TERM SHEETS, a talk with New York VC, Richard Kerby

that time we'll come again. But for now, and before we get into today's episode from one of our highest view YouTube series ever, Term Sheets, I wanted to share some of my most memorable experiences from afro Techen. Backstage at the conference, I got a chance to sit down with some of the biggest names in tech, media and business. I asked the things all of us want to know. How do we successfully raise venture capital? Are all our

efforts in diversity, equity and inclusion helping turning us? And how do we find customers or strategic partners for our businesses. Marlon Nichols is managing partner in mac Venture Capital, a Los Angeles based VC firm. Which focuses on c stage companies and invest in visionary founders. Marlin is one of the most genuine people I've met in this industry, always quick to respond to an email and always full of great council it has a quiver full of strategic advice.

We're talking backstage at afro Tech. Here's the conversation, well looks for afro tech here with my guy, Marlon Nichols of mac Venture Capital formerly Cross Culture Ventures. This is not your first afro tech. Tell me about your experience with afro tech and what Mexic Society. We first invested in Blinty maybe three years ago now, so it's been since then, and every year is doubled in size. I think this year might have tripled in size. So it's it's a amazing to see all these young black people,

ambitious young black people running around. You gave a really great talk last year about cap tables and helping people understand, you know, their diverse, their equity distribution, and that whole thing. So a lot of tips advice come out of the Bay Area and raising money. But if I'm raising money in let's say, in Illinois or Tennessee, how do I apply that when my ecosystem may not be the same as raising money in the Silicon Valley, it's all the same,

it's all the same games. So they're going to be investors and wherever you are, right, and it's about you finding them, particularly at the early stages. It's just simpically gonna be angel investors. So people that know something about the industry that you're going into that I want to support you, right, So target them first, get going build something, and then once you have something and attraction is rolling,

like institutional investors are gonna follow that traction. Right. So as long as you build it right and it's doing what it's supposed to do, then you can start reaching out outside of your your a full ecosystem to bring an additional capital. Let's start start local and find the people that make sense for your business. You just talked about a little bit difference between angel investors and institutional investors.

Can you dig into that a little bit, because if I'm looking at an angel maybe I don't have all the attraction and data points there yet to justify going to a institutional like a BC. So angel investors they're investing their own personal capital, right, whereas a Uh, institutional investor or a BC, someone like me. I'm investing out of a fund, so capital that I've raised from different groups of UM of investors, individuals, family offices, foundations, and downmands,

et cetera. And I'm deploying that capital over a period of time, typically about five years. Right, UM, Angel investors, I said, their own pocketbook, Right, what they need to see from you versus what I need to see from you is gonna be different. Also, our check sides are gonna be different, right, Um, they require less, They're also gonna write smaller checks. Right, I'm gonna require a bit more and I'm gonna right a much larger sex somewhere a half a million to one point five right. So

that's that's a that's I would say that's the key difference. UM. And they're they're usually willing to get involved at the ideation stage. Right, So you've got an idea in the space. I know the space really well. I think I can help you. I'm a fan of what you're doing, of you and your team. All right, let me put some money in here and also some sweat equity. I love that. So if I'm thinking about UM raising money and how

do I know how to price it? So if am I just trying to get enough money to get myself off the ground, or am I trying to raise enough to build a war chest to not only get off the ground, but get far enough out to where I can keep competitors off? How do you think about that? Companies can get in a lot of trouble have gotten in a lot of trouble historically when they raise more

money than they need. If you take on five ten percent more than what you actually need to hit your milestones, you're probably okay, right, But if you just pile on this capital and you don't have a you don't have a use for it, it usually gets wasted and um it gets wasted in the um in the form of resources. So now you're hiring a bunch of people that you

don't need. You're probably pursuing a lot of different avenues that you shouldn't be pursuing right now, right because the name of the game is his focus and just laser in on something, uh, find success with that, conquer it, and then start to add, you know, layers to it. If you have all that money, you probably you gonna skip the stage of making sure that the thing works and jump right into step two and step three, and a lot of times failures happen as a result of that.

