We're looking at space based power and climate solutions. We're looking at on orbit computing, improved network and data reductions. And then again, in the LEO area, we're looking at launch innovations and reduction costs. So essentially what I'm saying is we're trying to build a scaffolding for people to be able to operate in space.
Now you have the other part of it, which is beyond LEO, where we're looking at lunar logistics, asteroid surveillance and mapping, Jovian system development, which is the idea of looking for water. Because remember, even if Elon gets to Mars, he still needs water. He still needs water. And where is water? Water's on Mars, water's on some of the moons in Jupiter and so forth. We're looking at solar cell tech improvements.
Welcome to The Investor, a podcast where I, Joel Palofinkle, your host, dives deep into the minds of the world's most influential institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. Alright, so we are live. So we are live here. I'm not alone. And I'm here with Jason Carvalho with Human SVC.
So thanks again for coming on the show and it's been really exciting getting to know you the last couple months. But you know, excited for everyone else to get to know you a little better. We've got a few people that are in my community that are aspiring VCs looking to break into VC. So excited to kind of unpack your career, your life and more about Humanist VC and where it's heading.
But why don't we kick it off, start out with your early career, what you what you studied, and how you navigated into this career venture capital. And you know, we've also been involved in the space tech ecosystem. So maybe we can unpack that a little bit in the current state of that too, all that works for you. Great. Yeah. Yeah. Lovely. Always my appreciation and gratitude for you, Joel, and the community you've created. So just really awesome stuff.
You know, before I became an emerging fund manager, I didn't realize it was a thing. And it's a bit of a lonely journey. So to have stumbled upon what you are doing in your ecosystem has been very helpful to me and I appreciate that. So my gratitude, just to start. So Jason Carvello based out of Toronto, Ontario, born and raised in a small town of a few thousand people in Northern British Columbia. Parents immigrated to Canada in the early late 70s.
Father's a welder, mother was a banker, and I ended up going to school for psychology. And in my fourth year ended up running a business plan competition. It was one of the early business plan competitions in Canada at the time. We had modeled it off of at the time MIT's fifty ks, which is now known as the one hundred ks and Stanford's Basis competition.
And, you know, being in the social sciences realm, I was hanging out a little bit too much in the business building with the business folks running the business plan competition. And, you know, just ended up getting the bug of, of just realizing that, hey, I'm an entrepreneur. In my early, I guess, teens, I had developed a consulting business that was installing Lotus Notes into a company called Rio Tinto.
Essentially went to one of the sponsors of the Business Plan Competition who was running a top Fortune 100 software development company in 1999, February and said, Hey, I'd love to work for you. And they were at the time developing software for Microsoft Power Tools. This was back in the days when Microsoft and AOL Time Warner were actually farming a lot of their software development up to Canada. And I was in Vancouver, Victoria, BC at the time. And so I basically got the job.
The gentleman said, hey, you can come on working in business development. We need more customers that need custom software. And this is back in the old days when we were just starting to farm out overseas. And, you know, I got exposed very quickly, I think 21 years old, to the wide world of, you know, the first wave of the internet. So we were working on Netscape eight, we were working on Microsoft Power Tools, our products were going out to millions of people very, very quickly.
And so my mandate essentially was to go and recruit that new business. So living in a town in Victoria, BC, which is known as essentially there's only two types of people that live there, people are about to retire and people are going to school, trying to find customers.
And this is back in the old days where I still had a whiteboard in my car, I'd be going and trying to sell what software development looks like to, you know, local shop owners, small SMEs and what have you, I ended up stumbling upon a company that was developing software security products, convinced them to onboard to this custom software development shop. And they basically said, Hey, we love what you're doing. Do you want to come and join us as the first employee?
So that started kicking off my first ten years of being in technology, where for those ten years, I was fortunate to be working for two companies back to back that were able to get to over $50,000,000 in revenue. One was privately held, I then later on moved on to be the first employee of Indochino, another direct to consumer business, but that was actually venture capital backed, whereas the other company was privately held.
And my first ten years of my career is being able to see how two companies in the I guess now the second wave of the internet, we're building a direct to consumer brands, one privately held, the other was venture capital backed. So can we go, can we back up a second? There's something that comes to my mind when it comes to sales, right? Sales is essentially solving problems, right? There's only so much you can sell and stuff down a person's throat as far as like how great your product is.
But if you can position selling almost as if you're trying to help them and solve the problem. I kind of started to hear a little bit of that with the whiteboard. It's like, hey, here's where you are now. Where are you trying to go? And hey, let's see if we can help you. So tell me a little bit about the sales cycle back then driving door to door to different customers, whiteboarding stuff, and how that evolved when you got to like a $50,000,000 company. Yeah, it's a great question.
