January 21, 2025 • 45 mins
On this episode of The Founder's Sandbox, Brenda speaks with Salvador Badillo Rios. Salvador is Founder and CEO of EquiTech Innovate, a strategic consulting and advisory firm aimed at helping underserved and overlooked founders bring innovative and disruptive technologies to market. He is also Senior Associate and Portfolio Manager at National Security Innovation Capital (NSIC), a component of the Defense Innovation Unit (DIU), aimed at accelerating early-stage dual-use deep tech startups toward commercialization
At DIU and NSIC, Salvador supported 21 early-stage dual-use hardware startups across 12 states with ~$50M over three years leading to over $335M in total follow-on private capital (up to 20X funded amount at up to 11X prior to funding valuation).
They speak about Sal’s origin story; how despite being from a disadvantaged background, this has not deterred his purposefulness and positivity to make a difference particularly in underrepresented communities. Listen as Sal shares how he eventually settled on an engineering degree after choosing over music and English literature. What he does today as a senior portfolio manager in the DIU defense innovation unit’s National security innovation capital is a long way from Rancho Cucamonga.
You can find out more about Sal at:
Linked IN: https://www.linkedin.com/in/salvador-badillo-rios
Transcript:
00:04
Hi, I'm pleased to announce something very special to me, a new subscription-based service through Next Act Advisors that allows members exclusive access to personal industry insights and bespoke
00:32
corporate governance knowledge. This comes in the form of blogs, personal book recommendations, and early access to the founder's sandbox podcast episodes before they released to the public. If you want more white glove information on building your startup with information like what was in today's episode, sign up with the link in the show notes to enjoy being a special member of Next Act Advisors.
01:01
As a thank you to Founders Sandbox listeners, you can use code SANDBOX25 at checkout to enjoy 25% off your membership costs. Thank you.
01:19
Welcome back to the Founders Sandbox. I am Brenda McCabe, your host to this monthly podcast that reaches entrepreneurs and business owners who learn about building resilient, purpose-driven and scalable businesses with great corporate governance. Guests to this podcast are founders themselves, professional service providers, corporate board directors and investors.
01:47
who like me want to use the power of the enterprise, be it small, medium, and large, to create change for a better world. And I do storytelling with each one of my guests that starts with their origin story. And then we'll get into the contents of the podcast with each of my guests, and we touch upon topics around resilience, scalability, and purpose-driven.
02:15
initiatives or what drives the guest. So thank you for joining me. And I am absolutely delighted this month to have Salvador Badillo Rios, Sal, as my guest. So thank you for joining me, Sal. Thank you, Brenda. I'm very excited to be here. Excellent. So we met not too long ago. I am a member of Angel Capital Association and attended their national
02:44
Summit in Columbus, Ohio. And I'm from Columbus, Ohio. So I kind of killed two birds with one stone. And I was blown away. So I've been a member for three years. And this year they had for the first time a breakout session on deep tech and dual technologies. And Sal, you were one of t
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:04):
We're standing on the edge of something big.We're going to make some changes. Hi, I'm pleased
to announce something very special to me, anew subscription-based service through Next
(00:25):
Act Advisors that allows members exclusive accessto personal industry insights and bespoke corporate
governance knowledge. This comes in the formof blogs, personal book recommendations, and
early access to the founder's sandbox podcastepisodes before they released to the public.
(00:46):
If you want more white glove information onbuilding your startup with information like
what was in today's episode, sign up with thelink in the show notes to enjoy being a special
member of Next Act Advisors. As a thank youto Founders Sandbox listeners, you can use
code SANDBOX25 at checkout to enjoy 25% offyour membership costs. Thank you.
(01:19):
Welcome back to the Founders Sandbox. I am BrendaMcCabe, your host to this monthly podcast that
reaches entrepreneurs and business owners wholearn about building resilient, purpose-driven
and scalable businesses with great corporategovernance. Guests to this podcast are founders
(01:41):
themselves, professional service providers,corporate board directors and investors. who
like me want to use the power of the enterprise,be it small, medium, and large, to create change
for a better world. And I do storytelling witheach one of my guests that starts with their
origin story. And then we'll get into the contentsof the podcast with each of my guests, and
(02:08):
we touch upon topics around resilience, scalability,and purpose-driven. initiatives or what drives
the guest. So thank you for joining me. AndI am absolutely delighted this month to have
Salvador Badillo Rios, Sal, as my guest. Sothank you for joining me, Sal. Thank you, Brenda.
(02:32):
I'm very excited to be here. Excellent. So wemet not too long ago. I am a member of Angel
Capital Association and attended their nationalSummit in Columbus, Ohio. And I'm from Columbus,
Ohio. So I kind of killed two birds with onestone. And I was blown away. So I've been a
(02:52):
member for three years. And this year they hadfor the first time a breakout session on deep
tech and dual technologies. And Sal, you wereone of the panel members. And I myself love
to work with deep tech companies. So we hada lot of synchronicities. And that's when I
(03:17):
asked you to join me eventually here in thepodcast. Yeah, yeah, no. Yeah, that's where
we met. And I think it was an amazing opportunityto really connect with the angel community.
I think oftentimes, you know, there's a lotof focus on VCs, but angels really drive that
early start to these companies and to thesetechnologies. And so I wanted to make an effort
(03:39):
to reach out to the angel community, educate,inform, you know, angels about deep tech and
a lot of the DOD opportunities that there arefor startups and potential collaborations and
synergies. So yeah, I'm happy to have met you.So we're going to touch on a couple of those
points because you do have a multifaceted careerand background and diverse founder yourself
(04:04):
of your own. strategic consulting and advisoryfirm. So you are founder and CEO of Equitech
Innovate. And it's really working towards servingunderserved and overlooked founders that bring
innovative and disruptive technologies to market.So kudos to you. That's amazing. Thank you.
Thank you, yeah. And another hat you wear, andI don't know where you find the time in the
(04:29):
day. Frankly. And this was your speaking capacitywhen I met you earlier this year, your senior
associate and portfolio manager at the nationalsecurity innovation capital, a component of
the defense innovation unit, DIU. So lots ofacronyms in our department defense. So INSEC
(04:53):
and DIU. And I was fascinated because that particulararea, what you're involved in is it's accelerating
early stage dual use later on, you're goingto tell us what dual use is. Yeah. Deep tech
startups toward commercial commercialization.So, um, again, thank you, um, for joining me.
We're going to talk about deep tech. We're goingto get into also your own work that you're
(05:17):
doing with, um, underserved founders. And Ialways like to have a title of our episodes.
Um, and this one, I really think we're goingto talk about scalable businesses. So what
you're doing. particularly with NSIC and theDIU is scaling, identifying early stage companies
(05:37):
that truly have the promise of scaling. So scalablebusinesses. And you know, in a short period
of time, you have scaled and then we'll getinto the questions, but I was also very impressed
with the focus of the work at the DIU and NSIC,you've used yourself have supported 21 early
(05:59):
stage dual use hardware, all right, not software,hardware startups across 12 states with over
$50 million over the last three years. And that'sled on to lead on it investments of 335 million
of private capital and up to 20 times fundedamount at up to 11 times prior to fund evaluation.
(06:22):
Amazing, amazing, amazing. Thank you, yeah.All right. So can you... describe for my, let's
get into your origin story. Your PhD aerospaceengineering, first generation Latino. LGBT,
tell me what would be your tagline if anything.What I mean, this mashup of deep, tell me your
(06:48):
origin story. How did you know what you're doingtoday? Yeah, thank you, yeah. I mean, yeah,
I mean, I was thinking through the tagline andI was like, well, I think maybe one could be,
you know, life through punches, but I turnedthem into power and purpose. And so I think,
you know, everyone, I'm sure has their own setof struggles, right? Everyone has dealt a different
(07:12):
set of cards, right, in life. And it's reallywhat you make of that, right? That really defines
you. So for me, right, I grew up, Here in SouthernCalifornia. So I grew up in Rancho Cucamonga,
about an hour East of LA without traffic. Andso yeah, I grew up, my background is Mexican.
