1 00:00:03,460 --> 00:00:06,390 Sean Aylmer: Welcome to the Fear and Greed Daily Interview. I'm Sean Aylmer. 2 00:00:06,690 --> 00:00:08,800 Sean Aylmer: We're in the middle of a startup boom in Australia, 3 00:00:08,800 --> 00:00:12,990 Sean Aylmer: and now an innovative international investor is bringing $100 million 4 00:00:13,289 --> 00:00:17,650 Sean Aylmer: onto the scene. Clearco is the world's largest e-commerce investor, 5 00:00:17,920 --> 00:00:20,070 Sean Aylmer: having put more than two and a half billion US 6 00:00:20,070 --> 00:00:25,620 Sean Aylmer: dollars globally into 5,500 startups across three continents. Australia will 7 00:00:25,620 --> 00:00:29,139 Sean Aylmer: be the company's first Southern Hemisphere launch market. One of 8 00:00:29,140 --> 00:00:33,410 Sean Aylmer: the things that makes Clearco different from conventional venture capital firms is that 9 00:00:33,560 --> 00:00:36,159 Sean Aylmer: it operates on a revenue based funding model, which means 10 00:00:36,170 --> 00:00:39,379 Sean Aylmer: Clearco doesn't take an equity stake in the startup. Michele 11 00:00:39,380 --> 00:00:43,030 Sean Aylmer: Romanow is the co-founder and president of Clearco. She's also 12 00:00:43,030 --> 00:00:47,280 Sean Aylmer: a serial entrepreneur, having started six companies before her 35th birthday, 13 00:00:47,640 --> 00:00:50,370 Sean Aylmer: and is the youngest dragon on Dragon's Den in her home 14 00:00:50,370 --> 00:00:53,920 Sean Aylmer: country of Canada. She joins me this morning from New York. Michele, 15 00:00:53,920 --> 00:00:54,860 Sean Aylmer: welcome to Fear and Greed. 16 00:00:55,110 --> 00:00:57,310 Michele Romanow: Oh, it's wonderful to be here. Thank you for having me. 17 00:00:57,580 --> 00:01:00,370 Sean Aylmer: Michele, people like you make me exhausted. How can you 18 00:01:00,370 --> 00:01:02,980 Sean Aylmer: have six companies before your 35th birthday? 19 00:01:03,290 --> 00:01:09,420 Michele Romanow: Oh, I didn't sleep very much. It's pretty simple. I think the 20 00:01:09,420 --> 00:01:11,690 Michele Romanow: biggest thing is I started early. I started right out 21 00:01:11,690 --> 00:01:15,330 Michele Romanow: of engineering school. Started my first business which was a caviar 22 00:01:15,330 --> 00:01:18,290 Michele Romanow: fishery, and then the ball got rolling and just kind 23 00:01:18,290 --> 00:01:19,010 Michele Romanow: of took it from there. 24 00:01:19,250 --> 00:01:21,569 Sean Aylmer: Okay. So you're an engineer by training. Is that right? And what sort 25 00:01:22,230 --> 00:01:24,520 Sean Aylmer: of businesses have you been involved in yourself? 26 00:01:24,870 --> 00:01:27,500 Michele Romanow: So I go to school for engineering. I figure out 27 00:01:27,500 --> 00:01:29,760 Michele Romanow: that I'm not going to be very good at building 28 00:01:29,760 --> 00:01:33,380 Michele Romanow: bridges and instead much better at building businesses. So I build a little 29 00:01:33,380 --> 00:01:36,429 Michele Romanow: coffee shop on campus was my first business. I graduate 30 00:01:36,430 --> 00:01:39,020 Michele Romanow: and figure out the worldwide supply of sturgeon caviar is 31 00:01:39,020 --> 00:01:42,410 Michele Romanow: down by 95% because the world has overfished the Caspian 32 00:01:42,410 --> 00:01:44,890 Michele Romanow: Sea and moved myself out to the East Coast to build 33 00:01:45,209 --> 00:01:49,160 Michele Romanow: a fishery. Which was a great business until the 2008 recession. 