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Speaker 1: I'm with Lucas and this is black Tech, Green money.

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Speaker 1: My Easter League is an angel investor and startup advisor

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Speaker 1: working at the intersection of venture investing, startups, and social impact.

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Speaker 1: Her work aims to build a more equitable future through

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Speaker 1: strong businesses, new models for investment, and supporting founders that

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Speaker 1: are frequently undervalued. Startups are going through a lot these days,

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Speaker 1: and commitments to back and support black companies, black founders,

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Speaker 1: and black startups, so all sharp increases in twenty twenty

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Speaker 1: and twenty twenty one. I asked my issue of the

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Speaker 1: window of opportunity I existed just a short time ago.

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Speaker 1: It's still open.

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Speaker 2: I think a lot of entrepreneurs and emerging find managers

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Speaker 2: are asking whether or not they're going to take a week.

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Speaker 2: I think it depends on who you talk to. There's

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Speaker 2: a few things happening right now in the fundraising climate

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Speaker 2: that make it challenging britt large. A lot of it's

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Speaker 2: like the financial uncertainty, what's happening in the US economy

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Speaker 2: and the US kony tends to drive globally what folks

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Speaker 2: are thinking about in terms of startup and tech investments.

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Speaker 2: There's a change, though Aude I think we saw it

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Speaker 2: really when Elon Musk over Twitter, which seems like a

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Speaker 2: cultural moment. How does that directly connect to how investments

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Speaker 2: are being made. I think that a lot of folks

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Speaker 2: were uncomfortable with the commitments, the social justice commitments that

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Speaker 2: were made around sort of following the untimely passing of

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Speaker 2: George Floyd, and they are leveraging market conditions as a

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Speaker 2: reason to retreat from some of those commitments. We can't

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Speaker 2: do this because there's not enough of X. No one

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Speaker 2: was really asking people to make car bouts for black

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Speaker 2: and brown entrepreneurs if you believe in them, if you

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Speaker 2: believe in the track record or the evidence that's sort

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Speaker 2: of played itself out in the US economy. Black and

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Speaker 2: brown people tend to create their own businesses at overwhelming rates,

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Speaker 2: sort of outstriping their white counterparts, and their businesses could

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Speaker 2: happen to be quite successful. They weren't asking for car abouts.

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Speaker 2: They were just asking to consider my investment as for

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Speaker 2: what it is, which is something that's a high quality

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Speaker 2: that justice a very specific market need. You might not understand,

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Speaker 2: but millions and millions of people sort of understand. Because

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Speaker 2: I'm building against the issues that I know, despite not

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Speaker 2: asking for a car about that's how excuses are being

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Speaker 2: made now to retreat to old behaviors. Start, I should

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Speaker 2: say some investors, not all, but a good number of

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Speaker 2: them have not ever really been daring in terms of

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Speaker 2: where they've put their money. Venture capital as a general

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Speaker 2: matter does not encourage people to be daring in terms

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Speaker 2: of where they put their money. Just sort of pattern

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Speaker 2: matching exists for a real reason. It's rewarded the industry,

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Speaker 2: and I think there's a lot of that behavior that's

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Speaker 2: returned in large part because, like I said, to the

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Speaker 2: macroeconomic conditions and then examples of leadership that are giving

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Speaker 2: people cover or for changing their behavior. I would even

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Speaker 2: add that. And almost immediately after some of the commitments

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Speaker 2: were made, we saw the founder of base Camp. We

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Speaker 2: saw a ton of founders who decided that they were

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Speaker 2: going to take politics out of their businesses. Sort of

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Speaker 2: another way to suggest that we're not making those types

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Speaker 2: of commitments. Meritocracies the thing that matters the most. Also,

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Speaker 2: no one's debating that, but so sort of there have been,

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Speaker 2: I should say, immediately after George Floyd. But even now

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Speaker 2: they're more and more excuses for people to go back

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Speaker 2: to their old behaviors, so it's changed.

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Speaker 1: And so you touched on a couple of these points,

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Speaker 1: and I wanted to isolate them with this question, like

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Speaker 1: what long term effects related to the commitments made or

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Speaker 1: the initiatives after COVID and George Floyd can be found?

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Speaker 1: Are there any positive things that can be you know,

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Speaker 1: realized out of those communities?

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Speaker 2: Think so? I think so. I mean it's sort of

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Speaker 2: like human behavior tends to operate in a bell curve, right,

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Speaker 2: and so in the early days, it's like, oh, something's happening,

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Speaker 2: should we make commitment. There's a spike in commitments, and

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Speaker 2: then there's a reaction to that spike. I think as

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Speaker 2: a result, in twenty twenty, we saw a ton of

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Speaker 2: people who had the courage to step out in really

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Speaker 2: big ways and raise rounds. And whether or not founders

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Speaker 2: got investment because of the societal moment we were in

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Speaker 2: or just because people are finally paying attention. I think

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Speaker 2: there are a lot of great companies that come out

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Speaker 2: of that and have really incredible rounds as a result

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Speaker 2: of it. I think that the challenge for everyone, and

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Speaker 2: I think a lot of skeptics at the time are

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Speaker 2: asking how long would this commitment stick? I think that

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Speaker 2: that's where the pessimism comes in. That said, you know,

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Speaker 2: I think that we'll see that batch of companies that

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Speaker 2: raise money in twenty twenty, twenty twenty one, who is

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Speaker 2: a really big year. Things start to get dicey towards

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Speaker 2: the end of twenty twenty one. We'll see how they

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Speaker 2: make out the next five years. I think that that's

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Speaker 2: when the really prove themselves out. But how valuable those

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Speaker 2: early commitments actually were.

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Speaker 1: You've spent a lot of time working with corporations and helping,

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Speaker 1: you know, provide bridges for startups to work with big corporations.

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Speaker 1: And how do corporations treat carvos? You know, I think

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Speaker 1: about a lot of state and government you know carvos

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Speaker 1: where it maybe a state will designate twenty percent of

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Speaker 1: its dollars have to be spent with you know, a

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Speaker 1: minority owned company or some companies will have prime vendors

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Speaker 1: and sub vendors, and you got to work with the

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Speaker 1: prime if you want to get you know, in it

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Speaker 1: at all. So how do corporateations typically work in this regard?

