First Stage Investor

Invest in the Startup Changing HR

Invest in the Startup Changing HR
By Andy Gordon
Date June 25, 2020

TV has made dysfunctional families (Arrested Development) and companies (The Office) cute and funny. They’re not. And maybe that’s why we watch these shows. If we don’t laugh, we’d probably cry.

I’m not sure how one would restore a dysfunctional family to emotional health. But now there’s a remarkable company – People First RH – whose online platform lets companies handle thorny workplace issues like harassment and sexist behavior with transparency and fairness.

It’s long overdue. 65% of employees experience discrimination or harassment in the workplace. But only 10% report it to their employers. Why? Fear of reprisal.

Fear of being pigeonholed as a troublemaker. Fear of being ignored. Just a generalized fear of causing waves.

HR departments generally serve at the pleasure of the C-Suites.

Too often protecting the company’s reputation along with certain people in the company assumes more importance than protecting the employee.

It’s messed up. And it happens all the time. But our culture is evolving. There’s less tolerance for office misconduct now. Since 2017, 16 states have adopted workplace discrimination mandates that increases worker protection. And more states are expected to follow.

The message is clear: Workplace misconduct will not be tolerated.

It’s about time. Companies are paying attention for several reasons. For some, it’s simply the right thing to do. For others, it’s a financial calculation. Lawsuits are expensive to fight and more expensive to lose.

Some companies see creating a better work environment as a way to improve efficiency. Others seek reputational benefits like attracting better workers by being a fair and inclusive company.

And in the 16 states that have increased worker protections, companies must comply with the law or face the consequences.

Enter People First

People First offers a simple software solution that guides employees through an easy-to-follow process that encourages both sides to agree on a resolution. It provides employers with a central repository of cases while giving them the ability to direct cases to appropriate internal staff.

In its first nine months of use, People First’s conflict resolution platform exceeded expectations, with 100% of cases ending in a mutually reached resolution in an average of 18 days (compared to the national average of 275 days).

That won’t always be the case. When it isn’t, People First provides a pathway allowing individuals to file complaints with the Equal Employment Opportunity Commission (or equivalent state and local agencies).

How It Works

An employee accesses People First’s product through an app or its website. The first step is filling out a report describing the incident and the desired resolution. The report can include witnesses and attachments like photos, emails, videos, etc. Only when the report is submitted to HR does it become visible to the company. The report is automatically escalated to more senior executives at the company until the case is closed, which happens when the two people agree on a resolution.

The most frequent resolution is for an employee to apologize, leave the victim alone and get training. Importantly, the app checks in periodically for any retaliation.

If no resolution is reached, the employee can file the report with the EEOC.

Right Time and Place

People First is offering its product at a time of great upheaval and uncertainty. People are experiencing a heightened sense of vulnerability to discrimination and bullying behavior. Companies are also spending more on HR. And the tightening legal environment is removing the option of ignoring worker’s rights.

The end result is a spike in interest in People First’s product. Without spending any money on marketing, the company is fielding an overwhelming number of requests on a daily basis. It has on boarded 61 companies since last September. And it expects to generate $400,000 to $450,000 of revenue this year. That’s a big increase from the $23,000 it pulled in last year.

The market itself is experiencing rapid growth too. The global “enterprise, governance, risk, and compliance” software market (of which conflict resolution is a part) is expected to increase from $32.6 billion in 2020 to more than $61 billion by 2025.

An Expanding Suite of Products

People First is also expanding its offerings. It will soon allow employees to raise broader issues that reflect poorly on the company’s culture and practices, such as sexist content in company brochures or websites. It will also allow anonymous filing of reports. And, in about a year, it plans to give scores on diversity and inclusion. In fact, the company is already getting requests for that feature.

The company has a few competitors. But none are geared toward conflict resolution. And none have a team as deeply experienced and committed as People First.

I had a few conversations with Kamael Sugrim, one of the company’s co-founders (and COO). And she impressed me with her ideas on corporate culture and HR functionality, and how People First will stay ahead of the competition as companies seeing their success enter their space. She has more than 20 years of experience in software development and social impact-related corporate endeavors.

Shantanu Rana, the other co-founder (and CEO), has more than 20 years of experience building award-winning digital marketing solutions.

These founders have also put in more than $250,000 of their own money into People First. I’ve seen this before. And I consider it a strong predictive signal of success.

Top-notch Products and Execution

The company gets high marks for developing a product that the times demand. At this point, the company’s biggest risk is execution. That’s good news for investors. Execution so far has been superb.

People First may have to fiddle with their prices though. Right now, it offers a basic free product (it creates a great pipeline of future paying customers) and a plan that costs $40 per employee per year. In early 2021, it will begin offering a more versatile product at a subscription rate of $100 per employee.

Kamael says price has not been a pain point. But the first wave of signups tends to be highly motivated customers. They don’t necessarily represent long-term price sensitivities.

The fact that my only quibble about People First is pricing shows how impressed I am with this company. Its timing isn’t bad either.

Because of COVID-19, people are now more comfortable than ever using online tools and platforms to do things that we used to do in person. Discrimination and harassment reports are easier to capture or record online. And that should lead to more reports being filed and a greater need for People First’s platform.

People First puts people first. In the grip of a global pandemic, it’s a message that rightly resonates with employers and employees alike.

Deal Details

Startup: People First RH
Security type: Crowd SAFE
Discount: 10%
Valuation (cap): $6 million
Minimum investment: $100
Where to invest: Republic
Deadline: September 1, 2020

How to Invest

People First is raising up to $1.07 million on Republic. If you don’t already have a Republic account, you can sign up for one here.

Once you verify your account and are logged in to Republic, visit the People First deal page.

Then click the blue “Invest in People First RH” button. Enter the amount you want to invest, starting as low as $100, and proceed through the required steps. Be sure your investment is confirmed, then you’re good to go.


This opportunity, like all early-stage investments, is risky. Early-stage investments often fail. People First might need to raise another round of funding in a year or two, if not sooner.

If it executes well, this shouldn’t be a problem. But that’s a risk worth considering when investing in early-stage companies. The investment you’re making is NOT liquid.

Expect to hold your position for five to 10 years. An earlier exit is always possible but should not be expected.

All that said, I believe People First offers an attractive risk-reward ratio.

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