WEBVTT - HOW TODAY'S BANKING CLIMATE IMPACTS STARTUPS w/ Maisha Leek

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

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<v Speaker 1>My Easter League is an angel investor and startup advisor

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<v Speaker 1>working at the intersection of venture investing, startups, and social impact.

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<v Speaker 1>Her work aims to build a more equitable future through

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<v Speaker 1>strong businesses, new models for investment, and supporting founders that

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<v Speaker 1>are frequently undervalued. Startups are going through a lot these days,

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<v Speaker 1>and commitments to back and support black companies, black founders,

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<v Speaker 1>and black startups, so all sharp increases in twenty twenty

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<v Speaker 1>and twenty twenty one. I asked my issue of the

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<v Speaker 1>window of opportunity I existed just a short time ago.

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<v Speaker 1>It's still open.

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<v Speaker 2>I think a lot of entrepreneurs and emerging find managers

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

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<v Speaker 2>I think it depends on who you talk to. There's

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<v Speaker 2>a few things happening right now in the fundraising climate

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<v Speaker 2>that make it challenging britt large. A lot of it's

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<v Speaker 2>like the financial uncertainty, what's happening in the US economy

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<v Speaker 2>and the US kony tends to drive globally what folks

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<v Speaker 2>are thinking about in terms of startup and tech investments.

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<v Speaker 2>There's a change, though Aude I think we saw it

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<v Speaker 2>really when Elon Musk over Twitter, which seems like a

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<v Speaker 2>cultural moment. How does that directly connect to how investments

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<v Speaker 2>are being made. I think that a lot of folks

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<v Speaker 2>were uncomfortable with the commitments, the social justice commitments that

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<v Speaker 2>were made around sort of following the untimely passing of

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<v Speaker 2>George Floyd, and they are leveraging market conditions as a

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<v Speaker 2>reason to retreat from some of those commitments. We can't

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<v Speaker 2>do this because there's not enough of X. No one

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<v Speaker 2>was really asking people to make car bouts for black

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<v Speaker 2>and brown entrepreneurs if you believe in them, if you

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<v Speaker 2>believe in the track record or the evidence that's sort

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<v Speaker 2>of played itself out in the US economy. Black and

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<v Speaker 2>brown people tend to create their own businesses at overwhelming rates,

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<v Speaker 2>sort of outstriping their white counterparts, and their businesses could

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

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<v Speaker 2>They were just asking to consider my investment as for

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<v Speaker 2>what it is, which is something that's a high quality

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<v Speaker 2>that justice a very specific market need. You might not understand,

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<v Speaker 2>but millions and millions of people sort of understand. Because

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<v Speaker 2>I'm building against the issues that I know, despite not

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<v Speaker 2>asking for a car about that's how excuses are being

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<v Speaker 2>made now to retreat to old behaviors. Start, I should

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<v Speaker 2>say some investors, not all, but a good number of

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<v Speaker 2>them have not ever really been daring in terms of

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<v Speaker 2>where they've put their money. Venture capital as a general

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<v Speaker 2>matter does not encourage people to be daring in terms

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<v Speaker 2>of where they put their money. Just sort of pattern

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

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<v Speaker 2>and I think there's a lot of that behavior that's

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<v Speaker 2>returned in large part because, like I said, to the

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<v Speaker 2>macroeconomic conditions and then examples of leadership that are giving

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<v Speaker 2>people cover or for changing their behavior. I would even

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<v Speaker 2>add that. And almost immediately after some of the commitments

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<v Speaker 2>were made, we saw the founder of base Camp. We

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<v Speaker 2>saw a ton of founders who decided that they were

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<v Speaker 2>going to take politics out of their businesses. Sort of

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<v Speaker 2>another way to suggest that we're not making those types

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<v Speaker 2>of commitments. Meritocracies the thing that matters the most. Also,

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

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<v Speaker 2>I should say, immediately after George Floyd. But even now

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<v Speaker 2>they're more and more excuses for people to go back

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<v Speaker 2>to their old behaviors, so it's changed.

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<v Speaker 1>And so you touched on a couple of these points,

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<v Speaker 1>and I wanted to isolate them with this question, like

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<v Speaker 1>what long term effects related to the commitments made or

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<v Speaker 1>the initiatives after COVID and George Floyd can be found?

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<v Speaker 1>Are there any positive things that can be you know,

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<v Speaker 1>realized out of those communities?

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<v Speaker 2>Think so? I think so. I mean it's sort of

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<v Speaker 2>like human behavior tends to operate in a bell curve, right,

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

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

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<v Speaker 2>then there's a reaction to that spike. I think as

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<v Speaker 2>a result, in twenty twenty, we saw a ton of

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<v Speaker 2>people who had the courage to step out in really

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<v Speaker 2>big ways and raise rounds. And whether or not founders

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<v Speaker 2>got investment because of the societal moment we were in

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<v Speaker 2>or just because people are finally paying attention. I think

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<v Speaker 2>there are a lot of great companies that come out

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<v Speaker 2>of that and have really incredible rounds as a result

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<v Speaker 2>of it. I think that the challenge for everyone, and

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<v Speaker 2>I think a lot of skeptics at the time are

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<v Speaker 2>asking how long would this commitment stick? I think that

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

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<v Speaker 2>I think that we'll see that batch of companies that

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<v Speaker 2>raise money in twenty twenty, twenty twenty one, who is

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<v Speaker 2>a really big year. Things start to get dicey towards

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<v Speaker 2>the end of twenty twenty one. We'll see how they

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<v Speaker 2>make out the next five years. I think that that's

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<v Speaker 2>when the really prove themselves out. But how valuable those

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<v Speaker 2>early commitments actually were.

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

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<v Speaker 1>you know, provide bridges for startups to work with big corporations.

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<v Speaker 1>And how do corporations treat carvos? You know, I think

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<v Speaker 1>about a lot of state and government you know carvos

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<v Speaker 1>where it maybe a state will designate twenty percent of

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<v Speaker 1>its dollars have to be spent with you know, a

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<v Speaker 1>minority owned company or some companies will have prime vendors

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<v Speaker 1>and sub vendors, and you got to work with the

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<v Speaker 1>prime if you want to get you know, in it

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<v Speaker 1>at all. So how do corporateations typically work in this regard?

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<v Speaker 2>I think actually for whatever reason, perhaps because they're publicly

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<v Speaker 2>traded and they're for publicly accountable, they're doing a bit better,

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<v Speaker 2>but a lot of corporate leaders don't see it as

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<v Speaker 2>a car about. You've got folks that are coming in

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<v Speaker 2>and really want to align their investments with their consumer base,

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<v Speaker 2>which trends right to groups that tend to be underrepresented

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<v Speaker 2>in the venture world. I think that those that are

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<v Speaker 2>successful navigating corporate innovation teams, the sort of purchase managers

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<v Speaker 2>and corporations are faring a bit better than those in

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<v Speaker 2>the private markets. And that really might be about the

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<v Speaker 2>length of a commitment a company is used to making,

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<v Speaker 2>or the folks that are sponsoring the work within.

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<v Speaker 1>What are better ways corporations should think about how to

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<v Speaker 1>engage with minority own founders, because a lot of the

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<v Speaker 1>times it gets put on like, you know what, we

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<v Speaker 1>may not have a capacity to do business, and yeah.

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<v Speaker 2>You know, that's a really tough one. I think that

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<v Speaker 2>you know, some companies have done interesting things like ramp ups.