(07:38):
So my parents are from Mexico. They met hereand I'm the oldest of three. So I have two
younger siblings. One is a year younger andthen the youngest, seven years younger, but
he has down syndrome pretty severely. So I grewup in a disadvantaged background in a community
(08:00):
where really I didn't know anyone that wentto a four-year college, no one that went into
any STEM field, right? And so, and my parentsalso, right, had never gone to college. So
a lot of it was just learning and figuring thingsout along the way. But I was lucky to have
(08:21):
teachers that believed in me, that saw sortof something in me in school. And they would
say, oh, yeah, you need to go to college. Orthey would say, oh, you're good at math and
science, things like that. And so they wouldreaffirm those things. But even once I got
to high school, I really hadn't really plannedfor the future. I didn't really have thought
(08:44):
about what major I wanted to go into or whatcollege I wanted to go. And so it was around
being around other students that had thoughtabout that a little bit better or had parents
who were engineers or doctors that when theystarted asking me about it, I was like, oh,
I don't know, but let me start thinking aboutit a little bit more. And so, yeah, so in my
(09:11):
classroom, one of my teachers said, oh, theUC applications opened up. And so that's how
I found out. you know, that I should apply tocollege. There were several interests that
I had, write music, English literature, andthen STEM, right? And so I decided to go and
try engineering and initially started with civilengineering, transitioned into mechanical and
(09:38):
then added aerospace, just as, you know, beingin college and taking different courses and
being involved in different projects and clubs.That's sort of how my interest kind of evolved.
But even then, right, I didn't know about whata PhD was, or venture capital, or the field
(10:00):
that I'm in now. So a lot of it has been a bitof a learning process. And I'm lucky to have
had different organizations along the way gearedtowards underserved communities in STEM. you
know, PhD or things like that, that help createawareness for me about the different opportunities.
(10:23):
My thing is you can't really go after somethingthat you don't even know exists, right? So
the more you're aware about different opportunities,the more you can sort of start to pave your
path based on your own interests, so yeah. Soyou're a lifetime learner, although you're
very young still. Thank you for the interestin that. It's interesting because yesterday
(10:48):
I was on a webinar with the National Associationof Corporate Directors. It was about AI and
workers, right? And interesting enough, thecurrent generation, the largest generation
that composes the workforce in the United Statesare Gen Xers. No, Gen Zers. And the average
(11:14):
retention, so the average period of time thatthey're in is 2.4 years. The next generation
is the alpha, right? They're like 13, 14. Theywill have up to 17 careers, is what they're
saying. And so the young, yes. You have so manyopportunities. And again, I think people in
(11:37):
your early childhood, your neighborhood, yourschool, this professors that saw the, the ability
for you with STEM related topics, they gearedyou those opportunities. So yeah, it's amazing
the future of workforce and opportunities. Soyou yourself are going to get into in this
(12:01):
podcast. Yeah. Some of that so you get out ofcollege and what is your first gig? What'd
you do? Yeah, well, again, I went all the wayto the PhD route. So one thing that was unique
and what plugged me into DOD was, you know,going into my PhD, I had the opportunity to
(12:22):
go to UCLA, but having a unique opportunityto work with the Department of Defense. And
so whereas most students conduct research oncampus, in my case, I had the opportunity to,
after I take a few of my, you know, some ofmy course requirements go to Edwards Air Force
Research Lab, which is called the Rocket Lab,and really conduct research there. And so one,
(12:49):
you get a lot more resources, right? Just becauseyou're within DoD. And so you're able to really
run, you know, and create projects and do thesethings that are at a higher level, right? This
research is able to conduct at a higher level,and working on also important problems to national
(13:09):
security, you know, to the DOD that are moreapplicable than simply something that's just
in a lab, right, that may be cool and interesting,but maybe there's not, you know, a huge focus
on the application area. And so, yeah, I gotto work alongside other military members and
other researchers at DOD and really start tolook things from a national security perspective.
(13:34):
And so how is certain technologies, whethermore fundamental, more applied, how is that
important to DOD and national security in general?As well as, you know, I got to see a lot of
also the issues within traditional DOD and obstaclesand sort of inefficiencies as well. And so
(13:59):
it gave me sort of this unique perspective thatI would say most PhD students typically don't
get, so I was very fortunate to have that. Andso while being there, I also got interested
in an entrepreneurship program. I was like,I wanted to get myself out of my comfort zone,
out of the box and really interact with peoplefrom different backgrounds, not just from the
(14:26):
STEM background. And... And I loved it. I didn'tknow that I was going to love it. And I just
decided to try it one day. And I just reallyloved speaking with customers. I got to be
part of a student led startup. And so speakingto customers and that customer discovery phase,
pitching to VCs, brainstorming with people fromdifferent backgrounds. I was like, this is
(14:51):
where I want to be at. And so I thought I wantedto go into product development. at a startup.
And so that's what I was gearing towards. Andso taking business courses online. And again,
this is when the pandemic started to hit. Sotaking business courses online, learning more
(15:12):
about emerging technologies like quantum andAI, that just interested me. And then DoD found
me. And so they were like, okay, you have thisunique you know, technical background, background
with DoD and some knowledge, right, regardingDoD and then interest in this startup and business,
(15:37):
you know, business world. And so DoD was reallystarting, wanted to stand up and say National
Security Innovation Capital, which, you know,focuses on early stage hardware technology.
So as you may know, a lot of funding tends togo. towards VC funding tends to go towards
software and not enough towards hardware. Andoften hardware companies will resort to getting
(16:05):
foreign capital, which at times may be consideredadversarial and may compromise national security.
And so DoD wanted to sort of get a hold of thisa bit. And so stand up this program. And so,
yeah, a few of my team members and I, we basicallywere hired on board to really stand up this
program. And this really involved developingthe funding thesis, establishing the processes,
(16:31):
eventually me running operations. Then becauseof my background, right? I got to do a lot
more and help source these startups, evaluatethese startups and help fund them and then
support them. So I think naturally I just likewearing a lot of hats. It was very, it's been
a very startup culture. in a way just becausewe're a very small but mighty team. And so
(16:56):
it's allowed me to do a lot as well as havea seat at the table and really sort of see
things from that perspective. I love the thatyou were in the early stage of standing up
the is it pronounced in sick. We usually referit to as an insect. So what are you know, these
(17:21):
will be in the show notes, the we have a kindof infographic on NSIC. What are the I think
there's seven key areas of investment withinthe DOD? Yeah. So again, we're a component
of the Defense Innovation Unit. And so
(17:51):
companies that are a little bit more maturethat have some VC funding, that have commercial
product. And the goal there is for them to findsort of the use cases and sort of pair those
gaps with and look for specific solutions toaddress those gaps and transition that technology
(18:15):
into DoD. Again, we focus on the earlier stage,pre-seat to seat stage companies. And so, however,
our technology areas are aligned with DIU'sportfolios. So, you know, our technology areas
are autonomy. And then sensors is weaved intothat now. So advanced sensing would fall into
(18:38):
autonomy. Energy technology. So this can involveenergy storage. Advanced battery chemistries
is a big thing under that one. space technology.And so this is satellite stuff, as well as
satellite communications, things like that.Telecommunications, so advanced communications
(19:00):
technologies. And again, there's a lot of synergieswith these different technologies. And then
we have an emerging technologies area, whichunder that we've been edge computing hardware.
electronics, photonics, as well as hypersonicsplatforms. Interesting. It's fascinating. Yeah.
