding team, he didn’t believe they could tackle such a big problem.
Toast is a restaurant POS system that acts as a sort of operating system for an establishment, managing everything from online ordering, delivery and marketing to payroll and team management as well as the actual point of sale. Being able to do all the work that would require the creation of multiple complex products, such as payments.
Initially, Bennett told Narang not to build a restaurant POS. For them, it was too complex and nuanced, which is why the systems of the ’90s were still deeply intertwined 20 years later. However, he offered the Toast team a place in the Bessemer office to work on his product.
“I caught up with Aman and he told me he did this interesting thing after hearing that a lot of his customers were frustrated with payment platforms, which are different from POS,” Bennett said. “Aman said they built their own payment platform. Once again, I was like, ‘What did you do? You’re not allowed to pay.’ But they told me that they made it and that improves their products, and by the way, they make a margin on it.”
Bennett said when he added margin to payments and POS, it was impressive.
“It hit me like a ton of bricks,” Bennett said. “It’s a really cool business.”
From there it became his passion. And though it took a few more quarters to close the deal, they eventually got there. Bessemer led the company’s Series B financing in 2016.
We spoke to Bennett and Narang on a recent episode of Xtra Crunch Live to find out how they came together for the deal, what it means for both founders and investors when it comes to fund-raising, and Biggest lesson he’s learned so far. The episode also featured an Extra Crunch live pitch-off, where audience members showed their products to Bennett and Narang and received live feedback.
Xtra Crunch Live is open to everyone every Wednesday at 3 p.m. EDT/noon PDT, but only Xtra Crunch members are able to stream these seasons afterwards and watch past shows on demand in our episode library.
Despite, or perhaps because of, the complexity of the toast system, Narang says the fundamentals are the most important part of communicating business, especially when fundraising.