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<v Speaker 2>They've partnered, you know, sort of sort of partnered people

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<v Speaker 2>that they want to do business with with smaller chunks

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<v Speaker 2>of the business and then grow with them. And we've

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<v Speaker 2>moved them from early entrants into their ecosystem to preferred partners.

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<v Speaker 2>I think that folks that are planning for the long

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<v Speaker 2>term do really well. There's a really interesting effort by

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<v Speaker 2>Aerial Capital out of Chicago. This is John Rodgers and others.

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<v Speaker 2>They're focusing on investing in companies that I believe it's

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<v Speaker 2>like a ten million ar are black owning companies at

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<v Speaker 2>ten million ARAR and boosting them up. And the powerful

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<v Speaker 2>thing about their initiative is that Aerial Capital does a

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<v Speaker 2>lot of work with some of these larger corporations, and

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<v Speaker 2>their ability to pull in mid cap or sort of

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<v Speaker 2>slightly larger than mid cap black owned companies to do

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<v Speaker 2>their work is a great opportunity that early day of

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<v Speaker 2>like small business, interacting with the big company is difficult

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<v Speaker 2>for everyone. They don't speak the same language. I think

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<v Speaker 2>that what companies that are trying to be successful at

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<v Speaker 2>it are doing is really creating more intermediaries or opportunities

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<v Speaker 2>that smaller companies can grow their way into, taking advantage of,

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<v Speaker 2>and then partnering with larger entities that are calling them

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<v Speaker 2>to see sort of MidCap or higher MidCap companies that

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<v Speaker 2>can service them directly because they are there. I think

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<v Speaker 2>that people talk about black businesses and these really small

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

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<v Speaker 2>really really incredible companies that have you know, global contracts

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<v Speaker 2>and have been around for decades that deserve do.

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<v Speaker 1>And so it's no surprise that anybody listening to this

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<v Speaker 1>that we're having, you know, a real strong conversation about

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<v Speaker 1>banking in the United States and the implications of bank

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<v Speaker 1>collapse and over leveraging and all these different things. What

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<v Speaker 1>lasting implications might it have for startups when a bank collapses.

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<v Speaker 2>Yeah, I mean, if we think about what we just

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<v Speaker 2>went through with SVB specifically, which I paid really close

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<v Speaker 2>attention to, I think the challenge for the market and

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

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<v Speaker 2>small business interacting with the banking, with the standard banking

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<v Speaker 2>system and the power of a partner in the case

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<v Speaker 2>of SVB that really understands funky cash flow, really understands

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<v Speaker 2>the early elements of an idea and how to sort

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<v Speaker 2>of reconcile whether or not that deserves an investment that's

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<v Speaker 2>not simply about that's not simple adventure, right, A short

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<v Speaker 2>term bridge loan or a line of credit or all

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<v Speaker 2>these other things. Absence of that deep understanding of the

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<v Speaker 2>ecosystem is going to be a problem for a long time,

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<v Speaker 2>I think. I mean fundamentally, you know, there are a

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<v Speaker 2>lot of big banks that try really hard and have

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<v Speaker 2>a plethora of programs. Chase is really a great example

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<v Speaker 2>of that that's targeting small businesses. But in innovation, when

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<v Speaker 2>you're starting with just you and another person an idea,

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<v Speaker 2>you know, your first or second purchase order, that's not

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<v Speaker 2>enough for banks to really make a bet on you.

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<v Speaker 2>You really needed up someone that can that knows what

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

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

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<v Speaker 2>when the venture market is a little bit slower in

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<v Speaker 2>terms of deal flow, and it depends on the sector

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<v Speaker 2>that you're in, it's a little bit slower, you can

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<v Speaker 2>go to the private markets for you know, credit, but

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<v Speaker 2>because as a general matter, people are concerned about the

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<v Speaker 2>US economy, it's harder to get credit or as a

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<v Speaker 2>general matter, and so what would have been easier. I

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<v Speaker 2>found it easier for some businesses that I've worked with

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<v Speaker 2>as recently as last year to talk to a banker

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<v Speaker 2>about giving us a line of credit to float us

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<v Speaker 2>in the short fall. We had you know, really great revenue,

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<v Speaker 2>but we're really trying to extend our runway a little

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<v Speaker 2>bit or just have something in the back pocket in

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<v Speaker 2>case we came up against a challenge that that partnership

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<v Speaker 2>is not there. The longer it takes a founder to

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<v Speaker 2>go into the market to find capital to meet their

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<v Speaker 2>need is more time they are away from solving a

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<v Speaker 2>problem for the customer that they sought to address. So

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<v Speaker 2>it's a it's not just that there's the absence of

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<v Speaker 2>somebody that understands the harder it is to find capital,

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<v Speaker 2>the harder it is to grow a company really successfully.

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<v Speaker 2>And so I think that for a while we're going

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<v Speaker 2>to see will be sort of tough times for smaller

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<v Speaker 2>companies that are on a growth path. That said, I

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<v Speaker 2>think there's a lot of opportunity. I think that the

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<v Speaker 2>tools to grow a strong business are becoming more and

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<v Speaker 2>more available and more and more dynamic. There's a way

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<v Speaker 2>to get through, but you can't tool your way or

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<v Speaker 2>mention your way into success. Capital is involved in that,

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<v Speaker 2>and absent a partner that understands that, it's just going

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<v Speaker 2>to be a little bit harder for a while.

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<v Speaker 1>You know, one of the things I saw pervade. My

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<v Speaker 1>Twitter timeline when SVB collapsed was that it was propping

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<v Speaker 1>up and banks in general and VC in general were

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

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<v Speaker 1>and so people were saying, you know, we got to

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<v Speaker 1>focus on actually getting dollars in the door versus just

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<v Speaker 1>venture capital angel dollars and et cetera. And I wonder

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<v Speaker 1>what your take is on that. Do we have enough

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<v Speaker 1>of our startups actually trying to sell something? You know?

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<v Speaker 2>I think that there just like all these places, right

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<v Speaker 2>they say there are levels to this. There are some

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<v Speaker 2>people who were really getting by by raising capital as

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

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<v Speaker 2>I know some of them. I don't know a lot

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<v Speaker 2>of those people. Everybody I know that started business needs

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<v Speaker 2>to cut a check today, like someone is paying them,

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

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<v Speaker 2>I mean, listen, I think that venture and I love

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<v Speaker 2>the space, even though it sort of creates heartache, you know,

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<v Speaker 2>it's it's a really interesting industry to be in the

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<v Speaker 2>fact that that could be the case. There's a there's

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<v Speaker 2>a period where it was about innovation that real innovations.

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<v Speaker 2>Inventing the internet, you know, it takes time, right, and

0:11:42.480 --> 0:11:45.120
<v Speaker 2>so it's okay for you to go round after round

0:11:45.120 --> 0:11:46.880
<v Speaker 2>to get capital to be able to hire the people

0:11:46.920 --> 0:11:48.080
<v Speaker 2>to do the thing you need to do for the

0:11:48.080 --> 0:11:51.040
<v Speaker 2>major breakthrough. But the last few years sort of the

0:11:51.920 --> 0:11:55.160
<v Speaker 2>railroad tracks of innovation are already there, right, but the

0:11:55.240 --> 0:11:57.480
<v Speaker 2>mindset was outdated, and so you had a lot of

0:11:57.480 --> 0:12:01.280
<v Speaker 2>people that were you know, had grocery come companies. I

0:12:01.280 --> 0:12:03.360
<v Speaker 2>don't I don't know if I should day something some

0:12:03.440 --> 0:12:05.719
<v Speaker 2>of them, but like you know, well, well yeah, go

0:12:05.880 --> 0:12:08.280
<v Speaker 2>puff is a great big example, right, who are sort

0:12:08.320 --> 0:12:11.200
<v Speaker 2>of burning cash, right, and it's like, well, this is groceries.