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Speaker 2: I think actually for whatever reason, perhaps because they're publicly

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Speaker 2: traded and they're for publicly accountable, they're doing a bit better,

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Speaker 2: but a lot of corporate leaders don't see it as

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Speaker 2: a car about. You've got folks that are coming in

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Speaker 2: and really want to align their investments with their consumer base,

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Speaker 2: which trends right to groups that tend to be underrepresented

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Speaker 2: in the venture world. I think that those that are

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Speaker 2: successful navigating corporate innovation teams, the sort of purchase managers

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Speaker 2: and corporations are faring a bit better than those in

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Speaker 2: the private markets. And that really might be about the

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Speaker 2: length of a commitment a company is used to making,

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Speaker 2: or the folks that are sponsoring the work within.

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Speaker 1: What are better ways corporations should think about how to

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Speaker 1: engage with minority own founders, because a lot of the

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Speaker 1: times it gets put on like, you know what, we

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Speaker 1: may not have a capacity to do business, and yeah.

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Speaker 2: You know, that's a really tough one. I think that

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Speaker 2: you know, some companies have done interesting things like ramp ups.

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Speaker 2: They've partnered, you know, sort of sort of partnered people

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Speaker 2: that they want to do business with with smaller chunks

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Speaker 2: of the business and then grow with them. And we've

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Speaker 2: moved them from early entrants into their ecosystem to preferred partners.

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Speaker 2: I think that folks that are planning for the long

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Speaker 2: term do really well. There's a really interesting effort by

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Speaker 2: Aerial Capital out of Chicago. This is John Rodgers and others.

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Speaker 2: They're focusing on investing in companies that I believe it's

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Speaker 2: like a ten million ar are black owning companies at

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Speaker 2: ten million ARAR and boosting them up. And the powerful

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Speaker 2: thing about their initiative is that Aerial Capital does a

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Speaker 2: lot of work with some of these larger corporations, and

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Speaker 2: their ability to pull in mid cap or sort of

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Speaker 2: slightly larger than mid cap black owned companies to do

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Speaker 2: their work is a great opportunity that early day of

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Speaker 2: like small business, interacting with the big company is difficult

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Speaker 2: for everyone. They don't speak the same language. I think

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Speaker 2: that what companies that are trying to be successful at

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Speaker 2: it are doing is really creating more intermediaries or opportunities

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Speaker 2: that smaller companies can grow their way into, taking advantage of,

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Speaker 2: and then partnering with larger entities that are calling them

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Speaker 2: to see sort of MidCap or higher MidCap companies that

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Speaker 2: can service them directly because they are there. I think

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Speaker 2: that people talk about black businesses and these really small

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Speaker 2: things all the time, and that's not true. There are

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Speaker 2: really really incredible companies that have you know, global contracts

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Speaker 2: and have been around for decades that deserve do.

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Speaker 1: And so it's no surprise that anybody listening to this

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Speaker 1: that we're having, you know, a real strong conversation about

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Speaker 1: banking in the United States and the implications of bank

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Speaker 1: collapse and over leveraging and all these different things. What

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Speaker 1: lasting implications might it have for startups when a bank collapses.

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Speaker 2: Yeah, I mean, if we think about what we just

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Speaker 2: went through with SVB specifically, which I paid really close

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Speaker 2: attention to, I think the challenge for the market and

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Speaker 2: that's this fight background. It is hard when you're a

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Speaker 2: small business interacting with the banking, with the standard banking

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Speaker 2: system and the power of a partner in the case

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Speaker 2: of SVB that really understands funky cash flow, really understands

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Speaker 2: the early elements of an idea and how to sort

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Speaker 2: of reconcile whether or not that deserves an investment that's

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Speaker 2: not simply about that's not simple adventure, right, A short

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Speaker 2: term bridge loan or a line of credit or all

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Speaker 2: these other things. Absence of that deep understanding of the

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Speaker 2: ecosystem is going to be a problem for a long time,

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Speaker 2: I think. I mean fundamentally, you know, there are a

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Speaker 2: lot of big banks that try really hard and have

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Speaker 2: a plethora of programs. Chase is really a great example

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Speaker 2: of that that's targeting small businesses. But in innovation, when

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Speaker 2: you're starting with just you and another person an idea,

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Speaker 2: you know, your first or second purchase order, that's not

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Speaker 2: enough for banks to really make a bet on you.

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Speaker 2: You really needed up someone that can that knows what

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Speaker 2: they're looking at. And so in the absence of that,

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Speaker 2: I think we're seeing some of the challenges right now. Typically,

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Speaker 2: when the venture market is a little bit slower in

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Speaker 2: terms of deal flow, and it depends on the sector

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Speaker 2: that you're in, it's a little bit slower, you can

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Speaker 2: go to the private markets for you know, credit, but

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Speaker 2: because as a general matter, people are concerned about the

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Speaker 2: US economy, it's harder to get credit or as a

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Speaker 2: general matter, and so what would have been easier. I

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Speaker 2: found it easier for some businesses that I've worked with

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Speaker 2: as recently as last year to talk to a banker

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Speaker 2: about giving us a line of credit to float us

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Speaker 2: in the short fall. We had you know, really great revenue,

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Speaker 2: but we're really trying to extend our runway a little

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Speaker 2: bit or just have something in the back pocket in

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Speaker 2: case we came up against a challenge that that partnership

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Speaker 2: is not there. The longer it takes a founder to

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Speaker 2: go into the market to find capital to meet their

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Speaker 2: need is more time they are away from solving a

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Speaker 2: problem for the customer that they sought to address. So

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Speaker 2: it's a it's not just that there's the absence of

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Speaker 2: somebody that understands the harder it is to find capital,

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Speaker 2: the harder it is to grow a company really successfully.

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Speaker 2: And so I think that for a while we're going

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Speaker 2: to see will be sort of tough times for smaller

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Speaker 2: companies that are on a growth path. That said, I

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Speaker 2: think there's a lot of opportunity. I think that the

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Speaker 2: tools to grow a strong business are becoming more and

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Speaker 2: more available and more and more dynamic. There's a way

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Speaker 2: to get through, but you can't tool your way or

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Speaker 2: mention your way into success. Capital is involved in that,

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Speaker 2: and absent a partner that understands that, it's just going

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Speaker 2: to be a little bit harder for a while.

