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Can Hassle- and Worry-Free Employee Leave Exist? This Trio Is on a Mission to Prove It

Mahima Chawla, Lauren Dai and Amber Feng founded Cocoon in June 2020 to take the pain out of employee leave. Here, Chawla shares three lessons she's learned since then.

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As a mom of two, I've been on maternity leave twice in my career. There was a list of things I worried about, including when to tell my manager I was expecting, deciding how long I would take off and thinking about how to best transition projects to my team. The one thing I never worried about was the actual process of taking my leave — and it was an unexpected nightmare.

Sara Sandstrom

There was no clear explanation of how to apply for state benefits and how that overlapped with what my company offered. One leader told me I could use my unused vacation toward my leave; another leader said I couldn't. Then, when I had my second child, the company ended up keeping me on payroll longer than it should have. This resulted in me and dozens of other women having to send large amounts of money back to the company while we were on leave. It was unnecessary stress on top of trying to figure out how to feed and swaddle my newborn.

"Every single person we spoke to — whether they were a product manager or a chief people officer — said managing leave was an absolute nightmare," says Mahima Chawla, CEO and co-founder of Cocoon. "This is why my co-founders Amber Feng, Lauren Dai and I were inspired to start Cocoon. After we stumbled upon the bafflingly complicated world of leave, we knew we could serve as an ally to companies, fix this and empower companies to better support their people."

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Today in the U.S., more than half of employers (55%) offer paid maternity leave. Forty-five percent of employers offer paid paternity leave, and finally 35% offer paid extended family care leave. During this Great Resignation, organizations are scrambling to offer better benefits to attract and retain talent. And as many have lost loved ones during this time, organizations are also rethinking bereavement leave policies. Yet no one is tackling how to seamlessly administer leave, making it a hassle-free experience for the employer, and more importantly a worry-free experience for employees who are taking leave at critical moments in their lives.

Enter Cocoon. Cocoon is an employee leave management platform designed to address every type of employee leave including parental, medical, caregiver, bereavement and more. The platform covers all 50 states, factoring in company, government and insurance benefits, and manages leave end-to-end, from compliance, to claims, to payroll calculations.

Chawla, Dai and Feng founded Cocoon in June 2020 to take the pain out of leave. Here are three lessons Chawla has learned since then.

Stay focused

During her college days, Chawla remembers receiving text messages from her father containing only one word: Focus. "Both my parents instilled a strong work ethic in both my sister and I," she shares. "My dad always emphasized the importance of being focused, intentional and putting care behind everything you are doing. He always reminded us to do that one thing well before moving on."

The ability to focus has been one of the drivers for Cocoon's early success. When starting a company, founders can be pulled in many different directions. Chawla and her co-founders were mindful of this; they stayed focused on tackling one problem at a time. "We did a lot of research on every aspect of leave. From navigating federal and state laws, to hourly workers at large companies, to salaried workers at smaller companies, there were so many areas of opportunity," Chawla says. "We knew we needed a tight minimal viable product to go to market with." The co-founders were ruthless and prioritized, staying focused. In January 2021, they decided to launch the product just focusing on parental leave in California, Pennsylvania and Utah before laying the groundwork to go national and expand leave types successfully later in 2021.

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Allow for all voices to be heard

"When I was a kid, every single report card said the following: Mahima should speak up more and participate more," Chawla says. "There was this societal expectation that I had to be the loudest one to show I was learning and making an impact." She discovered that she is an extrovert when it comes to social situations and an introvert when it comes to academic settings and how she learns.

"I don't need to be constantly talking about what I am doing and what I am learning — it's not how I operate," she says. "I like to put my head down and just get work done, and there needs to be space for everyone to be heard, no matter how they work." In a society where we place a high premium on extroverts, Chawla and her co-founders are intentionally building a company where introverts, extroverts and ambiverts are all welcome. They enjoy healthy debate, problem-solving with different approaches and creating forums where everyone feels like they can contribute. "No matter how you contribute or lead, you are welcome and have a place at Cocoon."

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Know your proof points

Chawla and her co-founders spent months researching the leave space from every possible angle before pitching investors and starting the fundraising process. Chawla recalls some of the most powerful quotes they had on how the process for taking leave at companies was broken. "One employee shared with me 'I had my laptop with me applying for my California state benefits while being rolled into my C-section,'" Chawla says.

"Another one said: 'While I was on leave with a new baby the joke was, choose two: "eat, sleep or shower," and I was instead building spreadsheets to help me understand my pay during leave.'"

Chawla and her co-founders collected hundreds of proof points from their potential customers, clearly outlining the deep need and the huge opportunity they had with Cocoon. "We used all of these customer stories and quotes to build the case for our business," Chawla says. "We even created design mocks of what the platform could look like for customers. We got very strong buy-in from our early investors because the data was so clear."

Early investors like Mark Goldberg at Index understood the proof points and signed on. Cocoon recently raised a $20 million Series A funding led by Index Ventures, with participation from First Round Capital, SemperVirens, XYZ, Magnify Ventures and a group of strong individual investors. This brings the company's total funding to $26 million.

In addition to having your proof points, Chawla's advice to entrepreneurs is to continuously foster relationships with investors for the long term just like you would with candidates. "Just because they say no now, doesn't mean they won't say yes in the future," she says. "Timing is everything, so always keep the door open to possibilities."

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