0:12:11.240 --> 0:12:13.079
<v Speaker 2>You have a product, give it to a person, they

0:12:13.080 --> 0:12:16.120
<v Speaker 2>give you money fair exchange, and they still weren't sort

0:12:16.120 --> 0:12:19.720
<v Speaker 2>of making ends meet. Sort of got the old idea

0:12:20.240 --> 0:12:23.600
<v Speaker 2>of of sort of patient I shouldn't say patient capital,

0:12:23.760 --> 0:12:28.200
<v Speaker 2>of like letting venture capital be the cash flow mechanism

0:12:28.320 --> 0:12:31.880
<v Speaker 2>for companies and then having companies be surprised when the

0:12:31.960 --> 0:12:35.040
<v Speaker 2>music stops. I think existed for certain people. I think

0:12:35.080 --> 0:12:37.440
<v Speaker 2>for others who just didn't. The last few businesses that

0:12:37.480 --> 0:12:40.480
<v Speaker 2>I built don't operate that way, right, Like, you know,

0:12:40.559 --> 0:12:43.440
<v Speaker 2>they can hit seven or eight million ar R without

0:12:43.440 --> 0:12:46.600
<v Speaker 2>ever talking to a venture capitalist, And even in those

0:12:46.600 --> 0:12:49.840
<v Speaker 2>instances with healthy revenue and years of experience and a

0:12:50.240 --> 0:12:52.600
<v Speaker 2>solid book of business have trouble getting lines of credit

0:12:52.640 --> 0:12:55.079
<v Speaker 2>from banks. I think that, like the music stop for

0:12:55.080 --> 0:12:58.040
<v Speaker 2>a certain group of people, it will impact some. I'm

0:12:58.040 --> 0:13:01.800
<v Speaker 2>mostly concerned about the biotech indust I'm hoping that investors

0:13:01.800 --> 0:13:03.360
<v Speaker 2>I don't spend a ton of time there, spend some

0:13:03.400 --> 0:13:07.520
<v Speaker 2>time there. I'm hoping that investors sort of sort of

0:13:07.600 --> 0:13:11.480
<v Speaker 2>don't look at the challenges that the industry has had.

0:13:11.960 --> 0:13:14.439
<v Speaker 2>In the same way, biotex is a long lead thing.

0:13:14.480 --> 0:13:17.199
<v Speaker 2>It needs cash for a long time before it even improves,

0:13:17.440 --> 0:13:20.360
<v Speaker 2>whether or not it can bring something to market. So listen,

0:13:20.480 --> 0:13:22.280
<v Speaker 2>I think for every person it's going to be different.

0:13:22.440 --> 0:13:24.600
<v Speaker 2>My hope is that it's not in some sectors and

0:13:24.640 --> 0:13:26.079
<v Speaker 2>for others the music to serve to stop.

0:13:26.880 --> 0:13:30.800
<v Speaker 1>Yeahh And so let's imagine, because you just talked about

0:13:30.800 --> 0:13:33.480
<v Speaker 1>some things about venture capital have to change. Let's imagine

0:13:33.600 --> 0:13:36.160
<v Speaker 1>venture capital is a patient going to the hospital, right,

0:13:36.200 --> 0:13:40.160
<v Speaker 1>and he's got a broken leg, broken finger, and it's

0:13:40.160 --> 0:13:44.000
<v Speaker 1>bleeding out. Lots of problems, lots of problems, some more

0:13:44.040 --> 0:13:46.920
<v Speaker 1>severe than others. We know a lot of things could

0:13:46.960 --> 0:13:50.400
<v Speaker 1>be broken about VC. What's the part that's bleeding out

0:13:50.559 --> 0:13:52.240
<v Speaker 1>that's like, yo, we got to fix this before we

0:13:52.240 --> 0:13:53.760
<v Speaker 1>focus on the leg and the broken finger.

0:13:54.040 --> 0:13:59.320
<v Speaker 2>That is a great question. I think the most urgent challenge,

0:13:59.440 --> 0:14:02.600
<v Speaker 2>or the thing that comes to mind most immediately, is

0:14:02.800 --> 0:14:08.240
<v Speaker 2>risk aversion. So it's like venture capitalists, yeah, I do.

0:14:08.440 --> 0:14:11.559
<v Speaker 2>I mean it's like it's like everything's falling. Perhaps you

0:14:11.600 --> 0:14:15.080
<v Speaker 2>should be, you should operate more in a more safe manner,

0:14:15.160 --> 0:14:19.560
<v Speaker 2>But I'm hoping that sort of comfort risk tolerance. I

0:14:19.560 --> 0:14:23.640
<v Speaker 2>should say i'd risk first, but risk tolerance, essentially I hope,

0:14:23.800 --> 0:14:29.520
<v Speaker 2>is something that the industry fixed fastest. The way I

0:14:29.520 --> 0:14:33.040
<v Speaker 2>will break this down is that you know what you

0:14:33.080 --> 0:14:36.320
<v Speaker 2>are rewarded in venture capital, not necessarily by companies that

0:14:36.360 --> 0:14:39.960
<v Speaker 2>go the full distance. You're most immediately rewarded by whoever

0:14:40.000 --> 0:14:42.920
<v Speaker 2>picks up that company in a following round. So as

0:14:42.920 --> 0:14:45.000
<v Speaker 2>a result, when you write your first check, it doesn't

0:14:45.080 --> 0:14:47.600
<v Speaker 2>matter how much you have conviction that one found. You

0:14:47.600 --> 0:14:50.360
<v Speaker 2>are always thinking about when they leave my office, when

0:14:50.360 --> 0:14:53.240
<v Speaker 2>this round is done, well, the next group of investors

0:14:53.240 --> 0:14:55.680
<v Speaker 2>that they have to convince say yes, And as a result,

0:14:55.720 --> 0:14:58.360
<v Speaker 2>you can imagine when you think about the industry and

0:14:58.400 --> 0:15:01.600
<v Speaker 2>the makeup. Folks get real really tight about the definition

0:15:01.640 --> 0:15:03.080
<v Speaker 2>of a founder that would do really really well in

0:15:03.080 --> 0:15:04.920
<v Speaker 2>that environment, and you hear it all the time in

0:15:04.920 --> 0:15:07.880
<v Speaker 2>investment committee meetings. People get really really excited. But the

0:15:07.920 --> 0:15:09.720
<v Speaker 2>thing that stops them is like, I don't know how

0:15:09.760 --> 0:15:11.480
<v Speaker 2>this founder will do when they go out to raise

0:15:11.480 --> 0:15:16.040
<v Speaker 2>additional capital. And that is where I feel like that

0:15:16.040 --> 0:15:18.160
<v Speaker 2>that is the that is the bleeding out part of

0:15:18.280 --> 0:15:21.040
<v Speaker 2>venture that I think stops it from going as far

0:15:21.120 --> 0:15:21.720
<v Speaker 2>as it could go.

0:15:22.400 --> 0:15:22.560
<v Speaker 1>Right.