So I always tell um entrepreneurs, you want to raise for investment cycle, which is eighteen and twenty four months at tashed to that is a certain number of milestones that you want to achieve, right, So how much do I need to raise in order to achieve these milestones within that within that time frame? Right? And let's say I'm giving myself twenty four months, Well, realistically I want to be I should have hit those milestones by the eighteen months um point, giving me time to raise raise

money when I'm not running out of capital. And so it maybe an interesting question to ask a VC, but being somebody who's seen a lot of cap tables, has seen a lot of heartbreak, you know at the end of at the end of companies, talk to me about how you think about what entrepreneurs should be thinking about in the early stages of giving out equity to not only co founders but also to them early investors. What

kind of things that they be thinking about. Keep as much of your company early as you as you possibly can. So I always tell entrepreneurs. There are only two reasons that I think that you should be raising capital right. One is that you absolutely have to hire the resources to build a product. There's no other way for you to build this product and get it to market other

than raising venture capital to do that. The other is, you're at a point where you've built something and the only way that you're gonna scale this thing, and and let's say it's uh, it's a competitive space. There will be a competitive space. You gotta scale and scale quick, right, So now now you need the capital in order to do that. Scaling organically just gonna eg too long. Those are, in my opinion, the only two reasons why brounds should

be looking to take on venture funding. In terms of like employees, you want to be fair their their their reports, in terms of like compensation reports um that you can get from recruiting agencies and law firms and all that stuff. So I'd say, get ahold of that and see what, um what what the average payout in terms of equity and salary, etcetera for companies at your stage is and

just kind of stay as closer that as possible. You want to be competitive, but you also don't want to give a giveaway to farm We'll look ut here for afro Tech. Marlin Eckles mac Venture Capital formerly Cross Culture Ventures. You know afro Tech eighteen. I also spoke with Angela Right, a political and social commentator in fire Brand who takes

no prisoners. She took to the main stage at the afro Tech that year to discuss the black opportunity in cannabis with some prolific black innovators in the marijuana space. We say talking about social justice, how legislation impacts the black opportunity in tech, and demanding seas at the table versus building well Lucas afro Tech twenty nineteen, I am here with the world famous angel La Right. How are you?

I'm great, famous, but happy to be here. When we talk about tech, there is this I call Jesse Jackson approach that says, you know, we need to see that the table Facebook, Google and etcetera. And there's also this approach of we're gonna build our own table. Right, Can you talk to me about how you see that argument playing out with ten thousand black people here who are trying to build their dreams and what position we should be thinking about walking into the building into this just

the greater surrounding area. It felt so good and felt so free. And I think that one of the most incredible things about Reverend Jackson's approach so far with the tech community, what he did with Wall Street has been UM that it's not just one way, you know, to go about this. There are several We need people who own, but we also need people with seats at the table.

We need the people who haven't had seats yet, but we need someone to plus that door open, and Reverend Jackson has done a tremendous job of doing that through RABO Push Check twenties. So has the Congressional Black Caucus through UM their Tech Initiative, to ensure that we're not only UM hiring companies to be diversity and inclusion officers, but to ensure there's real equity at the at these companies.

And while we have miles to go, I think that's where ownership UM, an opportunity to have access to capital to create our own comes comes into play. UM. There is no innovator like a black mind, and I think that is the unique space that Afrotech creates and reminds us of. Right, I think that we can't hear that enough, UM, and so I think it's wonderful that what you all are doing. So thank you for letting me be apart. And so you just came off and talked about cannabis.

And when you look at the landscape of cannabis in the industry, I guess I should say, is what has been characteristic of the black companies who have found success in your view in this field where all the hurdles are, you know, placed for us to not be successful. Yeah, well, I have to be honest with you, I don't know.