(19:28):
And then within that we have sort of fundedas well companies that are in the sort of advanced
manufacturing, advanced materials, but theyusually align with one of the technology areas
that I mentioned. So for my listeners, I wouldabsolutely love you to define deep tech and
(19:51):
dual technologies, all right? Yeah. Becausemany, you know, I have quite a large audience
now and it's a concept that we don't run into.You don't go to the grocery store and buy.
Right, yeah. Yeah, I even had a friend, youknow, just a close personal friend that is
not in this field at all. asked me about thattoo. So yeah, it's constantly educating, right,
(20:15):
the audience, just because it is a crucial partof our society nowadays. So yeah, so I would
say I would describe deep tech startups as sortof being distinguished by their intensive focus
on sort of cutting edge technologies and scientificachievements. So they operate at the frontier
(20:37):
of innovation. And so I would say they're characterizedby sort of novel solutions that are rooted
in scientific breakthroughs or, you know, significanttechnological or scientific breakthroughs.
And you know, I think where a lot of technologies,a lot of conventional startups leverage existing
(21:00):
technologies to solve market needs, deep techstartups. can often create entirely new markets
or radically transform existing ones with theirdisruptive innovations. And so the reason I
think there's probably a name for this set oftechnologies is because they also face unique
(21:24):
challenges in commercializing their innovation.So one characteristic thing and challenge is
long development cycles. So, you know, theyoften require years, if not even decades, right,
for research and development before you evenhave some viable prototype, right, that may
(21:45):
become a product. High R&D costs, right, so,you know, very capital intensive, you know,
and securing funding can be challenging, especiallyin the early stages for these sets of technologies
that are often unproven or the market potentialis not quite fully understood. And so when
(22:09):
it comes to going to market, it may be a littlebit more challenging because it's not just
a matter of finding product market fit, butit's also about educating potential customers
about. you know, educating the market rightabout your technology. Right. And the dual
(22:34):
purpose? Yeah, so the dual use purpose reallyinvolves having both commercial and defense
applications. So defense tech, you know, issort of a focus on these DOD critical needs
for national security to enhance military capabilities.And so the dual use aspect means really developing
(23:00):
a product or technology that can serve both,civilian and military purposes. And so I will
say there are challenges with this though, justbecause the DOD aspect is mission focused,
right? And so you have to worry about findingproduct mission fit in that sense. Whereas
(23:22):
on the commercial side, you have to worry aboutfinding product market fit. And so, it can
be competing at times, right? Where,
the startups and VCs are naturally focused onrevenue and increasing sort of their investment
and DOD may be focused on the mission, right?And so, it's a matter of really finding where
(23:47):
you can overlap both of those missions, right?To really make progress in society. And then
it's also as you're developing a technology,it's a matter of balancing as well, the different
requirements and applications. So, yeah. Sothe startups that you have been involved with,
(24:11):
have they come like a spin out as a technologytransfer from a university or not? I mean,
where did you? Yeah. Where did these companiescome from? Their original ideas. Yeah. Yeah,
so a lot of the companies that we fund, someof the technologies have begun in a university
(24:35):
research lab setting. However, they're usuallya little bit further along before we see them
and we fund them. So we have partnerships withdifferent programs, including National Security
Innovation Network, which is a part of DIU.that really focuses more on really helping
spin out these technologies out of a researchsetting and finding those DOD use cases. And
(25:02):
again, we also look at companies from all overthe US. So, our meetings are usually virtual,
which makes it easy for companies to reach us.But yeah, they come from all sorts of settings,
right? Some of them have spin out from the lab.others from another company. But like I mentioned,
(25:26):
by the time we see them and we fund them, they'vealready had some preliminary traction on the
DOD side, whether that means some funding spokento and, you know, DOD users to really develop
the requirements, as well as some commercialpreliminary traction, like obtaining letters
of support and things like that. Yeah. So aboutthe time I met you, I'd also been working in
(25:50):
deep tech. And I have heard that perhaps privateinvestment VC money had been crowding out the
traditional investment of Nandaluda fundingthat was under either the DOD or SBIR. Right.
(26:16):
And for like the last 20 years or so. And theDepartment of Defense, and actually under,
I think it was the Obama administration, AshCarter kind of flipped the model and said that
we can actually do dilutive as well as non-dilutivefunding in order to attract again, I don't
(26:39):
know whether you're losing the game, but toreally get back into the pipeline. of potential
new businesses and new technologies. Is that,and that's kind of what I've, you know, you
perceive it. I also saw that SBIR grants, VCswere no longer allowed to participate probably
(27:00):
about eight years ago. So what have your observationsbeen on the public versus private investment
in the strategic mission-driven sectors is,is it true? What I'm saying is that I mean,
there's no probably it's not black or white,right? So what is the transition between public
(27:26):
and private investment in these strategic sectorsevolve? Yeah, yeah. Yeah. So the way I would
see it is, you know, a while back, there wasreally a lack of communication between sort
of these public and private entities. And sothere wasn't much of a collaboration going
on. And so, for example, with the establishmentof DIU, the purpose was to really establish
(27:51):
those public and private partnerships to reallyfurther innovation and especially deep tech
innovation. And so that was just the first goal,right? Let's improve and establish these public
and private partnerships and show that we canwork together to fund companies. that was a
(28:12):
little bit rocky and figuring out, okay, howdoes that work and who does what? But I think
over time, right, those relationships have reallybecome established in some way and have been
fortified. And now, DIU and NSIC and all theseother DOD entities, we have strong relationships
(28:36):
with different BCs and accelerators and othertypes of organizations. they are aware of us
and are interested in really knowing what ourpriorities are. And we are trying to always
better communicate that to them. And we're goingon funding companies together. So I would say
that was sort of the first phase over time.Then, you know, I think you focused on, OK,
(29:04):
let's see if we can if this model works, right?If we can fund companies. using OTAs, for example,
these prototype contracts, and helps to transitionsome of this technology into DoD. And I would
say now where we're at is now we're really hyper-focusedon the, you know, because we already proved
(29:30):
we can do this, so now it's, okay, let's focuson the most impact for an urgent technologies
to DoD, especially given the current geopoliticalclimate. And so now we've sort of shifted into
really a focus on these high impact, high, youknow, at large scale and in high urgency technologies
(29:52):
and startups. So it's a journey, right? It'san evolution. It's been a journey, yeah. And
then on the hardware side, right, again, it'sbeen a little bit different, but again, similar
where, you know, there wasn't a lot of, I wouldsay, VC interests to really fund, especially
hardware, early stage technologies. VCs weretypically repelled by that, right, in some
(30:16):
sense. And naturally so, right? But I thinkwith standing up NSIC and these other organizations,
there's been actually several VCs now in thispre-seed to seed stage, funding. hardware companies.
(30:37):
And so I would say now the hurdle is probablyas we funded these companies, now they go on
to series A, series B and now they need BCsat that stage, right? To really help them along
and further their scaling, right? And so I wouldsay more work is probably needed on that end
(30:57):
now.
Very exciting times.
Let's switch gears and let's go back to yourconsulting firm. Equitech innovate. Again,
I don't know where you find the time, but I,you know, so can you showcase here what it
(31:22):
is that you do in serving the underrepresentedfounders that are in these disruptive technologies?
