August 18, 2025 • 53 mins
In this episode, Joel Palathinkal chats with Melissa Pegus from TechSquare Ventures about her journey in venture capital and her entrepreneurial family background. They explore her shift from college to product management, her e-commerce experience, and the impact of Buy Now Pay Later on consumer trends. Melissa shares insights on evaluating consumer deals, startup growth, and scaling sales. They also discuss her transition to venture capital, firm value propositions, and participation methods. The episode covers venture capital roles, ESG, climate tech, and university spinouts, with audience questions on startup investments and portfolio management.
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And so, having that experience and thattactical support and advice and I think the
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recency of a lot of that knowledge as well hasalso been super helpful.
And it's allowed me to bring together thethings that I love about being an operator and
also the finance and quite frankly, theexecution part of investing.
So, that's made it a lot of good fun.
And, again, I think the two things thatfounders need most is access to markets and
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access to capital.
And so for anyone who's interested in pursuinga career and venture, it's really about how do
you help check off those two boxes, especiallyas capital is increasingly becoming a
commodity.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
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minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
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Times.
Okay, how is it now?
Crystal clear.
Okay, great.
Yeah, I have a little fan.
So I think we're live.
Okay.
All right, so can you guys hear me okay?
Great, all right.
Well, why don't we just jump into it then?
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Melissa, thanks for popping in, excited to haveyou in here, talking about your journey, you're
at TechSquare Ventures, but you just had areally interesting background and that's quite
prevalent with anybody in BC.
We've all kind of had our unique journey.
There isn't really a clear cut path to get intoventure.
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So we all kind of have our unique path, but whydon't we start with your background, where you
grew up, what your parents did how you foundout about venture and then how you broke into
it and maybe why you did.
And then we can maybe take it from there.
Yeah, absolutely.
So I think I had a bit of an internationalupbringing.
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I'm blessed to have family across the world.
So that allowed for exposure, think, todifferent schools of thought and most
importantly for me in my career, seeingcommerce through many different lenses.
And that's largely what's inspired my journeythroughout e commerce.
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So primarily, did the bulk of my schooling inNew York, I went to university in DC.
And I have the, in hindsight, I can say I wasfortunate enough to have graduated from college
during turmoil and economic collapse, whichallowed us all to, forced us all, I think, to
be really creative about how we thought aboutcrafting career paths.
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And that's largely how I started my career offin the world of startups.
So the very first startup I worked for wasFrontier Strategy Group, they just taken on
funding by Spark Capital, who primarilyinvested in them a lot of social and consumer
focused technology.
And that's where I learned a ton aboutinnovation and product building.
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I was on the product solutions team, andreally, were doing product development and
product launch, and really fell in love withthat process.
And then iteratively, I think acrossexperiences, it's sort of like, first you do
product development, then you have to figureout how to take that product to market.
And then it's, do you go through channels,direct sales, corp dev conversations?
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And I think that's what's really inspired thetrajectory.
And then having been through multiple startupjourneys, I've been through, let's say, five
acquisitions across six startups to date.
When I was thinking about what I wanted to dowith my career next, I realized that I had
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learned so much as an operator in thoseenvironments that I wanted to be able to take
that experience to supporting a portfolio ofcompanies through a VC firm.
And at the time also was meditating on a moveto Atlanta.
And so I think lots of wonderful things alignedand found a wonderful opportunity to support
the mission of Tech Square Ventures where ourprimary thesis is that entrepreneurs really
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need two things to thrive as access to capitaland access to markets and much of the team has
an operating background.
Yeah, so backing up a second, right?
Because I also have some anecdotes aboutproduct.
I was a product manager as well.
But maybe backing up when you were in school,what was your major and what did you think you
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wanted to do?
And then how did you get surprised when you gotinto product building and maybe a couple
learnings from product building as well thatyou have?
Yeah, absolutely.
So when I was in school, I had an incrediblephilosophy professor, my freshman year
professor Ambrosio, who basically saideverything that you learn in college is going
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to teach you how to think.
None of this will prepare you for a job thatyou're going to have in the real world.
So just assume that you're going to effectivelyhave to, you will show up on the first day
knowing nothing except for how to teachyourself.
And so I never felt the pressure in terms ofwhat I needed to focus on directly translating
to what I was going do as a career path later.
So I double majored in government andeconomics, and I double minored in sociology
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and philosophy.
And again, I chose those because I really loveeconomics.
Actually, if I didn't go into the world oftechnology, I started a PhD in economics and
then decided that I needed to get a real jobbecause PhDs are expensive.
But I think where that was most impactful isthat it taught me how to be scrappy.
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And taught me about the different ways that wasmost effective for me to teach myself how to
learn and approach new topics.
And so I think product development, andspecifically product solutions at Frontiers
Strategy Group was great, because it was a newgroup, there was no defined method or process
around how to do things.
And so it was really about breaking things andmoving quickly, trying to create data sets
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where data didn't exist.
And most importantly, I think what was alwaystop of mind was that constant was the process
of constant market validation.
So we'd make some hypotheses, and we'd go andtest it in the market, which is a large part of
what you're doing through the process ofresearch and academia.
Would you say that pivoting into product is alittle like similarly opaque to venture?
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That's something that I felt.
So I was an engineer and then productimmediately became this highly sought after
career.
People are like the product managers at Uberand Slack and everyone wanted to be a PM and it
was really difficult.
So I felt like I had my own journey trying topivot into product, didn't have a There's not a
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real degree in product management.
Then the same thing with venture.
I had to reinvent myself and brand myself to beattractive to someone to hire me as a VC.
But I guess, did you see some of those sameparallels with just the role of a product
manager?
Yeah, I think what was unique about the role isthat I wasn't a traditional PM.
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I really straddled that line between productand commercial.
And I think similarly opaque, but if I have toreflect on the roles that I found myself, that
I found myself in across my career, I've sortof really leaned into serendipity.
And so if someone were to ask me like, how doyou get, go get a job in product?
I'd be like, I don't know, let's figure out howto build one.
And then go show people that you've builtsomething.
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So it seems like a snow cake process, but I'msure that there are other schools and programs
at university.
And now there's so many great, like postgraduate, like opportunities for learning,
right?
So many communities like beyond DACH, and I'msure a number of other similarly focused like
certificate or certificate programs orcommunities where you can learn about that
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journey.
And I think the one thing that we always takefor granted is like find someone who's doing
that thing that you want to do and ask them,make sure it's a really specific ask, but I
find that most people do or at least theyshould always want to lean in when it comes to
helping others because the rising tide reallyraises all ships.
If you don't know, and I think just try to bescrappy.
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Yeah, no, that's really good advice.
And maybe you can unpack a little bit of theroles that you're working in.
So you started doing a lot of e commerce.
What were some of the products that you werefocusing on in e commerce?
Yeah, what sectors were they?
So, the first e commerce company that I workedwith was free commerce and they were started
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off as one of the largest open source projectson GitHub as a Ruby on Rails based platform
prior to their wanting to take the commercialroute and start charging for the product and
platform.
And effectively, when I joined, the mission wasto build a channel program, both on the agency
partner for wholesale and implementation and onthe technical integration partner side.
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Because e commerce, when we look at anyretailer, tech stack could serve in many varied
ecosystem of tools that all need to beintegrated to work in unison, that way the
retailer can make money.
And so, that was great.
And I think that was the broadest view of ecommerce at the platform level and then started
to specialize more in the MarTech stack andpayments.
So, then I worked with Curalade and then MPPGlobal.
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So, Curalade was focused on MarTech integratingsort of social media content and signal into
your site.
And then PP Global was helping media andentertainment companies really embrace e
commerce through subscription payments.
And then working with DICK agency, right, soseeing the services side as well.
And DICK agency is one of Shopify Plus'slargest agency partner.
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So, I learned a ton about the challenges ofdifferent sizes and scale of e commerce and
also through different perspectives, working atvarious points sort of in the technology stack
for an e comm retailer.
And for me, was great.
Like, I always think about my personal missionin life is right, I want to help empower
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entrepreneurs and merchants across the world tosort of bring their products and goods to the
world stage.
And so e commerce is just so clearly alignedwith that.
When I reflect on sort of my family and thevery entrepreneurial roles that they've had,
it's really all been centered around commerce.
I mean, my grandfather and on my mother's sidein Trinidad, he had a large cocoa estate and
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did a lot of exporting of cocoa that likechocolatiers would use to make products.
Have you ever cracked open the cocoa, likeinside?
I have, actually think it's better than thelike final sugary product.
I know it tastes like lychee almost, Yeah,does.
Then you
get to enjoy the lychee sap and then you haveto, what they do is they dry the seed and let
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it ferment and then grind it up and that's howyou get the unsweetened cocoa powder.
Yeah, my cousin that's back in India, they havecrops and they've had the cocoa.
So I have a memory of being a child andtraveling back home and cracking it open.
I'm like, wow, this is what chocolate is.
It's like lychee.
So that's really interesting.
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And one thing that I've been really looking atand made an investment recently in a buy now
pay later, pretty well known company.
So how do you think that's gonna impact ecommerce?
And do you think that's gonna unlock a lot ofcapital for people to just kinda pay for things
much more frequently?
Or I guess, any thesis you have on buy now pay
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later It's really interesting.
And I think any opportunity that you have toremove any friction in sales process and the
transaction process, a higher likelihood thatyou have that you're going to have some
positive conversions to the end customer.
And so I think from the retailer perspective,it's a great strategy.
And we've seen it's incredibly effective,right?
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The data doesn't lie.
One of the areas that I'm really interested in,I'd actually be interested to know if you have
any strong opinions or perspective about thisis that I think it's been probably, I want to
say not less well regulated, but the barrierfor applying for buy now pay later credit is
not as stringent as applying for a traditionalcredit card.
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So I think I saw an article, maybe it was aboutsix or seven months ago saying that in The UK,
they were starting to require more stringentreview for how you're extending credit to
consumers and making sure they understandexactly what that means.
There's always a ton of emphasis on consumereducation to people who really understand the
products that they're using and what they'reconsuming.
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And so, I'm interested to see what the futurefor regulation of Buy Now Pay Later looks like,
and if that impacts its effectiveness as partof a retailer sort of e comm and conversion
strategy.
It's definitely easy to embed on the site, it'seasy to sign up and, you know, and get going
with it and purchase product.
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I'm not yet well versed in sort of what thedownsides are for the consumer.
So, I'm really interested to see how the spaceevolves, but I definitely think most sort of
winning retailers that's something that they'veimplemented and they're actively using on the
site.
There's definitely, I think a handful ofwinners in the space.
Yeah, because you can, I think fromintegrating, I think it's down to the point
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where it's a couple lines of code like Stripeto be able to have that interface?
And then I didn't know that.
That is great if getting the credit is mucheasier because typically getting a credit card,
it's like they pull your FICO credit score,which is just such a legacy process to build
credit.