Of many, UM, the one that I am the most impressed with and do a lot of work with is forth Movement UM Kaream Webb, who was just on the panel UM talks about it and it's just this revolutionary concept. I say all the time that it's like, UM, if we were to create our ideal program for what reparation

should look like, that's it. And what they've done for us by us is say, UM, there are these brilliant people who have been hamstrung in life by the fact that they were born in the families where they weren't rich, or they made one bad move and ended up incarcerated, or they had a sibling or a cent or a daughter who was incarcerated due to the War on drugs. We want to find that person, that UM person who has this great potential and train them for a year

to equip them to be their own retail operator. It is an incredible concept and to me, it is exactly what social equity should look like. When we talk about opportunities in cannabis. It shouldn't be about a level playing field. It should be giving us what we deserve and what we have earned in part because we were punished. Do no no fault of our own to ensure that we absolutely and actually have viable businesses in the long run. You mentioned this and that there's not just one way

to be successful in any of these industries. How important is it for our black voices to be in the boardroom, and not just with regards to diversity and inclusion, immensely important. One thing that we know right now is there's not a single black woman of a fortune five company, UM, not a single black woman's CEO. And uh, it's twenty nineteen, right, this is our four hundred year of being here. I've

been saying it all year long. I'm continue saying it um since the first documented enslave person arrived on these shores, and for four hundred years, we have been building up the companies of everyone else, consuming their products, consuming their services. And we know that our culture is so often appropriate. We know that our neighborhoods are so often gentrified. We know that we're so often um at the cutting edge of whatever is the coolest and next best, greatest thing.

Of course we should have a board seat. That's the least we should have as a board seat. When you think about anything from funding to access to consumers, look like neutrality and etcetera. How important is legislation with regards to finding success and each of either of these avenues,

You know, it's key. I think about often, UM for the people who are watching this who haven't seen the documentary about Maynard Jackson, thinking about what he did as and it wasn't legislation, but it was through his executive powers as the mayor of the City of Atlanta when the airport project came up and said, no, let me tell you, how many people who look like me are gonna be working on this airport? Is thirty three and a third percent. No, we don't always have to rely

on and set asides or goals or quotas. But what we know happens as a result of that is that we finally get our say, we finally get our opportunities. That does not happen if it's not forced, because unfortunately, historically,

we haven't been in decision making seats. So that's why Maynard Jackson, whether he's a mayor or Keisha Lance Bottoms now as the mayor of the City of of Atlanta, or a state legislator, or a Maxie Waters who's the chairwoman of the Financial Services Committee, and said, let me tell you what we're gonna do. In order for this legislation of past, You're gonna have to have offices of minority and women inclusion in every financial service agency in

the federal government. That's how this is gonna work. So if there's not someone there that's like, I'm gonna be the elbows and the mouth and I'm ensure that you do us right by my people, it doesn't change. So we need it. You're ten thousand people here for AFRO Tech this year. How important is this conference? Major? It's major for our mental health, it's major for us to see each other um in this space. I think it's

major for partnership opportunities. You might come here and meet your next business partner, and if nothing else, you leave encouraged knowing that you're not in this space alone and you have the ability to keep going. So if I don't think we even have to say we shall overcome today, I feel like I'll overcame something. I feel like a conqueror in this speech. Shout out to Kirk Franklin for conquerors. By the way, I'm Will Lucas. This is black tech,

green money. I'm gonna introduce you to some of the biggest names, some of the brightest minds and brilliant ideas. I feel black and building simply using tech to secure your bag. This podcast is for you. Richard Kirby is general partner on Equal Ventures. We're sitting on the set of term Sheets, afro Tech series about venture capital in New York City, discussing what it takes not only to be a VC, but what are the characteristics of a

good VC. What is the makeup of a successful VC and how do I know if the gig is a fit of my personality and profile? Yeah, venture capital is about investing and supporting early stage entrepreneurs, and so that means you're you're finding companies that are hopefully diamonds in the rough. You're doing diligence and so you're trying to figure out if that investment is a good fit for

your invested profile. And then you're making the investment. You may or may not be taking a board seat, but then you're also finding ways to be supporting on those companies and so what do they need to get done to make their chance of success much higher? You'll do So that means recruiting, happening with fundraising, strategy, business development, even maybe sales, and so those components make up a

lot of different pieces of ventric capital. On top of that, obviously, if you're running a fund, you have to fundraise for your fund, and that's another kind of um back off of something that we try to focus on as well.