What was it that made you go out on your own?Yeah, yeah, so just being in the deep tech
space that I'm at, and, you know, dual use aswell, you know, one thing that I started noticing,
and it's something that I've noticed even fromjust my own background, right, in STEM, right,
(31:46):
sort of one, a lack of diversity and representation,right, of, you know, different backgrounds,
especially my backgrounds, right, whether it's
And so again, this is naturally found in a lotof the, deep tech spaces, right? Finding leadership
(32:13):
and innovators in that space. And that, that'sa whole nother conversation, right? But there's
a lot of hurdles, just even for people gettingto that space, right? And so naturally you
find sort of a lack of talent there. And thenthe other thing is, you know, once, you know,
(32:35):
you have underserved communities in deep tech,right, then you have less of them that are
aware or become deep tech founders, right? Andso then once you are a deep tech founder, right,
then you have these VC funding gaps, right,that you find, right, where out of all the
(32:57):
VC funding, 136 billion, only 1% goes to Blackfounders or even smaller to Latinx or Indigenous
or to women. And especially being in the fieldthat I am in, I would see very few, again,
founders from understaffed communities evenapplying to our program. But then unfortunately,
(33:20):
even those that did apply, sometimes the qualitywas just not up to par. Okay. And so it does
tear me a bit, you know, in the sense that,you know, I have compassion, but at the same
time, there's a level of quality that we needto maintain and things like that. And that
(33:40):
is because they often lack some of the resourcesand guidance, right? And so even to get to
where they're at now has been such a huge feat.And so that's where I saw the opportunity
strategic consulting and advisory firm to reallyhelp underserved founders and give them a little
(34:02):
bit more guidance and really help them get theirtechnologies to market. Bringing in my DOD
expertise, my deep tech expertise, and alsoin working with underserved communities throughout
my career with different nonprofits and whatnot.All right. Yeah. Yeah, being that person that
(34:25):
looks like them, right? In the room, right?And you also have, you're a mentor for the
Stanford Latino Business Action Network. Andyou're serving on the board of directors for
Science is Elementary. And tell me, is thatalso part of kind of mission-driven? Speak
(34:47):
to me a bit about those collaborations. Yeah,yeah, it is, yeah. So... Again, just because
I'm interested in helping underserved founders,you know, I must have gone, I think to an event
at Stanford, and then that's how I got pluggedin to that nonprofit organization. Okay. Yeah,
so I became a mentor, that this was before startingEcotech Innovate. And so again, that's where
(35:13):
I also just got to focus on helping underservedfounders and really guiding them, get them
through that process. And then in terms of thenonprofits that I'm a board of directors for,
yeah, so one of them is Science is Elementary.And so that nonprofit, we focus on really providing
(35:37):
inspiring, innovative, high quality scienceexperiences to preschool and elementary school
children from underserved communities. And.you know, that involves, you know, teaching
students, right, training teachers as well,to really build sustainable and quality sort
(35:58):
of curriculum, and then engaging as well withdifferent scientists and STEM professionals,
and some of them may serve as role models andmentors and things like that. So again, I didn't
have any sort of exposure to this. I wish Idid when I was, you know, a young kid. But,
you know, I think providing that for the industrycommunities is very important because that's
(36:19):
where it begins, right? Yes, but you get exposedto it. Yeah, you get exposed, so you learn
about opportunities. And so you can dream tobe a scientist or things like that. And also
you get rid of those fears, right? That mayintimidate you from going into STEM, right?
Because now there's familiar. And then alsoit's important to know that going to STEM doesn't
(36:44):
necessarily mean you need to be a scientist,right? I've transitioned into this role, which
is more business, right? But my science background,I'm able to leverage that and it's sort of
a value add. So in the show notes, I would liketo call out different ways by which my listeners
(37:06):
can contact you. Can you speak to... what youwould like to have in the show notes? Is that
your LinkedIn profile? Tell me a little bitabout that. Yeah, so yeah, people can reach
me on LinkedIn. I'm on there. Also, www.ancik.mil,you can find my LinkedIn there. And also, equi
(37:33):
You can find my, you know. LinkedIn informationthere as well as my email, salvador at equi
Excellent. So that will be in the show notesas well as the infographic of NSIC. Thank you.
So I am gonna move into the part of the podcastthat I repeat with every single guest. I have
(38:00):
my own consulting firm, NextAct Advisors, andI really work with growth stage companies on
being purpose driven, scalable and resilient.And I'd like to ask you, I guess, what does
purpose driven mean to you? Yeah, I think tome, I've actually always been drawn to purpose
driven work. And so for me, it's the so what,right? So there's a lot of cool things you
(38:26):
can do, cool technologies. But to me, it's thewhy, right? And the so what behind it, that
really pushes me and motivates me to reallydo the work that I do because I know I'm making
a difference in people's lives in one way oranother, in a positive way. So whether it's
(38:47):
through the nonprofits that I've been involvedwith, both at a volunteering level and then
now on the board leadership or through NSICand DIU, right? Helping the war fighter and
helping with national security. or now withmy consulting firm and really focusing on helping
underserved founders, I think that I'm justdrawn to really purpose-driven work that creates
(39:15):
a positive impact in people at scale, right?And maybe lead on to your next question, but
that does it in a meaningful way. So that movesthe needle. I love it. So you've chosen really
in alignment with your own Origin story. Soscalable growth. What does that mean to you?
(39:39):
And maybe wearing your INSEC hat or what wasscalable? Yeah. So I think, you know, first
in terms of like, you know, deep tech startupsand going that route, the focus is first on
finding product market fit and really gettingthere. But once you do, I think scaling is
(40:04):
really about growing, right? Growing not onlyyour team, but expanding your product and really
doing it in an impactful way. And I think alongwith that comes many challenges, right? That
you have to make sure your manufacturing processesare in order and that can... really accommodate
(40:29):
for the volume and speed at which you need todo that. And so I think before scaling needs
to come preparedness, right? Being preparedto grow before you do grow because one thing
I find often is, you know, sometimes peopleare focused on growing and then as you're growing,
you're really finding all these things thatyou can't keep up with, right? And then unfortunately,
(40:52):
sometimes that's where startups fail, right?And so, and it's sad because you've gone so
far right along. And so, since you've workedso hard to get there, it's important to just
take a beat and really prepare for the growthbecause I think that will set you up for success.
You know, I'm gonna divert a little bit fromthe third question. I mean, product market
(41:20):
fit. Yeah. And software, right? Deep tech technologies,it's really about around technology readiness
level, TRLs, right? Scaling right to that levelwhere you are scalable, right? Can you for
my listeners again, indulge us in technologyreadiness levels? Yeah. So, yeah. So there
(41:48):
are different, you know, technology readinesslevels that really describe sort of. where
your technology is in its development. WithNSIC, for example, we have a minimum TRL three.
And so that involves at least having sort ofanalytical and experimental critical function
(42:08):
and or characteristic proof of concept. So wedon't fund, you know, sort of paper studies
or science projects. And so, that's a TRL levelthat we focus on. And as that TRL advances,
then you get into the testing phase and in-fieldenvironment testing and things like that. So
(42:34):
then you can further refine your technologyuntil it's really ready for a proper use case.
And then I would say one thing we focus on nowis also just on the level of advancement in
that TRL, right? So, you know, the more youcan advance with the funding, the better and
(42:57):
so that involves really having a very strongproduct development plan, right, in place.
So that you get more bang for your buck in away. Right, right. So the product roadmap.