0:15:22.760 --> 0:15:25.440
<v Speaker 2>I think there's a there's another there isn't If if

0:15:25.440 --> 0:15:29.600
<v Speaker 2>we were more risk tolerant, we were more comfortable with

0:15:29.640 --> 0:15:33.720
<v Speaker 2>the fact that and we knew that our colleagues are

0:15:33.720 --> 0:15:38.120
<v Speaker 2>more comfortable with taking risks on what they what they

0:15:39.000 --> 0:15:41.000
<v Speaker 2>on what could be great, and what a good company

0:15:41.040 --> 0:15:43.880
<v Speaker 2>looks like. Look at the bones of the idea and

0:15:43.960 --> 0:15:47.080
<v Speaker 2>be more risk tolerant to the individual. I think that'll

0:15:47.120 --> 0:15:49.200
<v Speaker 2>help us go further, because at the end of the day,

0:15:49.320 --> 0:15:51.160
<v Speaker 2>no matter how much capital you raised, you have to

0:15:51.200 --> 0:15:53.800
<v Speaker 2>deploy it, and you have to deploy into companies that

0:15:53.840 --> 0:15:57.320
<v Speaker 2>can actually have delivered to a customer, that can grow successfully.

0:15:58.040 --> 0:16:00.240
<v Speaker 2>Add infinitum right dot dot dot right. And I think

0:16:00.280 --> 0:16:02.440
<v Speaker 2>that the real challenge for us is a lack of

0:16:02.480 --> 0:16:08.200
<v Speaker 2>imagination and an inability to take on significant take on

0:16:08.360 --> 0:16:12.000
<v Speaker 2>risk beyond what we think our colleagues might be interested

0:16:12.000 --> 0:16:14.360
<v Speaker 2>in in order to sort of, you know, make a

0:16:14.360 --> 0:16:16.320
<v Speaker 2>big bet. I think that's the biggest challenge we can invite.

0:16:16.360 --> 0:16:19.120
<v Speaker 2>We won't invite more people into our industry, The deal

0:16:19.160 --> 0:16:23.120
<v Speaker 2>phil will get tighter, the range of a founder that

0:16:23.200 --> 0:16:25.640
<v Speaker 2>gets funding will get smaller. The more we're sort of

0:16:25.680 --> 0:16:28.680
<v Speaker 2>confined by who we think our friends will like in

0:16:28.720 --> 0:16:30.840
<v Speaker 2>the next round, as opposed to the validity of the

0:16:30.880 --> 0:16:31.600
<v Speaker 2>idea itself.

0:16:32.520 --> 0:16:35.280
<v Speaker 1>Oh that's good. You talked about some of the things

0:16:35.360 --> 0:16:38.280
<v Speaker 1>that Silicon Valley Bank filled the gap in, you know,

0:16:38.320 --> 0:16:41.320
<v Speaker 1>with regard and they understood how financing works for a

0:16:41.320 --> 0:16:43.920
<v Speaker 1>lot of startups. Who fills that void now?

0:16:44.280 --> 0:16:46.880
<v Speaker 2>I don't really know. I think that remains to be seen.

0:16:47.320 --> 0:16:49.440
<v Speaker 2>I think it's an exciting opportunity for anyone that wants

0:16:49.440 --> 0:16:53.280
<v Speaker 2>to make a market. It takes some time. I would

0:16:53.320 --> 0:16:55.560
<v Speaker 2>ask myself, like, where the people who are at Silicon

0:16:55.640 --> 0:16:57.480
<v Speaker 2>Valley Bank, what are they doing now? What do they

0:16:57.560 --> 0:17:00.200
<v Speaker 2>want to do? It would be interesting if a part

0:17:00.200 --> 0:17:02.760
<v Speaker 2>of a group of them started something new during the

0:17:02.760 --> 0:17:05.639
<v Speaker 2>crisis itself. Rex did a lot to fill the gap.

0:17:06.520 --> 0:17:08.960
<v Speaker 2>It's a little bit different because, as far as I understand,

0:17:09.320 --> 0:17:11.680
<v Speaker 2>REX is like a fintech company, it's not sort of

0:17:11.760 --> 0:17:17.280
<v Speaker 2>a proper, proper bank. I think that you know, they

0:17:17.280 --> 0:17:19.600
<v Speaker 2>do know the startup ecosystem exceptionally well. It was a

0:17:19.600 --> 0:17:22.919
<v Speaker 2>really good moment for them to bring in new customers.

0:17:23.320 --> 0:17:25.040
<v Speaker 2>We talked a lot about startups, but it doesn't just

0:17:25.040 --> 0:17:28.840
<v Speaker 2>expect startups. It expects fund managers, which are startups themselves, right,

0:17:28.880 --> 0:17:33.000
<v Speaker 2>they're businesses themselves. It will be interesting. I think it's

0:17:33.040 --> 0:17:36.960
<v Speaker 2>a really great opportunity for folks that want to pick

0:17:36.960 --> 0:17:38.879
<v Speaker 2>it up because there's a real gap in the market.

0:17:39.160 --> 0:17:41.560
<v Speaker 2>Even Brexit. It's best the more products that it spins

0:17:41.600 --> 0:17:44.240
<v Speaker 2>out in the absence of SPB, it won't be enough.

0:17:44.240 --> 0:17:46.920
<v Speaker 2>There's in a single institution that should cover all of

0:17:46.960 --> 0:17:49.120
<v Speaker 2>the bases there and I'm excited to see who fills

0:17:49.119 --> 0:17:50.240
<v Speaker 2>the void.

0:17:50.640 --> 0:17:54.119
<v Speaker 1>So we've talked a lot about, you know, the actual

0:17:54.119 --> 0:17:56.199
<v Speaker 1>banking relationship, but with one of the other things that

0:17:56.200 --> 0:18:00.199
<v Speaker 1>we're hearing a lot about is interest rates and its

0:18:00.280 --> 0:18:03.040
<v Speaker 1>impact on how people spend their dollars. How much discussion

0:18:03.040 --> 0:18:05.600
<v Speaker 1>their income people may have, But what is what should

0:18:05.640 --> 0:18:08.959
<v Speaker 1>a startup be thinking about maybe having three raised money

0:18:09.119 --> 0:18:13.160
<v Speaker 1>or having raised money? What do startups? What should startups

0:18:13.160 --> 0:18:15.840
<v Speaker 1>here when they hear interest rates going through the roof?

0:18:16.400 --> 0:18:19.440
<v Speaker 2>Yeah, so you know, I'm not an economist, but I'll

0:18:19.480 --> 0:18:22.840
<v Speaker 2>do my best here. My sense of it is that,

0:18:23.320 --> 0:18:25.680
<v Speaker 2>you know, lower interest rates sort of laws would be

0:18:25.720 --> 0:18:28.040
<v Speaker 2>flushed with cash. They're more dynamic and where they place it.

0:18:28.440 --> 0:18:30.920
<v Speaker 2>Higher interest rates gets people to being really specific about

0:18:30.960 --> 0:18:34.639
<v Speaker 2>where they place their capital. I saw a post recently

0:18:34.720 --> 0:18:37.480
<v Speaker 2>Jenny Fielding, who runs the fund. I think they're calling

0:18:37.520 --> 0:18:43.280
<v Speaker 2>themselves everywhere Adventures now is selling founders that you know

0:18:43.359 --> 0:18:45.240
<v Speaker 2>act as if this last round is the last capital

0:18:45.320 --> 0:18:49.480
<v Speaker 2>to raise. I don't know enough to say if it

0:18:49.520 --> 0:18:54.440
<v Speaker 2>should be that dire, but it's fair right, it should

0:18:54.480 --> 0:18:57.040
<v Speaker 2>be really intentional about where you put a dollar. You

0:18:57.119 --> 0:19:01.240
<v Speaker 2>only can spend it once and we don't know what

0:19:02.480 --> 0:19:06.480
<v Speaker 2>you know what future rounds will look like, if there

0:19:06.520 --> 0:19:08.639
<v Speaker 2>will be the same size as they once were. In

0:19:08.720 --> 0:19:11.640
<v Speaker 2>large part after SVB, there was like a pause when

0:19:11.680 --> 0:19:14.040
<v Speaker 2>people went back to business. Things seemed to be fine.