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Speaker 1: You know, one of the things I saw pervade. My

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Speaker 1: Twitter timeline when SVB collapsed was that it was propping

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Speaker 1: up and banks in general and VC in general were

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Speaker 1: propping up startups that actually didn't know how to make money,

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Speaker 1: and so people were saying, you know, we got to

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Speaker 1: focus on actually getting dollars in the door versus just

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Speaker 1: venture capital angel dollars and et cetera. And I wonder

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Speaker 1: what your take is on that. Do we have enough

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Speaker 1: of our startups actually trying to sell something? You know?

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Speaker 2: I think that there just like all these places, right

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Speaker 2: they say there are levels to this. There are some

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Speaker 2: people who were really getting by by raising capital as

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Speaker 2: a way to pay to do payroll, right. I don't know,

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Speaker 2: I know some of them. I don't know a lot

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Speaker 2: of those people. Everybody I know that started business needs

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Speaker 2: to cut a check today, like someone is paying them,

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Speaker 2: they're putting in the bank, they're pushing that money out. Yeah,

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Speaker 2: I mean, listen, I think that venture and I love

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Speaker 2: the space, even though it sort of creates heartache, you know,

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Speaker 2: it's it's a really interesting industry to be in the

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Speaker 2: fact that that could be the case. There's a there's

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Speaker 2: a period where it was about innovation that real innovations.

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Speaker 2: Inventing the internet, you know, it takes time, right, and

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Speaker 2: so it's okay for you to go round after round

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Speaker 2: to get capital to be able to hire the people

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Speaker 2: to do the thing you need to do for the

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Speaker 2: major breakthrough. But the last few years sort of the

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Speaker 2: railroad tracks of innovation are already there, right, but the

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Speaker 2: mindset was outdated, and so you had a lot of

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Speaker 2: people that were you know, had grocery come companies. I

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Speaker 2: don't I don't know if I should day something some

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Speaker 2: of them, but like you know, well, well yeah, go

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Speaker 2: puff is a great big example, right, who are sort

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Speaker 2: of burning cash, right, and it's like, well, this is groceries.

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Speaker 2: You have a product, give it to a person, they

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Speaker 2: give you money fair exchange, and they still weren't sort

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Speaker 2: of making ends meet. Sort of got the old idea

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Speaker 2: of of sort of patient I shouldn't say patient capital,

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Speaker 2: of like letting venture capital be the cash flow mechanism

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Speaker 2: for companies and then having companies be surprised when the

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Speaker 2: music stops. I think existed for certain people. I think

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Speaker 2: for others who just didn't. The last few businesses that

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Speaker 2: I built don't operate that way, right, Like, you know,

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Speaker 2: they can hit seven or eight million ar R without

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Speaker 2: ever talking to a venture capitalist, And even in those

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Speaker 2: instances with healthy revenue and years of experience and a

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Speaker 2: solid book of business have trouble getting lines of credit

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Speaker 2: from banks. I think that, like the music stop for

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Speaker 2: a certain group of people, it will impact some. I'm

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Speaker 2: mostly concerned about the biotech indust I'm hoping that investors

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Speaker 2: I don't spend a ton of time there, spend some

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Speaker 2: time there. I'm hoping that investors sort of sort of

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Speaker 2: don't look at the challenges that the industry has had.

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Speaker 2: In the same way, biotex is a long lead thing.

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Speaker 2: It needs cash for a long time before it even improves,

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Speaker 2: whether or not it can bring something to market. So listen,

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Speaker 2: I think for every person it's going to be different.

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Speaker 2: My hope is that it's not in some sectors and

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Speaker 2: for others the music to serve to stop.

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Speaker 1: Yeahh And so let's imagine, because you just talked about

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Speaker 1: some things about venture capital have to change. Let's imagine

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Speaker 1: venture capital is a patient going to the hospital, right,

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Speaker 1: and he's got a broken leg, broken finger, and it's

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Speaker 1: bleeding out. Lots of problems, lots of problems, some more

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Speaker 1: severe than others. We know a lot of things could

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Speaker 1: be broken about VC. What's the part that's bleeding out

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Speaker 1: that's like, yo, we got to fix this before we

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Speaker 1: focus on the leg and the broken finger.

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Speaker 2: That is a great question. I think the most urgent challenge,

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Speaker 2: or the thing that comes to mind most immediately, is

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Speaker 2: risk aversion. So it's like venture capitalists, yeah, I do.

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Speaker 2: I mean it's like it's like everything's falling. Perhaps you

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Speaker 2: should be, you should operate more in a more safe manner,

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Speaker 2: But I'm hoping that sort of comfort risk tolerance. I

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Speaker 2: should say i'd risk first, but risk tolerance, essentially I hope,

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Speaker 2: is something that the industry fixed fastest. The way I

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Speaker 2: will break this down is that you know what you

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Speaker 2: are rewarded in venture capital, not necessarily by companies that

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Speaker 2: go the full distance. You're most immediately rewarded by whoever

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Speaker 2: picks up that company in a following round. So as

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Speaker 2: a result, when you write your first check, it doesn't

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Speaker 2: matter how much you have conviction that one found. You

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Speaker 2: are always thinking about when they leave my office, when

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Speaker 2: this round is done, well, the next group of investors

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Speaker 2: that they have to convince say yes, And as a result,

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Speaker 2: you can imagine when you think about the industry and

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Speaker 2: the makeup. Folks get real really tight about the definition

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Speaker 2: of a founder that would do really really well in

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Speaker 2: that environment, and you hear it all the time in

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Speaker 2: investment committee meetings. People get really really excited. But the

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Speaker 2: thing that stops them is like, I don't know how

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Speaker 2: this founder will do when they go out to raise

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Speaker 2: additional capital. And that is where I feel like that

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Speaker 2: that is the that is the bleeding out part of

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Speaker 2: venture that I think stops it from going as far

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Speaker 2: as it could go.

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Speaker 1: Right.

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Speaker 2: I think there's a there's another there isn't If if

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Speaker 2: we were more risk tolerant, we were more comfortable with

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Speaker 2: the fact that and we knew that our colleagues are

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Speaker 2: more comfortable with taking risks on what they what they

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Speaker 2: on what could be great, and what a good company

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Speaker 2: looks like. Look at the bones of the idea and

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Speaker 2: be more risk tolerant to the individual. I think that'll

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Speaker 2: help us go further, because at the end of the day,

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Speaker 2: no matter how much capital you raised, you have to

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Speaker 2: deploy it, and you have to deploy into companies that

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Speaker 2: can actually have delivered to a customer, that can grow successfully.