You could be someone that pays your bills ontime and is trustworthy, but you just moved to
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this country and it's impossible to get acredit card or maybe even get a loan for an
apartment.
So I think that needs to change.
I mean, I was inspired several years ago withTala, that startup that was based in Africa,
they could take some of the interesting statsthat I still remember from the founder is if
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your phone is always charged in general, you'remore credit worthy because that just shows
you're more tech savvy and you're on top ofstuff.
But they triangulate that through just lookingat just processing tons of data.
So I think integrating in with some system,like maybe your email or something in a secure
way where it can pull in your records or justyour bank.
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Connecting with Plaid with your bank and justlooking at your direct deposits that are coming
in from your salary, and then like yourspending activity, I feel like that should
essentially be like a real time credit score.
But I don't know who's really innovating onthat.
But I feel like that could be a kind of alittle more real time credit ranking option
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than the FICO score.
Because people can go bankrupt or getforeclosed and then kind of get a credit card
in a couple of years.
That happened with the recession.
So I think on that end, that's what I think.
I think like using some type of data or tech atsome point, if you can use that to pair with
like the buy now pay later to kind of getcredit and you build credibility as long as you
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keep on paying later on time, I guess.
And that's always great.
And then what are your thoughts?
I saw a video with Hassan Minhaj, he did awhole series on retail.
So instead of people investing more in like amore high profile brand like Chanel, people are
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buying like fast fashion.
And they're buying them quicker because they'recheaper, they're still stylish.
So have you dealt with anything on the fashionside and like any trends that you've seen with
retail Yeah, and so consumer
I've worked with a range of brands ranging fromfast fashion all the way to luxury.
And I think what it really comes down to isit's really about community.
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And so, this is a lens that retailers areevaluating, like even the technologies that
they use, right?
Does this allow me to tell my story and buildcommunity?
But for people who, I think it's less about theprice point of the items that you're consuming
and I think it's more about what that brand andwhat that product says about you.
I think the definition of a Dublin good, right?
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Is really evolving.
And so, you know, you have celebrities who havemade like Fashion Nova as like a brand and it's
no longer this thing that you have to like hidethat you know, you got this dress that maybe
was like lower priced and they're building likereal community around that brand and then same
things for high end luxury goods.
Some people are turned off by the fact thatmaybe they are more closed brands.
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And some people like the fact that these arestill limited quantity goods.
I think in the like streetwear segment, we'realso seeing a ton of innovation around limited
quantity goods and drops.
And how that's also changing the way thatpeople are thinking about products.
You know, I think first and foremost, if you'relaunching any consumer brand, people are
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definitely taking like a brand and communitydriven approach first.
And that's going to be really impactful,especially when we think about sort of rising
customer acquisition costs, the most strategicthing that you can do for your business is make
sure that not only are you getting a customermake that first purchase, but you're creating a
hook that allows you to keep drawing them backin that keeps them engaged with the brands and
the product and the properties and other peoplewho are also buying your products as well.
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And then, what are some of the KPIs on theconsumer side that you guys look from?
I'm assuming probably just the rising cost toacquire a customer.
And then probably just the MRR probably seeinga step up.
Are there some quantitative KPIs that maybe asa VC we should look at if we're looking at
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consumer products?
A new dress brand in Brooklyn.
It's growing traction.
People don't go to Macy's anymore.
Or the department stores are actually tying tothese communities and brands.
So when we're evaluating those consumer deals,any maybe just top level metrics that would be
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good to look at?
Yeah, absolutely.
So Tech Core Ventures does not invest inconsumer brands.
We focus on B2B and SaaS platforms.
But I think conventional wisdom around like,what are the metrics that really make for a
healthy consumer business?
You definitely want to look at the ratio ofyour customer acquisition cost to customer
lifetime value.
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Also looking at like different channels forscale and repeatability of the business margin
on the products and cash conversion cycle offthe top of my head would be like key metrics
that I would ask about.
And I think what the last year, year and a halfhas taught us is that we also want to ask
really nuanced and savvy questions aboutderisking your supply chain.
And thinking about supply chain is another sortof strategic arm that you can wield over the
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business that gives you an edge on yourcompetition as well.
Yeah.
And I'm sure a lot of those insights probablycame from when you were working as an operator
at some of these startups.
Maybe you can talk about some other learningsand then maybe some observations that you saw
because you did see the cycles of actuallygetting acquired.
So what were some things that you saw and youdon't have to name any specific examples, but
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just general things that you saw coming fromlike a company as a startup and then now it's
growing, it's becoming more mature.
There's like formally ahead of HR and probablylike true team leads.
So, how have you seen kind of like theleadership scale up to it?
Because normally it's like the, some of the cofounders did a lot of the product development.
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Now they scale up and hire like a VP ofproduct.
There's probably like a brand marketer versusjust like a regular full stack marketer.
I've seen that a few times, but maybe you canwalk us through that and what you observed as
far as like the startups maturing.
Yeah, I mean, I think the sort of two keytakeaways because every startup is different
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and I always am very hesitant about sayinglike, here's some one size fits all rules you
should follow and you'll absolutely be asuccess.
I think first, it's never too early to investin people, especially as leaders, if you take
care of your team, your team will take care ofyour customers.
And so really an emphasis on people is a greatthing.
And it's never too early to think about yourpeople strategy.
I think looking in hindsight, I've alwayswished that we sort of doubled down on people
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strategy earlier.
And then as a leadership team and as you'rehiring, know, your heads of the different
departments, specialization just becomes soimportant as you scale.
And the trick in that is not so much hiring.
I think it's really in the delegation and beingable to fire yourself from your role, right?
And every twelve to eighteen months and say,I'm going to continue to work on the business
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and now need to hand this off for someone who'sgoing to work in the business.
And that's why I think team building isparamount because developing that culture of
sort of trust and collaboration andaccountability, right?
That's the foundation that's going to allow youto turn to someone and say, you should own
this, I'm going to go focus on the biggerproblems that we have to solve now.
Yeah.
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And then in terms of successful outcomes,whether you're going to IPO or you're going to
be acquired, or maybe you're going to continueto stay private, because I think any number of
those things, like there's no one definitionfor what it means to have a successful and
scaling business.
The best thing that you can do is I think notoptimize for any one of those giving yourself
the most number of, I guess, the greatestoptionality possible.
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I think when we all talk to portfolio companieswho are all looking at a potential acquisition,
maybe they've hired a banker like where theyare in the best position to have those
conversations is when that's not the onlyoutcome that they have to drive towards.
And they have some timeline against whichthey're working towards to have this sort of
like exit or liquidity about the business.
Yeah, one thing that talking about firingyourself, one thing that I learned, I think I
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watched the talk on sales strategies for likeCEOs scaling a sales team.
And one thing that I think I saw in like a 500startups video was a lot of times the CEO, they
will kind of lead like a new business verticaland they'll actually do the selling first.
And then eventually when they felt that, hey,this actually can work and I can sell it.
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Now I can probably hire a salesperson to trainand then have them lead it and then have them
build a sales team around that.
Guess Any insights on just building, from yourexperiences, just building sales organizations
and because that's really the chasm, right?
You got like 55 ks in MRR and you're just kindof hit a speed bump.
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Like it's tough to get to like the 100 ks inMRR.
So at that point you need to really kind of dothe math and the calculations on, hey, is our
cost to acquire a customer to get to that 100MRR.
We need like this enterprise, this additionalheadcount to be able to take those many more
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calls and then hopefully convert those leadsinto sales.
So that in mind, guess just kind of scaling tothe next level of revenue.
You know, any, you know, takeaways from that?
Yeah, absolutely.
So the shift from founder led sales now handingit off to a sales team, think the trick in
there is also making sure that you'reprofessionalizing your sales practice and
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motions.
Because if not, have to mention, you have torealize that like they don't have, it's not the
same optics when a customer is talking to theCEO versus the salesperson, and maybe they've
been relying on their network or their Rolodex.
And so making sure that you've professionalizedthe sales motions such that it is a really
seamless handoff.
And I think if it's something that you'repersonally struggling with, and this is
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something I've had to do as organizations havereached those inflection points is like, look
at your total cost of sales for the deals andalso the opportunity costs of what you're not
focused on.
And that will pretty quickly illuminate thefact that they're right that your focus is
needed elsewhere but having also what we see isfor founder led sales, especially for those
early sales, these are probably opportunitiesthat are entering your funnel sort of middle of
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funnel.
So, I think also taking the opportunity todevelop a practice around top of funnel
customer acquisition against that way when youhave that handoff, you're not seeing your
business stall for a few quarters and thentrying to restart now a professionalized sales
motion.
Yeah, that's really helpful.
And I've heard some other helpful advice aroundwhen you hire SDRs, they should essentially do
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the prospecting as well.
So that way, they're not really just kind ofwaiting for.
So do believe that too?
Do you think it's good to have the salespersonalso do prospecting?
Or do you think you should just have a closerbe ready to just take the call?
It really depends on what you're selling and
who you're
selling it to, right?
I think there are certain categories for Iwould say the media and entertainment vertical,
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especially if you selling into enterprise andthe media entertainment vertical, that's
probably going to be largely network based saleand an SDR is just not going to be that
helpful.
You probably need some sort of accountexecutive who already has some experience or
network within that space.
And also channel partnerships, typically, as wethink about more enterprise opportunities,
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where you would think of your SDRs is reallyfacilitating top of funnel, it's actually
probably going to be your partnerships team,right?
Because that's where a lot of youropportunities are coming from.
Now, for more like SMB and mid market sales,SDRs can be incredibly helpful.
Think it's really about how you deploy them inan effective way that is always helpful to your
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brands.
And I believe pretty strongly that SDRs belongwithin the marketing organization because
that's part of the top of funnel net thatthey're casting.
And they're giving that iterative feedback tothe marketing team around the type of research
they need to do around the key customer andwhat's resonating and what isn't.
So, there's a lot of dependence on the nuanceof your business, again, what your product is,
who you're selling to, what your average salesprice is.
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But I think just being really thoughtful aboutnot what you're not so much what your sales
process should be.
Don't think that's the first way to lead intoit.
But it's rather what is your customer's buyingprocess?
And that will eliminate sort of the keyinflection points that you need to resource
against along that journey to them hopefullybecoming a customer.
Yeah, that's really helpful advice.
Yeah, and I just think that just you kind ofliving in those ecosystems, you just kind of
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saw it firsthand.
So, it's super valuable to hear it from you.
And then, you're an operator for some time andthen what was the catalyst to have you start
thinking about venture and getting into theinvesting role?
Yeah, so as part of having a pretty broadmandate as an operator, I'd also started to be
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more responsible for finance and legal, startedinteracting more with our investors.
And then I think as I started to become morefamiliar to people who themselves were in the
venture roles, and so I would help them withdiligence or sourcing just informally.
