Sales pitch: What Nest said to get its original investmentJanuary 15, 2014: 3:23 PM ET
Long before being sold to Google for $3.2 billion, Nest had to persuade venture capitalists.
Back in 2010, Nest's founding team went to pitch itself to venture capital firm Kleiner Perkins Caufield & Byers. The two investors with whom they met, Randy Komisar and Trae Vassallo, were obviously impressed by the co-founders' intelligence and Apple (AAPL) pedigree. And they also were intrigued by the idea for a "smart" thermostat, particularly because it tied into an Internet-of-things investment thesis that Komisar and Vassallo already were beginning to develop.
Related: Why I sold Nest to Google
The only problem was that... well, it was a thermostat. These were the guys who were credited with developing the iPod. Was this really ambitious enough? And could Komisar and Vassallo sell it to their skeptical partners?
The key was a single line at the end of Nest's presentation:
After the thermostat, we're going to reimagine every unloved product in people's lives.
"When I saw that, I looked around my office at all of the beige plastic devices that had populated my life and were trying to hide from view because they were so ugly and cheap," Komisar recalls. "At that point I had to be in, and Trae agreed."
Komisar and Vassallo then won over their partners, joining Shasta Ventures on Nest's first round of funding. According to a Kleiner Perkins investor, the firm will recognize around a 20x return on that investment, via the sale to Google.
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