0:19:14.240 --> 0:19:16.320
<v Speaker 2>People had access to the capitol, but there is more

0:19:16.359 --> 0:19:20.320
<v Speaker 2>and more churn and chatter about the size of rounds

0:19:20.320 --> 0:19:22.679
<v Speaker 2>being a lot smaller than one they once expected. So

0:19:22.720 --> 0:19:27.119
<v Speaker 2>if you're building an expensive company like logistics or grocery stores,

0:19:27.200 --> 0:19:30.120
<v Speaker 2>for example, and you sort of mapped out how much

0:19:30.119 --> 0:19:31.959
<v Speaker 2>more might need to raise at each step, you might

0:19:32.000 --> 0:19:34.800
<v Speaker 2>find yourself in a higher position than before. So just

0:19:34.920 --> 0:19:37.240
<v Speaker 2>be aware. I think this is mostly advised.

0:19:56.280 --> 0:19:58.800
<v Speaker 1>We've got a pretty interesting financial climate on our hands

0:19:59.640 --> 0:20:02.520
<v Speaker 1>and raise it up in facing is high bank's abilities

0:20:02.560 --> 0:20:06.520
<v Speaker 1>in question. Even crypto is struggling to recover. None of

0:20:06.520 --> 0:20:09.000
<v Speaker 1>this discounts the fact that many startups still need venti

0:20:09.080 --> 0:20:12.920
<v Speaker 1>capital and many are out actively fundraising. So how do

0:20:13.040 --> 0:20:16.959
<v Speaker 1>vcs behave differently when you consider all these factors? May

0:20:17.080 --> 0:20:17.919
<v Speaker 1>should speaks on it.

0:20:18.040 --> 0:20:20.080
<v Speaker 2>I think they become more conservative, like we all do

0:20:20.560 --> 0:20:22.960
<v Speaker 2>with our money. You know, at the end of the day,

0:20:23.240 --> 0:20:26.360
<v Speaker 2>everyone has a loss. Venture capitalists their LPs are looking

0:20:26.400 --> 0:20:28.720
<v Speaker 2>at them in terms of the returns they can generate.

0:20:29.040 --> 0:20:32.720
<v Speaker 2>People get more conservative. I think that folks will do that.

0:20:32.760 --> 0:20:35.879
<v Speaker 2>I think that the venture capitalists that do really, really well,

0:20:35.720 --> 0:20:39.359
<v Speaker 2>we'll get really really specific in their thesis, hyper focus

0:20:39.440 --> 0:20:42.280
<v Speaker 2>in an area so that they make choices that they

0:20:42.280 --> 0:20:44.600
<v Speaker 2>really can believe in, and when they make risks, they

0:20:44.600 --> 0:20:47.160
<v Speaker 2>have strong conviction about why they're making them. And actually

0:20:47.200 --> 0:20:49.080
<v Speaker 2>that's a lesson to us all. Where you put your

0:20:49.119 --> 0:20:50.800
<v Speaker 2>money should be in the places that you think matter

0:20:50.880 --> 0:20:54.679
<v Speaker 2>the most, and double down in the areas that you

0:20:54.720 --> 0:20:57.880
<v Speaker 2>think are really important. If saving for retirement is really important,

0:20:58.000 --> 0:21:00.400
<v Speaker 2>this is the time that's been all of your time.

0:21:00.520 --> 0:21:02.720
<v Speaker 2>Really understanding a bit about where you're putting your money

0:21:02.720 --> 0:21:05.159
<v Speaker 2>in that regard, it'll help you make the right choices

0:21:05.200 --> 0:21:07.280
<v Speaker 2>in the moment. So I think that the same thing.

0:21:07.320 --> 0:21:08.800
<v Speaker 2>The way to think about bunch of capitalists is the

0:21:08.800 --> 0:21:10.800
<v Speaker 2>way we all are. Everyone has a boss, they're held

0:21:10.840 --> 0:21:14.320
<v Speaker 2>accountable too. They've taken capital from other people the responsibilities

0:21:14.359 --> 0:21:17.320
<v Speaker 2>to deploy it with return, And I think that the

0:21:17.320 --> 0:21:20.040
<v Speaker 2>folks that do well will be open to risk in

0:21:20.040 --> 0:21:22.040
<v Speaker 2>their very specific sectors that they know really well.

0:21:23.280 --> 0:21:26.080
<v Speaker 1>Is I've talked to a few different founders who recently

0:21:26.080 --> 0:21:30.560
<v Speaker 1>owned this podcast who were super successful in raising money

0:21:30.640 --> 0:21:32.680
<v Speaker 1>during COVID when we didn't even know what the world

0:21:32.680 --> 0:21:36.080
<v Speaker 1>would look like coming right COVID. It's crazy, yeah, And

0:21:36.440 --> 0:21:40.800
<v Speaker 1>I wonder with this current climate, is it still a

0:21:40.840 --> 0:21:43.040
<v Speaker 1>good time to raise so how do I know if

0:21:43.040 --> 0:21:44.400
<v Speaker 1>this is a good time to raise.

0:21:44.320 --> 0:21:48.880
<v Speaker 2>You don't have a choice, right, like? You really, there

0:21:48.920 --> 0:21:51.040
<v Speaker 2>isn't a perfect time for anything. I think the COVID

0:21:51.440 --> 0:21:54.120
<v Speaker 2>moment surprised a lot of us. You know, the world

0:21:54.240 --> 0:21:57.159
<v Speaker 2>is ending, and yet it's easy to get capital. The

0:21:57.200 --> 0:21:59.600
<v Speaker 2>world is ending, and ten people just want a house.

0:22:00.000 --> 0:22:04.119
<v Speaker 2>This is a really wild moment, you really. I mean,

0:22:04.119 --> 0:22:06.520
<v Speaker 2>if you're a founder and you're building a company, I

0:22:06.560 --> 0:22:10.200
<v Speaker 2>think that let's see what are the risks of you

0:22:11.160 --> 0:22:14.200
<v Speaker 2>beginning to put feelers out there starting to raise money.

0:22:14.359 --> 0:22:18.600
<v Speaker 2>If you're unsuccessful, you stop the race, get feedback, make

0:22:18.640 --> 0:22:21.480
<v Speaker 2>an adjustment, figure out what's wrong. If you are successful,

0:22:21.560 --> 0:22:24.320
<v Speaker 2>no love lost. Right. If you're not as successful as

0:22:24.320 --> 0:22:26.560
<v Speaker 2>you thought, you have capital, and then what do you do? Right? Like,

0:22:26.840 --> 0:22:29.720
<v Speaker 2>I think that you know, we can try to pick

0:22:29.720 --> 0:22:32.440
<v Speaker 2>our moments in the best moment to do this. If

0:22:32.480 --> 0:22:36.480
<v Speaker 2>the next level of your business requires capital, the best

0:22:36.520 --> 0:22:39.680
<v Speaker 2>thing you can do is move in that direction, right,

0:22:40.040 --> 0:22:41.800
<v Speaker 2>And the only thing failure will teach you is how

0:22:41.840 --> 0:22:43.440
<v Speaker 2>to do better next time. I don't think that there's

0:22:43.440 --> 0:22:47.080
<v Speaker 2>any any way to hesitate or resist there as a

0:22:47.080 --> 0:22:49.560
<v Speaker 2>general matter. If you're thinking about maybe I shouldn't raise at all.