And that was a great way for me to understandwhat is venture really about?
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What does it take to be a good VC?
What's really helpful for founders?
And after I'd had these experiences, and I'dworked with companies at different stages of
growth and different funding environments, Andit also built these financial skills.
And it also got my CMA.
It felt like a really good time to make thattransition.
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Because I was already informally doing a lot ofventure like activities.
And I think serendipitously at the time that Ihad sort of decided that's what I wanted to
explore next.
That's when I'd met the team at TechSportVentures and there was a really good fit and
alignment of needs.
I think what makes me really helpful to ourportfolio companies and just generally founders
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that we talk to is because I've had thoseoperator experiences.
And so I'm not pontificating at a high levelabout strategy, but I think more importantly, a
lot of war stories and war wounds about wherethings just didn't, they didn't go according to
plan.
Because that's the reality of startups, right?
You sort of make plans and sometimes it goesright, but more often than not, there's all
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sorts of complications and things that you haveto pivot around.
And so, having that experience and thattactical support and advice, and I think the
recency of a lot of that knowledge as well hasalso been super helpful.
And it's allowed me to bring together thethings that I love about being an operator, and
also the finance and quite frankly, theexecution part of investing.
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So that's made it a lot of good fun.
And, again, I think the two things thatfounders need most is access to markets and
access to capital.
And so, for anyone who's interested in pursuinga career and venture, it's really about how do
you help check off those two boxes, especiallyas capital is increasingly becoming a
(29:20):
commodity.
You're now hearing founders increasingly ask asthey engage with potential investors, like what
else is it that your firm is able to provide inaddition to funding?
Because now they're in a position where theycan choose between firms, they're probably
getting multiple term sheets.
And I think that's a really good thing for VCas an industry, that each firm is really being
(29:42):
forced to clarify what their value propositionis.
Yeah, no, that's really helpful.
And I think you hit on a couple importantpoints.
I think one thing is that you decided that youwanted to be a venture capitalist.
So it's probably something that you discernedfor some time.
And then you're like, hey, you know what, Ithink this is an avenue.
But you made another earlier point that madesense too, which is having optionality, right?
(30:05):
So it's like, I could continue to be anotheroperator and maybe do some angel investing or I
could just kind of be a full time professionalVC because I Yeah, think you go ahead.
I was gonna say and I think there now there'sso many different ways to participate in
venture capital, right?
You can be an angel investor, you canparticipate as part of a syndicate.
(30:29):
In addition to investing in a company, there'salso really valuable ways to get involved, like
being an advisor, being a board member, Iencourage people to really explore what it
means to have that responsibility to support acompany and also to have that fiduciary
responsibility, right to focus on returns.
But there's so many ways to lean into thatrole, not experience, you don't have to do VC
(30:52):
full time to be an investor.
And truly exploring like what that means andhow it aligns with your interest and what you
like to do.
Because I think very often people also getcaught up in like, it is a very special thing
to be able to call yourself a VC because it's asmall industry, there are limited roles.
Think I read an interesting stat was like, aremore people recruited to the NBA.
(31:15):
Yeah.
There are new roles available in venture.
And so I think like making sure that it'ssomething that you really want to do, and you
understand the responsibility.
And quite frankly, maybe talking to a fewfriends that you might know who are founders
and asking them like, what does a great VC looklike for you?
Even if you haven't met that, even if theyhaven't found someone yet, like what is the
archetype of a wonderful VC with what kind ofinvestor do they want on their cap table?
(31:40):
Yeah, I wanna pull back the analogy that youbrought up for product.
So, if you wanna get into product, build aproduct.
If you wanna get into VC, you could invest $100in Republic and build a small portfolio with
the capacity that you have.
You can spend a couple thousand dollars andjust launch a syndicate with one of these
(32:01):
platforms that they do all the accounting andeverything.
So that's almost like a mini fund, right?
If you got like a really hot deal.
And then there's the whole trend now that we'vetalked about in the past of just emerging
managers.
That's the perfect combination of a startupplus being a VC.
There's no other startup that I would say thatis taxing as starting your own fund.
(32:28):
Because it's kind of the business and the brandand then you're raising capital just like an
entrepreneur.
So I
think you can do that too.
I think that's exactly it.
On the other side of like founder support andunderstanding what it means, like really think
about what it means to have to like fundraiseand get potential LPs on That is a process that
if you haven't thought about it and haven'tgone through it, there's a lot of nuance there.
(32:53):
And so, it's even worth reaching out topotential LPs that you might have in mind to
understand like what they are looking for whenthey make an investment.
Because that's also, you know, in some in manyways, that's also a sales process.
You're selling yourself to LPs and you'reselling yourself to founders.
We have a few people here that are growing intheir career trying to transition into VC.
(33:17):
So any tips for like the interview process?
So it doesn't have to be anything specific, butif you're an operator and then now you're I
think that was a really good superpower thatyou had, probably something that you really had
to carry weight as like one of the bestcandidates.
That you did go through those operatorworkflows.
(33:38):
And I think another thing that you hit on wassourcing deals.
So definitely, you could probably find atemplate on the internet, which is like a
checklist of, Hey, here's the market size,here's the team, the TAM, all that stuff.
The competitors.
So you could probably put together some type ofmemo and bring those really great deals that
are a good fit for the fund that you'rejoining.
(34:01):
Because you did a lot of e commerce and the newfund may have a different focus.
So you wanna kind of tailor the deals, but likeany other tips that you would recommend as far
as pivoting or trying to kind of outperform inthe interview because it is pretty competitive.
Absolutely, I, so two things.
(34:26):
In a firm, there's like a variety of roles,right?
Whether you're on the execution side, portfoliosupport sourcing.
And so, I think really being thoughtful aboutwhat the need is, and maybe even asking
questions about how they do those things today.
And it'll give you a really good sense of wherethere are opportunities for improvement or
where they've made deliberate choices.
(34:46):
And I think also really understanding what thefund values are and making sure that aligns
with your own because if you source a deal,your fund ends up investing in them.
There, yes, the fund will be on the cap table,but that founder is going to know that you were
that sort of first point of introduction.
And so, you want to make sure that the way thatyou are going to support that company and how
(35:08):
you'll participate, that there's a goodalignment of values between you and the fund.
And then I think, you know, wanting to learnmore about for sourcing, we almost seem to
think that sourcing is this like serendipitousthing that happens.
Like I was walking down the street, I met agreat startup.
In fact, that's not how sourcing works.
I think it's up to your friends.
And so, there is a deliberate process aroundthat.
(35:31):
So I think the more that you can try tounderstand what the actual motions and daily
activities will be about, the better beingreally thoughtful about what those
responsibilities are.
And again, I think that will help stand outagain, across a sea of candidates who maybe are
just so excited about the opportunities forparticipating just in an industry that's all
about innovation, and maybe haven't peeled backthose layers.
(35:54):
If you're going to focus on the execution side,I think there are so many great resources, both
like paid and free that you can look at tounderstand like, what is the financial
foundation that I need to have in order to dothis?
You know, one of the greatest resources outthere, in addition to some of these like paid
communities like NBCA, the National VentureCapital Association, they've so many great free
(36:17):
templates on their sites around here is thebest practice for term different models for
contracts.
And they do lots of great events andprogramming.
And that's a great way because they do set, Ithink that the standard for The US for
investing here, right?
They do set the standard and bench line for,here's what these different formats should look
like.
So, I always think finding a way to in partfamiliarize yourself with or do the job before
(36:41):
you're in the role is always going to be yourbest option because it's going to just help you
ask better questions.
And I think that's a big part of what being inBC is about.
It's about learning how to always ask betterquestions.
Yeah, and for the audience, do you think youcan take a moment to maybe unpack some of the
(37:01):
roles and responsibilities for like anexecution person versus portfolio support.
I think you mentioned a third one too.
So maybe you can unpack that a little bit.
So maybe the audience can kind of keep that inmind as they're thinking about it.
And then maybe also just sourcing versusscreening and best practices at like the bigger
funds and how they're done professionally.
(37:22):
So,
around sourcing, it's really around definingwhat the fund's thesis is and then almost
creating as if you were going through a salesprocess, right?
So, where all the places like if this is thefirm's thesis or one of their thesis, where
should I be looking for these sorts of foundersunderstanding sort of the size and stage of a
(37:43):
company as well is really helpful.
So, creating these parameters understandinglike what are the metrics, what's the criteria
that the fund is looking for in theirinvestment profile.
And this will vary for fund like they look fordifferent stages, different sort of proof
points for traction milestones that have beenmet, so on and so forth.
So, that's quite a bit around sourcing.
(38:04):
And I think spending lots of time both gettingsmart in your target industries, in your target
verticals, as well as understanding the profileof what is a great investment opportunity for
that fund.
And that's not sort of one size fits all.
In fact, many funds, they do publish thisinformation, because they also want to help
founders who are reaching out to them knowwhether they should be self selecting in out.
(38:27):
For execution, you know, it's really thinkingabout going through the diligence process and
putting together the memo.
And so, it's things like if you when you askyour founder and the founder for access to data
room at the appropriate, to their data room atthe appropriate point in those conversations,
conversations?
Like, what are you looking for in their proform a on their cap table?
(38:49):
Does your firm have any requirements aroundlike the types of equity or debt that they want
to see that they've previously taken?
Customs going through product demos, customerdiscovery, really making sure that you're
rigorously scrutinizing all these differentfacets that make for a solid business.
There's also a bit of like founder interviewsand team interviews as well, because in
(39:13):
addition to the product and the customer, thisis also a team that you're investing in the
team.
And then doing a lot of the scenario analysisand probably probability weighted analysis to
understand potential outcomes for thatbusiness.
And so that diligence process is great, becauseone, it makes sure that you've done thorough
(39:35):
work to meet the fiduciary commitments thatyou're making to the LPs when you tell them
we're gonna, you know, we're gonna take yourmoney, and we're gonna make really good
decisions with it.
But it also, going in-depth also helps youbuild that muscle long term to kind of know
what you're looking for.
And what you're hoping to build is some sort ofability to recognize what a great startup looks
(39:56):
like, be able to differentiate between a greatenduring business versus something that just
might be marketed really, really well.
And then memos, you know, I think memos likeany other writing exercise, it really helps you
clarify your own thinking, it helps tomemorialize why you've made a decision.
And I think even, I know some funds do this,but even when they decide not to invest, they
(40:18):
will similarly go through a memo writingprocess if it's a company technically could fit
within their, their target profile, and that'sreally helpful to allow them to look backwards
and say, did we make the right decision or justunderstand how their clarity of thinking is
evolving over time.
Encourage everyone to write about anythingwhenever you can.
It's such a great muscle to build for yourself.
(40:39):
And so, and then there's like the legal part ofexecution.
So, putting together the different legal docsand term sheets and things like that.
And there's a bit of like negotiation thathappens, especially in this environment, where
we're seeing all sorts of movement related tomultiples and valuations, right?
