Chuck Cohn, CEO of St. Louis-based education startup Varsity Tutors, just went to Silicon Valley and did what many startup CEOs based there often fail to do: score an investment round from top-tier venture capitalists.
And Cohn did it in short order, securing $50 million from Mark Zuckerberg’s Chan Zuckerberg Initiative, Technology Crossover Ventures and Learn Capital after meeting with just 10 potential investors, he told CNBC in an interview.
He’s now raised $107 million in total.
Cohn got the money, one of his investors says, by doing something usually associated with Silicon Valley but doing it far from America’s technology capital: Growing a company for close to a decade using his own capital and a small team.
“This was not Stanford, not Silicon Valley, where leaving (a prestigious university or a good job) to start your own company is a badge of honor,” says Woody Marshall, a partner with Technology Crossover Ventures who led the firm’s early investments in Netflix, Spotify and Airbnb. “This was in St. Louis.”
It also helped Cohn’s cause that Varsity Tutors is attacking a retail market that Marshall says is worth $15 billion annually and is about to be upended by the internet.
“They’re taking an analog process and putting it online. An instant tutoring session is a new construct,” Marshall says.
Cohn got the idea for the company when he had a bad experience with a tutor while in high school: He was struggling in French but got a tutor who spoke almost no English.
The legacy tutoring business has required students to go to a physical retail location — and only after securing an appointment.
The experience has been inconvenient, expensive and one-size-fits-all, Cohn says.
He started Varsity Tutors in 2007 while still a student at Washington University in St. Louis. After handing out flyers on campus and in local coffee shops, demand took off immediately from students who needed help fast.
The company now has 500 employees.
“Our original business model was similar to Netflix’s early DVD-by-mail business — you go to our website and request a tutor to come to your home,” says Cohn, 32.
Now the tutoring is done online.
To date the company has provided 100,000 students with more than 3 million hours of instruction, according to Cohn.
Varsity Tutors’ newest offering, called Instant Tutoring, aims to connect students with one of its 40,000 on-demand tutors in more 150 subjects in as little as 15 seconds.
But Cohn’s path to from student to well-funded entrepreneur hasn’t been a straight line.
The early growth of the company happened while he was still taking college classes and interviewing for a job at the now-defunct investment bank Bear Stearns.
The work, “80 to 100 hours a week,” he says, almost overwhelmed him.
“I ended up having a small breakdown and freaking out for a couple of hours about how I would handle it all,” he says.
Then in the summer of 2011 came a key moment when he decided to quit his job as “a junior VC” and devote himself full-time to his own company.
“The spouse of one of my 10 full-time employees said, ‘My wife gives 100 percent working for this company. Why don’t you?'” Cohn recounted.
“That’s when it struck me that I was letting my fear get in the way of making the leap. I had become the primary thing holding back the business.”