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Speaker 2: Add infinitum right dot dot dot right. And I think

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Speaker 2: that the real challenge for us is a lack of

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Speaker 2: imagination and an inability to take on significant take on

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Speaker 2: risk beyond what we think our colleagues might be interested

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Speaker 2: in in order to sort of, you know, make a

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Speaker 2: big bet. I think that's the biggest challenge we can invite.

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Speaker 2: We won't invite more people into our industry, The deal

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Speaker 2: phil will get tighter, the range of a founder that

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Speaker 2: gets funding will get smaller. The more we're sort of

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Speaker 2: confined by who we think our friends will like in

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Speaker 2: the next round, as opposed to the validity of the

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Speaker 2: idea itself.

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Speaker 1: Oh that's good. You talked about some of the things

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Speaker 1: that Silicon Valley Bank filled the gap in, you know,

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Speaker 1: with regard and they understood how financing works for a

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Speaker 1: lot of startups. Who fills that void now?

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Speaker 2: I don't really know. I think that remains to be seen.

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Speaker 2: I think it's an exciting opportunity for anyone that wants

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Speaker 2: to make a market. It takes some time. I would

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Speaker 2: ask myself, like, where the people who are at Silicon

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Speaker 2: Valley Bank, what are they doing now? What do they

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Speaker 2: want to do? It would be interesting if a part

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Speaker 2: of a group of them started something new during the

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Speaker 2: crisis itself. Rex did a lot to fill the gap.

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Speaker 2: It's a little bit different because, as far as I understand,

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Speaker 2: REX is like a fintech company, it's not sort of

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Speaker 2: a proper, proper bank. I think that you know, they

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Speaker 2: do know the startup ecosystem exceptionally well. It was a

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Speaker 2: really good moment for them to bring in new customers.

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Speaker 2: We talked a lot about startups, but it doesn't just

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Speaker 2: expect startups. It expects fund managers, which are startups themselves, right,

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Speaker 2: they're businesses themselves. It will be interesting. I think it's

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Speaker 2: a really great opportunity for folks that want to pick

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Speaker 2: it up because there's a real gap in the market.

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Speaker 2: Even Brexit. It's best the more products that it spins

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Speaker 2: out in the absence of SPB, it won't be enough.

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Speaker 2: There's in a single institution that should cover all of

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Speaker 2: the bases there and I'm excited to see who fills

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Speaker 2: the void.

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Speaker 1: So we've talked a lot about, you know, the actual

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Speaker 1: banking relationship, but with one of the other things that

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Speaker 1: we're hearing a lot about is interest rates and its

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Speaker 1: impact on how people spend their dollars. How much discussion

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Speaker 1: their income people may have, But what is what should

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Speaker 1: a startup be thinking about maybe having three raised money

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Speaker 1: or having raised money? What do startups? What should startups

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Speaker 1: here when they hear interest rates going through the roof?

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Speaker 2: Yeah, so you know, I'm not an economist, but I'll

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Speaker 2: do my best here. My sense of it is that,

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Speaker 2: you know, lower interest rates sort of laws would be

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Speaker 2: flushed with cash. They're more dynamic and where they place it.

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Speaker 2: Higher interest rates gets people to being really specific about

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Speaker 2: where they place their capital. I saw a post recently

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Speaker 2: Jenny Fielding, who runs the fund. I think they're calling

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Speaker 2: themselves everywhere Adventures now is selling founders that you know

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Speaker 2: act as if this last round is the last capital

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Speaker 2: to raise. I don't know enough to say if it

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Speaker 2: should be that dire, but it's fair right, it should

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Speaker 2: be really intentional about where you put a dollar. You

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Speaker 2: only can spend it once and we don't know what

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Speaker 2: you know what future rounds will look like, if there

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Speaker 2: will be the same size as they once were. In

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Speaker 2: large part after SVB, there was like a pause when

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Speaker 2: people went back to business. Things seemed to be fine.

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Speaker 2: People had access to the capitol, but there is more

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Speaker 2: and more churn and chatter about the size of rounds

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Speaker 2: being a lot smaller than one they once expected. So

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Speaker 2: if you're building an expensive company like logistics or grocery stores,

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Speaker 2: for example, and you sort of mapped out how much

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Speaker 2: more might need to raise at each step, you might

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Speaker 2: find yourself in a higher position than before. So just

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Speaker 2: be aware. I think this is mostly advised.

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Speaker 1: We've got a pretty interesting financial climate on our hands

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Speaker 1: and raise it up in facing is high bank's abilities

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Speaker 1: in question. Even crypto is struggling to recover. None of

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Speaker 1: this discounts the fact that many startups still need venti

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Speaker 1: capital and many are out actively fundraising. So how do

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Speaker 1: vcs behave differently when you consider all these factors? May

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Speaker 1: should speaks on it.

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Speaker 2: I think they become more conservative, like we all do

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Speaker 2: with our money. You know, at the end of the day,

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Speaker 2: everyone has a loss. Venture capitalists their LPs are looking

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Speaker 2: at them in terms of the returns they can generate.

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Speaker 2: People get more conservative. I think that folks will do that.

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Speaker 2: I think that the venture capitalists that do really, really well,

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Speaker 2: we'll get really really specific in their thesis, hyper focus

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Speaker 2: in an area so that they make choices that they

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Speaker 2: really can believe in, and when they make risks, they

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Speaker 2: have strong conviction about why they're making them. And actually

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Speaker 2: that's a lesson to us all. Where you put your

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Speaker 2: money should be in the places that you think matter

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Speaker 2: the most, and double down in the areas that you

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Speaker 2: think are really important. If saving for retirement is really important,

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Speaker 2: this is the time that's been all of your time.

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Speaker 2: Really understanding a bit about where you're putting your money

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Speaker 2: in that regard, it'll help you make the right choices

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Speaker 2: in the moment. So I think that the same thing.