0:22:50.119 --> 0:22:52.880
<v Speaker 2>Maybe I should tweak something in my business. I think

0:22:52.880 --> 0:22:55.000
<v Speaker 2>it just really goes back to the things you learned

0:22:55.440 --> 0:22:57.120
<v Speaker 2>back in the day with your mom or your dad,

0:22:57.160 --> 0:23:00.639
<v Speaker 2>which is really like, you know, spend money what you have,

0:23:00.760 --> 0:23:02.840
<v Speaker 2>try to keep as much reserves as you possibly can,

0:23:02.880 --> 0:23:04.960
<v Speaker 2>and try to be smart about the choices you need

0:23:05.000 --> 0:23:07.679
<v Speaker 2>to make over communicate with your team who are in

0:23:07.680 --> 0:23:09.680
<v Speaker 2>this with you and are equally nervous because their jobs

0:23:09.720 --> 0:23:12.399
<v Speaker 2>are connected to the choices that you're making. But I

0:23:12.400 --> 0:23:14.359
<v Speaker 2>don't think there's a really there's no really way, as

0:23:14.359 --> 0:23:16.680
<v Speaker 2>they say, to time the market. Got to do what

0:23:16.720 --> 0:23:17.159
<v Speaker 2>you can to do.

0:23:17.880 --> 0:23:20.879
<v Speaker 1>Yeah, yeah, And I've heard it said, or maybe I

0:23:20.880 --> 0:23:22.399
<v Speaker 1>said it myself. I don't even know if you said this,

0:23:22.440 --> 0:23:25.600
<v Speaker 1>but I mean, it's always a good time for good companies.

0:23:25.680 --> 0:23:28.560
<v Speaker 1>Like good companies don't necessarily have to think about what

0:23:28.600 --> 0:23:31.760
<v Speaker 1>the market looks like. And I wonder if that apprehension,

0:23:31.880 --> 0:23:36.080
<v Speaker 1>or the potential apprehension to consider the time, does that

0:23:36.119 --> 0:23:38.720
<v Speaker 1>tell you more about the founder that maybe they're not

0:23:38.760 --> 0:23:42.120
<v Speaker 1>as confident or maybe or what does it tell you? Yeah?

0:23:42.160 --> 0:23:44.920
<v Speaker 2>I mean you mean if a founder delays grazing, now,

0:23:45.040 --> 0:23:47.640
<v Speaker 2>what does that tell you? Yes, yes, it could tell.

0:23:47.720 --> 0:23:51.880
<v Speaker 2>It could be a lot of things. I remember, there

0:23:51.880 --> 0:23:54.480
<v Speaker 2>are moments where you know, we're building a business and

0:23:55.280 --> 0:23:58.639
<v Speaker 2>our CFO, there's a fractional CFO worked with lots of

0:23:58.640 --> 0:24:02.359
<v Speaker 2>other companies, just it was a good time to raise money.

0:24:03.000 --> 0:24:05.400
<v Speaker 2>We had money. We just wanted a little bit more leverage.

0:24:05.800 --> 0:24:09.040
<v Speaker 2>Discourage us for raising money because our priority at the time,

0:24:09.080 --> 0:24:11.840
<v Speaker 2>you only can spend one minute, one time, one way,

0:24:12.680 --> 0:24:15.800
<v Speaker 2>needed to be the fundamentals of our business. Right it

0:24:15.840 --> 0:24:17.200
<v Speaker 2>was going to make or break this in the long term.

0:24:17.240 --> 0:24:19.480
<v Speaker 2>And sure, we knew exactly who to ask for money

0:24:20.280 --> 0:24:22.280
<v Speaker 2>and we're probably going to get it, and we decided

0:24:22.320 --> 0:24:25.119
<v Speaker 2>not to. So sometimes founders decide not to raise because

0:24:25.480 --> 0:24:28.160
<v Speaker 2>they prioritize something else that they think is more significant

0:24:28.200 --> 0:24:31.359
<v Speaker 2>in their long term success. Doesn't tell you much of anything.

0:24:31.800 --> 0:24:34.800
<v Speaker 2>There are some founders that you know, I have moments

0:24:34.800 --> 0:24:36.720
<v Speaker 2>where I talk a good game and then when it

0:24:36.720 --> 0:24:38.320
<v Speaker 2>comes time to do it, I'm nervous about it. Like

0:24:38.320 --> 0:24:41.480
<v Speaker 2>there are some founders that are people periods who aren't

0:24:41.480 --> 0:24:45.760
<v Speaker 2>going to hesitate because of confidence. I think that that's

0:24:45.800 --> 0:24:48.320
<v Speaker 2>not a problem, that's not a character flaw, that's not

0:24:48.359 --> 0:24:51.600
<v Speaker 2>a suggestion that they're not good at their their their job,

0:24:51.960 --> 0:24:55.960
<v Speaker 2>or their business. It's a scary time, right, and fear

0:24:56.160 --> 0:24:58.119
<v Speaker 2>can be a great motivator if they're connected with the

0:24:58.200 --> 0:25:01.240
<v Speaker 2>right person. So I don't really I talk to founders.

0:25:01.600 --> 0:25:05.400
<v Speaker 2>I try to be as open and as helpful as possible,

0:25:05.640 --> 0:25:07.000
<v Speaker 2>and so you don't have to come to me as

0:25:07.000 --> 0:25:09.040
<v Speaker 2>a perfect founder. We can talk our way through it.

0:25:09.040 --> 0:25:11.080
<v Speaker 2>It doesn't really tell you much. Accept that they're human

0:25:11.280 --> 0:25:14.280
<v Speaker 2>and they're reading the tea leaves and they're being realistic about,

0:25:14.560 --> 0:25:16.000
<v Speaker 2>you know, whether or not there's a good use of

0:25:16.560 --> 0:25:17.640
<v Speaker 2>or investment of their time.

0:25:18.640 --> 0:25:20.119
<v Speaker 1>And so I want to ask you about because you've

0:25:20.160 --> 0:25:22.280
<v Speaker 1>spent a lot of time again working with big companies

0:25:22.280 --> 0:25:25.520
<v Speaker 1>and helping them build those bridges with startups. I was

0:25:25.560 --> 0:25:29.479
<v Speaker 1>reading this list that Michael Seibel from y Combator had

0:25:29.520 --> 0:25:31.400
<v Speaker 1>put out, and it was a pocket guide for essential

0:25:31.600 --> 0:25:35.720
<v Speaker 1>YC advice and this will one line this yeah yeah,

0:25:35.720 --> 0:25:38.280
<v Speaker 1>and this one line piqued my interest and it said

0:25:38.320 --> 0:25:43.040
<v Speaker 1>avoid big company corporate development ceries. They only waste time. Yeah,

0:25:43.080 --> 0:25:45.840
<v Speaker 1>And it got me thinking about something I do. I

0:25:45.920 --> 0:25:47.840
<v Speaker 1>have a marketing company outside of this, and I've been

0:25:47.880 --> 0:25:52.800
<v Speaker 1>thinking about I don't even respond to corporate or governmental

0:25:52.920 --> 0:25:57.600
<v Speaker 1>RFPs because they take so much time to respond to

0:25:57.640 --> 0:26:03.840
<v Speaker 1>them and tip the resources put in, the investment put

0:26:03.880 --> 0:26:07.040
<v Speaker 1>in is not worth the reward.