It's just it's definitely an excitinginvestment environment right now.
(41:02):
On the portfolio support side, this meansdifferent things to different fronts.
It can tactically mean working with founders onthings like their sales strategy, marketing,
maybe product, very common, it can also behiring.
And so that's why we're seeing like, forexample, a lot of firms now have like a head of
platform that can be an HR specialist becausewe know that startups, one of the biggest needs
(41:25):
that they have is hiring and recruiting greattalent.
So portfolio support can mean different things.
Sorry, different things for different funds.
Yeah.
And it'll also probably vary a bit depending onthe profile of the companies that they're
investing in.
So, if they're investing in like capitalintensive companies, maybe the portfolio
support includes some sort of like, R and Dadvisory, like grant writing, something like
(41:50):
that.
So, and that's also starting to be a key pointof differentiation, how they think about doing
portfolio support.
Let's see.
And then in terms of different roles thatoutside of that, you know, there's absolutely
fundraising is a huge focus for funds asthey're thinking about raising subsequent
(42:12):
funds.
Sort of media branding and marketingincreasingly, we're seeing funds are thinking
of themselves as media entities in addition tobeing these like vehicles, think injuries and
Horowitz is great example, like they'velaunched a massive media arm as well.
And so thought leadership is very important tothem being able to syndicate that across
channels.
And so, you know, I think like any company,like any industry, we're at a space where we
(42:37):
have just such a tremendous volume and capacityof different ways to participate.
And so now it's really all aboutdifferentiation.
And I think as you're talking to funds that youwant to join, also having a perspective on what
it is like not only being able to support theiractivities, but what is it that you can
uniquely add that makes their value propositionas an investor, more defined and more
(43:00):
pronounced and more compelling in a marketthat's increasingly competitive.
No, it's really helpful.
And I think there's also a couple of differentdynamics, I think, based on the size of the
fund and then kind of the organizationalstructure, because sometimes I'm assuming like
associates can also be empowered to set theterms and negotiate.
(43:23):
And then I feel like sometimes when there's alot of hierarchy, it's like only reserved for
like the principal, like after like aninvestment committee.
Would you agree with that too?
It's like kind of just dependent on theorganizational structure?
I think it depends on the organizationalstructure.
I think smaller size in terms of amount of likecapital under management, number of people,
(43:44):
smaller funds can be scrappier and have moregeneralist roles and rates like any company.
And as you become bigger, you have morespecialization and more rigid structure.
And so it's really about the environment thatyou think you're gonna thrive in.
Yeah, no, it's really helpful.
Well, somebody had a question here.
Have you started to see ESG in some venturefunds?
(44:06):
I guess that was the question.
Guess is that the right question, John?
Like ESG because I've clean tech funds and I'veseen some funds that are doing like climate
tech, and I've seen mostly ESG and like more ofthe private equity space for like impact
investing.
But have you seen any of that kind of like nowget into venture where people are?
(44:28):
Absolutely.
So, ESG and climate tech are definitelyimportant areas.
They're top of mind for all of us, right?
We're currently facing the realities of allsorts of environmental changes.
And I think it's an important point that youmentioned that we've primarily seen that in the
private equity space, because today when wethink about clean tech, like this is largely
(44:48):
like capital intensive, like physical product.
I myself could not the top of my head thinkabout a ton of innovation in that space.
That's not like hardware enabled.
Well, actually one of TSC portfolio companieshas recently announced Cloverly is doing
incredible things and sort of carbon credit andcarbon offset space.
(45:09):
But I think by and large, right, they tend tobe hardware and very capital intensive.
But I think we'll start to see the evolution ofdifferent types of businesses who are looking
at ways of solving these challenges in new andnovel ways.
Some funds are generalists, and so they willadopt ESG as part of the broader spectrum of
(45:31):
things that they're looking at, right?
It's definitely a key priority.
And we have lots of specialist ESG funds.
I also think for a lot of corporate VC arms, asenterprises start to think about their
environmental footprint, I think it will alsoincreasingly be a priority there personally.
And I'm happy to be wrong about it, but I thinkwhat is going to accelerate investing in this
(45:55):
space as well, is a lot of the laws and newregulations around sustainability, and around
sort of managing your, your environmentalimpact and footprint, that will be a forcing
function for innovation in this space.
So, John, I'm not sure that entirely asks youranswers your question, like, let me know if
(46:17):
there's anything I can clarify.
But that's a bit of how I think about it.
And I would say climate tech and sustainabilityis absolutely a focus for Engage.
Yeah, and I'm looking at your website here, Iwanted to double click on one point that you
said earlier, because when it comes tosourcing, the typical strategy that you would
(46:37):
assume is, hey, people go on Crunchbase andthey go on Eventbrite and they go on PitchBook.
But I'm looking at your website here, you'relooking at university spinouts.
So you made a really important point to kind oflike really map out that sector and also think
about the communities.
Because there could be some unique Slackchannel or some conference where all those
(46:59):
experts attend and I've been involved in somedeep tech and some of the insights and
knowledge and even deal flow has come from likeuniversities.
So when you guys are looking at universityspinouts, I'm assuming Georgia like
Tech.
Yeah, Georgia Tech is one of the leadingresearch institutions in the country,
definitely in the South.
And, you know, I think universities are a greatsource for innovation.
(47:22):
We see a lot of technology being spun out ofthese sort of research labs.
So I think that goes back to creating asourcing strategy around the thesis.
So if this is your general perspective, or theproblem that you think you're trying to solve,
where are all of the places that people who arealso interested in solving this problem?
Like, where do they live?
Where are they thinking about what the futureof these things look like?
(47:45):
Yeah, with the universities is essentially alsolike the tech transfer labs, because they have
the IP, and then they have a vested interest toalso try to commercialise that as much as
possible.
So for them partnering with you, that couldhelp to accelerate that because they have the
tech, they have the IP, they essentially maynot have the team.
(48:06):
But as you guys are company builders, you guysare helping to kind of find a CEO, find someone
to run growth.
And then I think that the strength that theuniversity has is they have those labs and they
have the scientists to build that tech up, butthen really to scale it and generate revenue
from that, you need some additional key people,which I think you guys can help kind of like
(48:27):
insert to take to scale and turn into aprofitable company at some point.
Yeah, absolutely.
Cool.
Oh, it looks like there's one question here.
I guess John and Bandar, do you guys just wantto yell out your questions?
And then I know we got a few minutes left, somaybe we can get those final questions.
(48:50):
So I guess John, you want to just shout outyour question?
Or I can read it too.
Yeah, no.
Thanks, Liz and Joel, doing this.
Appreciate it a lot.
My question is basically, if this has alreadybeen covered, I apologize.
But I've made a lot of investments into venturecapital funds as a LP or as an angel.
(49:12):
I'm looking to make investments now moredirectly with the startups.
I was just wondering if you have any advice orsuggestions for that.
Yeah, absolutely.
I mean, it sounds like you need a really solidsourcing strategy.
It's clear that you're coded, you've got a goodability to deploy capital, but I would say,
(49:32):
getting in touch with founders, Very often wemake assumptions around what size chat is going
to be there, there are limit or it's too small,and especially if there's other strategic value
that you can offer.
So figure out what is the niche that you'repassionate about that you're that you want to
focus on.
And I would say similarly coming up with asourcing strategy about how you're going to
meet these founders.
(49:53):
And it's really as simple as asking, I thinkfounders love to hear especially from
individuals, right?
Because you're not going be the lead investor,which is where they start to have to make these
trade off decisions and choose a bit more.
But you can say, love what you're building.
And I think this is how I can add value.
And, know, I'd like to participate, I'd like toinvest in your, you know, in your next round.
And again, you can sort of say like, this ishow much I'm willing to invest or like, what
(50:18):
the, what size checks are you accepting fromindividuals?
And that's a great way to go about it.
I think it's also a wonderful way for you tothink about what a more formal career in BC
looks like, right?
Because that's the same problem they have.
They're like, we have all this capital todeploy, and we want to figure out how we deploy
it.
The other thing that you can do is if you findother sort of like minded individuals who are
(50:40):
interested in the same spaces that you are, youcan also set up like a syndicate on AngelList,
and use that as the way to have a larger volumeof capital that when you reach out to founders,
you can invest if, find depending on your focusindustry that the capital requirements are a
bit larger than what you might independently bewilling to do.
(51:00):
Thank you so much.
That was awesome.
Thanks a lot.
Appreciate it.
Yeah, my pleasure.
And Bandar, you had kind of a portfolioquestion.
You want to just elaborate on your question?
Yeah.
Hi.
Hi, everyone.
Hi, Melissa.
Nice to meet you.
Hi.
I'm asking about the portfolio.
I have seen seen it yesterday.
(51:21):
It it has more than 62 startups and a lot ofdomains, and so you have something in bee and
honey and batteries and laundry.
So, is it a challenge to manage like thisdiversified portfolio or it's something or
(51:41):
there is some strategy to manage this kind ofportfolio?
Yeah, absolutely.
So, some firms are generalist, others focus ona specific industry.
So, maybe they just focus on batteries orlaundry.
And at Tech Square Ventures, we focus onbusiness model type.
So, B2B, mostly because we think that thechallenge of startups are going to encounter at
(52:02):
the stage that we're investing typically seedand series A.
Those are the challenges that we have theexperience to help those entrepreneurs with as
they think about strategy of stealing that goto market machine.
And so again, role is not to be the expert intheir business, because that would be
(52:24):
problematic if we knew more about theirindustry, their business than they did.
But it's really about being equipped to supportthem and being very clear about what that looks
like upfront.
So, part of value prop and so our value prop isthat we can absolutely help them with the
challenges that they're going to encounter asthey seek to scale for the specific type of
business model that they selected.
(52:45):
Yeah, thanks.
That was helpful.
Okay, awesome.
Great, well, hey Melissa, I know we're likethree minutes away, so wanted to just be
mindful of your time.
And if anybody else has a really quickquestion, feel free to shoot it out.
But if we don't see anything else, just wannapersonally thank you for coming in.
I know you're super busy, so it just means alot for you to make time for us and share your
(53:09):
journey.
There's just a lot of really helpful Thenuggets nuggets in are
all mine.
This has been excellent.
Thanks so much for inviting me to be a part ofthis with you guys.
This is great.
No, this is great.
Well, hope you have a great week and hope tocatch up soon.
Keep in touch and let me know if you're in NewYork, do some coffee or something.
Yeah, let's do it.
(53:29):
All right.
And so, having that experience and thattactical support and advice and I think the
(00:04):
recency of a lot of that knowledge as well hasalso been super helpful.
And it's allowed me to bring together thethings that I love about being an operator and
also the finance and quite frankly, theexecution part of investing.
So, that's made it a lot of good fun.
And, again, I think the two things thatfounders need most is access to markets and
(00:25):
access to capital.