Yeah. Thank you. Let's get back to the sandboxand its resilience. What does resilience mean
(43:18):
to you? Yeah, thank you. Yeah. Yeah, it's onething that someone told me, you know, they
said, you're very resilient. And I was like,oh, really? Thank you. And so, yeah, reflecting
back in my life, right? Again, as I mentionedbefore, you know, you'll be dealt different
cards in life, you know, punches, right? Andsometimes that will be things that you have
(43:39):
no control over. And sometimes there'll be consequencesbecause, you know, you're human and you're
young and you make mistakes. And... you're stubbornat times or things like that. And so I think
resilience is, for me it involves a few things.One is not allowing that to define you. And
so it means getting back up, but it also meansgetting back up stronger and wiser, at least
(44:07):
for me, right? There's, I think something youcan learn about yourself. and about the situation
and about others, right? In whatever circumstanceyou're in. And so it's really making sure you
learn the most you can about that particularsituation so that when you do stand up and
move forward, you're able to do so in a moreintentional and successful way, hopefully.
(44:33):
Thank you. So last question, did you have funin the sandbox today? Oh, I had a lot of fun.
Yeah, thank you so much. Yeah. It's been a uniqueexperience. And so, I had a great time speaking
to you when we first met and so today as well.So thank you so much for inviting me. Thank
you, Sal. To my listeners, if you liked thisepisode with Sal Badiyurios, CEO and founder
(44:58):
of Equitech Innovate, as well as advisor withInsic of the DIU, that's the Defense Innovation
Unit. Please. sign up for the Founder's Sandbox.It's released monthly. And business owners,
corporate directors, and professional serviceproviders are my guests and they help us learn
(45:22):
about how to build with strong governance, resilient,scalable, and purpose-driven companies to make
profits for good. So signing off for this month,thank you. And again, Sal, thank you for joining
me. Thank you.
We're standing on the edge of something big.We're going to make some changes. Hi, I'm pleased
to announce something very special to me, anew subscription-based service through Next
(00:25):
Act Advisors that allows members exclusive accessto personal industry insights and bespoke corporate
governance knowledge. This comes in the formof blogs, personal book recommendations, and
early access to the founder's sandbox podcastepisodes before they released to the public.
(00:46):
If you want more white glove information onbuilding your startup with information like
what was in today's episode, sign up with thelink in the show notes to enjoy being a special
member of Next Act Advisors. As a thank youto Founders Sandbox listeners, you can use
code SANDBOX25 at checkout to enjoy 25% offyour membership costs. Thank you.
(01:19):
Welcome back to the Founders Sandbox. I am BrendaMcCabe, your host to this monthly podcast that
reaches entrepreneurs and business owners wholearn about building resilient, purpose-driven
and scalable businesses with great corporategovernance. Guests to this podcast are founders
(01:41):
themselves, professional service providers,corporate board directors and investors. who
like me want to use the power of the enterprise,be it small, medium, and large, to create change
for a better world. And I do storytelling witheach one of my guests that starts with their
origin story. And then we'll get into the contentsof the podcast with each of my guests, and
(02:08):
we touch upon topics around resilience, scalability,and purpose-driven. initiatives or what drives
the guest. So thank you for joining me. AndI am absolutely delighted this month to have
Salvador Badillo Rios, Sal, as my guest. Sothank you for joining me, Sal. Thank you, Brenda.
(02:32):
I'm very excited to be here. Excellent. So wemet not too long ago. I am a member of Angel
Capital Association and attended their nationalSummit in Columbus, Ohio. And I'm from Columbus,
Ohio. So I kind of killed two birds with onestone. And I was blown away. So I've been a
(02:52):
member for three years. And this year they hadfor the first time a breakout session on deep
tech and dual technologies. And Sal, you wereone of the panel members. And I myself love
to work with deep tech companies. So we hada lot of synchronicities. And that's when I
(03:17):
asked you to join me eventually here in thepodcast. Yeah, yeah, no. Yeah, that's where
we met. And I think it was an amazing opportunityto really connect with the angel community.
I think oftentimes, you know, there's a lotof focus on VCs, but angels really drive that
early start to these companies and to thesetechnologies. And so I wanted to make an effort
(03:39):
to reach out to the angel community, educate,inform, you know, angels about deep tech and
a lot of the DOD opportunities that there arefor startups and potential collaborations and
synergies. So yeah, I'm happy to have met you.So we're going to touch on a couple of those
points because you do have a multifaceted careerand background and diverse founder yourself
(04:04):
of your own. strategic consulting and advisoryfirm. So you are founder and CEO of Equitech
Innovate. And it's really working towards servingunderserved and overlooked founders that bring
innovative and disruptive technologies to market.So kudos to you. That's amazing. Thank you.
Thank you, yeah. And another hat you wear, andI don't know where you find the time in the
(04:29):
day. Frankly. And this was your speaking capacitywhen I met you earlier this year, your senior
associate and portfolio manager at the nationalsecurity innovation capital, a component of
the defense innovation unit, DIU. So lots ofacronyms in our department defense. So INSEC
(04:53):
and DIU. And I was fascinated because that particulararea, what you're involved in is it's accelerating
early stage dual use later on, you're goingto tell us what dual use is. Yeah. Deep tech
startups toward commercial commercialization.So, um, again, thank you, um, for joining me.
We're going to talk about deep tech. We're goingto get into also your own work that you're
(05:17):
doing with, um, underserved founders. And Ialways like to have a title of our episodes.
Um, and this one, I really think we're goingto talk about scalable businesses. So what
you're doing. particularly with NSIC and theDIU is scaling, identifying early stage companies
(05:37):
that truly have the promise of scaling. So scalablebusinesses. And you know, in a short period
of time, you have scaled and then we'll getinto the questions, but I was also very impressed
with the focus of the work at the DIU and NSIC,you've used yourself have supported 21 early
(05:59):
stage dual use hardware, all right, not software,hardware startups across 12 states with over
$50 million over the last three years. And that'sled on to lead on it investments of 335 million
of private capital and up to 20 times fundedamount at up to 11 times prior to fund evaluation.
(06:22):
Amazing, amazing, amazing. Thank you, yeah.All right. So can you... describe for my, let's
get into your origin story. Your PhD aerospaceengineering, first generation Latino. LGBT,
tell me what would be your tagline if anything.What I mean, this mashup of deep, tell me your
(06:48):
origin story. How did you know what you're doingtoday? Yeah, thank you, yeah. I mean, yeah,
I mean, I was thinking through the tagline andI was like, well, I think maybe one could be,
you know, life through punches, but I turnedthem into power and purpose. And so I think,
you know, everyone, I'm sure has their own setof struggles, right? Everyone has dealt a different
(07:12):
set of cards, right, in life. And it's reallywhat you make of that, right? That really defines
you. So for me, right, I grew up, Here in SouthernCalifornia. So I grew up in Rancho Cucamonga,
about an hour East of LA without traffic. Andso yeah, I grew up, my background is Mexican.
(07:38):
So my parents are from Mexico. They met hereand I'm the oldest of three. So I have two
younger siblings. One is a year younger andthen the youngest, seven years younger, but
he has down syndrome pretty severely. So I grewup in a disadvantaged background in a community
(08:00):
where really I didn't know anyone that wentto a four-year college, no one that went into
any STEM field, right? And so, and my parentsalso, right, had never gone to college. So
a lot of it was just learning and figuring thingsout along the way. But I was lucky to have
(08:21):
teachers that believed in me, that saw sortof something in me in school. And they would
say, oh, yeah, you need to go to college. Orthey would say, oh, you're good at math and
science, things like that. And so they wouldreaffirm those things. But even once I got
to high school, I really hadn't really plannedfor the future. I didn't really have thought
(08:44):
about what major I wanted to go into or whatcollege I wanted to go. And so it was around
being around other students that had thoughtabout that a little bit better or had parents
who were engineers or doctors that when theystarted asking me about it, I was like, oh,
I don't know, but let me start thinking aboutit a little bit more. And so, yeah, so in my
(09:11):
classroom, one of my teachers said, oh, theUC applications opened up. And so that's how
I found out. you know, that I should apply tocollege. There were several interests that
I had, write music, English literature, andthen STEM, right? And so I decided to go and
try engineering and initially started with civilengineering, transitioned into mechanical and
(09:38):
then added aerospace, just as, you know, beingin college and taking different courses and
being involved in different projects and clubs.That's sort of how my interest kind of evolved.