So you you mentioned a couple of different disciplines, and I would think about if I was, you know, a person coming out of college and I wanted to do venture capital, you added other things other than just giving money to startups, and what are those the things that make a VC partner a good partner instead of just

a checkbook. Yeah, yeah, I think it's um hard to add value because you never know what's happening in the day to day of a business and or startup, which is why you have to try your best to be as hands on as possible and be as intimate and closely as now as possible. And so the things that we work on is, you know, with our portfolio company CEOs, we talk to our CEOs every two weeks. We've got scheduled sessions so that we can ask them, you know, how things going on, how you how could be helpful

Because when you're running a company, you're too busy. You can't think of like how can will help me? Or which help me? You need to have scheduled time for them to ask where your needs right now and how can I be helpful? Sometimes that maybe you know, I need to hire a VP of engineering, Can you help me? Sometimes that means I'm getting ready the fundraise, I need to practice, I need to get my story right, I need to figure out which investor I should be targeting.

And sometimes that means, hey, we're thinking about changing our business like we were doing this today, we think it makes more sense to pivot in other direction. Can we run our strategy and our vision value to get a sense of like is this the right path us? And so it's a variety of things. But we try and do is be proactive and being helpful and make those conversations happen because it's really hard to elicit how a founder can need help without asking that question the first place.

So at what stage should have started to be talking to a VC versus like an angel or just you know, family and friends. Talk to me about the different stages of the progression of the types of investors I should be talking to. Sure, sure, Um, you know, angel investors and family friends are just folks that kind of invest in a person, right, Um, you know, site unseen what your idea is. I'm a believer in Will. I want to support whatever Will is doing. And so those are

they hopefully the first dollars you can get. Those dollars aren't easy. You know, as an undergrad to come out of college, I did not know folks that could give me a million bucks or half million dollars to get started. So it's very hard to find family and friends. Um, But they do exist, and I think that they exist for a reason. But that said, though, um, it actually

can be easier to access. Sometimes actual METROC capitalists they have websites, their profile files, they build own personal brands. It's really hard to know who is an angel, who

has capital as an individual or not. Now, the timing for targeting a venture investor versus an angel is tricky because some investors at a venture fund will invest in a company before it's even begun, before it started, before it's incorporated, before it's a product in place, and someone want to see traction and data, and so it's important to figure out what's the right fit investor profile for

you as a company. Um So, if you're just starting out, maybe it's you and your co founder, you probably want to focus on what is now called precede funds. These are funds that will help you raise capital before they're actually built a product. The capital, you know, whether it's half a million dollars maybe less anymore, the soul folks, that capital is for you to get the product in market, so you can get to a spot where a c invest like myself will be more comfortable taking risk on

you as a seed. Correct, there's there's been this new bifurcation amongst preceding seed where precede is no product. Let's give you capital build something, and seed is there may not be a product in place, but up what we think about it is you're about twelve months away from demonstrating product market fit. And when we try and work out founders, just to figure out what is proper market fit for your company and how can we help you get there beyond just the capital that we're hope we

gonna provide to you. How do vcs make money? Yeah, so, so vcs make income in two ways UM one salary and the second piece carry and so um. You know, just to make the math easier, let's save a hundred million dollar venture fund UM. The GPS generally will take tent of the carry, which is twenty percent of the profits.

So let's say hunter million dollar fund, we've returned two hundred million dollars of capital back to our LP I E have made a hundred million dollars of value for my investors UM eight sent that money will go back to your LPs as their profit will go to the partners of the fund, So twenty million dollars will go spread out. However, you guys agreed to amongst your partnership and that's kind of the the profit slash carry that you'll take UM at the early stage to the C stage.

It takes a while to reach that because our companies are very very early. They may not exit for five, seven, ten years, and so it takes time to get to carry the early stage. It's it's a much short time frame at the leader stage and the last pieces. UH funds generally take two percent of those fees of of the capitol, sorry for managic few to run their business,

and so human fun generally manage these two percent. So you have two million dollars in that example each year to run your business, and that two million dollars goes to pay your salary, your employees salary, rent, travel, entertainment, you know, if you feed your team. All these things go into that that that budget. You have to kind of manage that with that capital. So in your opinion, what makes a good VC? What are the characteristics of

somebody who could be good at this? Yeah, I think the um the traits for an individual are just inherent in somebody else. It's not really about like what you studied in school. It's much more about like who you are as an individual. Are you intellectually curious? Are you um, do you enjoy learning about different things? And I guess lastly,