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Speaker 2: The way to think about bunch of capitalists is the

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Speaker 2: way we all are. Everyone has a boss, they're held

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Speaker 2: accountable too. They've taken capital from other people the responsibilities

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Speaker 2: to deploy it with return, And I think that the

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Speaker 2: folks that do well will be open to risk in

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Speaker 2: their very specific sectors that they know really well.

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Speaker 1: Is I've talked to a few different founders who recently

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Speaker 1: owned this podcast who were super successful in raising money

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Speaker 1: during COVID when we didn't even know what the world

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Speaker 1: would look like coming right COVID. It's crazy, yeah, And

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Speaker 1: I wonder with this current climate, is it still a

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Speaker 1: good time to raise so how do I know if

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Speaker 1: this is a good time to raise.

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Speaker 2: You don't have a choice, right, like? You really, there

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Speaker 2: isn't a perfect time for anything. I think the COVID

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Speaker 2: moment surprised a lot of us. You know, the world

427
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Speaker 2: is ending, and yet it's easy to get capital. The

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Speaker 2: world is ending, and ten people just want a house.

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Speaker 2: This is a really wild moment, you really. I mean,

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Speaker 2: if you're a founder and you're building a company, I

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Speaker 2: think that let's see what are the risks of you

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Speaker 2: beginning to put feelers out there starting to raise money.

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Speaker 2: If you're unsuccessful, you stop the race, get feedback, make

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Speaker 2: an adjustment, figure out what's wrong. If you are successful,

435
00:22:21,560 --> 00:22:24,320
Speaker 2: no love lost. Right. If you're not as successful as

436
00:22:24,320 --> 00:22:26,560
Speaker 2: you thought, you have capital, and then what do you do? Right? Like,

437
00:22:26,840 --> 00:22:29,720
Speaker 2: I think that you know, we can try to pick

438
00:22:29,720 --> 00:22:32,440
Speaker 2: our moments in the best moment to do this. If

439
00:22:32,480 --> 00:22:36,480
Speaker 2: the next level of your business requires capital, the best

440
00:22:36,520 --> 00:22:39,680
Speaker 2: thing you can do is move in that direction, right,

441
00:22:40,040 --> 00:22:41,800
Speaker 2: And the only thing failure will teach you is how

442
00:22:41,840 --> 00:22:43,440
Speaker 2: to do better next time. I don't think that there's

443
00:22:43,440 --> 00:22:47,080
Speaker 2: any any way to hesitate or resist there as a

444
00:22:47,080 --> 00:22:49,560
Speaker 2: general matter. If you're thinking about maybe I shouldn't raise at all.

445
00:22:50,119 --> 00:22:52,880
Speaker 2: Maybe I should tweak something in my business. I think

446
00:22:52,880 --> 00:22:55,000
Speaker 2: it just really goes back to the things you learned

447
00:22:55,440 --> 00:22:57,120
Speaker 2: back in the day with your mom or your dad,

448
00:22:57,160 --> 00:23:00,639
Speaker 2: which is really like, you know, spend money what you have,

449
00:23:00,760 --> 00:23:02,840
Speaker 2: try to keep as much reserves as you possibly can,

450
00:23:02,880 --> 00:23:04,960
Speaker 2: and try to be smart about the choices you need

451
00:23:05,000 --> 00:23:07,679
Speaker 2: to make over communicate with your team who are in

452
00:23:07,680 --> 00:23:09,680
Speaker 2: this with you and are equally nervous because their jobs

453
00:23:09,720 --> 00:23:12,399
Speaker 2: are connected to the choices that you're making. But I

454
00:23:12,400 --> 00:23:14,359
Speaker 2: don't think there's a really there's no really way, as

455
00:23:14,359 --> 00:23:16,680
Speaker 2: they say, to time the market. Got to do what

456
00:23:16,720 --> 00:23:17,159
Speaker 2: you can to do.

457
00:23:17,880 --> 00:23:20,879
Speaker 1: Yeah, yeah, And I've heard it said, or maybe I

458
00:23:20,880 --> 00:23:22,399
Speaker 1: said it myself. I don't even know if you said this,

459
00:23:22,440 --> 00:23:25,600
Speaker 1: but I mean, it's always a good time for good companies.

460
00:23:25,680 --> 00:23:28,560
Speaker 1: Like good companies don't necessarily have to think about what

461
00:23:28,600 --> 00:23:31,760
Speaker 1: the market looks like. And I wonder if that apprehension,

462
00:23:31,880 --> 00:23:36,080
Speaker 1: or the potential apprehension to consider the time, does that

463
00:23:36,119 --> 00:23:38,720
Speaker 1: tell you more about the founder that maybe they're not

464
00:23:38,760 --> 00:23:42,120
Speaker 1: as confident or maybe or what does it tell you? Yeah?

465
00:23:42,160 --> 00:23:44,920
Speaker 2: I mean you mean if a founder delays grazing, now,

466
00:23:45,040 --> 00:23:47,640
Speaker 2: what does that tell you? Yes, yes, it could tell.

467
00:23:47,720 --> 00:23:51,880
Speaker 2: It could be a lot of things. I remember, there

468
00:23:51,880 --> 00:23:54,480
Speaker 2: are moments where you know, we're building a business and

469
00:23:55,280 --> 00:23:58,639
Speaker 2: our CFO, there's a fractional CFO worked with lots of

470
00:23:58,640 --> 00:24:02,359
Speaker 2: other companies, just it was a good time to raise money.

471
00:24:03,000 --> 00:24:05,400
Speaker 2: We had money. We just wanted a little bit more leverage.

472
00:24:05,800 --> 00:24:09,040
Speaker 2: Discourage us for raising money because our priority at the time,

473
00:24:09,080 --> 00:24:11,840
Speaker 2: you only can spend one minute, one time, one way,

474
00:24:12,680 --> 00:24:15,800
Speaker 2: needed to be the fundamentals of our business. Right it

475
00:24:15,840 --> 00:24:17,200
Speaker 2: was going to make or break this in the long term.

476
00:24:17,240 --> 00:24:19,480
Speaker 2: And sure, we knew exactly who to ask for money

477
00:24:20,280 --> 00:24:22,280
Speaker 2: and we're probably going to get it, and we decided

478
00:24:22,320 --> 00:24:25,119
Speaker 2: not to. So sometimes founders decide not to raise because

479
00:24:25,480 --> 00:24:28,160
Speaker 2: they prioritize something else that they think is more significant

480
00:24:28,200 --> 00:24:31,359
Speaker 2: in their long term success. Doesn't tell you much of anything.