But even then, right, I didn't know about whata PhD was, or venture capital, or the field
(10:00):
that I'm in now. So a lot of it has been a bitof a learning process. And I'm lucky to have
had different organizations along the way gearedtowards underserved communities in STEM. you
know, PhD or things like that, that help createawareness for me about the different opportunities.
(10:23):
My thing is you can't really go after somethingthat you don't even know exists, right? So
the more you're aware about different opportunities,the more you can sort of start to pave your
path based on your own interests, so yeah. Soyou're a lifetime learner, although you're
very young still. Thank you for the interestin that. It's interesting because yesterday
(10:48):
I was on a webinar with the National Associationof Corporate Directors. It was about AI and
workers, right? And interesting enough, thecurrent generation, the largest generation
that composes the workforce in the United Statesare Gen Xers. No, Gen Zers. And the average
(11:14):
retention, so the average period of time thatthey're in is 2.4 years. The next generation
is the alpha, right? They're like 13, 14. Theywill have up to 17 careers, is what they're
saying. And so the young, yes. You have so manyopportunities. And again, I think people in
(11:37):
your early childhood, your neighborhood, yourschool, this professors that saw the, the ability
for you with STEM related topics, they gearedyou those opportunities. So yeah, it's amazing
the future of workforce and opportunities. Soyou yourself are going to get into in this
(12:01):
podcast. Yeah. Some of that so you get out ofcollege and what is your first gig? What'd
you do? Yeah, well, again, I went all the wayto the PhD route. So one thing that was unique
and what plugged me into DOD was, you know,going into my PhD, I had the opportunity to
(12:22):
go to UCLA, but having a unique opportunityto work with the Department of Defense. And
so whereas most students conduct research oncampus, in my case, I had the opportunity to,
after I take a few of my, you know, some ofmy course requirements go to Edwards Air Force
Research Lab, which is called the Rocket Lab,and really conduct research there. And so one,
(12:49):
you get a lot more resources, right? Just becauseyou're within DoD. And so you're able to really
run, you know, and create projects and do thesethings that are at a higher level, right? This
research is able to conduct at a higher level,and working on also important problems to national
(13:09):
security, you know, to the DOD that are moreapplicable than simply something that's just
in a lab, right, that may be cool and interesting,but maybe there's not, you know, a huge focus
on the application area. And so, yeah, I gotto work alongside other military members and
other researchers at DOD and really start tolook things from a national security perspective.
(13:34):
And so how is certain technologies, whethermore fundamental, more applied, how is that
important to DOD and national security in general?As well as, you know, I got to see a lot of
also the issues within traditional DOD and obstaclesand sort of inefficiencies as well. And so
(13:59):
it gave me sort of this unique perspective thatI would say most PhD students typically don't
get, so I was very fortunate to have that. Andso while being there, I also got interested
in an entrepreneurship program. I was like,I wanted to get myself out of my comfort zone,
out of the box and really interact with peoplefrom different backgrounds, not just from the
(14:26):
STEM background. And... And I loved it. I didn'tknow that I was going to love it. And I just
decided to try it one day. And I just reallyloved speaking with customers. I got to be
part of a student led startup. And so speakingto customers and that customer discovery phase,
pitching to VCs, brainstorming with people fromdifferent backgrounds. I was like, this is
(14:51):
where I want to be at. And so I thought I wantedto go into product development. at a startup.
And so that's what I was gearing towards. Andso taking business courses online. And again,
this is when the pandemic started to hit. Sotaking business courses online, learning more
(15:12):
about emerging technologies like quantum andAI, that just interested me. And then DoD found
me. And so they were like, okay, you have thisunique you know, technical background, background
with DoD and some knowledge, right, regardingDoD and then interest in this startup and business,
(15:37):
you know, business world. And so DoD was reallystarting, wanted to stand up and say National
Security Innovation Capital, which, you know,focuses on early stage hardware technology.
So as you may know, a lot of funding tends togo. towards VC funding tends to go towards
software and not enough towards hardware. Andoften hardware companies will resort to getting
(16:05):
foreign capital, which at times may be consideredadversarial and may compromise national security.
And so DoD wanted to sort of get a hold of thisa bit. And so stand up this program. And so,
yeah, a few of my team members and I, we basicallywere hired on board to really stand up this
program. And this really involved developingthe funding thesis, establishing the processes,
(16:31):
eventually me running operations. Then becauseof my background, right? I got to do a lot
more and help source these startups, evaluatethese startups and help fund them and then
support them. So I think naturally I just likewearing a lot of hats. It was very, it's been
a very startup culture. in a way just becausewe're a very small but mighty team. And so
(16:56):
it's allowed me to do a lot as well as havea seat at the table and really sort of see
things from that perspective. I love the thatyou were in the early stage of standing up
the is it pronounced in sick. We usually referit to as an insect. So what are you know, these
(17:21):
will be in the show notes, the we have a kindof infographic on NSIC. What are the I think
there's seven key areas of investment withinthe DOD? Yeah. So again, we're a component
of the Defense Innovation Unit. And so
(17:51):
companies that are a little bit more maturethat have some VC funding, that have commercial
product. And the goal there is for them to findsort of the use cases and sort of pair those
gaps with and look for specific solutions toaddress those gaps and transition that technology
(18:15):
into DoD. Again, we focus on the earlier stage,pre-seat to seat stage companies. And so, however,
our technology areas are aligned with DIU'sportfolios. So, you know, our technology areas
are autonomy. And then sensors is weaved intothat now. So advanced sensing would fall into
(18:38):
autonomy. Energy technology. So this can involveenergy storage. Advanced battery chemistries
is a big thing under that one. space technology.And so this is satellite stuff, as well as
satellite communications, things like that.Telecommunications, so advanced communications
(19:00):
technologies. And again, there's a lot of synergieswith these different technologies. And then
we have an emerging technologies area, whichunder that we've been edge computing hardware.
electronics, photonics, as well as hypersonicsplatforms. Interesting. It's fascinating. Yeah.
(19:28):
And then within that we have sort of fundedas well companies that are in the sort of advanced
manufacturing, advanced materials, but theyusually align with one of the technology areas
that I mentioned. So for my listeners, I wouldabsolutely love you to define deep tech and
(19:51):
dual technologies, all right? Yeah. Becausemany, you know, I have quite a large audience
now and it's a concept that we don't run into.You don't go to the grocery store and buy.
Right, yeah. Yeah, I even had a friend, youknow, just a close personal friend that is
not in this field at all. asked me about thattoo. So yeah, it's constantly educating, right,
(20:15):
the audience, just because it is a crucial partof our society nowadays. So yeah, so I would
say I would describe deep tech startups as sortof being distinguished by their intensive focus
on sort of cutting edge technologies and scientificachievements. So they operate at the frontier
(20:37):
of innovation. And so I would say they're characterizedby sort of novel solutions that are rooted
in scientific breakthroughs or, you know, significanttechnological or scientific breakthroughs.
