Time to Break Up with Corporate: Why We Backed Wethos
Breakups are a process.
It’s not just recognizing and ending an unfulfilling relationship. It’s also acknowledging what’s missing, and asking yourself “What would make me feel fulfilled?”
This is what millions of Americans asked themselves in 2021. Their answer: to quit their jobs and start their own businesses as content creators, freelancers, and consultants. Even as the economy has turned for the worst, with layoffs in process and the threat of a recession looming, the amount of freelancers is expected to continue to dramatically increase. In fact, freelance ranks swell even more during downturns, as evidenced by the 12% increase in freelancers during the Great Recession of 2008.
But when freelancers left their humdrum jobs to pursue the shiny American dream of entrepreneurship or out of necessity due to poor economic conditions, 6-figure opportunities weren’t knocking at their doors. Instead, they found themselves comparing payment processors, testing project management solutions, figuring out the correct pricing without relevant data, and scouring the internet for advice on how to create service packages.
Without a strong foundation for operations, businesses can’t become stable, let alone grow successfully from single person operations to comprehensive agencies.
In response to the lack of tools that worked in favor of growing sole entrepreneurs and a culture of pricing secrecy, Rachel Renock and Claire Humphreys built Wethos to make 6-figure freelancing a tangible goal for everyone. Their unique approach, business model, and zealot-like gusto caught our eye at Javelin Venture Partners. When we met them and co-led the investment round with Third Prime Capital in September 2021, they had 5,000 users. By the end of 2021, they had quadrupled their user base to 20,000 users, and are now well over 40,000 users at the time of writing.
With such a beautiful, useful product, it’s easy to see why so many people have become active users.
Wethos Origin Story
After years of working at creative agencies, Rachel and Claire felt stifled. They were tired of working in a corporate environment where their brilliant, creative, marketing genius minds couldn’t thrive. Rachel was already taking freelance opportunities on the side with non-profits to satisfy that desire for meaningful work.
Both women had the skills and the network to build a successful business, so why not become their own bosses?
They left their soul-sucking corporate jobs to pursue more meaningful work, but they quickly realized that freelancers were at a huge disadvantage when it came to quoting high-ticket projects.
They tried a number of SaaS products and platforms that could serve as bookkeeping software, networking platforms, and proposal creation. But none of it worked well because it was all siloed across multiple platforms.
Plus, most options available were meant for solopreneurs (self-employed or single-person businesses). As a result, the options had limited capabilities to help freelancers grow, let alone collaborate to pitch big-ticket opportunities.
With such limited tools and information available, Rachel and Claire realized that most freelancers struggle to build sustainable businesses doing what they love. In fact, 95% of freelancers don’t make over six figures.
So they decided to build something that helped people earn more money together.
Empowering Freelancers with Price Transparency
Rachel and Claire founded Wethos to be an accessible, all-encompassing platform that helps freelancers scale their businesses. And while their Virtual Studio software allows users to build service packages, issue invoices, process payments, and manage cash flow, it also helps freelancers understand how to price their services.
It started originally with Rachel and Claire sharing their own pricing and scoping templates with the community. Soon after that, other freelancers started sharing their pitch templates as well, growing this crowd-sourced database with hundreds of scopes and thousands of services across various industries. This offering quickly became their unique selling point and is core to their distribution strategy.
On top of all that, these services are available to users at no cost.
In other words, Wethos is a free step-by-step playbook for anyone to break up with their corporate job. Freelancers at any stage of their business can set up their operations, see what other people in their industry are charging, and find other like-minded professionals to collaborate on big opportunities. By showing people how their full-time roles translate into priced out statements of work, this radical transparency makes it even easier for people to take the big leap into self employment.
To any outside observer it becomes immediately obvious that Rachel and Claire are not just about convincing people to use their platform. They genuinely want to encourage people to pursue meaningful career paths. They are shouting to the world, “Quit your job and start something new! We’ll make it easy. We’ll show you how.”
Why Javelin Is Excited to Invest in Wethos
We really fell in love with Rachel and Claire’s creative, unique, and edgy approach to running their business. The freelancing industry is infamously opaque when it comes to pricing and collaboration, and Wethos breaks that taboo of staying ‘hush hush” about work and pricing, and creates a more transparent marketplace for freelancers to meet, collaborate, and price themselves fairly.
By the time we met them, we were already familiar with the challenges that freelancers face. In 2012, we invested in Thumbtack, a platform that connects people with local service professionals such as home maintenance, tax preparation, event planning, and pet services. We appreciate and understand the struggles of small business owners and sole proprietors, and Wethos was a natural investment opportunity.
One of the big obstacles we’ve seen both companies tackle is the barrier to entry. Bookkeeping software, website hosting, and payment processing fees can stack up quickly. It can also be a burden for many freelancers to build out their packages, their website, and their invoicing processes from scratch.
Wethos, however, is free for people to use, and it includes all the tools a freelancer needs to sell their products. As more people leave their toxic work environments in search of more fulfilling opportunities, they will need affordable tools and accessible knowledge to achieve a sustainable business. From building a free-to-use tool to sharing their own pricing templates, we love that Rachel And Claire’s values form the foundation of Wethos’s product.
The genius of their business model is that, while their front end is a sales and billing software, Wethos aims to function as a neobank on the back end. We’ve seen lots of neobanks come onto the market, often founded by ex-bankers or financiers, who are not as intimately familiar with the end user pain points. But now many of these neobanks are challenging both institutional banks and other neobanks with very similar looking digital banking products, which means the customer acquisition cost (CAC) goes up and up.
So rather than follow those same patterns and make the same noise, Rachel and Claire decided to break the neobanking wheel. They aren’t ex-bankers trying to sell to a community they don’t understand. They understand the struggles of launching over 150 projects and generating $1.3 million in revenue with their own freelancing studio. They’ve experienced first-hand what it’s like to hit the ceiling as a freelancer, with seemingly no capacity to scale.
Instead of another bank, they build something mission critical: operational business software that naturally integrates with an in-house fintech product. Because a new business owner isn’t concerned about where to store their money if they haven’t figured out how to earn it.
Over time, Wethos will collect data on how freelancers grow their businesses on the platform, and then develop additional features to help their user base even further. They aim to build services such as invoice factoring and lending, and they hope to offer a marketplace for other financial products.
As a result, Wethos makes it that much easier for people to break up with their corporate lives and build something of their own. And that’s what we want to empower.
Helping Freelancers Scale to the Top Together
Quitting a job to set up a functioning business that pays the bills is not easy. As more and more people leave their full-time jobs to freelance — probably for the first time — accessible tools are absolutely necessary to empower people to launch and scale their own businesses.
We are huge fans of the Wethos mission to help freelancers climb to the top together, rather than race to the bottom alone. And that’s what we love to see: tools that lift everyone up and help them live better lives.
If you’re just as enthusiastic as we are about this fintech rocket ship and their mission, they’re hiring! Check out all the open roles with Wethos.
P.S. Big shoutout to our friend and collaborator Virginie Raphael of Full Circle Capital for the initial introduction to Rachel and Claire!