Those are simpler times, I'll say. I bought a car with a $1,000 of cash. Basically, it was gonna be the thing that was gonna drive, you know, I was gonna basically have my office in it. I had my hockey gear and you know, I had the my family is kind of Catholic, so I had the rosary there. My mom kind of installed that there. And we had the whiteboard. And so ultimately, this is just the beginning of, you know, not every company is a software yet company, right?
Yeah. Remember, now kind of we had that tagline that was here for a decade. So going and trying to convince companies to be more efficient, more effective, to help actually coach them to realize the value of software was really what we're dealing with in those early 2000s era.
And so, you you would walk into a store, you'd have to do a risk analysis, you had to understand the pain points of the clients and say, like, look, we can build you a custom management solution software or custom CRM software for you. Salesforce wasn't yet dominant, HubSpot was not yet dominant. And so we were providing custom software solutions. For small businesses, we were also going into governments and saying, hey, we can make your government, your ministry more efficient.
We were bidding on RFPs. So there was a whole process of being able to document on a whiteboard all of your problems, be able to look at where all the costs are and say, hey, we can develop a solution that can help reduce these costs, make your business more efficient, and allow you to hit your goals at the end the year. And I think, you know, that was an era where we weren't on Zoom, nobody, everybody was maybe on ICQ or MSN. AOL chat.
But you were still dealing with the requirement to understand the needs of your customer, be able to understand the risk and governance issues that that individual, whether it be a small business, a large enterprise, or government was facing, and then be able to accurately create documentation, which I feel a lot of companies lack right now, documentation is to create documentation, whether we call it functional requirements documents, we call it
PRD, product requirement documents, but be able to connect that and provide that to the stakeholders, say, hey, here's what we're going to do, how we're going to do it. And here's what the timeline for product development is going to look like. Yeah, and you know, now when you write these PRDs, who are the different stakeholders that you're working with? Because you got the customer, then you got internal stakeholders.
And, you know, tell me what the difference between like software and then now like a company like Indochino, which is like a consumer brand. Yeah, how's that sales cycle changed? So I'll say that when we talk about sales cycles, and we'll talk about technical documentation, I'd say I'd start with the talent. The talent, you know, in the old days, you would go and develop a computer science degree, you get a business degree, you'd have some level of what's going on.
And then you would go maybe work for an enterprise level company, and then you would come back and then you work for a startup. In today's world, whether it be from 2000 to 2010 to 2020, we are now seeing talent just get a certificate, get thrown into a large enterprise, get siloed, develop product documents, develop sales documents, but not really understand how it all kind of connects.
And I would say in the old days, when you walk into a software development company, and you're a client coming to a software development company, you look in the office, you would always have, even in a startup, you'd have a business analyst, you have a project manager, you'd have a product manager, you'd have a QA for sure, and so forth.
In those days, again, I'm biased because I was fortunate to live and work with companies that were very successful, which I thought was normal, by the way, at 21. I thought that was normal, that that level of success was normal during that period of time. But where we're at right now is that we are almost now just kind of creating sales documentation and saying, hey, we're going to sell this and we're going to say this is needed.
But the internal organization, the stakeholders don't have the proper documentation to actually understand the product. And they don't then have the requirements to be able to go out and hire the appropriate talent to go and continue to develop that product, if that makes any sense. So we're getting products to market quicker than we've ever gotten them to.
But when a company gets receives a certain amount of funding, they're dropping the ball because they don't have the documentation to understand what is actually required for the product. And the sales folks are just selling new features as new feature sets.
And we don't have that product loop because, again, in the old days, I sound like an old person, but in the old days, we would have a process where a BA would go and talk with all those different stakeholders, gather requirements, put it together in a specific document, go to the product owner, etc. So in summary, I think we are in exciting times, because we have the ability, it's the greatest time in human history to create products.
But we're in scary times, especially look at the current situation of the global economic situation, is that we need more folks that are working with salespeople to create documentation and create timelines, to create an understanding of what is required to build product that can live for a longer period of time, if that makes sense. Yeah, that makes total sense.
And then tell me where, you know, with the global macro trends right now, where do you think venture is heading as far as like just the kind of their positioning? So we're seeing valuations drop. We're seeing investors have a little more leverage now. There's been a few deals recently where you know towards the end of the year, there's much more favorable terms for investors and you're getting incentivized to move fast, right?