34 00:01:49,280 --> 00:01:52,000 Michele Romanow: In which case it was a horrible business. And from 35 00:01:52,000 --> 00:01:54,530 Michele Romanow: there started an early e-commerce company in Canada. So I 36 00:01:54,530 --> 00:01:58,200 Michele Romanow: deeply understand our customers. It's now a small publicly traded 37 00:01:58,200 --> 00:02:01,330 Michele Romanow: company in Canada. From there, built another app that was 38 00:02:01,330 --> 00:02:04,810 Michele Romanow: acquired by Groupon in 2014. And that really leads to 39 00:02:04,810 --> 00:02:08,030 Michele Romanow: the part of the story where I get asked to join the cast 40 00:02:08,030 --> 00:02:09,410 Michele Romanow: of Dragon's Den. I think you guys have the same 41 00:02:09,410 --> 00:02:10,251 Michele Romanow: show in Australia, it's Shark Tank. 42 00:02:10,251 --> 00:02:12,180 Sean Aylmer: Yeah, Shark Tank is how we call it. 43 00:02:12,660 --> 00:02:15,820 Michele Romanow: Exactly. But the same concept. Entrepreneurs come on the show. 44 00:02:16,350 --> 00:02:18,889 Michele Romanow: And it was a really unique opportunity that I got 45 00:02:18,889 --> 00:02:20,609 Michele Romanow: invited to join the show when I was quite young, 46 00:02:20,610 --> 00:02:23,680 Michele Romanow: I was 28. And everyone's like, wow, congrats. And I'm like, 47 00:02:23,880 --> 00:02:27,169 Michele Romanow: oh my goodness, I'm scared. I'm the youngest person here. 48 00:02:27,169 --> 00:02:30,510 Michele Romanow: I feel like the poorest person here. And I think 49 00:02:30,880 --> 00:02:32,959 Michele Romanow: as a result of that, I just saw these businesses 50 00:02:32,960 --> 00:02:36,669 Michele Romanow: a lot differently. And what I saw, because we film the whole show in 51 00:02:36,669 --> 00:02:39,300 Michele Romanow: three weeks, we see 250 pitches in those three weeks. It's the 52 00:02:39,300 --> 00:02:42,519 Michele Romanow: same way everywhere the show is made. And so you're starting 53 00:02:42,520 --> 00:02:43,989 Michele Romanow: to see these entrepreneurs come on the show and they 54 00:02:43,990 --> 00:02:47,419 Michele Romanow: have great e-commerce products. And they're like, look, I'm looking for a hundred thousand dollars 55 00:02:47,419 --> 00:02:51,350 Michele Romanow: for 10% of my business. And what's really interesting is when you ask 56 00:02:51,350 --> 00:02:55,110 Michele Romanow: those founders what they needed the money for, it was always the same two things. It was, 57 00:02:55,110 --> 00:02:57,389 Michele Romanow: I need it for user growth, which is Facebook and 58 00:02:57,389 --> 00:03:00,130 Michele Romanow: Google ads, and I need it for inventory. And so 59 00:03:00,130 --> 00:03:03,280 Michele Romanow: I remember talking to my co-founder Andrew D'Souza and being like, 60 00:03:03,550 --> 00:03:05,919 Michele Romanow: why are founders using the most expensive capital in the world 61 00:03:05,919 --> 00:03:08,160 Michele Romanow: which is equity, to do something that really has a 62 00:03:08,160 --> 00:03:10,269 Michele Romanow: fixed return? And so we put our heads together and 63 00:03:10,270 --> 00:03:12,460 Michele Romanow: I actually remember, I came back on the show and 64 00:03:12,460 --> 00:03:14,580 Michele Romanow: I was like, look, I'm just going to throw in a different 65 00:03:14,580 --> 00:03:17,300 Michele Romanow: deal today. I'm going to give you that a hundred thousand dollars you were 66 00:03:17,300 --> 00:03:20,130 Michele Romanow: looking for, but instead of taking 10% of your company 67 00:03:20,130 --> 00:03:22,710 Michele Romanow: that I will own forever, I just want 10% of 68 00:03:22,710 --> 00:03:25,630 Michele Romanow: your revenue just until you pay me back my capital 69 00:03:25,730 --> 00:03:28,870 Michele Romanow: plus 6%. And the founder of that day was really confused. Well, 70 00:03:28,870 --> 00:03:30,329 Michele Romanow: isn't this a loan? And I'm like, no, it's not 71 00:03:30,330 --> 00:03:33,720 Michele Romanow: a loan. There's no personal guarantee. There's no fixed payment timeline. 