And so for anyone who's interested in pursuinga career and venture, it's really about how do
you help check off those two boxes, especiallyas capital is increasingly becoming a
commodity.
Welcome to The Investor, a podcast where I,Joel Palafinkel, your host, dives deep into the
(00:46):
minds of the world's most influentialinstitutional investors.
In each episode, we sit down with an investorto hear about their journeys and how global
markets are driving capital allocation.
So join us on this journey as we explore theseinsights.
(01:09):
Times.
Okay, how is it now?
Crystal clear.
Okay, great.
Yeah, I have a little fan.
So I think we're live.
Okay.
All right, so can you guys hear me okay?
Great, all right.
Well, why don't we just jump into it then?
(01:32):
Melissa, thanks for popping in, excited to haveyou in here, talking about your journey, you're
at TechSquare Ventures, but you just had areally interesting background and that's quite
prevalent with anybody in BC.
We've all kind of had our unique journey.
There isn't really a clear cut path to get intoventure.
(01:52):
So we all kind of have our unique path, but whydon't we start with your background, where you
grew up, what your parents did how you foundout about venture and then how you broke into
it and maybe why you did.
And then we can maybe take it from there.
Yeah, absolutely.
So I think I had a bit of an internationalupbringing.
(02:14):
I'm blessed to have family across the world.
So that allowed for exposure, think, todifferent schools of thought and most
importantly for me in my career, seeingcommerce through many different lenses.
And that's largely what's inspired my journeythroughout e commerce.
(02:36):
So primarily, did the bulk of my schooling inNew York, I went to university in DC.
And I have the, in hindsight, I can say I wasfortunate enough to have graduated from college
during turmoil and economic collapse, whichallowed us all to, forced us all, I think, to
be really creative about how we thought aboutcrafting career paths.
(02:57):
And that's largely how I started my career offin the world of startups.
So the very first startup I worked for wasFrontier Strategy Group, they just taken on
funding by Spark Capital, who primarilyinvested in them a lot of social and consumer
focused technology.
And that's where I learned a ton aboutinnovation and product building.
(03:21):
I was on the product solutions team, andreally, were doing product development and
product launch, and really fell in love withthat process.
And then iteratively, I think acrossexperiences, it's sort of like, first you do
product development, then you have to figureout how to take that product to market.
And then it's, do you go through channels,direct sales, corp dev conversations?
(03:43):
And I think that's what's really inspired thetrajectory.
And then having been through multiple startupjourneys, I've been through, let's say, five
acquisitions across six startups to date.
When I was thinking about what I wanted to dowith my career next, I realized that I had
(04:04):
learned so much as an operator in thoseenvironments that I wanted to be able to take
that experience to supporting a portfolio ofcompanies through a VC firm.
And at the time also was meditating on a moveto Atlanta.
And so I think lots of wonderful things alignedand found a wonderful opportunity to support
the mission of Tech Square Ventures where ourprimary thesis is that entrepreneurs really
(04:27):
need two things to thrive as access to capitaland access to markets and much of the team has
an operating background.
Yeah, so backing up a second, right?
Because I also have some anecdotes aboutproduct.
I was a product manager as well.
But maybe backing up when you were in school,what was your major and what did you think you
(04:48):
wanted to do?
And then how did you get surprised when you gotinto product building and maybe a couple
learnings from product building as well thatyou have?
Yeah, absolutely.
So when I was in school, I had an incrediblephilosophy professor, my freshman year
professor Ambrosio, who basically saideverything that you learn in college is going
(05:11):
to teach you how to think.
None of this will prepare you for a job thatyou're going to have in the real world.
So just assume that you're going to effectivelyhave to, you will show up on the first day
knowing nothing except for how to teachyourself.
And so I never felt the pressure in terms ofwhat I needed to focus on directly translating
to what I was going do as a career path later.
So I double majored in government andeconomics, and I double minored in sociology
(05:35):
and philosophy.
And again, I chose those because I really loveeconomics.
Actually, if I didn't go into the world oftechnology, I started a PhD in economics and
then decided that I needed to get a real jobbecause PhDs are expensive.
But I think where that was most impactful isthat it taught me how to be scrappy.
(05:57):
And taught me about the different ways that wasmost effective for me to teach myself how to
learn and approach new topics.
And so I think product development, andspecifically product solutions at Frontiers
Strategy Group was great, because it was a newgroup, there was no defined method or process
around how to do things.
And so it was really about breaking things andmoving quickly, trying to create data sets
(06:20):
where data didn't exist.
And most importantly, I think what was alwaystop of mind was that constant was the process
of constant market validation.
So we'd make some hypotheses, and we'd go andtest it in the market, which is a large part of
what you're doing through the process ofresearch and academia.
Would you say that pivoting into product is alittle like similarly opaque to venture?
(06:46):
That's something that I felt.
So I was an engineer and then productimmediately became this highly sought after
career.
People are like the product managers at Uberand Slack and everyone wanted to be a PM and it
was really difficult.
So I felt like I had my own journey trying topivot into product, didn't have a There's not a
(07:07):
real degree in product management.
Then the same thing with venture.
I had to reinvent myself and brand myself to beattractive to someone to hire me as a VC.
But I guess, did you see some of those sameparallels with just the role of a product
manager?
Yeah, I think what was unique about the role isthat I wasn't a traditional PM.
(07:29):
I really straddled that line between productand commercial.
And I think similarly opaque, but if I have toreflect on the roles that I found myself, that
I found myself in across my career, I've sortof really leaned into serendipity.
And so if someone were to ask me like, how doyou get, go get a job in product?
I'd be like, I don't know, let's figure out howto build one.
And then go show people that you've builtsomething.
(07:53):
So it seems like a snow cake process, but I'msure that there are other schools and programs
at university.
And now there's so many great, like postgraduate, like opportunities for learning,
right?
So many communities like beyond DACH, and I'msure a number of other similarly focused like
certificate or certificate programs orcommunities where you can learn about that
(08:18):
journey.
And I think the one thing that we always takefor granted is like find someone who's doing
that thing that you want to do and ask them,make sure it's a really specific ask, but I
find that most people do or at least theyshould always want to lean in when it comes to
helping others because the rising tide reallyraises all ships.
If you don't know, and I think just try to bescrappy.
(08:40):
Yeah, no, that's really good advice.
And maybe you can unpack a little bit of theroles that you're working in.
So you started doing a lot of e commerce.
What were some of the products that you werefocusing on in e commerce?
Yeah, what sectors were they?
So, the first e commerce company that I workedwith was free commerce and they were started
(09:00):
off as one of the largest open source projectson GitHub as a Ruby on Rails based platform
prior to their wanting to take the commercialroute and start charging for the product and
platform.
And effectively, when I joined, the mission wasto build a channel program, both on the agency
partner for wholesale and implementation and onthe technical integration partner side.
(09:23):
Because e commerce, when we look at anyretailer, tech stack could serve in many varied
ecosystem of tools that all need to beintegrated to work in unison, that way the
retailer can make money.
And so, that was great.
And I think that was the broadest view of ecommerce at the platform level and then started
to specialize more in the MarTech stack andpayments.
So, then I worked with Curalade and then MPPGlobal.
(09:44):
So, Curalade was focused on MarTech integratingsort of social media content and signal into
your site.
And then PP Global was helping media andentertainment companies really embrace e
commerce through subscription payments.
And then working with DICK agency, right, soseeing the services side as well.
And DICK agency is one of Shopify Plus'slargest agency partner.
(10:04):
So, I learned a ton about the challenges ofdifferent sizes and scale of e commerce and
also through different perspectives, working atvarious points sort of in the technology stack
for an e comm retailer.
And for me, was great.
Like, I always think about my personal missionin life is right, I want to help empower
(10:25):
entrepreneurs and merchants across the world tosort of bring their products and goods to the
world stage.
And so e commerce is just so clearly alignedwith that.
When I reflect on sort of my family and thevery entrepreneurial roles that they've had,
it's really all been centered around commerce.
I mean, my grandfather and on my mother's sidein Trinidad, he had a large cocoa estate and
(10:47):
did a lot of exporting of cocoa that likechocolatiers would use to make products.
Have you ever cracked open the cocoa, likeinside?
I have, actually think it's better than thelike final sugary product.
I know it tastes like lychee almost, Yeah,does.
Then you
get to enjoy the lychee sap and then you haveto, what they do is they dry the seed and let
(11:11):
it ferment and then grind it up and that's howyou get the unsweetened cocoa powder.
Yeah, my cousin that's back in India, they havecrops and they've had the cocoa.
So I have a memory of being a child andtraveling back home and cracking it open.
I'm like, wow, this is what chocolate is.
It's like lychee.
So that's really interesting.
(11:31):
And one thing that I've been really looking atand made an investment recently in a buy now
pay later, pretty well known company.
So how do you think that's gonna impact ecommerce?
And do you think that's gonna unlock a lot ofcapital for people to just kinda pay for things
much more frequently?
Or I guess, any thesis you have on buy now pay
(11:54):
later It's really interesting.
And I think any opportunity that you have toremove any friction in sales process and the
transaction process, a higher likelihood thatyou have that you're going to have some
positive conversions to the end customer.
And so I think from the retailer perspective,it's a great strategy.
And we've seen it's incredibly effective,right?
(12:16):
The data doesn't lie.
One of the areas that I'm really interested in,I'd actually be interested to know if you have
any strong opinions or perspective about thisis that I think it's been probably, I want to
say not less well regulated, but the barrierfor applying for buy now pay later credit is
not as stringent as applying for a traditionalcredit card.
(12:36):
So I think I saw an article, maybe it was aboutsix or seven months ago saying that in The UK,
they were starting to require more stringentreview for how you're extending credit to
consumers and making sure they understandexactly what that means.
There's always a ton of emphasis on consumereducation to people who really understand the
products that they're using and what they'reconsuming.
(12:57):
And so, I'm interested to see what the futurefor regulation of Buy Now Pay Later looks like,
and if that impacts its effectiveness as partof a retailer sort of e comm and conversion
strategy.
It's definitely easy to embed on the site, it'seasy to sign up and, you know, and get going
with it and purchase product.
(13:17):
I'm not yet well versed in sort of what thedownsides are for the consumer.
So, I'm really interested to see how the spaceevolves, but I definitely think most sort of
winning retailers that's something that they'veimplemented and they're actively using on the
site.
There's definitely, I think a handful ofwinners in the space.
Yeah, because you can, I think fromintegrating, I think it's down to the point
(13:39):
where it's a couple lines of code like Stripeto be able to have that interface?
And then I didn't know that.
That is great if getting the credit is mucheasier because typically getting a credit card,
it's like they pull your FICO credit score,which is just such a legacy process to build
credit.
You could be someone that pays your bills ontime and is trustworthy, but you just moved to
(14:04):
this country and it's impossible to get acredit card or maybe even get a loan for an
apartment.