So are you starting to see that as well where before with all the FOMO, like a lot of the favor was going towards the founder and it was super difficult to get into these deals. I'm starting to see a lot of the investors have much more leverage to be able to come in on on better terms and better valuations. I don't know if you're seeing the same thing and then how then tell us a little more. Let's cover that and then we'll cover a couple more things that I want to talk about.
Yeah, so the short answer is yes. And I think number one, we have to ask ourselves, you know, who is the investor type? So I started angel investing in my 30s. And I started just investing in what I knew, which was at the time direct to consumer, like, you know, software, I understood that. And so I started to invest and I started to look at companies that had product market fit, they had some type of revenue runway. But then over the last, let's just say after 2015, things just got insane.
Things literally just went insane, where anybody with a napkin could go and just say, hey, I've got some really interesting ideas of a product to develop. And I'm not saying that the product wasn't required. What we started to see is we started to see a lot of exceptional CEOs who were exceptional at selling.
And what they would do is they would create the following narrative, which was like, Hey, we've got this idea of developing a product, we actually have our users who are willing to give us their credit cards to give us, you know, a monthly, you know, reoccurring revenue, even though we haven't developed the product. And we're just going to develop the product, and we have access to the clients. And therefore, you know, we'll do a friends and family round of half a million dollars.
And then in six months, we'll go back and we'll go raise like 1.2 to 1.5. And because we're seeing revenue, and because we have been building this product, we believe we're in the best position for you to kind of invest in us. But what we ultimately then saw is because of failure and lack of documentation, we saw these companies acquire a significant amount of capital.
And because they didn't really understand the nuances of product development, whether you be a direct to consumer brand and understand the operational side, and you have process maps to understand how operations works and logistics works, or if you're on the software side, you understand how product development cycles work and what QA cycles work and so forth.
Because you don't have that documentation, what was happening was companies were receiving a tremendous amount of capital, but their leaders or management teams weren't able to actually go out and find the appropriate talent to help them continue to build the feature sets that were required that they were promising their investors and promising the market. And now all of a sudden, we get to this crazy thing that we've all just lived through.
We've never, most of us have never lived through this pandemic issue, where in 2020, we just saw the stock market go like this. And we started to see consumers obviously go home and start to spend online and, you know, acquire more things. And we created this anomaly, which would never ever take place. And even the most sophisticated investors were like, this thing is going to keep going up. Here we are in December 2021, '20 and now the whole market is reset.
And what is taking place is a requirement for us who are investors to look at companies and founders who have a real understanding of what that product roadmap looks like. And they can communicate effectively. And rather than look at the TAM and say, hey, the TAM is going to be X, let's talk about what the next twelve months looks like of product development. Do I have the right job descriptions and the right talent that is in the pipe to be able to go and hire?
If I'm raising $2,000,000 where is that money actually going to go? These are more important questions that we as investors have to continue to ask. And as operators more importantly, to ask ourselves, do we even want to take that money on Right now? Sorry, we've gone off in a few little kind of connected. Think another big thing is, you know, looking when you're when you're fundamentally looking at companies, obviously, the product roadmap is important.
And then, you know, the product is essentially what enables sales and revenue creation. So one pretty insightful thing, you know, it's pretty much common sense, but I just thought it was a great way to position it. I heard for any entrepreneur expenses are like fingernails, you have to trim them once a month. But I thought that was really interesting.
So I think, you know, it's going to be quite interesting as you look at people's like three statement financial models to see, hey, you know what, are they reducing their spending? Where are they cutting the costs? And does that, you know, improve their gross margins and improve revenue? And then, you know, if they have product, are all the products they're building tied to revenue?
Or are they just more like innovation or R and D projects, but you know just kind of using product marketing best practices to kind of you know improve the conversion funnel, have new drop downs that like reduce the steps to like two steps. I think that also helps to like improve conversion. Mean, any of you guys like follow like user research, I mean, Amazon spends millions of dollars probably every couple months just improving the customer journey.
And that's on their product roadmap to kind of just make things much more streamlined to just close, close faster revenue. So I think those are, those are things that I think are gonna be put under the microscope more. But I don't know what your thoughts are on that. Yeah. I agree.
I think the key word of the next three years, because I don't think we're coming out of a recession until 2024, the bottom half of twenty twenty four, because what we're seeing right now is we're seeing pullback of investors who are in the markets, they're pulling their money out of equities, And they're keeping it on hand, because of where the interest rates are going, we're seeing discounted future cash flows being reduced, valuations being reduced because of that.