do you enjoy helping others? Those are really three points that are you know, inherent to anybody that could make them inefficient or sorry, excess of ventric capitalists because the day sourcing is a big piece, so finding companies and that means do you get excited by finding new things? Like? UM, you can see that in any industry you could get excited by finding the rare sneaker that you haven't seen him out yet, or that new track on spot but

you ever heard yet? That excites people, and finding a new company excites venture capitalists. UM. Doing diligence, so you know, diving deep to figure out, you know, what does company do, what space they in? How can this company get very very large? That's just learning. If you enjoy learning, you'll enjoy diving deep on the company understand how it works

or the industry that operates in. And lastly, you know, when you're on a board of a company or an investor, you're trying to do everything possible to help that company. You know, try to get them as many unfair bandages as possible that the founder has less on their play and they tebeles listen to their play. That's all that is really is helping people. So if you enjoy helping people, that's a great way to have manifest that inherent trade

yours to, you know, do good for a company. So let's talk about New York and particularly doing venture capital here in New York. Um finance capital of the world. Um, some would argue, How many would argue, and what is the difference between doing venture capital here versus doing it in the Bay Area or in other smaller markets that you think yeah? I think, um yeah, the Bay Era is the tech capital of the world, period full stop.

We're not. I don't think we can lainly claim to that, but I think New York has you mentioned finance, New York has an epicenter of many different other industries, whether it be finance, media, advertising, lots of e commerce, and

so we touch many many different fields. And so we may not be the technology capital of the world, but I think we're like the industry capital world because there's so many industries that are called New York their home and their HQ, and we think that allows us to kind of see and better n then different kinds of businesses, and so we don't have to just look at a pure software businesses. We can look at companies that maybe have a little software but actually still many other moving

parts that aren't really suffer related. And because the nuances of these verticals that are based in New York, we have context networks that have a better understanding of these other verticals that maybe aren't just considered tech only. You had done a study, I don't know if you want to call it a study, but you did some research a couple of years ago on why there is not a lot of black people in venture capital across the country. UM. I want to say it was three or four years ago.

Now the original post went up on your website. What did you learn then and what has not changed or what has changed? Yeah, I guess what I've learned is that, UM, I guess look at the data I learn anything, which is that I already knew there were very few black folk in venture capital. Um just I could probably count on one hand when I was back in the Bear in twin time I first started UH and so the data didn't surprise me. Um. I wrote the data. I wrote the report and the data because I wanted folks

to have a voice. I wanted to kind of shine a light on the problem because I feel like when you discuss problems without data, people are like, I don't see it. I can't really, it's not tangible to me. I can't grasp it. And so I thought I put data around the issue, people would understand how bad it is and then think through how can we think about

those changes. What I have seen positively though, is that there's now more and more African American as a black folk in the kind of junior ranks of venture capitals to the associate role, the principal role, which generally is you know, the stepping stone to become a part of the fund, which I think is great to kind of build that pipeline of folks. It's still not near enough to kind of replace the qual called the old guarden ventric capital, but there's more to do there. I think.

The other thing that I'm seeing positively is that um, there's more and more funds started by black gps UM. I think the problem with trying to create or I should say correct the lack of diversity of venture capitals that most venture funds don't hire anyone in the year, Like the average venture fund hires zero people per year, is a small group of group of people with small teams, and so if you're not hiring every year, you really

can't change the dynamics of your team. And so one way to actually change it is to just create newer funds. And I think as we create more funds, those funds themselves be more diverse, and then we'll see more progress. As in terms of diversifying the metricpol industry, have you seen a lot of progress with regards to black founders being able to raise money successfully and black women particularly

being able to raise money successfully. There is some progress, not nearly enough though, I mean, I think the numbers are still very anemic on black female founders that are able to raise meaning amounts of capital. And I think it's um a couple of reasons why. One the initial dynamics when there aren't investors that look like you, they're less likely to trust you, believe in you, want to invest in, you want to support you, and that makes it challenging for anyone who's a person of color to