481
00:24:31,800 --> 00:24:34,800
Speaker 2: There are some founders that you know, I have moments

482
00:24:34,800 --> 00:24:36,720
Speaker 2: where I talk a good game and then when it

483
00:24:36,720 --> 00:24:38,320
Speaker 2: comes time to do it, I'm nervous about it. Like

484
00:24:38,320 --> 00:24:41,480
Speaker 2: there are some founders that are people periods who aren't

485
00:24:41,480 --> 00:24:45,760
Speaker 2: going to hesitate because of confidence. I think that that's

486
00:24:45,800 --> 00:24:48,320
Speaker 2: not a problem, that's not a character flaw, that's not

487
00:24:48,359 --> 00:24:51,600
Speaker 2: a suggestion that they're not good at their their their job,

488
00:24:51,960 --> 00:24:55,960
Speaker 2: or their business. It's a scary time, right, and fear

489
00:24:56,160 --> 00:24:58,119
Speaker 2: can be a great motivator if they're connected with the

490
00:24:58,200 --> 00:25:01,240
Speaker 2: right person. So I don't really I talk to founders.

491
00:25:01,600 --> 00:25:05,400
Speaker 2: I try to be as open and as helpful as possible,

492
00:25:05,640 --> 00:25:07,000
Speaker 2: and so you don't have to come to me as

493
00:25:07,000 --> 00:25:09,040
Speaker 2: a perfect founder. We can talk our way through it.

494
00:25:09,040 --> 00:25:11,080
Speaker 2: It doesn't really tell you much. Accept that they're human

495
00:25:11,280 --> 00:25:14,280
Speaker 2: and they're reading the tea leaves and they're being realistic about,

496
00:25:14,560 --> 00:25:16,000
Speaker 2: you know, whether or not there's a good use of

497
00:25:16,560 --> 00:25:17,640
Speaker 2: or investment of their time.

498
00:25:18,640 --> 00:25:20,119
Speaker 1: And so I want to ask you about because you've

499
00:25:20,160 --> 00:25:22,280
Speaker 1: spent a lot of time again working with big companies

500
00:25:22,280 --> 00:25:25,520
Speaker 1: and helping them build those bridges with startups. I was

501
00:25:25,560 --> 00:25:29,479
Speaker 1: reading this list that Michael Seibel from y Combator had

502
00:25:29,520 --> 00:25:31,400
Speaker 1: put out, and it was a pocket guide for essential

503
00:25:31,600 --> 00:25:35,720
Speaker 1: YC advice and this will one line this yeah yeah,

504
00:25:35,720 --> 00:25:38,280
Speaker 1: and this one line piqued my interest and it said

505
00:25:38,320 --> 00:25:43,040
Speaker 1: avoid big company corporate development ceries. They only waste time. Yeah,

506
00:25:43,080 --> 00:25:45,840
Speaker 1: And it got me thinking about something I do. I

507
00:25:45,920 --> 00:25:47,840
Speaker 1: have a marketing company outside of this, and I've been

508
00:25:47,880 --> 00:25:52,800
Speaker 1: thinking about I don't even respond to corporate or governmental

509
00:25:52,920 --> 00:25:57,600
Speaker 1: RFPs because they take so much time to respond to

510
00:25:57,640 --> 00:26:03,840
Speaker 1: them and tip the resources put in, the investment put

511
00:26:03,880 --> 00:26:07,040
Speaker 1: in is not worth the reward.

512
00:26:07,119 --> 00:26:07,879
Speaker 2: Yeah, the reward.

513
00:26:08,160 --> 00:26:11,600
Speaker 1: So I wonder what your thoughts are on this idea.

514
00:26:11,840 --> 00:26:15,800
Speaker 2: With everything, it depends I respect Michael, I know your

515
00:26:15,840 --> 00:26:19,880
Speaker 2: experience is real. You're a master entrepreneur yourself, and I've

516
00:26:19,920 --> 00:26:23,200
Speaker 2: seen it. It depends. What if I told you that

517
00:26:23,320 --> 00:26:26,720
Speaker 2: the decision maker in there was like my best friend

518
00:26:26,760 --> 00:26:29,119
Speaker 2: of twenty years, so right not do it? It just

519
00:26:29,160 --> 00:26:32,679
Speaker 2: really depends correct people. Here's the thing all everyone will

520
00:26:32,720 --> 00:26:35,280
Speaker 2: waste your time if you let them. Number one, number two,

521
00:26:36,200 --> 00:26:38,800
Speaker 2: lots of people together operating, because a group will definitely

522
00:26:38,880 --> 00:26:40,800
Speaker 2: waste your time if you let them, and that's the

523
00:26:40,840 --> 00:26:44,400
Speaker 2: case of companies. I think it depends on what you're

524
00:26:44,440 --> 00:26:46,040
Speaker 2: going to get. Say you and I were building a

525
00:26:46,040 --> 00:26:48,800
Speaker 2: business for five years of marketing business and we decide

526
00:26:49,040 --> 00:26:51,119
Speaker 2: that we're gonna get put into this. We're going to

527
00:26:51,160 --> 00:26:53,040
Speaker 2: put into the RFP. We've met three people that we

528
00:26:53,080 --> 00:26:56,720
Speaker 2: think could influence the decision at Nike, for example, and

529
00:26:56,760 --> 00:26:59,000
Speaker 2: we're doing it because it's probably going to be a

530
00:26:59,000 --> 00:27:00,640
Speaker 2: loss leader. It's going to take a lot of work,

531
00:27:00,800 --> 00:27:04,160
Speaker 2: we're going to service this business for three months because

532
00:27:04,280 --> 00:27:06,520
Speaker 2: the long tail, the ability to be able to say

533
00:27:06,520 --> 00:27:08,119
Speaker 2: that we had Nike as a client, it's going to

534
00:27:08,200 --> 00:27:10,000
Speaker 2: crue to our benefit in the long term. We're not

535
00:27:10,000 --> 00:27:12,480
Speaker 2: gonna make this our whole business. If we've been running

536
00:27:12,480 --> 00:27:14,280
Speaker 2: a business for a while, we can make that choice.