72 00:03:33,720 --> 00:03:37,320 Michele Romanow: There's no compounding interest. And if you don't pay me back, 73 00:03:37,320 --> 00:03:38,650 Michele Romanow: I'm not going to take your business or put you 74 00:03:38,650 --> 00:03:41,790 Michele Romanow: into bankruptcy, like normal debt does. I said, the only 75 00:03:41,790 --> 00:03:43,490 Michele Romanow: trick to my deal is that I really want to 76 00:03:43,490 --> 00:03:45,690 Michele Romanow: see your Facebook ad data because I'll understand if you 77 00:03:45,690 --> 00:03:48,670 Michele Romanow: have really good unit economics. And so it was actually 78 00:03:48,670 --> 00:03:50,710 Michele Romanow: on the show that day that the founder was like, yes, 79 00:03:50,710 --> 00:03:54,660 Michele Romanow: I want to take that deal. And the rest is a little bit of history and 80 00:03:54,660 --> 00:03:57,050 Michele Romanow: that's really become what Clearco is today. 81 00:03:57,390 --> 00:03:59,620 Sean Aylmer: Okay. So let me get this straight. So revenue based 82 00:03:59,710 --> 00:04:02,770 Sean Aylmer: funding is all about, so it's not a loan, because 83 00:04:02,940 --> 00:04:06,060 Sean Aylmer: there are no guarantees, but it is about Clearco providing 84 00:04:06,060 --> 00:04:09,310 Sean Aylmer: a hundred thousand, in this example, being paid back on 85 00:04:09,310 --> 00:04:12,750 Sean Aylmer: the basis of revenue, plus whatever rate that is. Is 86 00:04:12,750 --> 00:04:16,430 Sean Aylmer: that over one year, two year, three? Is there a term involved and 87 00:04:16,430 --> 00:04:17,500 Sean Aylmer: what are the guarantees? 88 00:04:17,970 --> 00:04:21,200 Michele Romanow: No, there's no guarantees. So we have no personal guarantees on your business. 89 00:04:21,200 --> 00:04:23,839 Michele Romanow: That's why we really have to understand your data. If you don't 90 00:04:23,839 --> 00:04:26,890 Michele Romanow: pay us back, we don't put you into bankruptcy. And 91 00:04:26,890 --> 00:04:29,520 Michele Romanow: typically we get our money back anywhere from eight to 92 00:04:29,520 --> 00:04:32,550 Michele Romanow: 12 months, I would say is usually typical. And there's 93 00:04:32,810 --> 00:04:36,170 Michele Romanow: some companies that we funded 25 times and we've scaled them 94 00:04:36,170 --> 00:04:39,859 Michele Romanow: from $10,000 a month businesses all the way to a hundred million 95 00:04:39,860 --> 00:04:43,210 Michele Romanow: dollar businesses, because we will give companies between $10,000 up 96 00:04:43,210 --> 00:04:43,340 Michele Romanow: to $10 million. 97 00:04:43,340 --> 00:04:47,219 Sean Aylmer: And is 6% a typical interest rate, or does that move around 98 00:04:47,220 --> 00:04:47,299 Sean Aylmer: a bit? 99 00:04:47,910 --> 00:04:49,859 Michele Romanow: Yeah, so it's actually not an interest rate, it's a flat fee. 100 00:04:49,950 --> 00:04:53,530 Michele Romanow: So if we give you $100,000, you owe us $106, 000. If you take 101 00:04:53,800 --> 00:04:55,310 Michele Romanow: two years to pay us back, you still owe us $106,000, 102 00:04:57,260 --> 00:04:58,970 Michele Romanow: which is why it's very different than an interest rate 103 00:04:58,970 --> 00:05:01,890 Michele Romanow: because it doesn't compound or grow. You actually always know 104 00:05:01,890 --> 00:05:04,810 Michele Romanow: what it's going to cost you for that capital. And yeah, 105 00:05:04,810 --> 00:05:06,589 Michele Romanow: if you spend your money on inventory or ads, it's 106 00:05:06,589 --> 00:05:07,020 Michele Romanow: always 6%. 