And you know, I think where a lot of technologies,a lot of conventional startups leverage existing
(21:00):
technologies to solve market needs, deep techstartups. can often create entirely new markets
or radically transform existing ones with theirdisruptive innovations. And so the reason I
think there's probably a name for this set oftechnologies is because they also face unique
(21:24):
challenges in commercializing their innovation.So one characteristic thing and challenge is
long development cycles. So, you know, theyoften require years, if not even decades, right,
for research and development before you evenhave some viable prototype, right, that may
(21:45):
become a product. High R&D costs, right, so,you know, very capital intensive, you know,
and securing funding can be challenging, especiallyin the early stages for these sets of technologies
that are often unproven or the market potentialis not quite fully understood. And so when
(22:09):
it comes to going to market, it may be a littlebit more challenging because it's not just
a matter of finding product market fit, butit's also about educating potential customers
about. you know, educating the market rightabout your technology. Right. And the dual
(22:34):
purpose? Yeah, so the dual use purpose reallyinvolves having both commercial and defense
applications. So defense tech, you know, issort of a focus on these DOD critical needs
for national security to enhance military capabilities.And so the dual use aspect means really developing
(23:00):
a product or technology that can serve both,civilian and military purposes. And so I will
say there are challenges with this though, justbecause the DOD aspect is mission focused,
right? And so you have to worry about findingproduct mission fit in that sense. Whereas
(23:22):
on the commercial side, you have to worry aboutfinding product market fit. And so, it can
be competing at times, right? Where,
the startups and VCs are naturally focused onrevenue and increasing sort of their investment
and DOD may be focused on the mission, right?And so, it's a matter of really finding where
(23:47):
you can overlap both of those missions, right?To really make progress in society. And then
it's also as you're developing a technology,it's a matter of balancing as well, the different
requirements and applications. So, yeah. Sothe startups that you have been involved with,
(24:11):
have they come like a spin out as a technologytransfer from a university or not? I mean,
where did you? Yeah. Where did these companiescome from? Their original ideas. Yeah. Yeah,
so a lot of the companies that we fund, someof the technologies have begun in a university
(24:35):
research lab setting. However, they're usuallya little bit further along before we see them
and we fund them. So we have partnerships withdifferent programs, including National Security
Innovation Network, which is a part of DIU.that really focuses more on really helping
spin out these technologies out of a researchsetting and finding those DOD use cases. And
(25:02):
again, we also look at companies from all overthe US. So, our meetings are usually virtual,
which makes it easy for companies to reach us.But yeah, they come from all sorts of settings,
right? Some of them have spin out from the lab.others from another company. But like I mentioned,
(25:26):
by the time we see them and we fund them, they'vealready had some preliminary traction on the
DOD side, whether that means some funding spokento and, you know, DOD users to really develop
the requirements, as well as some commercialpreliminary traction, like obtaining letters
of support and things like that. Yeah. So aboutthe time I met you, I'd also been working in
(25:50):
deep tech. And I have heard that perhaps privateinvestment VC money had been crowding out the
traditional investment of Nandaluda fundingthat was under either the DOD or SBIR. Right.
(26:16):
And for like the last 20 years or so. And theDepartment of Defense, and actually under,
I think it was the Obama administration, AshCarter kind of flipped the model and said that
we can actually do dilutive as well as non-dilutivefunding in order to attract again, I don't
(26:39):
know whether you're losing the game, but toreally get back into the pipeline. of potential
new businesses and new technologies. Is that,and that's kind of what I've, you know, you
perceive it. I also saw that SBIR grants, VCswere no longer allowed to participate probably
(27:00):
about eight years ago. So what have your observationsbeen on the public versus private investment
in the strategic mission-driven sectors is,is it true? What I'm saying is that I mean,
there's no probably it's not black or white,right? So what is the transition between public
(27:26):
and private investment in these strategic sectorsevolve? Yeah, yeah. Yeah. So the way I would
see it is, you know, a while back, there wasreally a lack of communication between sort
of these public and private entities. And sothere wasn't much of a collaboration going
on. And so, for example, with the establishmentof DIU, the purpose was to really establish
(27:51):
those public and private partnerships to reallyfurther innovation and especially deep tech
innovation. And so that was just the first goal,right? Let's improve and establish these public
and private partnerships and show that we canwork together to fund companies. that was a
(28:12):
little bit rocky and figuring out, okay, howdoes that work and who does what? But I think
over time, right, those relationships have reallybecome established in some way and have been
fortified. And now, DIU and NSIC and all theseother DOD entities, we have strong relationships
(28:36):
with different BCs and accelerators and othertypes of organizations. they are aware of us
and are interested in really knowing what ourpriorities are. And we are trying to always
better communicate that to them. And we're goingon funding companies together. So I would say
that was sort of the first phase over time.Then, you know, I think you focused on, OK,
(29:04):
let's see if we can if this model works, right?If we can fund companies. using OTAs, for example,
these prototype contracts, and helps to transitionsome of this technology into DoD. And I would
say now where we're at is now we're really hyper-focusedon the, you know, because we already proved
(29:30):
we can do this, so now it's, okay, let's focuson the most impact for an urgent technologies
to DoD, especially given the current geopoliticalclimate. And so now we've sort of shifted into
really a focus on these high impact, high, youknow, at large scale and in high urgency technologies
(29:52):
and startups. So it's a journey, right? It'san evolution. It's been a journey, yeah. And
then on the hardware side, right, again, it'sbeen a little bit different, but again, similar
where, you know, there wasn't a lot of, I wouldsay, VC interests to really fund, especially
hardware, early stage technologies. VCs weretypically repelled by that, right, in some
(30:16):
sense. And naturally so, right? But I thinkwith standing up NSIC and these other organizations,
there's been actually several VCs now in thispre-seed to seed stage, funding. hardware companies.
(30:37):
And so I would say now the hurdle is probablyas we funded these companies, now they go on
to series A, series B and now they need BCsat that stage, right? To really help them along
and further their scaling, right? And so I wouldsay more work is probably needed on that end
(30:57):
now.
Very exciting times.
Let's switch gears and let's go back to yourconsulting firm. Equitech innovate. Again,
I don't know where you find the time, but I,you know, so can you showcase here what it
(31:22):
is that you do in serving the underrepresentedfounders that are in these disruptive technologies?