So I think that needs to change.
I mean, I was inspired several years ago withTala, that startup that was based in Africa,
they could take some of the interesting statsthat I still remember from the founder is if
(14:24):
your phone is always charged in general, you'remore credit worthy because that just shows
you're more tech savvy and you're on top ofstuff.
But they triangulate that through just lookingat just processing tons of data.
So I think integrating in with some system,like maybe your email or something in a secure
way where it can pull in your records or justyour bank.
(14:47):
Connecting with Plaid with your bank and justlooking at your direct deposits that are coming
in from your salary, and then like yourspending activity, I feel like that should
essentially be like a real time credit score.
But I don't know who's really innovating onthat.
But I feel like that could be a kind of alittle more real time credit ranking option
(15:09):
than the FICO score.
Because people can go bankrupt or getforeclosed and then kind of get a credit card
in a couple of years.
That happened with the recession.
So I think on that end, that's what I think.
I think like using some type of data or tech atsome point, if you can use that to pair with
like the buy now pay later to kind of getcredit and you build credibility as long as you
(15:34):
keep on paying later on time, I guess.
And that's always great.
And then what are your thoughts?
I saw a video with Hassan Minhaj, he did awhole series on retail.
So instead of people investing more in like amore high profile brand like Chanel, people are
(15:56):
buying like fast fashion.
And they're buying them quicker because they'recheaper, they're still stylish.
So have you dealt with anything on the fashionside and like any trends that you've seen with
retail Yeah, and so consumer
I've worked with a range of brands ranging fromfast fashion all the way to luxury.
And I think what it really comes down to isit's really about community.
(16:19):
And so, this is a lens that retailers areevaluating, like even the technologies that
they use, right?
Does this allow me to tell my story and buildcommunity?
But for people who, I think it's less about theprice point of the items that you're consuming
and I think it's more about what that brand andwhat that product says about you.
I think the definition of a Dublin good, right?
(16:40):
Is really evolving.
And so, you know, you have celebrities who havemade like Fashion Nova as like a brand and it's
no longer this thing that you have to like hidethat you know, you got this dress that maybe
was like lower priced and they're building likereal community around that brand and then same
things for high end luxury goods.
Some people are turned off by the fact thatmaybe they are more closed brands.
(17:02):
And some people like the fact that these arestill limited quantity goods.
I think in the like streetwear segment, we'realso seeing a ton of innovation around limited
quantity goods and drops.
And how that's also changing the way thatpeople are thinking about products.
You know, I think first and foremost, if you'relaunching any consumer brand, people are
(17:22):
definitely taking like a brand and communitydriven approach first.
And that's going to be really impactful,especially when we think about sort of rising
customer acquisition costs, the most strategicthing that you can do for your business is make
sure that not only are you getting a customermake that first purchase, but you're creating a
hook that allows you to keep drawing them backin that keeps them engaged with the brands and
the product and the properties and other peoplewho are also buying your products as well.
(17:49):
And then, what are some of the KPIs on theconsumer side that you guys look from?
I'm assuming probably just the rising cost toacquire a customer.
And then probably just the MRR probably seeinga step up.
Are there some quantitative KPIs that maybe asa VC we should look at if we're looking at
(18:09):
consumer products?
A new dress brand in Brooklyn.
It's growing traction.
People don't go to Macy's anymore.
Or the department stores are actually tying tothese communities and brands.
So when we're evaluating those consumer deals,any maybe just top level metrics that would be
(18:30):
good to look at?
Yeah, absolutely.
So Tech Core Ventures does not invest inconsumer brands.
We focus on B2B and SaaS platforms.
But I think conventional wisdom around like,what are the metrics that really make for a
healthy consumer business?
You definitely want to look at the ratio ofyour customer acquisition cost to customer
lifetime value.
(18:50):
Also looking at like different channels forscale and repeatability of the business margin
on the products and cash conversion cycle offthe top of my head would be like key metrics
that I would ask about.
And I think what the last year, year and a halfhas taught us is that we also want to ask
really nuanced and savvy questions aboutderisking your supply chain.
And thinking about supply chain is another sortof strategic arm that you can wield over the
(19:14):
business that gives you an edge on yourcompetition as well.
Yeah.
And I'm sure a lot of those insights probablycame from when you were working as an operator
at some of these startups.
Maybe you can talk about some other learningsand then maybe some observations that you saw
because you did see the cycles of actuallygetting acquired.
So what were some things that you saw and youdon't have to name any specific examples, but
(19:37):
just general things that you saw coming fromlike a company as a startup and then now it's
growing, it's becoming more mature.
There's like formally ahead of HR and probablylike true team leads.
So, how have you seen kind of like theleadership scale up to it?
Because normally it's like the, some of the cofounders did a lot of the product development.
(19:58):
Now they scale up and hire like a VP ofproduct.
There's probably like a brand marketer versusjust like a regular full stack marketer.
I've seen that a few times, but maybe you canwalk us through that and what you observed as
far as like the startups maturing.
Yeah, I mean, I think the sort of two keytakeaways because every startup is different
(20:20):
and I always am very hesitant about sayinglike, here's some one size fits all rules you
should follow and you'll absolutely be asuccess.
I think first, it's never too early to investin people, especially as leaders, if you take
care of your team, your team will take care ofyour customers.
And so really an emphasis on people is a greatthing.
And it's never too early to think about yourpeople strategy.
I think looking in hindsight, I've alwayswished that we sort of doubled down on people
(20:41):
strategy earlier.
And then as a leadership team and as you'rehiring, know, your heads of the different
departments, specialization just becomes soimportant as you scale.
And the trick in that is not so much hiring.
I think it's really in the delegation and beingable to fire yourself from your role, right?
And every twelve to eighteen months and say,I'm going to continue to work on the business
(21:03):
and now need to hand this off for someone who'sgoing to work in the business.
And that's why I think team building isparamount because developing that culture of
sort of trust and collaboration andaccountability, right?
That's the foundation that's going to allow youto turn to someone and say, you should own
this, I'm going to go focus on the biggerproblems that we have to solve now.
Yeah.
(21:23):
And then in terms of successful outcomes,whether you're going to IPO or you're going to
be acquired, or maybe you're going to continueto stay private, because I think any number of
those things, like there's no one definitionfor what it means to have a successful and
scaling business.
The best thing that you can do is I think notoptimize for any one of those giving yourself
the most number of, I guess, the greatestoptionality possible.
(21:46):
I think when we all talk to portfolio companieswho are all looking at a potential acquisition,
maybe they've hired a banker like where theyare in the best position to have those
conversations is when that's not the onlyoutcome that they have to drive towards.
And they have some timeline against whichthey're working towards to have this sort of
like exit or liquidity about the business.
Yeah, one thing that talking about firingyourself, one thing that I learned, I think I
(22:10):
watched the talk on sales strategies for likeCEOs scaling a sales team.
And one thing that I think I saw in like a 500startups video was a lot of times the CEO, they
will kind of lead like a new business verticaland they'll actually do the selling first.
And then eventually when they felt that, hey,this actually can work and I can sell it.
(22:35):
Now I can probably hire a salesperson to trainand then have them lead it and then have them
build a sales team around that.
Guess Any insights on just building, from yourexperiences, just building sales organizations
and because that's really the chasm, right?
You got like 55 ks in MRR and you're just kindof hit a speed bump.
(22:58):
Like it's tough to get to like the 100 ks inMRR.
So at that point you need to really kind of dothe math and the calculations on, hey, is our
cost to acquire a customer to get to that 100MRR.
We need like this enterprise, this additionalheadcount to be able to take those many more
(23:18):
calls and then hopefully convert those leadsinto sales.
So that in mind, guess just kind of scaling tothe next level of revenue.
You know, any, you know, takeaways from that?
Yeah, absolutely.
So the shift from founder led sales now handingit off to a sales team, think the trick in
there is also making sure that you'reprofessionalizing your sales practice and
(23:39):
motions.
Because if not, have to mention, you have torealize that like they don't have, it's not the
same optics when a customer is talking to theCEO versus the salesperson, and maybe they've
been relying on their network or their Rolodex.
And so making sure that you've professionalizedthe sales motions such that it is a really
seamless handoff.
And I think if it's something that you'repersonally struggling with, and this is
(24:02):
something I've had to do as organizations havereached those inflection points is like, look
at your total cost of sales for the deals andalso the opportunity costs of what you're not
focused on.
And that will pretty quickly illuminate thefact that they're right that your focus is
needed elsewhere but having also what we see isfor founder led sales, especially for those
early sales, these are probably opportunitiesthat are entering your funnel sort of middle of
(24:25):
funnel.
So, I think also taking the opportunity todevelop a practice around top of funnel
customer acquisition against that way when youhave that handoff, you're not seeing your
business stall for a few quarters and thentrying to restart now a professionalized sales
motion.
Yeah, that's really helpful.
And I've heard some other helpful advice aroundwhen you hire SDRs, they should essentially do
(24:51):
the prospecting as well.
So that way, they're not really just kind ofwaiting for.
So do believe that too?
Do you think it's good to have the salespersonalso do prospecting?
Or do you think you should just have a closerbe ready to just take the call?
It really depends on what you're selling and
who you're
selling it to, right?
I think there are certain categories for Iwould say the media and entertainment vertical,
(25:16):
especially if you selling into enterprise andthe media entertainment vertical, that's
probably going to be largely network based saleand an SDR is just not going to be that
helpful.
You probably need some sort of accountexecutive who already has some experience or
network within that space.
And also channel partnerships, typically, as wethink about more enterprise opportunities,
(25:38):
where you would think of your SDRs is reallyfacilitating top of funnel, it's actually
probably going to be your partnerships team,right?
Because that's where a lot of youropportunities are coming from.
Now, for more like SMB and mid market sales,SDRs can be incredibly helpful.
Think it's really about how you deploy them inan effective way that is always helpful to your
(25:59):
brands.
And I believe pretty strongly that SDRs belongwithin the marketing organization because
that's part of the top of funnel net thatthey're casting.
And they're giving that iterative feedback tothe marketing team around the type of research
they need to do around the key customer andwhat's resonating and what isn't.
So, there's a lot of dependence on the nuanceof your business, again, what your product is,
who you're selling to, what your average salesprice is.
(26:21):
But I think just being really thoughtful aboutnot what you're not so much what your sales
process should be.
Don't think that's the first way to lead intoit.
But it's rather what is your customer's buyingprocess?
And that will eliminate sort of the keyinflection points that you need to resource
against along that journey to them hopefullybecoming a customer.
Yeah, that's really helpful advice.
Yeah, and I just think that just you kind ofliving in those ecosystems, you just kind of
(26:47):
saw it firsthand.
So, it's super valuable to hear it from you.
And then, you're an operator for some time andthen what was the catalyst to have you start
thinking about venture and getting into theinvesting role?