107 00:05:07,640 --> 00:05:10,839 Sean Aylmer: Wow. You must have very supportive shareholders of your business, Michele. 108 00:05:12,529 --> 00:05:16,219 Michele Romanow: We really started a new model. And I can tell you, 109 00:05:16,220 --> 00:05:18,279 Michele Romanow: it's really funny being back in New York right now, 110 00:05:18,279 --> 00:05:21,730 Michele Romanow: because this is where we went to get our original capital base. 111 00:05:21,730 --> 00:05:24,790 Michele Romanow: And I can tell you, there was 249 people on Wall 112 00:05:24,790 --> 00:05:27,760 Michele Romanow: Street that said no to us. They said, you guys 113 00:05:27,760 --> 00:05:29,970 Michele Romanow: don't understand credit. You're going to lose all your money. 114 00:05:30,070 --> 00:05:32,970 Michele Romanow: You don't know what you're doing. And what we said is, look, 115 00:05:32,970 --> 00:05:36,089 Michele Romanow: I've run an e-commerce business before. The success of e-commerce 116 00:05:36,089 --> 00:05:39,350 Michele Romanow: businesses is correlated to what your unit economics are, which 117 00:05:39,350 --> 00:05:41,930 Michele Romanow: means after you make a sale and you subtract your 118 00:05:41,930 --> 00:05:44,100 Michele Romanow: product cost and your cost of ads, are you making money? 119 00:05:44,610 --> 00:05:48,560 Michele Romanow: And your growth rate and what audience sizes you've penetrated. 120 00:05:48,610 --> 00:05:50,640 Michele Romanow: And so it took a long time and many years. 121 00:05:50,960 --> 00:05:54,420 Michele Romanow: We were schlepping around in 2016 and 2017 asking for 122 00:05:54,420 --> 00:05:58,320 Michele Romanow: this money. And we were able to show investors that, 123 00:05:58,370 --> 00:06:01,049 Michele Romanow: in fact, we have way more businesses. I mean, we've 124 00:06:01,050 --> 00:06:04,140 Michele Romanow: put up two and a half billion dollars into founder's hands- 125 00:06:06,160 --> 00:06:06,671 Sean Aylmer: An incredible amount of money. 126 00:06:06,671 --> 00:06:12,049 Michele Romanow: It's an incredible amount of money. And I just want to put that as a sense of scale for you. A huge venture fund in the 127 00:06:12,050 --> 00:06:14,740 Michele Romanow: US, one of the big ones, is maybe a billion dollar fund. 128 00:06:14,970 --> 00:06:17,719 Michele Romanow: And they deploy that capital over seven years. We've done 129 00:06:17,720 --> 00:06:19,820 Michele Romanow: two and a half billion in six years. So what we believe 130 00:06:19,820 --> 00:06:22,110 Michele Romanow: is that our market size is so much bigger. We are 131 00:06:22,410 --> 00:06:25,110 Michele Romanow: incredibly excited about the Australian marketplace, because we know it's 132 00:06:25,430 --> 00:06:29,430 Michele Romanow: super tech savvy, lots of e-commerce companies and really underserved. 133 00:06:30,240 --> 00:06:31,270 Sean Aylmer: So why Australia? 134 00:06:31,500 --> 00:06:34,089 Michele Romanow: It's that. It's we know there's tons of great e-commerce 135 00:06:34,089 --> 00:06:36,460 Michele Romanow: founders there. We don't think they're being served well by 136 00:06:36,470 --> 00:06:38,839 Michele Romanow: current options. And we can see that in terms of 137 00:06:39,120 --> 00:06:41,580 Michele Romanow: the way that banks have set up and they've charged 138 00:06:41,910 --> 00:06:44,630 Michele Romanow: for their capital and they've had guarantees associated with them. And so 139 00:06:44,630 --> 00:06:48,460 Michele Romanow: we think there's just some incredible founders there that deserve a 140 00:06:48,460 --> 00:06:49,270 Michele Romanow: better capital option. 141 00:06:50,710 --> 00:06:52,560 Sean Aylmer: And it's not necessarily what we would always think of as a digital company. 