be able to kind of raise capital. In the end, ironman Um similarly, it's hard to get in the venture industry as well as a junior member or not, because people aren't looking for that. I think the other piece two is accessibility, and so if the venture investors don't look like you, the chance that you're in their orbit or someone you know is in the orbit is very very limiting. Now on the positive side, though, we are seeing more and more funds pop up that are focused

on women, people of color, African American founders. I think that's great. We need more and more of that, and I think as we see more of that, the legacy venture funds will realize they're missing things and spend more and more time on that dimension. And so I think the biggest challenge right now for a person of color woman founder is that seed stage. I think it's really

hard to get that round done. Once you're prox and market, you've got traction, it makes it easier for a investor who doesn't look like you to get there because they can like put you aside and look at your numbers. UM. Now, with that said, it's hard to get to that point, and if your box stop from actually even having a chance of building in the first place, it's very very limiting pipeline. So I think there's a lot more work

to be done there. I don't have all the answers, but they need see more done, more work to be done to thought thinks of that as well. Yeah, and again you just said I don't have all the answers, but I think about even if you know, with the amount of black investors we have today, black female investors and people like you, black man investors, there's so many amazing companies or potentially amazing companies, and there's just not enough of those investors to go around that are you know,

tendable to being able to write them a check. But there's also a conversation about by enemies necessary, I gotta make this company happen. What do you say to those companies that are listening and watching this too, and who may run into you at Afro Tech or may see you in the street down in New York. Because what happens in my experience, I see so many and you guys become like the savior. So you're the only ones.

So everybody's out to come see Richard. So if you can't fund everybody, and you can't listen to every pitch and you and so I see you at Apple Tech and you've got a line of a hundred people. A hundred people are pitching you. I may have the best idea, but I'm a number six five and you you're desensitized by that point. So what do you say to those folks who are, you know, trying to make it happen at the seed stage and even in precede stage, he

didn't get to you. What do you say to encourage him? Yeah? I think, um, you said the best by any means necessary. And so it may be a cold email and maybe you know they know Will, and they know Will knows Kirby, and so they can use Will as as a conduit

to get to Kirby. I think the challenge with having so few investors that are black in the space that wants support black founders is that, um, the legacy venture funds assume that, like Kirby, has seen every deal of every black founder, and so you know this, this founder came to me, I gotta ask what do you think about Will? And if I'm not investing in Will's company, that's like a negative signal to them, which which shouldn't

be the case. As you said before, there's thousands of companies they can't all be a good fit for what I do. It equal ventures or what we do equal ventures, and so it's fine the right fit. And I think that is a dynamic that's bad for the industry and we need to find ways to improve that. And so I think that means having more people of color adventure and then that helps pursue or open the doors for more founders that can say, hey, I don't have to only come to Kirby or you know, folks are Home

Capital or Charles a precursor or anyone else. It's you know, my officers are actually limitless, and we need to get to that point to enable as many founders of color as possible to raise capital at the early stage, because at the point in time right now, like founders aren't succeeding,

not because their business sucks, the idea sucks. Not getting a chance, you're not even giving giving the capital to give you a shot to go kind of test out your idea, whereas our counterparts can have nothing to show for it, raise millions of dollars and go test it out. We need to get to that level of paralysm to make the inferent more equitable. When you think about taking that twenty million dollars and running versus You know, when founders come to you, everybody believes they have a billion

dollar business. I would assume you know, in the in the macro sure, everybody thinks everybody wants to buy their product. How do you bring founders back down to earth in some respect, but also encourage them to think bigger than they may be thinking about the opportunity for their products or service. Yes, so we focus on the seat stage for us at Equal Ventures and so for us, most companies are coming to us with like an initial product

in place. They haven't built out their full vision yet, but they have a larger vision for what they want to accomplish. And we call that initial product like their wedge. So what's your wedge into the market, the initial product that will get you access to your customer base of the future. And our viewpoint there is what are you building in turning your company that will allow you to

attract more data too? Then you know, go after what your larger vision maybe whether it be a point solution today in a marketplace in the future, or a point solution today and building a platform for your category in the future. And our viewpoint there is we want our founders to know what that vision is. But even if that vision ends up not becoming a billon dollar business,