Yeah, so as part of having a pretty broadmandate as an operator, I'd also started to be
(27:10):
more responsible for finance and legal, startedinteracting more with our investors.
And then I think as I started to become morefamiliar to people who themselves were in the
venture roles, and so I would help them withdiligence or sourcing just informally.
And that was a great way for me to understandwhat is venture really about?
(27:31):
What does it take to be a good VC?
What's really helpful for founders?
And after I'd had these experiences, and I'dworked with companies at different stages of
growth and different funding environments, Andit also built these financial skills.
And it also got my CMA.
It felt like a really good time to make thattransition.
(27:53):
Because I was already informally doing a lot ofventure like activities.
And I think serendipitously at the time that Ihad sort of decided that's what I wanted to
explore next.
That's when I'd met the team at TechSportVentures and there was a really good fit and
alignment of needs.
I think what makes me really helpful to ourportfolio companies and just generally founders
(28:16):
that we talk to is because I've had thoseoperator experiences.
And so I'm not pontificating at a high levelabout strategy, but I think more importantly, a
lot of war stories and war wounds about wherethings just didn't, they didn't go according to
plan.
Because that's the reality of startups, right?
You sort of make plans and sometimes it goesright, but more often than not, there's all
(28:38):
sorts of complications and things that you haveto pivot around.
And so, having that experience and thattactical support and advice, and I think the
recency of a lot of that knowledge as well hasalso been super helpful.
And it's allowed me to bring together thethings that I love about being an operator, and
also the finance and quite frankly, theexecution part of investing.
(28:59):
So that's made it a lot of good fun.
And, again, I think the two things thatfounders need most is access to markets and
access to capital.
And so, for anyone who's interested in pursuinga career and venture, it's really about how do
you help check off those two boxes, especiallyas capital is increasingly becoming a
(29:20):
commodity.
You're now hearing founders increasingly ask asthey engage with potential investors, like what
else is it that your firm is able to provide inaddition to funding?
Because now they're in a position where theycan choose between firms, they're probably
getting multiple term sheets.
And I think that's a really good thing for VCas an industry, that each firm is really being
(29:42):
forced to clarify what their value propositionis.
Yeah, no, that's really helpful.
And I think you hit on a couple importantpoints.
I think one thing is that you decided that youwanted to be a venture capitalist.
So it's probably something that you discernedfor some time.
And then you're like, hey, you know what, Ithink this is an avenue.
But you made another earlier point that madesense too, which is having optionality, right?
(30:05):
So it's like, I could continue to be anotheroperator and maybe do some angel investing or I
could just kind of be a full time professionalVC because I Yeah, think you go ahead.
I was gonna say and I think there now there'sso many different ways to participate in
venture capital, right?
You can be an angel investor, you canparticipate as part of a syndicate.
(30:29):
In addition to investing in a company, there'salso really valuable ways to get involved, like
being an advisor, being a board member, Iencourage people to really explore what it
means to have that responsibility to support acompany and also to have that fiduciary
responsibility, right to focus on returns.
But there's so many ways to lean into thatrole, not experience, you don't have to do VC
(30:52):
full time to be an investor.
And truly exploring like what that means andhow it aligns with your interest and what you
like to do.
Because I think very often people also getcaught up in like, it is a very special thing
to be able to call yourself a VC because it's asmall industry, there are limited roles.
Think I read an interesting stat was like, aremore people recruited to the NBA.
(31:15):
Yeah.
There are new roles available in venture.
And so I think like making sure that it'ssomething that you really want to do, and you
understand the responsibility.
And quite frankly, maybe talking to a fewfriends that you might know who are founders
and asking them like, what does a great VC looklike for you?
Even if you haven't met that, even if theyhaven't found someone yet, like what is the
archetype of a wonderful VC with what kind ofinvestor do they want on their cap table?
(31:40):
Yeah, I wanna pull back the analogy that youbrought up for product.
So, if you wanna get into product, build aproduct.
If you wanna get into VC, you could invest $100in Republic and build a small portfolio with
the capacity that you have.
You can spend a couple thousand dollars andjust launch a syndicate with one of these
(32:01):
platforms that they do all the accounting andeverything.
So that's almost like a mini fund, right?
If you got like a really hot deal.
And then there's the whole trend now that we'vetalked about in the past of just emerging
managers.
That's the perfect combination of a startupplus being a VC.
There's no other startup that I would say thatis taxing as starting your own fund.
(32:28):
Because it's kind of the business and the brandand then you're raising capital just like an
entrepreneur.
So I
think you can do that too.
I think that's exactly it.
On the other side of like founder support andunderstanding what it means, like really think
about what it means to have to like fundraiseand get potential LPs on That is a process that
if you haven't thought about it and haven'tgone through it, there's a lot of nuance there.
(32:53):
And so, it's even worth reaching out topotential LPs that you might have in mind to
understand like what they are looking for whenthey make an investment.
Because that's also, you know, in some in manyways, that's also a sales process.
You're selling yourself to LPs and you'reselling yourself to founders.
We have a few people here that are growing intheir career trying to transition into VC.
(33:17):
So any tips for like the interview process?
So it doesn't have to be anything specific, butif you're an operator and then now you're I
think that was a really good superpower thatyou had, probably something that you really had
to carry weight as like one of the bestcandidates.
That you did go through those operatorworkflows.
(33:38):
And I think another thing that you hit on wassourcing deals.
So definitely, you could probably find atemplate on the internet, which is like a
checklist of, Hey, here's the market size,here's the team, the TAM, all that stuff.
The competitors.
So you could probably put together some type ofmemo and bring those really great deals that
are a good fit for the fund that you'rejoining.
(34:01):
Because you did a lot of e commerce and the newfund may have a different focus.
So you wanna kind of tailor the deals, but likeany other tips that you would recommend as far
as pivoting or trying to kind of outperform inthe interview because it is pretty competitive.
Absolutely, I, so two things.
(34:26):
In a firm, there's like a variety of roles,right?
Whether you're on the execution side, portfoliosupport sourcing.
And so, I think really being thoughtful aboutwhat the need is, and maybe even asking
questions about how they do those things today.
And it'll give you a really good sense of wherethere are opportunities for improvement or
where they've made deliberate choices.
(34:46):
And I think also really understanding what thefund values are and making sure that aligns
with your own because if you source a deal,your fund ends up investing in them.
There, yes, the fund will be on the cap table,but that founder is going to know that you were
that sort of first point of introduction.
And so, you want to make sure that the way thatyou are going to support that company and how
(35:08):
you'll participate, that there's a goodalignment of values between you and the fund.
And then I think, you know, wanting to learnmore about for sourcing, we almost seem to
think that sourcing is this like serendipitousthing that happens.
Like I was walking down the street, I met agreat startup.
In fact, that's not how sourcing works.
I think it's up to your friends.
And so, there is a deliberate process aroundthat.
(35:31):
So I think the more that you can try tounderstand what the actual motions and daily
activities will be about, the better beingreally thoughtful about what those
responsibilities are.
And again, I think that will help stand outagain, across a sea of candidates who maybe are
just so excited about the opportunities forparticipating just in an industry that's all
about innovation, and maybe haven't peeled backthose layers.
(35:54):
If you're going to focus on the execution side,I think there are so many great resources, both
like paid and free that you can look at tounderstand like, what is the financial
foundation that I need to have in order to dothis?
You know, one of the greatest resources outthere, in addition to some of these like paid
communities like NBCA, the National VentureCapital Association, they've so many great free
(36:17):
templates on their sites around here is thebest practice for term different models for
contracts.
And they do lots of great events andprogramming.
And that's a great way because they do set, Ithink that the standard for The US for
investing here, right?
They do set the standard and bench line for,here's what these different formats should look
like.
So, I always think finding a way to in partfamiliarize yourself with or do the job before
(36:41):
you're in the role is always going to be yourbest option because it's going to just help you
ask better questions.
And I think that's a big part of what being inBC is about.
It's about learning how to always ask betterquestions.
Yeah, and for the audience, do you think youcan take a moment to maybe unpack some of the
(37:01):
roles and responsibilities for like anexecution person versus portfolio support.
I think you mentioned a third one too.
So maybe you can unpack that a little bit.
So maybe the audience can kind of keep that inmind as they're thinking about it.
And then maybe also just sourcing versusscreening and best practices at like the bigger
funds and how they're done professionally.
(37:22):
So,
around sourcing, it's really around definingwhat the fund's thesis is and then almost
creating as if you were going through a salesprocess, right?
So, where all the places like if this is thefirm's thesis or one of their thesis, where
should I be looking for these sorts of foundersunderstanding sort of the size and stage of a
(37:43):
company as well is really helpful.
So, creating these parameters understandinglike what are the metrics, what's the criteria
that the fund is looking for in theirinvestment profile.
And this will vary for fund like they look fordifferent stages, different sort of proof
points for traction milestones that have beenmet, so on and so forth.
So, that's quite a bit around sourcing.
(38:04):
And I think spending lots of time both gettingsmart in your target industries, in your target
verticals, as well as understanding the profileof what is a great investment opportunity for
that fund.
And that's not sort of one size fits all.
In fact, many funds, they do publish thisinformation, because they also want to help
founders who are reaching out to them knowwhether they should be self selecting in out.
(38:27):
For execution, you know, it's really thinkingabout going through the diligence process and
putting together the memo.
And so, it's things like if you when you askyour founder and the founder for access to data
room at the appropriate, to their data room atthe appropriate point in those conversations,
conversations?
Like, what are you looking for in their proform a on their cap table?
(38:49):
Does your firm have any requirements aroundlike the types of equity or debt that they want
to see that they've previously taken?
Customs going through product demos, customerdiscovery, really making sure that you're
rigorously scrutinizing all these differentfacets that make for a solid business.
There's also a bit of like founder interviewsand team interviews as well, because in
(39:13):
addition to the product and the customer, thisis also a team that you're investing in the
team.
And then doing a lot of the scenario analysisand probably probability weighted analysis to
understand potential outcomes for thatbusiness.
And so that diligence process is great, becauseone, it makes sure that you've done thorough
(39:35):
work to meet the fiduciary commitments thatyou're making to the LPs when you tell them
we're gonna, you know, we're gonna take yourmoney, and we're gonna make really good
decisions with it.
But it also, going in-depth also helps youbuild that muscle long term to kind of know
what you're looking for.
And what you're hoping to build is some sort ofability to recognize what a great startup looks
(39:56):
like, be able to differentiate between a greatenduring business versus something that just
might be marketed really, really well.
And then memos, you know, I think memos likeany other writing exercise, it really helps you
clarify your own thinking, it helps tomemorialize why you've made a decision.
And I think even, I know some funds do this,but even when they decide not to invest, they
(40:18):
will similarly go through a memo writingprocess if it's a company technically could fit
within their, their target profile, and that'sreally helpful to allow them to look backwards
and say, did we make the right decision or justunderstand how their clarity of thinking is
evolving over time.