142 00:06:52,560 --> 00:06:55,680 Sean Aylmer: You've also invested in Beard Market and Vegan Grocery Store 143 00:06:55,680 --> 00:06:59,460 Sean Aylmer: already in Australia, which aren't pure e-commerce players, are they? 144 00:06:59,960 --> 00:07:03,089 Michele Romanow: Yeah. I mean, they have an e-commerce component, right? Beard Market has 145 00:07:03,089 --> 00:07:06,360 Michele Romanow: an awesome e-commerce part of it. So does Australia's Vegan 146 00:07:06,360 --> 00:07:09,330 Michele Romanow: Grocery Store. But a lot of these have offline revenue 147 00:07:09,330 --> 00:07:12,590 Michele Romanow: as well. But as long as they have a digital component, we 148 00:07:12,590 --> 00:07:13,770 Michele Romanow: can get very excited about backing them. 149 00:07:14,170 --> 00:07:15,770 Sean Aylmer: Michele, stay with me. We'll be back in a minute. 150 00:07:21,180 --> 00:07:25,830 Sean Aylmer: I'm speaking to Michele Romanow, the co-founder and president of Clearco. Okay. 151 00:07:25,830 --> 00:07:28,820 Sean Aylmer: Now the use of artificial intelligence platforms to help make 152 00:07:28,820 --> 00:07:32,780 Sean Aylmer: funding decisions. I want to delve into that a little bit. I have 153 00:07:33,050 --> 00:07:35,170 Sean Aylmer: been seeing you on YouTube and read about you and 154 00:07:35,170 --> 00:07:38,040 Sean Aylmer: the idea that it removes age, gender, race, and religion, 155 00:07:38,090 --> 00:07:42,950 Sean Aylmer: as factors influencing investments is really, really interesting, particularly in 156 00:07:43,020 --> 00:07:46,520 Sean Aylmer: a startup market where a lot of traditional funders aren't 157 00:07:46,520 --> 00:07:48,180 Sean Aylmer: meeting traditional companies. 158 00:07:49,580 --> 00:07:51,650 Michele Romanow: So let me explain to you how it works if 159 00:07:51,650 --> 00:07:53,840 Michele Romanow: you're a founder. So if you're a founder that's looking 160 00:07:53,840 --> 00:07:57,310 Michele Romanow: to raise capital, you can come to Clearco, you can 161 00:07:57,310 --> 00:07:59,460 Michele Romanow: connect us to the apps that run your business. So 162 00:07:59,460 --> 00:08:01,810 Michele Romanow: these are things like your payment processor, where you're spending 163 00:08:01,810 --> 00:08:04,670 Michele Romanow: money on ads, your accounting data. That all takes you 164 00:08:04,710 --> 00:08:06,810 Michele Romanow: maybe 10 minutes, if you remember your passwords. If you 165 00:08:06,810 --> 00:08:10,330 Michele Romanow: don't remember your passwords, like me, it's 20 minutes. But in 20 minutes, 166 00:08:10,610 --> 00:08:12,540 Michele Romanow: we can give you a term sheet and we can say, look, 167 00:08:12,540 --> 00:08:14,440 Michele Romanow: based on the data in your business, this is how 168 00:08:14,440 --> 00:08:19,510 Michele Romanow: much capital we can give you and this is the 6% of the terms of that capital. So first of all, that 169 00:08:19,510 --> 00:08:23,300 Michele Romanow: is way faster than any VC (Venture Capital) process. I mean, I've 170 00:08:23,300 --> 00:08:25,820 Michele Romanow: raised multiple rounds of VC money for this company. I 171 00:08:25,820 --> 00:08:28,710 Michele Romanow: wish we could have raised Clearco through Clearco, but we didn't have that option. 172 00:08:29,110 --> 00:08:32,250 Michele Romanow: And the fastest you can ever fundraise is really three 173 00:08:32,250 --> 00:08:34,339 Michele Romanow: to six months. And it is a gruelling process. I 174 00:08:34,340 --> 00:08:36,520 Michele Romanow: completely take my eye off the business and I just 175 00:08:36,520 --> 00:08:40,010 Michele Romanow: basically go fundraising. So we have a way faster option. 