537
00:27:14,640 --> 00:27:17,960
Speaker 2: I know a founder who was a really incredible marketer,

538
00:27:18,160 --> 00:27:21,119
Speaker 2: has an innovative way of doing it. She's most of

539
00:27:21,119 --> 00:27:23,960
Speaker 2: her team is part time. She's got Disney as a client,

540
00:27:24,560 --> 00:27:27,200
Speaker 2: she has Vogue as a client occasionally. You know, there

541
00:27:27,200 --> 00:27:30,359
Speaker 2: are times when a business can be a lot more

542
00:27:30,440 --> 00:27:33,119
Speaker 2: trouble than it's worth. But in part par for the course,

543
00:27:33,320 --> 00:27:35,840
Speaker 2: she's gotten to meet the m and a teams of

544
00:27:35,880 --> 00:27:37,920
Speaker 2: these of these years. So it's just it really is

545
00:27:38,640 --> 00:27:41,560
Speaker 2: about what the life cycle of the business. Where I

546
00:27:41,600 --> 00:27:45,760
Speaker 2: think Michael's right is that starting a business where you

547
00:27:45,760 --> 00:27:47,560
Speaker 2: know you're gonna have a few clients and that's gonna

548
00:27:47,600 --> 00:27:50,920
Speaker 2: be the thing that you chase, that's probably problematic unless

549
00:27:51,160 --> 00:27:53,800
Speaker 2: you came from that industry. This is the same playbook

550
00:27:53,800 --> 00:27:56,560
Speaker 2: for any B to B business and have the relationships

551
00:27:56,560 --> 00:27:58,639
Speaker 2: to get you in the door over with your hurdles faster.

552
00:27:59,080 --> 00:28:02,320
Speaker 2: It really depends. It's wise advice because they can take

553
00:28:02,320 --> 00:28:04,560
Speaker 2: a lot of time, but strategically they can be worth it.

554
00:28:04,560 --> 00:28:07,920
Speaker 2: It's the same reason why you know you might join

555
00:28:07,960 --> 00:28:10,280
Speaker 2: a board, right and not an unpaid board. It's like,

556
00:28:10,359 --> 00:28:13,000
Speaker 2: actually everyone want here. I'm going to probably raise money

557
00:28:13,040 --> 00:28:15,159
Speaker 2: from in a few years, so that's you know, like

558
00:28:15,160 --> 00:28:17,920
Speaker 2: it's like you're making an investment that doesn't really show

559
00:28:17,960 --> 00:28:20,400
Speaker 2: out right away, but could be a long term, long

560
00:28:20,480 --> 00:28:23,159
Speaker 2: term to be powerful. Ultimately, though, I will say to

561
00:28:23,200 --> 00:28:26,159
Speaker 2: our corporate friends, they know they have challenges interacting with

562
00:28:26,359 --> 00:28:29,400
Speaker 2: an innovative and small businesses. They know they need our innovation.

563
00:28:30,359 --> 00:28:32,600
Speaker 2: They have teams thinking about it every day. It's probably

564
00:28:32,600 --> 00:28:35,159
Speaker 2: part of the problem. They know that this is a

565
00:28:35,200 --> 00:28:37,280
Speaker 2: thing that they want to get better at who're not there,

566
00:28:37,480 --> 00:28:39,080
Speaker 2: and they admit it. And I think that that's just

567
00:28:39,440 --> 00:28:40,880
Speaker 2: sort of everybody's got their problems.

568
00:28:41,840 --> 00:28:44,480
Speaker 1: And to that end, go let's go one level deeper.

569
00:28:45,320 --> 00:28:47,600
Speaker 1: What is some of the pre work that not enough

570
00:28:47,640 --> 00:28:49,960
Speaker 1: of us do to make sure that when we do respond,

571
00:28:50,360 --> 00:28:54,240
Speaker 1: we have a better we're better positioned to win those deals.

572
00:28:54,360 --> 00:28:57,400
Speaker 2: Yeah, I think the enterprise clients as a general matter,

573
00:28:57,440 --> 00:29:02,520
Speaker 2: are different than everyday consumers. They despite knowing that you're

574
00:29:02,520 --> 00:29:06,040
Speaker 2: a young company, will expect a lot of you. Typically

575
00:29:06,120 --> 00:29:08,320
Speaker 2: they're going to ask you for insurance requirements that you

576
00:29:08,360 --> 00:29:11,600
Speaker 2: might maybe be ready for professional liability insurance. Ask your

577
00:29:11,600 --> 00:29:14,040
Speaker 2: founder friends. There's probably a great recommendation they can make

578
00:29:14,040 --> 00:29:16,480
Speaker 2: for you can get a cheap and quick These insurance

579
00:29:16,520 --> 00:29:18,320
Speaker 2: people are use getting these calls last minute for small

580
00:29:18,320 --> 00:29:21,960
Speaker 2: businesses because it happens a lot. Yeah, yeah, right, it's

581
00:29:22,000 --> 00:29:25,120
Speaker 2: always it's always a surprise. It's always a surprise, and

582
00:29:25,200 --> 00:29:29,040
Speaker 2: someone's tragically text messaging someone to get it's fine. You know.

583
00:29:29,240 --> 00:29:32,800
Speaker 2: I think that understanding that when you're doing an enterprise

584
00:29:32,880 --> 00:29:35,880
Speaker 2: client or working with them, you've actually got two jobs.

585
00:29:36,360 --> 00:29:39,000
Speaker 2: There's delivery of the work and then there's sort of

586
00:29:39,520 --> 00:29:43,000
Speaker 2: delivery of the client, like managing them and helping them

587
00:29:43,040 --> 00:29:46,440
Speaker 2: be success in your story. I don't think it's specific

588
00:29:46,520 --> 00:29:49,200
Speaker 2: to us. I think that the more you have exposure

589
00:29:49,240 --> 00:29:52,880
Speaker 2: to servicing enterprise clients, or the more you can find

590
00:29:52,880 --> 00:29:55,560
Speaker 2: people in your network you have experience doing it, the

591
00:29:55,600 --> 00:29:58,520
Speaker 2: easier it is to figure them out and navigate them.