And then we're seeing whether consumer sentiment, which is obviously the leading indicator, is going to be high or low. The reality is that consumers are going to stop spending due to the inflation and where that's driving us. So take those three factors and you could basically predict out that we're going to see some lows in 2023. We're really not going to see a true rebound until about 2024.
So if I'm an investor, or if I'm a founder right now, I'm asking the question and the question of the day is, do I understand operations? Do I understand how to communicate effectively what is required for us to be excellent operators to be able to withstand the storm? Can we focus in on understanding the risks of the business, outline those risks over twelve months? Can we communicate effectively those to investors?
And can we then align our HR models with hiring talent who help reduce those risks within the organization, make the organization more efficient, whether it be in sales, marketing, ops, what have you.
And then can we also, I say this to founders, when you're looking for investors, why not run the risk matrix, say in the next twenty four months, we're going to have these risks and then specifically target specific investors who you know who have either dealt with these risks in the past or have portfolio companies that have dealt with those risks.
And when you do, let's say you're going after 100 investors, 20 of those investors will get an email and say, Hi, Samantha, I'm reaching out to you because I've identified these two risks in our business. We have great growth, we have decent margins, we have decent revenue right now. We feel like we have a moat in terms of our user acquisition strategy and we have a handle on our product.
But where I need your help and I need not only your dollars, but I need your help on the advisory level is to help us with this specific problem. I think operators who are thinking that way and LPs who are wanting to listen for those stories are going to win in the next twenty four months.
So tell me about your journey from being an angel investor to I guess like Angel Fund managing LP, know, I guess being an emerging LP to now starting your own firm and also tell me how that converged into investing in deep tech and space as well. Because that's quite a big jump from the expertise and direct to consumer. And I mean, I made the change too. Mean, was a B2B SaaS deep tech person first, but then I got into consumer and also a couple other sectors too.
But I think it'd be good to talk through that because there's people that have subject matter expertise, come from like a professional training or they work somewhere. And they eventually, you know, take the advantage, take on the advantage of being a generalist or switching into other sectors. So maybe you can talk through how people can navigate that. Yeah, the first is on a personal level.
My vivid vision, and there's a book that I always ask every founder I interview to read and actually run the exercise, is a book created by a COO called Cameron Herold, who created the one-eight 100 GOT JUNK franchise out of Vancouver. Is my vivid vision for my life was always to be living on the innovative edge.
Doctor. Robert Noyes, who was the founder of Intel, is one of the people I studied for a long time, who I admire as I believe a great founder who created great technology and moved and advanced humanity. And so my early first ten to fifteen years was about, do I know anything about building companies? Can I get myself into a place where I can learn how to build at scale, privately held and then venture capital backed?
Then in my 30s, I started really understanding the role, which I felt I was really exceptional at, which was not actually not always the CEO role that I loved the most. It was really the COO role that I really needed to learn more about. So I spent a lot of time really understanding that COO role, which is what I asked founders to actually think through in their management teams to understand how that dynamic can help stabilize their management teams.
And then in 2017, after looking at my vivid vision of always wanting to be on the edge of technology, I basically just spent like two, three days not talking to my family in my office and coming up with the thesis that I was only going to invest in founders that were building a digital frontier to reshape the human condition. I didn't understand what that really meant, but what it did do is it combined two passions of mine.
One, is social enterprise and social entrepreneurship, which is really about systemic change, and the idea that technology, as a capitalist, will actually solve the world's greatest problems. When I was then looking further into what does that mean, what categories of technology would help advance humanity the most, a colleague of mine out of Sao Paulo, who runs a company called envisioning.io, has developed a number of infographics forecasting where the future goes.
And I had in my office an infographic called Envisioning Technology twenty twelve-two thousand and forty five, and it lists all of the major industries: IoT, biotech, materials, space, geoengineering. And as you're going from 2012 to 02/1945, you're moving from internet, which is on the left, and as you're moving to scrolling right, you're seeing biotech, materials, space, and also geoengineering, the impact of technologies on the consumer enterprise level are growing, growing, growing.
And then I looked at just my previous life of just being on the road and talking about social enterprise. And I had some really exceptional experiences with some really awesome Canadian astronauts during my time and just being kind of wowed by where that feature is. And I've got Star Trek and Star Wars in the background here. Clearly that type of person. And I started to just reverse engineer what was happening in space based on the data that was given to me by the infographic.
And I just started saying, okay, you know what, rather than taking our hard earned money and putting it into things that I know, I'm going to start to really experiment and start to invest into space tech companies. And my superpower, you know, God has given me the ability to be great at networking. And also, I'm fortunate to have my mom's skill set, which is being authentic.