176 00:08:40,420 --> 00:08:43,220 Michele Romanow: And then, think about the data we're using. We don't need 177 00:08:43,230 --> 00:08:45,309 Michele Romanow: your pitch deck. We don't need to meet you. We 178 00:08:45,309 --> 00:08:47,460 Michele Romanow: don't know who you are or where you grew up 179 00:08:47,740 --> 00:08:50,380 Michele Romanow: or which university you went to. In fact, in many cases, 180 00:08:50,380 --> 00:08:53,400 Michele Romanow: we don't even care what product you're selling. We care 181 00:08:53,400 --> 00:08:56,069 Michele Romanow: about the things I talked about earlier which were, unit economics, 182 00:08:56,070 --> 00:09:00,170 Michele Romanow: growth rate and your audience penetration sizes. And in that way, 183 00:09:00,170 --> 00:09:03,010 Michele Romanow: it's been really remarkable. So when we built this, we 184 00:09:03,010 --> 00:09:05,040 Michele Romanow: just thought about building something that was better for founders. 185 00:09:05,220 --> 00:09:08,040 Michele Romanow: This was a faster way to do it. This is where I didn't have to do all these pitch 186 00:09:08,040 --> 00:09:09,900 Michele Romanow: meetings and get all these custom spreadsheets and do all 187 00:09:09,900 --> 00:09:12,840 Michele Romanow: this diligence. So that was the original way. But we 188 00:09:12,840 --> 00:09:15,630 Michele Romanow: realised that we basically built an AI (Artificial Intelligence) that took out a lot of 189 00:09:16,190 --> 00:09:19,390 Michele Romanow: the bias from these decision-makings. And so when we look back at 190 00:09:19,390 --> 00:09:23,050 Michele Romanow: our portfolio, Sean, we saw very different statistics. We had 191 00:09:23,050 --> 00:09:26,470 Michele Romanow: backed eight times more women than the venture capital industry average. 192 00:09:26,750 --> 00:09:29,160 Michele Romanow: We had backed founders in all 50 states in America. 193 00:09:29,160 --> 00:09:31,610 Michele Romanow: In the UK, 70% of our founders lived outside of 194 00:09:31,710 --> 00:09:34,530 Michele Romanow: the UK. And a much higher proportion of our founders 195 00:09:34,530 --> 00:09:38,120 Michele Romanow: were black, indigenous and people of colour, which to me 196 00:09:38,490 --> 00:09:42,650 Michele Romanow: means that there have just always been these very strong biases. And again, I 197 00:09:42,650 --> 00:09:45,270 Michele Romanow: don't blame VC. It's a human to human business. And so 198 00:09:45,270 --> 00:09:47,740 Michele Romanow: if you went to schools with other VCs and if you knew them. 199 00:09:48,390 --> 00:09:50,360 Michele Romanow: The first litmus test of pitching a VC is that 200 00:09:50,360 --> 00:09:51,880 Michele Romanow: they don't take cold email intros. So you have to 201 00:09:51,880 --> 00:09:58,319 Michele Romanow: be in their network. And so we've gotten businesses that look like they're from a certain pedigree 202 00:09:58,320 --> 00:10:01,309 Michele Romanow: and from a certain background. And look, the reality is, 203 00:10:01,309 --> 00:10:04,470 Michele Romanow: is I've always believed that great businesses can come from anywhere. 204 00:10:04,790 --> 00:10:07,190 Michele Romanow: I believe that actually founders that have had probably a 205 00:10:07,190 --> 00:10:09,980 Michele Romanow: tougher card in life are often better founders than ones 206 00:10:09,980 --> 00:10:12,400 Michele Romanow: that had a silver spoon in life. And so we just think it's going to 207 00:10:13,380 --> 00:10:16,110 Michele Romanow: be pretty incredible to think about the world we can 208 00:10:16,110 --> 00:10:19,570 Michele Romanow: live in when everyone with a great idea has the 209 00:10:19,570 --> 00:10:21,330 Michele Romanow: ability to get that business funded. 