592
00:29:58,720 --> 00:30:01,160
Speaker 2: As long as you've got a strong website, a clear

593
00:30:01,200 --> 00:30:05,760
Speaker 2: path to issue invoices on time, and you know how

594
00:30:05,760 --> 00:30:07,760
Speaker 2: to and you figure out how to manage your client

595
00:30:07,840 --> 00:30:10,560
Speaker 2: through milestones in your contract, You're going to be fine.

596
00:30:11,720 --> 00:30:13,560
Speaker 2: There are little sort of tips and tricks will ask

597
00:30:13,600 --> 00:30:16,400
Speaker 2: you when you sign up, but all those things, some

598
00:30:16,520 --> 00:30:18,000
Speaker 2: of them you can kind of flow through. They don't

599
00:30:17,840 --> 00:30:19,000
Speaker 2: really care. You're surprised.

600
00:30:19,800 --> 00:30:22,640
Speaker 1: Yeah, And for those companies who are working through their

601
00:30:22,680 --> 00:30:26,800
Speaker 1: internal challenges to onboard startups and particularly black founders. I

602
00:30:26,880 --> 00:30:29,280
Speaker 1: mentioned earlier that too often we get put into we

603
00:30:29,320 --> 00:30:32,520
Speaker 1: don't have the capacity sort of you know, bucket, what

604
00:30:32,720 --> 00:30:35,360
Speaker 1: are because you've done this work, what are some of

605
00:30:35,440 --> 00:30:39,240
Speaker 1: the strongest cases you've found that are effective in helping

606
00:30:39,320 --> 00:30:44,080
Speaker 1: big companies see startups as potential partners versus risks.

607
00:30:44,560 --> 00:30:48,960
Speaker 2: Yeah, almost always. The opportunity lies in some innovation that

608
00:30:49,000 --> 00:30:51,560
Speaker 2: the big company cannot pull off on its own. And

609
00:30:51,640 --> 00:30:55,400
Speaker 2: even the most innovative companies, the advantage that a small

610
00:30:55,480 --> 00:30:58,880
Speaker 2: company has that big company does not is that based

611
00:30:58,920 --> 00:31:01,280
Speaker 2: on your height search of the customer. So say the

612
00:31:01,320 --> 00:31:03,600
Speaker 2: customer is like this height, and you're this tall, and

613
00:31:03,640 --> 00:31:06,440
Speaker 2: the big companies that tall, you're just so much closer

614
00:31:07,200 --> 00:31:10,120
Speaker 2: to the sensitivities of a customer. The sensitivity is the

615
00:31:10,160 --> 00:31:12,880
Speaker 2: market that they don't feel because they're too massive. There

616
00:31:12,880 --> 00:31:15,280
Speaker 2: are insights you can bring that it would take their

617
00:31:15,280 --> 00:31:17,640
Speaker 2: best team weeks and weeks to do desk research to

618
00:31:17,640 --> 00:31:19,800
Speaker 2: figure out because you're living the reality and every day,

619
00:31:20,040 --> 00:31:22,160
Speaker 2: and so I would kind of flip it a little bit.

620
00:31:22,440 --> 00:31:27,560
Speaker 2: I would say to small and medium businesses to assert

621
00:31:27,640 --> 00:31:31,560
Speaker 2: your superpower, which is really the you are eating what

622
00:31:31,600 --> 00:31:33,720
Speaker 2: you kill and as a result, you know where the

623
00:31:33,720 --> 00:31:36,840
Speaker 2: fish are right and they're sort of and you've really

624
00:31:36,880 --> 00:31:38,800
Speaker 2: got to assert that and connect it. The other thing

625
00:31:38,800 --> 00:31:42,080
Speaker 2: I would suggest, which I see a few companies do this,

626
00:31:42,080 --> 00:31:45,640
Speaker 2: particularly in marketing, less in some of the more durable

627
00:31:45,720 --> 00:31:51,080
Speaker 2: like hardware businesses do. But it is possible team up

628
00:31:51,120 --> 00:31:53,240
Speaker 2: with someone in the business that you admire to go

629
00:31:53,360 --> 00:31:55,360
Speaker 2: after the big business. So if you get a feedback

630
00:31:55,400 --> 00:31:58,880
Speaker 2: about capacity, right, you know, well, your marketing business can

631
00:31:58,920 --> 00:32:00,680
Speaker 2: be paired with on the other person you know on

632
00:32:00,720 --> 00:32:03,960
Speaker 2: the market who might be a competimate. Like you guys

633
00:32:03,960 --> 00:32:06,000
Speaker 2: are good friends, they're kind of in your space. You

634
00:32:06,040 --> 00:32:08,600
Speaker 2: respect what they do, but you're running two different businesses.

635
00:32:08,640 --> 00:32:11,840
Speaker 2: There's a lot of relationships like that. Come together and

636
00:32:11,880 --> 00:32:14,200
Speaker 2: go after the business together and figure out how you

637
00:32:14,200 --> 00:32:16,560
Speaker 2: guys are going to manage it. Through, especially if the

638
00:32:16,600 --> 00:32:18,800
Speaker 2: contract could be something that, as I said, is a

639
00:32:18,880 --> 00:32:22,440
Speaker 2: long term of value as you market your services to

640
00:32:23,240 --> 00:32:26,560
Speaker 2: the clients you've been serving to, even other larger organizations.

641
00:32:26,080 --> 00:32:45,800
Speaker 1: Stas Black Tech Green Money is a production of Blavity,

642
00:32:45,800 --> 00:32:49,320
Speaker 1: Afrotech and the Black Effect Podcast Network and iHeart Media

643
00:32:49,480 --> 00:32:52,440
Speaker 1: and it's produced by Morgan Debond and me Well Lucas,

644
00:32:52,880 --> 00:32:55,320
Speaker 1: with addition of production support by Sarah Ergon and Rose

645
00:32:55,400 --> 00:32:59,480
Speaker 1: mc lucas. Special thank you to Michael Davis I Vanessa Serrano.

646
00:33:00,040 --> 00:33:01,880
Speaker 1: Learn more about my guests and other tech disruptors and

647
00:33:01,920 --> 00:33:05,800
Speaker 1: innovators at afrotech dot com. Enjoining Black Tech Green Money

648
00:33:06,680 --> 00:33:11,240
Speaker 1: shot us to somebody go get your money, Peace and love,