Encourage everyone to write about anythingwhenever you can.
It's such a great muscle to build for yourself.
(40:39):
And so, and then there's like the legal part ofexecution.
So, putting together the different legal docsand term sheets and things like that.
And there's a bit of like negotiation thathappens, especially in this environment, where
we're seeing all sorts of movement related tomultiples and valuations, right?
It's just it's definitely an excitinginvestment environment right now.
(41:02):
On the portfolio support side, this meansdifferent things to different fronts.
It can tactically mean working with founders onthings like their sales strategy, marketing,
maybe product, very common, it can also behiring.
And so that's why we're seeing like, forexample, a lot of firms now have like a head of
platform that can be an HR specialist becausewe know that startups, one of the biggest needs
(41:25):
that they have is hiring and recruiting greattalent.
So portfolio support can mean different things.
Sorry, different things for different funds.
Yeah.
And it'll also probably vary a bit depending onthe profile of the companies that they're
investing in.
So, if they're investing in like capitalintensive companies, maybe the portfolio
support includes some sort of like, R and Dadvisory, like grant writing, something like
(41:50):
that.
So, and that's also starting to be a key pointof differentiation, how they think about doing
portfolio support.
Let's see.
And then in terms of different roles thatoutside of that, you know, there's absolutely
fundraising is a huge focus for funds asthey're thinking about raising subsequent
(42:12):
funds.
Sort of media branding and marketingincreasingly, we're seeing funds are thinking
of themselves as media entities in addition tobeing these like vehicles, think injuries and
Horowitz is great example, like they'velaunched a massive media arm as well.
And so thought leadership is very important tothem being able to syndicate that across
channels.
And so, you know, I think like any company,like any industry, we're at a space where we
(42:37):
have just such a tremendous volume and capacityof different ways to participate.
And so now it's really all aboutdifferentiation.
And I think as you're talking to funds that youwant to join, also having a perspective on what
it is like not only being able to support theiractivities, but what is it that you can
uniquely add that makes their value propositionas an investor, more defined and more
(43:00):
pronounced and more compelling in a marketthat's increasingly competitive.
No, it's really helpful.
And I think there's also a couple of differentdynamics, I think, based on the size of the
fund and then kind of the organizationalstructure, because sometimes I'm assuming like
associates can also be empowered to set theterms and negotiate.
(43:23):
And then I feel like sometimes when there's alot of hierarchy, it's like only reserved for
like the principal, like after like aninvestment committee.
Would you agree with that too?
It's like kind of just dependent on theorganizational structure?
I think it depends on the organizationalstructure.
I think smaller size in terms of amount of likecapital under management, number of people,
(43:44):
smaller funds can be scrappier and have moregeneralist roles and rates like any company.
And as you become bigger, you have morespecialization and more rigid structure.
And so it's really about the environment thatyou think you're gonna thrive in.
Yeah, no, it's really helpful.
Well, somebody had a question here.
Have you started to see ESG in some venturefunds?
(44:06):
I guess that was the question.
Guess is that the right question, John?
Like ESG because I've clean tech funds and I'veseen some funds that are doing like climate
tech, and I've seen mostly ESG and like more ofthe private equity space for like impact
investing.
But have you seen any of that kind of like nowget into venture where people are?
(44:28):
Absolutely.
So, ESG and climate tech are definitelyimportant areas.
They're top of mind for all of us, right?
We're currently facing the realities of allsorts of environmental changes.
And I think it's an important point that youmentioned that we've primarily seen that in the
private equity space, because today when wethink about clean tech, like this is largely
(44:48):
like capital intensive, like physical product.
I myself could not the top of my head thinkabout a ton of innovation in that space.
That's not like hardware enabled.
Well, actually one of TSC portfolio companieshas recently announced Cloverly is doing
incredible things and sort of carbon credit andcarbon offset space.
(45:09):
But I think by and large, right, they tend tobe hardware and very capital intensive.
But I think we'll start to see the evolution ofdifferent types of businesses who are looking
at ways of solving these challenges in new andnovel ways.
Some funds are generalists, and so they willadopt ESG as part of the broader spectrum of
(45:31):
things that they're looking at, right?
It's definitely a key priority.
And we have lots of specialist ESG funds.
I also think for a lot of corporate VC arms, asenterprises start to think about their
environmental footprint, I think it will alsoincreasingly be a priority there personally.
And I'm happy to be wrong about it, but I thinkwhat is going to accelerate investing in this
(45:55):
space as well, is a lot of the laws and newregulations around sustainability, and around
sort of managing your, your environmentalimpact and footprint, that will be a forcing
function for innovation in this space.
So, John, I'm not sure that entirely asks youranswers your question, like, let me know if
(46:17):
there's anything I can clarify.
But that's a bit of how I think about it.
And I would say climate tech and sustainabilityis absolutely a focus for Engage.
Yeah, and I'm looking at your website here, Iwanted to double click on one point that you
said earlier, because when it comes tosourcing, the typical strategy that you would
(46:37):
assume is, hey, people go on Crunchbase andthey go on Eventbrite and they go on PitchBook.
But I'm looking at your website here, you'relooking at university spinouts.
So you made a really important point to kind oflike really map out that sector and also think
about the communities.
Because there could be some unique Slackchannel or some conference where all those
(46:59):
experts attend and I've been involved in somedeep tech and some of the insights and
knowledge and even deal flow has come from likeuniversities.
So when you guys are looking at universityspinouts, I'm assuming Georgia like
Tech.
Yeah, Georgia Tech is one of the leadingresearch institutions in the country,
definitely in the South.
And, you know, I think universities are a greatsource for innovation.
(47:22):
We see a lot of technology being spun out ofthese sort of research labs.
So I think that goes back to creating asourcing strategy around the thesis.
So if this is your general perspective, or theproblem that you think you're trying to solve,
where are all of the places that people who arealso interested in solving this problem?
Like, where do they live?
Where are they thinking about what the futureof these things look like?
(47:45):
Yeah, with the universities is essentially alsolike the tech transfer labs, because they have
the IP, and then they have a vested interest toalso try to commercialise that as much as
possible.
So for them partnering with you, that couldhelp to accelerate that because they have the
tech, they have the IP, they essentially maynot have the team.
(48:06):
But as you guys are company builders, you guysare helping to kind of find a CEO, find someone
to run growth.
And then I think that the strength that theuniversity has is they have those labs and they
have the scientists to build that tech up, butthen really to scale it and generate revenue
from that, you need some additional key people,which I think you guys can help kind of like
(48:27):
insert to take to scale and turn into aprofitable company at some point.
Yeah, absolutely.
Cool.
Oh, it looks like there's one question here.
I guess John and Bandar, do you guys just wantto yell out your questions?
And then I know we got a few minutes left, somaybe we can get those final questions.
(48:50):
So I guess John, you want to just shout outyour question?
Or I can read it too.
Yeah, no.
Thanks, Liz and Joel, doing this.
Appreciate it a lot.
My question is basically, if this has alreadybeen covered, I apologize.
But I've made a lot of investments into venturecapital funds as a LP or as an angel.
(49:12):
I'm looking to make investments now moredirectly with the startups.
I was just wondering if you have any advice orsuggestions for that.
Yeah, absolutely.
I mean, it sounds like you need a really solidsourcing strategy.
It's clear that you're coded, you've got a goodability to deploy capital, but I would say,
(49:32):
getting in touch with founders, Very often wemake assumptions around what size chat is going
to be there, there are limit or it's too small,and especially if there's other strategic value
that you can offer.
So figure out what is the niche that you'repassionate about that you're that you want to
focus on.
And I would say similarly coming up with asourcing strategy about how you're going to
meet these founders.
(49:53):
And it's really as simple as asking, I thinkfounders love to hear especially from
individuals, right?
Because you're not going be the lead investor,which is where they start to have to make these
trade off decisions and choose a bit more.
But you can say, love what you're building.
And I think this is how I can add value.
And, know, I'd like to participate, I'd like toinvest in your, you know, in your next round.
And again, you can sort of say like, this ishow much I'm willing to invest or like, what
(50:18):
the, what size checks are you accepting fromindividuals?
And that's a great way to go about it.
I think it's also a wonderful way for you tothink about what a more formal career in BC
looks like, right?
Because that's the same problem they have.
They're like, we have all this capital todeploy, and we want to figure out how we deploy
it.
The other thing that you can do is if you findother sort of like minded individuals who are
(50:40):
interested in the same spaces that you are, youcan also set up like a syndicate on AngelList,
and use that as the way to have a larger volumeof capital that when you reach out to founders,
you can invest if, find depending on your focusindustry that the capital requirements are a
bit larger than what you might independently bewilling to do.
(51:00):
Thank you so much.
That was awesome.
Thanks a lot.
Appreciate it.
Yeah, my pleasure.
And Bandar, you had kind of a portfolioquestion.
You want to just elaborate on your question?
Yeah.
Hi.
Hi, everyone.
Hi, Melissa.
Nice to meet you.
Hi.
I'm asking about the portfolio.
I have seen seen it yesterday.
(51:21):
It it has more than 62 startups and a lot ofdomains, and so you have something in bee and
honey and batteries and laundry.
So, is it a challenge to manage like thisdiversified portfolio or it's something or
(51:41):
there is some strategy to manage this kind ofportfolio?
Yeah, absolutely.
So, some firms are generalist, others focus ona specific industry.
So, maybe they just focus on batteries orlaundry.
And at Tech Square Ventures, we focus onbusiness model type.
So, B2B, mostly because we think that thechallenge of startups are going to encounter at
(52:02):
the stage that we're investing typically seedand series A.
Those are the challenges that we have theexperience to help those entrepreneurs with as
they think about strategy of stealing that goto market machine.
And so again, role is not to be the expert intheir business, because that would be
(52:24):
problematic if we knew more about theirindustry, their business than they did.
But it's really about being equipped to supportthem and being very clear about what that looks
like upfront.
So, part of value prop and so our value prop isthat we can absolutely help them with the
challenges that they're going to encounter asthey seek to scale for the specific type of
business model that they selected.
(52:45):
Yeah, thanks.
That was helpful.
Okay, awesome.
Great, well, hey Melissa, I know we're likethree minutes away, so wanted to just be
mindful of your time.
And if anybody else has a really quickquestion, feel free to shoot it out.
But if we don't see anything else, just wannapersonally thank you for coming in.
I know you're super busy, so it just means alot for you to make time for us and share your
(53:09):
journey.
There's just a lot of really helpful Thenuggets nuggets in are
all mine.
This has been excellent.
Thanks so much for inviting me to be a part ofthis with you guys.
This is great.
No, this is great.
Well, hope you have a great week and hope tocatch up soon.
Keep in touch and let me know if you're in NewYork, do some coffee or something.
Yeah, let's do it.
(53:29):
All right.
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