210 00:10:21,559 --> 00:10:23,870 Sean Aylmer: The thing gnawing at me about everything you've just said, 211 00:10:23,870 --> 00:10:27,040 Sean Aylmer: it's fantastic, total agreement, but every time you talk to 212 00:10:27,040 --> 00:10:29,900 Sean Aylmer: a big investor, they always talk about how important management 213 00:10:29,900 --> 00:10:33,219 Sean Aylmer: is. How important the person running the show is. And 214 00:10:33,220 --> 00:10:35,750 Sean Aylmer: in some ways is it just that if you've got 215 00:10:35,750 --> 00:10:38,050 Sean Aylmer: the financial results and the cultural results you're going to 216 00:10:38,050 --> 00:10:39,540 Sean Aylmer: have a good manager so you don't need to worry 217 00:10:39,540 --> 00:10:41,670 Sean Aylmer: about that? I'm just interested in whether you have much 218 00:10:41,670 --> 00:10:43,360 Sean Aylmer: to do with the CEO of these companies? 219 00:10:43,730 --> 00:10:45,370 Michele Romanow: We have nothing to do with who the CEO is and 220 00:10:45,370 --> 00:10:47,200 Michele Romanow: managements are. I think it's one of the unique parts 221 00:10:47,200 --> 00:10:50,270 Michele Romanow: of our model. And look, of course I would believe 222 00:10:50,270 --> 00:10:51,929 Michele Romanow: that management makes a difference in the team, but I 223 00:10:51,929 --> 00:10:56,059 Michele Romanow: also believe that's reflected in their numbers. And VCs get 224 00:10:56,059 --> 00:10:58,730 Michele Romanow: to play this king making game where they get to 225 00:10:58,730 --> 00:11:02,150 Michele Romanow: anoint certain companies winners and certain companies losers, based on 226 00:11:02,150 --> 00:11:05,720 Michele Romanow: whatever criteria that is either intuitive in their minds. And 227 00:11:06,070 --> 00:11:08,450 Michele Romanow: we think that there's probably a better way. And we've 228 00:11:08,450 --> 00:11:10,350 Michele Romanow: seen a lot of people that don't look like traditional 229 00:11:10,350 --> 00:11:14,709 Michele Romanow: founders that have built incredibly successful companies because of that. 230 00:11:15,070 --> 00:11:17,730 Sean Aylmer: Okay. So the $64 question of course is how has 231 00:11:17,730 --> 00:11:21,960 Sean Aylmer: Clearco gone in its investments? Because if it works, Clearco 232 00:11:21,960 --> 00:11:24,040 Sean Aylmer: should be doing reasonably well out of it, as should 233 00:11:24,040 --> 00:11:25,959 Sean Aylmer: all the people you've invested in. Well, some of them anyway. 234 00:11:26,870 --> 00:11:29,870 Michele Romanow: Yeah, exactly. We know that companies that take our capital 235 00:11:29,870 --> 00:11:32,240 Michele Romanow: grow at double the rate of the companies that don't 236 00:11:32,240 --> 00:11:33,929 Michele Romanow: take our capital. So I can tell you that our 237 00:11:33,929 --> 00:11:37,439 Michele Romanow: founders are more successful when they join the Clearco family. 238 00:11:37,640 --> 00:11:39,700 Michele Romanow: We not only give founders capital, we also give them 239 00:11:39,700 --> 00:11:42,189 Michele Romanow: access to an enormous network of other founders and a 240 00:11:42,190 --> 00:11:44,270 Michele Romanow: lot of advice to go along with how to spend 241 00:11:44,270 --> 00:11:46,559 Michele Romanow: that money and how to grow efficiently. And so there's a lot of products. 