What was it that made you go out on your own?Yeah, yeah, so just being in the deep tech
space that I'm at, and, you know, dual use aswell, you know, one thing that I started noticing,
and it's something that I've noticed even fromjust my own background, right, in STEM, right,
(31:46):
sort of one, a lack of diversity and representation,right, of, you know, different backgrounds,
especially my backgrounds, right, whether it's
And so again, this is naturally found in a lotof the, deep tech spaces, right? Finding leadership
(32:13):
and innovators in that space. And that, that'sa whole nother conversation, right? But there's
a lot of hurdles, just even for people gettingto that space, right? And so naturally you
find sort of a lack of talent there. And thenthe other thing is, you know, once, you know,
(32:35):
you have underserved communities in deep tech,right, then you have less of them that are
aware or become deep tech founders, right? Andso then once you are a deep tech founder, right,
then you have these VC funding gaps, right,that you find, right, where out of all the
(32:57):
VC funding, 136 billion, only 1% goes to Blackfounders or even smaller to Latinx or Indigenous
or to women. And especially being in the fieldthat I am in, I would see very few, again,
founders from understaffed communities evenapplying to our program. But then unfortunately,
(33:20):
even those that did apply, sometimes the qualitywas just not up to par. Okay. And so it does
tear me a bit, you know, in the sense that,you know, I have compassion, but at the same
time, there's a level of quality that we needto maintain and things like that. And that
(33:40):
is because they often lack some of the resourcesand guidance, right? And so even to get to
where they're at now has been such a huge feat.And so that's where I saw the opportunity
strategic consulting and advisory firm to reallyhelp underserved founders and give them a little
(34:02):
bit more guidance and really help them get theirtechnologies to market. Bringing in my DOD
expertise, my deep tech expertise, and alsoin working with underserved communities throughout
my career with different nonprofits and whatnot.All right. Yeah. Yeah, being that person that
(34:25):
looks like them, right? In the room, right?And you also have, you're a mentor for the
Stanford Latino Business Action Network. Andyou're serving on the board of directors for
Science is Elementary. And tell me, is thatalso part of kind of mission-driven? Speak
(34:47):
to me a bit about those collaborations. Yeah,yeah, it is, yeah. So... Again, just because
I'm interested in helping underserved founders,you know, I must have gone, I think to an event
at Stanford, and then that's how I got pluggedin to that nonprofit organization. Okay. Yeah,
so I became a mentor, that this was before startingEcotech Innovate. And so again, that's where
(35:13):
I also just got to focus on helping underservedfounders and really guiding them, get them
through that process. And then in terms of thenonprofits that I'm a board of directors for,
yeah, so one of them is Science is Elementary.And so that nonprofit, we focus on really providing
(35:37):
inspiring, innovative, high quality scienceexperiences to preschool and elementary school
children from underserved communities. And.you know, that involves, you know, teaching
students, right, training teachers as well,to really build sustainable and quality sort
(35:58):
of curriculum, and then engaging as well withdifferent scientists and STEM professionals,
and some of them may serve as role models andmentors and things like that. So again, I didn't
have any sort of exposure to this. I wish Idid when I was, you know, a young kid. But,
you know, I think providing that for the industrycommunities is very important because that's
(36:19):
where it begins, right? Yes, but you get exposedto it. Yeah, you get exposed, so you learn
about opportunities. And so you can dream tobe a scientist or things like that. And also
you get rid of those fears, right? That mayintimidate you from going into STEM, right?
Because now there's familiar. And then alsoit's important to know that going to STEM doesn't
(36:44):
necessarily mean you need to be a scientist,right? I've transitioned into this role, which
is more business, right? But my science background,I'm able to leverage that and it's sort of
a value add. So in the show notes, I would liketo call out different ways by which my listeners
(37:06):
can contact you. Can you speak to... what youwould like to have in the show notes? Is that
your LinkedIn profile? Tell me a little bitabout that. Yeah, so yeah, people can reach
me on LinkedIn. I'm on there. Also, www.ancik.mil,you can find my LinkedIn there. And also, equi
(37:33):
You can find my, you know. LinkedIn informationthere as well as my email, salvador at equi
Excellent. So that will be in the show notesas well as the infographic of NSIC. Thank you.
So I am gonna move into the part of the podcastthat I repeat with every single guest. I have
(38:00):
my own consulting firm, NextAct Advisors, andI really work with growth stage companies on
being purpose driven, scalable and resilient.And I'd like to ask you, I guess, what does
purpose driven mean to you? Yeah, I think tome, I've actually always been drawn to purpose
driven work. And so for me, it's the so what,right? So there's a lot of cool things you
(38:26):
can do, cool technologies. But to me, it's thewhy, right? And the so what behind it, that
really pushes me and motivates me to reallydo the work that I do because I know I'm making
a difference in people's lives in one way oranother, in a positive way. So whether it's
(38:47):
through the nonprofits that I've been involvedwith, both at a volunteering level and then
now on the board leadership or through NSICand DIU, right? Helping the war fighter and
helping with national security. or now withmy consulting firm and really focusing on helping
underserved founders, I think that I'm justdrawn to really purpose-driven work that creates
(39:15):
a positive impact in people at scale, right?And maybe lead on to your next question, but
that does it in a meaningful way. So that movesthe needle. I love it. So you've chosen really
in alignment with your own Origin story. Soscalable growth. What does that mean to you?
(39:39):
And maybe wearing your INSEC hat or what wasscalable? Yeah. So I think, you know, first
in terms of like, you know, deep tech startupsand going that route, the focus is first on
finding product market fit and really gettingthere. But once you do, I think scaling is
(40:04):
really about growing, right? Growing not onlyyour team, but expanding your product and really
doing it in an impactful way. And I think alongwith that comes many challenges, right? That
you have to make sure your manufacturing processesare in order and that can... really accommodate
(40:29):
for the volume and speed at which you need todo that. And so I think before scaling needs
to come preparedness, right? Being preparedto grow before you do grow because one thing
I find often is, you know, sometimes peopleare focused on growing and then as you're growing,
you're really finding all these things thatyou can't keep up with, right? And then unfortunately,
(40:52):
sometimes that's where startups fail, right?And so, and it's sad because you've gone so
far right along. And so, since you've workedso hard to get there, it's important to just
take a beat and really prepare for the growthbecause I think that will set you up for success.
You know, I'm gonna divert a little bit fromthe third question. I mean, product market
(41:20):
fit. Yeah. And software, right? Deep tech technologies,it's really about around technology readiness
level, TRLs, right? Scaling right to that levelwhere you are scalable, right? Can you for
my listeners again, indulge us in technologyreadiness levels? Yeah. So, yeah. So there
(41:48):
are different, you know, technology readinesslevels that really describe sort of. where
your technology is in its development. WithNSIC, for example, we have a minimum TRL three.
And so that involves at least having sort ofanalytical and experimental critical function
(42:08):
and or characteristic proof of concept. So wedon't fund, you know, sort of paper studies
or science projects. And so, that's a TRL levelthat we focus on. And as that TRL advances,
then you get into the testing phase and in-fieldenvironment testing and things like that. So
(42:34):
then you can further refine your technologyuntil it's really ready for a proper use case.
And then I would say one thing we focus on nowis also just on the level of advancement in
that TRL, right? So, you know, the more youcan advance with the funding, the better and
(42:57):
so that involves really having a very strongproduct development plan, right, in place.
So that you get more bang for your buck in away. Right, right. So the product roadmap.
Yeah. Thank you. Let's get back to the sandboxand its resilience. What does resilience mean
(43:18):
to you? Yeah, thank you. Yeah. Yeah, it's onething that someone told me, you know, they
said, you're very resilient. And I was like,oh, really? Thank you. And so, yeah, reflecting
back in my life, right? Again, as I mentionedbefore, you know, you'll be dealt different
cards in life, you know, punches, right? Andsometimes that will be things that you have
(43:39):
no control over. And sometimes there'll be consequencesbecause, you know, you're human and you're
young and you make mistakes. And... you're stubbornat times or things like that. And so I think
resilience is, for me it involves a few things.One is not allowing that to define you. And
so it means getting back up, but it also meansgetting back up stronger and wiser, at least
(44:07):
for me, right? There's, I think something youcan learn about yourself. and about the situation
and about others, right? In whatever circumstanceyou're in. And so it's really making sure you
learn the most you can about that particularsituation so that when you do stand up and
move forward, you're able to do so in a moreintentional and successful way, hopefully.
(44:33):
Thank you. So last question, did you have funin the sandbox today? Oh, I had a lot of fun.
Yeah, thank you so much. Yeah. It's been a uniqueexperience. And so, I had a great time speaking
to you when we first met and so today as well.So thank you so much for inviting me. Thank
you, Sal. To my listeners, if you liked thisepisode with Sal Badiyurios, CEO and founder
(44:58):
of Equitech Innovate, as well as advisor withInsic of the DIU, that's the Defense Innovation
Unit. Please. sign up for the Founder's Sandbox.It's released monthly. And business owners,
corporate directors, and professional serviceproviders are my guests and they help us learn
(45:22):
about how to build with strong governance, resilient,scalable, and purpose-driven companies to make
profits for good. So signing off for this month,thank you. And again, Sal, thank you for joining
me. Thank you.
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