0:26:07.119 --> 0:26:07.879
<v Speaker 2>Yeah, the reward.

0:26:08.160 --> 0:26:11.600
<v Speaker 1>So I wonder what your thoughts are on this idea.

0:26:11.840 --> 0:26:15.800
<v Speaker 2>With everything, it depends I respect Michael, I know your

0:26:15.840 --> 0:26:19.880
<v Speaker 2>experience is real. You're a master entrepreneur yourself, and I've

0:26:19.920 --> 0:26:23.200
<v Speaker 2>seen it. It depends. What if I told you that

0:26:23.320 --> 0:26:26.720
<v Speaker 2>the decision maker in there was like my best friend

0:26:26.760 --> 0:26:29.119
<v Speaker 2>of twenty years, so right not do it? It just

0:26:29.160 --> 0:26:32.679
<v Speaker 2>really depends correct people. Here's the thing all everyone will

0:26:32.720 --> 0:26:35.280
<v Speaker 2>waste your time if you let them. Number one, number two,

0:26:36.200 --> 0:26:38.800
<v Speaker 2>lots of people together operating, because a group will definitely

0:26:38.880 --> 0:26:40.800
<v Speaker 2>waste your time if you let them, and that's the

0:26:40.840 --> 0:26:44.400
<v Speaker 2>case of companies. I think it depends on what you're

0:26:44.440 --> 0:26:46.040
<v Speaker 2>going to get. Say you and I were building a

0:26:46.040 --> 0:26:48.800
<v Speaker 2>business for five years of marketing business and we decide

0:26:49.040 --> 0:26:51.119
<v Speaker 2>that we're gonna get put into this. We're going to

0:26:51.160 --> 0:26:53.040
<v Speaker 2>put into the RFP. We've met three people that we

0:26:53.080 --> 0:26:56.720
<v Speaker 2>think could influence the decision at Nike, for example, and

0:26:56.760 --> 0:26:59.000
<v Speaker 2>we're doing it because it's probably going to be a

0:26:59.000 --> 0:27:00.640
<v Speaker 2>loss leader. It's going to take a lot of work,

0:27:00.800 --> 0:27:04.160
<v Speaker 2>we're going to service this business for three months because

0:27:04.280 --> 0:27:06.520
<v Speaker 2>the long tail, the ability to be able to say

0:27:06.520 --> 0:27:08.119
<v Speaker 2>that we had Nike as a client, it's going to

0:27:08.200 --> 0:27:10.000
<v Speaker 2>crue to our benefit in the long term. We're not

0:27:10.000 --> 0:27:12.480
<v Speaker 2>gonna make this our whole business. If we've been running

0:27:12.480 --> 0:27:14.280
<v Speaker 2>a business for a while, we can make that choice.

0:27:14.640 --> 0:27:17.960
<v Speaker 2>I know a founder who was a really incredible marketer,

0:27:18.160 --> 0:27:21.119
<v Speaker 2>has an innovative way of doing it. She's most of

0:27:21.119 --> 0:27:23.960
<v Speaker 2>her team is part time. She's got Disney as a client,

0:27:24.560 --> 0:27:27.200
<v Speaker 2>she has Vogue as a client occasionally. You know, there

0:27:27.200 --> 0:27:30.359
<v Speaker 2>are times when a business can be a lot more

0:27:30.440 --> 0:27:33.119
<v Speaker 2>trouble than it's worth. But in part par for the course,

0:27:33.320 --> 0:27:35.840
<v Speaker 2>she's gotten to meet the m and a teams of

0:27:35.880 --> 0:27:37.920
<v Speaker 2>these of these years. So it's just it really is

0:27:38.640 --> 0:27:41.560
<v Speaker 2>about what the life cycle of the business. Where I

0:27:41.600 --> 0:27:45.760
<v Speaker 2>think Michael's right is that starting a business where you

0:27:45.760 --> 0:27:47.560
<v Speaker 2>know you're gonna have a few clients and that's gonna

0:27:47.600 --> 0:27:50.920
<v Speaker 2>be the thing that you chase, that's probably problematic unless

0:27:51.160 --> 0:27:53.800
<v Speaker 2>you came from that industry. This is the same playbook

0:27:53.800 --> 0:27:56.560
<v Speaker 2>for any B to B business and have the relationships

0:27:56.560 --> 0:27:58.639
<v Speaker 2>to get you in the door over with your hurdles faster.

0:27:59.080 --> 0:28:02.320
<v Speaker 2>It really depends. It's wise advice because they can take

0:28:02.320 --> 0:28:04.560
<v Speaker 2>a lot of time, but strategically they can be worth it.

0:28:04.560 --> 0:28:07.920
<v Speaker 2>It's the same reason why you know you might join

0:28:07.960 --> 0:28:10.280
<v Speaker 2>a board, right and not an unpaid board. It's like,

0:28:10.359 --> 0:28:13.000
<v Speaker 2>actually everyone want here. I'm going to probably raise money

0:28:13.040 --> 0:28:15.159
<v Speaker 2>from in a few years, so that's you know, like

0:28:15.160 --> 0:28:17.920
<v Speaker 2>it's like you're making an investment that doesn't really show

0:28:17.960 --> 0:28:20.400
<v Speaker 2>out right away, but could be a long term, long

0:28:20.480 --> 0:28:23.159
<v Speaker 2>term to be powerful. Ultimately, though, I will say to

0:28:23.200 --> 0:28:26.159
<v Speaker 2>our corporate friends, they know they have challenges interacting with

0:28:26.359 --> 0:28:29.400
<v Speaker 2>an innovative and small businesses. They know they need our innovation.

0:28:30.359 --> 0:28:32.600
<v Speaker 2>They have teams thinking about it every day. It's probably

0:28:32.600 --> 0:28:35.159
<v Speaker 2>part of the problem. They know that this is a

0:28:35.200 --> 0:28:37.280
<v Speaker 2>thing that they want to get better at who're not there,

0:28:37.480 --> 0:28:39.080
<v Speaker 2>and they admit it. And I think that that's just

0:28:39.440 --> 0:28:40.880
<v Speaker 2>sort of everybody's got their problems.

0:28:41.840 --> 0:28:44.480
<v Speaker 1>And to that end, go let's go one level deeper.

0:28:45.320 --> 0:28:47.600
<v Speaker 1>What is some of the pre work that not enough

0:28:47.640 --> 0:28:49.960
<v Speaker 1>of us do to make sure that when we do respond,

0:28:50.360 --> 0:28:54.240
<v Speaker 1>we have a better we're better positioned to win those deals.

0:28:54.360 --> 0:28:57.400
<v Speaker 2>Yeah, I think the enterprise clients as a general matter,

0:28:57.440 --> 0:29:02.520
<v Speaker 2>are different than everyday consumers. They despite knowing that you're

0:29:02.520 --> 0:29:06.040
<v Speaker 2>a young company, will expect a lot of you. Typically

0:29:06.120 --> 0:29:08.320
<v Speaker 2>they're going to ask you for insurance requirements that you

0:29:08.360 --> 0:29:11.600
<v Speaker 2>might maybe be ready for professional liability insurance. Ask your

0:29:11.600 --> 0:29:14.040
<v Speaker 2>founder friends. There's probably a great recommendation they can make

0:29:14.040 --> 0:29:16.480
<v Speaker 2>for you can get a cheap and quick These insurance

0:29:16.520 --> 0:29:18.320
<v Speaker 2>people are use getting these calls last minute for small

0:29:18.320 --> 0:29:21.960
<v Speaker 2>businesses because it happens a lot. Yeah, yeah, right, it's

0:29:22.000 --> 0:29:25.120
<v Speaker 2>always it's always a surprise. It's always a surprise, and

0:29:25.200 --> 0:29:29.040
<v Speaker 2>someone's tragically text messaging someone to get it's fine. You know.