242 00:11:47,350 --> 00:11:49,929 Michele Romanow: You can see your own dashboard, you can see what 243 00:11:49,929 --> 00:11:51,730 Michele Romanow: your benchmarks are. You can see how your CAC (Customer Acquisition Cost) is 244 00:11:51,730 --> 00:11:54,300 Michele Romanow: comparing to other people in your category. And so all 245 00:11:54,300 --> 00:11:56,640 Michele Romanow: of those are very useful pieces of software that we 246 00:11:56,640 --> 00:11:58,880 Michele Romanow: built on top. And then, it's been one of the 247 00:11:58,880 --> 00:12:01,450 Michele Romanow: reasons that Clearco has been able to expand. We were 248 00:12:02,120 --> 00:12:05,050 Michele Romanow: the first deal that SoftBank has ever invested in Canada 249 00:12:05,420 --> 00:12:07,530 Michele Romanow: was Clearco. And so there's people that are clearly very 250 00:12:07,530 --> 00:12:08,930 Michele Romanow: excited about the model today. 251 00:12:09,410 --> 00:12:12,120 Sean Aylmer: Michele, you obviously like entrepreneurs and startups. Why? 252 00:12:12,559 --> 00:12:14,740 Michele Romanow: Because I think they're our best bet to change the 253 00:12:14,740 --> 00:12:16,880 Michele Romanow: future and build the world that we want to live in. 254 00:12:16,880 --> 00:12:21,020 Michele Romanow: I look at all the solutioning we have and I think about 255 00:12:21,020 --> 00:12:24,620 Michele Romanow: even a big problem like climate change, for example. Governments 256 00:12:24,620 --> 00:12:26,610 Michele Romanow: have spent trillions of dollars trying to make a dent 257 00:12:26,610 --> 00:12:28,370 Michele Romanow: on this. And the real people that have made a 258 00:12:28,370 --> 00:12:32,270 Michele Romanow: difference are the entrepreneurs that built electric cars and trucks 259 00:12:32,270 --> 00:12:35,160 Michele Romanow: that people wanted to drive. The Nest Thermostat made a 260 00:12:35,160 --> 00:12:39,559 Michele Romanow: meaningful difference in the US. And so they're just such 261 00:12:39,559 --> 00:12:41,660 Michele Romanow: a good channel to back. And I think that that's 262 00:12:42,010 --> 00:12:43,740 Michele Romanow: what I spent my career doing. I was not only 263 00:12:43,740 --> 00:12:45,620 Michele Romanow: a founder. So I understand that part of a journey 264 00:12:45,620 --> 00:12:48,350 Michele Romanow: and understand how hard this is and how the cards 265 00:12:48,350 --> 00:12:51,630 Michele Romanow: are really stacked against you. But then inevitably, if you 266 00:12:51,630 --> 00:12:54,429 Michele Romanow: want to help founders win, you have to solve the 267 00:12:54,429 --> 00:12:57,809 Michele Romanow: capital problem, because the capital is so unfairly distributed today. 268 00:12:58,190 --> 00:13:00,530 Michele Romanow: And so this is our attempt to make a little 269 00:13:00,530 --> 00:13:02,010 Michele Romanow: drop in that bucket and we think we can have 270 00:13:02,010 --> 00:13:02,949 Michele Romanow: a meaningful impact. 271 00:13:03,090 --> 00:13:05,559 Sean Aylmer: Well, what I think is exciting for Australian businesses is the 272 00:13:05,559 --> 00:13:09,130 Sean Aylmer: cost of capital with Clearco is far less than many 273 00:13:09,130 --> 00:13:11,760 Sean Aylmer: other alternatives. So good luck. It's launching this week in Australia. 274 00:13:11,760 --> 00:13:13,640 Sean Aylmer: Thank you very much for talking to Fear and Greed, Michele. 275 00:13:14,230 --> 00:13:15,470 Michele Romanow: Oh, it was amazing to be here. Thank you for 276 00:13:15,470 --> 00:13:15,880 Michele Romanow: having me. 277 00:13:16,210 --> 00:13:19,520 Sean Aylmer: That was Michele Romanow, the co-founder and president of Clearco. 278 00:13:19,600 --> 00:13:22,610 Sean Aylmer: This is the Fear and Greed Daily Interview. Join me every morning for 279 00:13:22,610 --> 00:13:25,120 Sean Aylmer: the full Fear and Greed podcast with all the business 280 00:13:25,120 --> 00:13:27,809 Sean Aylmer: news you need to know. I'm Sean Aylmer, enjoy your day.