that's still find for us. You know, we're a fifty six million dollar seed fund, and we don't require our founders to be able to have to build a business to be a billion dollars for it to work for our model. Now do we want to happen, of course when every company get to that size and scale. But given that we are a smaller fund, we take high ownership and write you know, large checks for seed rounds. That model can work just fine for us if our

company sells for less. And so when we invest the seed stage, you know, call it twelve months later, we have a comm with our founders and say, hey, you have a point in time here where you can go the kind of supercharged route of taking more capital on and you know, putting the goal host you know, success much further on the road for you, or you can take a more less capital inefficient path and say, hey,

you know what, I'm gonna go this other route. Build a great business, but don't have to have the kind of bearings of having to build a build into our company for success. In my mind. When you see people who have that sort of thinking, is it something about their personality that says, you know, I'm not trying to build Google. I just want to take my eyelash, you know, my eyelash product company and do a couple of million

dollars a year and live a good life. Like what is it about those founders that say that you found that say, you know, I understand what the market is like for this, and I'm going to be realistic about it and just live a good life based on a good income. Yes, so I think, Um, two kind of questions. They're one is like, there's certain business that that shouldn't

take venture capital. And so if your business will kind of um probably cash flow nicely out of the gate, and there really aren't scalable paths of building a off fore enabled business, you might not need venture capital. Might be other ways. Yeah, yeah, so you know, there there's um uh current workflows let's say across any industry that happened manually today, Like for instance, let's say, um benefits selection. So you know, I'm a large company. You mentioned Google,

I'm Google. I may want to you know, work with a benefits broker to select with benefit I don't find employees, so I don't want dental or vision or what I want to offer my employees. And then that process today works with you talking to a broker, a broker talking to a carrier and a very like manual face to face email, phone call discussion. But now you think about how do you add software aut layers that you can have a more fluid and efficient process for benefits selection

benefit discovery. And that's an example of what software navlement could look like in the benefit space, and that can apply to many other verticals in our opinion at least, Um, back to your previous question around like thinking about scale and so forth, and so that first class of companies you may not be a good fifermenture capital at all. Um. The way we think about founders are looking for like

the home run or larger vision is twofold. One is founder market fit and we mean by that is you know, why are you and your team the best team to go approach this model? And we think people gather it in one of two ways. Either you've spent your entire career majority of your career in that market. So if you were in the benefits space, maybe you spent you know ten years and benefits no inside at out and

you're the best person to go solve this. Or it could be you have um a personal experience or passion for it that led you down this path to become an expert. And so one of our companies in our portfois coming called Jerry Um. They work in the senior living space and the founder had an instance where his father had Alzheimer's and he had to find a home to put his father in a memory care scenario so

that he could be taken care of. And he's from Canada, originally in Canada has you know, great medical benefits and it was super easy for him to do so UM fast forward, you know, a couple of months later, his wife's parents in the same issue. You live in America, and the process was very very different, very very painful, and he thought, Okay, I'm experiencing this personal experience and

it pains me. I want to find a way to improve on this process and so you can have it either from you know, your career or your personal life. That founder market fit that we look for. And then at the end of the day, it's hard for anyone to turn down a great ex opportunity. Let's say a company comes and says, hey, we want to buy your business for a hundred million dollars and you own half the business or something like that. It's a lot of

money for you. Even though you might believe that like this could be a billion dollar business that could make you know, hundreds of millions of dollars, the thought process there is it might make sense to think about secondary and so if you can give a founder some capital today, that fills them, you know, leaves the other stress of you know, paying for their home, paying for childcare, paying

for school. And if you can take that stress away from them financially, they can think about, you know, envisioning that larger vision of that company that they have been succeeded in building. Black Tech Green Money is a production of blackty Afro Tech on the Black Effect podcast network and I Hired Media. Is produced by Morgan Davon and me Well Lucas, with additional production support by Love Beach Him and Risus Lewis. Special thank you to Michael Davis.

Is the car savan Yan you know like the wine. Yes that's his real name. Learn more about My Guess and other tech disruptors and innovative to afro tech dot com, joining black tech, Green Money, and it was a five star rating on iTunes. Go get your money, Peace and love,