0:29:29.240 --> 0:29:32.800
<v Speaker 2>I think that understanding that when you're doing an enterprise

0:29:32.880 --> 0:29:35.880
<v Speaker 2>client or working with them, you've actually got two jobs.

0:29:36.360 --> 0:29:39.000
<v Speaker 2>There's delivery of the work and then there's sort of

0:29:39.520 --> 0:29:43.000
<v Speaker 2>delivery of the client, like managing them and helping them

0:29:43.040 --> 0:29:46.440
<v Speaker 2>be success in your story. I don't think it's specific

0:29:46.520 --> 0:29:49.200
<v Speaker 2>to us. I think that the more you have exposure

0:29:49.240 --> 0:29:52.880
<v Speaker 2>to servicing enterprise clients, or the more you can find

0:29:52.880 --> 0:29:55.560
<v Speaker 2>people in your network you have experience doing it, the

0:29:55.600 --> 0:29:58.520
<v Speaker 2>easier it is to figure them out and navigate them.

0:29:58.720 --> 0:30:01.160
<v Speaker 2>As long as you've got a strong website, a clear

0:30:01.200 --> 0:30:05.760
<v Speaker 2>path to issue invoices on time, and you know how

0:30:05.760 --> 0:30:07.760
<v Speaker 2>to and you figure out how to manage your client

0:30:07.840 --> 0:30:10.560
<v Speaker 2>through milestones in your contract, You're going to be fine.

0:30:11.720 --> 0:30:13.560
<v Speaker 2>There are little sort of tips and tricks will ask

0:30:13.600 --> 0:30:16.400
<v Speaker 2>you when you sign up, but all those things, some

0:30:16.520 --> 0:30:18.000
<v Speaker 2>of them you can kind of flow through. They don't

0:30:17.840 --> 0:30:19.000
<v Speaker 2>really care. You're surprised.

0:30:19.800 --> 0:30:22.640
<v Speaker 1>Yeah, And for those companies who are working through their

0:30:22.680 --> 0:30:26.800
<v Speaker 1>internal challenges to onboard startups and particularly black founders. I

0:30:26.880 --> 0:30:29.280
<v Speaker 1>mentioned earlier that too often we get put into we

0:30:29.320 --> 0:30:32.520
<v Speaker 1>don't have the capacity sort of you know, bucket, what

0:30:32.720 --> 0:30:35.360
<v Speaker 1>are because you've done this work, what are some of

0:30:35.440 --> 0:30:39.240
<v Speaker 1>the strongest cases you've found that are effective in helping

0:30:39.320 --> 0:30:44.080
<v Speaker 1>big companies see startups as potential partners versus risks.

0:30:44.560 --> 0:30:48.960
<v Speaker 2>Yeah, almost always. The opportunity lies in some innovation that

0:30:49.000 --> 0:30:51.560
<v Speaker 2>the big company cannot pull off on its own. And

0:30:51.640 --> 0:30:55.400
<v Speaker 2>even the most innovative companies, the advantage that a small

0:30:55.480 --> 0:30:58.880
<v Speaker 2>company has that big company does not is that based

0:30:58.920 --> 0:31:01.280
<v Speaker 2>on your height search of the customer. So say the

0:31:01.320 --> 0:31:03.600
<v Speaker 2>customer is like this height, and you're this tall, and

0:31:03.640 --> 0:31:06.440
<v Speaker 2>the big companies that tall, you're just so much closer

0:31:07.200 --> 0:31:10.120
<v Speaker 2>to the sensitivities of a customer. The sensitivity is the

0:31:10.160 --> 0:31:12.880
<v Speaker 2>market that they don't feel because they're too massive. There

0:31:12.880 --> 0:31:15.280
<v Speaker 2>are insights you can bring that it would take their

0:31:15.280 --> 0:31:17.640
<v Speaker 2>best team weeks and weeks to do desk research to

0:31:17.640 --> 0:31:19.800
<v Speaker 2>figure out because you're living the reality and every day,

0:31:20.040 --> 0:31:22.160
<v Speaker 2>and so I would kind of flip it a little bit.

0:31:22.440 --> 0:31:27.560
<v Speaker 2>I would say to small and medium businesses to assert

0:31:27.640 --> 0:31:31.560
<v Speaker 2>your superpower, which is really the you are eating what

0:31:31.600 --> 0:31:33.720
<v Speaker 2>you kill and as a result, you know where the

0:31:33.720 --> 0:31:36.840
<v Speaker 2>fish are right and they're sort of and you've really

0:31:36.880 --> 0:31:38.800
<v Speaker 2>got to assert that and connect it. The other thing

0:31:38.800 --> 0:31:42.080
<v Speaker 2>I would suggest, which I see a few companies do this,

0:31:42.080 --> 0:31:45.640
<v Speaker 2>particularly in marketing, less in some of the more durable

0:31:45.720 --> 0:31:51.080
<v Speaker 2>like hardware businesses do. But it is possible team up

0:31:51.120 --> 0:31:53.240
<v Speaker 2>with someone in the business that you admire to go

0:31:53.360 --> 0:31:55.360
<v Speaker 2>after the big business. So if you get a feedback

0:31:55.400 --> 0:31:58.880
<v Speaker 2>about capacity, right, you know, well, your marketing business can

0:31:58.920 --> 0:32:00.680
<v Speaker 2>be paired with on the other person you know on

0:32:00.720 --> 0:32:03.960
<v Speaker 2>the market who might be a competimate. Like you guys

0:32:03.960 --> 0:32:06.000
<v Speaker 2>are good friends, they're kind of in your space. You

0:32:06.040 --> 0:32:08.600
<v Speaker 2>respect what they do, but you're running two different businesses.

0:32:08.640 --> 0:32:11.840
<v Speaker 2>There's a lot of relationships like that. Come together and

0:32:11.880 --> 0:32:14.200
<v Speaker 2>go after the business together and figure out how you

0:32:14.200 --> 0:32:16.560
<v Speaker 2>guys are going to manage it. Through, especially if the

0:32:16.600 --> 0:32:18.800
<v Speaker 2>contract could be something that, as I said, is a

0:32:18.880 --> 0:32:22.440
<v Speaker 2>long term of value as you market your services to

0:32:23.240 --> 0:32:26.560
<v Speaker 2>the clients you've been serving to, even other larger organizations.

0:32:26.080 --> 0:32:45.800
<v Speaker 1>Stas Black Tech Green Money is a production of Blavity,

0:32:45.800 --> 0:32:49.320
<v Speaker 1>Afrotech and the Black Effect Podcast Network and iHeart Media

0:32:49.480 --> 0:32:52.440
<v Speaker 1>and it's produced by Morgan Debond and me Well Lucas,

0:32:52.880 --> 0:32:55.320
<v Speaker 1>with addition of production support by Sarah Ergon and Rose

0:32:55.400 --> 0:32:59.480
<v Speaker 1>mc lucas. Special thank you to Michael Davis I Vanessa Serrano.

0:33:00.040 --> 0:33:01.880
<v Speaker 1>Learn more about my guests and other tech disruptors and

0:33:01.920 --> 0:33:05.800
<v Speaker 1>innovators at afrotech dot com. Enjoining Black Tech Green Money

0:33:06.680 --> 0:33:11.240
<v Speaker 1>shot us to somebody go get your money, Peace and love,