So I can go into meetings and just, I'm not looking to be a greedy little guy or, you know, unauthentic, I'm just trying to be myself and really understand. And because I have an operator background, I was able to really quickly get access to really awesome founders. And every single time I talk with these founders, and this is by doing 2020, I really started investing in in SpaceTech. We were doing it through Clubhouse. We weren't doing it through Zoom.
You're listening to founders talking Clubhouse. And I and what I found, Joel, was I found that these founders really believed that the solutions they were developing were going to help humanity. And that was really key for me to understand that these were scientists and engineers, and as an individual, and where I want my family and where I want to be, I want to be closer to that type of thought process.
And so what I found is that while we were kind of cutting checks to this angel investor, as an angel investor into space tech companies, I felt that there needed to be a fund that had a true operator mentality that could help these space tech companies move forward.
But it also was tied very much to the idea of systemic change in social entrepreneurship, which I had been exposed to back in 2003 when I attended the first world forums at Oxford, which was an MBA school at Oxford where Jeff Skoll, who is the co founder of eBay, has donated basically all his wealth through the Skoll Foundation for social enterprise. Back twenty years ago, you could create systemic change the way that Mohammed Unis did, which was through microfinance.
But those models don't necessarily work in the first world nations. And when you look at the issues that we're facing globally, data is one of the most important things that we need access to. But in order to get data, we need to be able to get satellites up into space and we need to be able to create the infrastructure for us to be able to get that access to that data to be able to create solutions for that.
So I'll pass it over for a second, but my journey was, let's look space, I love the founders, I believe I can provide significant value. I believe that there needs to be a fund developed that focuses specifically on a technical vision that will build a portfolio roadmap which will enable the development of a new space economy, not based on hype, but based on what is actually required, which then I can speak to now who are my co GP is formerly from SpaceX and so forth.
But that is kind of that that initial journey. For education of the audience, can you just unpack the space industry and you know the verticals that that you're aware of and and maybe where they're heading? Obviously we have a space station that's now being constructed, you know, reconstructed, right? And, you know, there's private space travel that's emerging and it's becoming more prominent. They're partnering with governments.
So, you know, maybe you can unpack the sector as a whole and maybe share some insight in terms of like where the good opportunities are and then where are the opportunities that are just a little more crowded? You know, obviously in my opinion, like launch is definitely capital intensive and there's a few players, but would love to kind of understand, you know, where you see like lower low Earth orbit satellites and then launch and then kind of the other verticals.
Yeah, and so the big number that gets kind of pushed around in terms of space is just the trillion dollar opportunity, the $1,000,000,000,000 opportunity by 02/1940, essentially. And then when you look at it from just a consumer facing, if there are people watching or listening to this, you know, the narrative that you hear in the public is that there's two big kind of icons that are moving space forward.
One is focused on tourism, which is Jeff Bezos, and then you have Elon Musk, is discussing heavy lift and getting to Mars. Both are driving the economy. Then you have Virgin, which is Richard Branson there as well, which is really kind of focused on tourism. So you have the idea that the business model for space is space tourism.
And the reason that exists is because the cost to actually send vehicles up into space for launch has gone down significantly, which is being the catalyst for propulsion segment of the new space economy to kind of grow.
So anybody, you know, quote unquote, who worked at a propulsion company now could be able to develop a propulsion system that would help, you know, increase the probability of X amount of rockets getting up to space, which then increases the probability that if you, you know, if you want to go to space, you now have this option.
And so what we've been seeing is we've been seeing the cost of launch go down, and we're starting to see the requirement of navigation and mapping, cloud solutions, manufacturing, software and hardware, satellite comms, robotics, AI, kind of build out these subcategories within space. Where we're most interested in is we're most interested in two things, key technology areas in, low orbit and beyond low orbit.
So if I want to get into specifics of technology, we're looking at kind of constellation data and broadband, orbital debris and mitigation and protection. That's essentially meaning if we're going to send all this stuff up there, there's a whole bunch of debris in the middle of the atmosphere. There's a potential of major risk there. We're looking at servicing and logistics, maritime defense. We're looking at autonomous operations, what we've seen in AI, ML, RL.
This is imperative in order for that new space economy to be able to function. We're looking at space based power and climate solutions. We're looking at on orbit computing, improved network and data reductions. And then again, in the LEO area, we're looking at launch innovations and reduction costs. So essentially what I'm saying is we're trying to build a scaffolding for people to be able to operate in space.
Now you have the other part of it, is beyond LEO, where we're looking at lunar logistics, asteroid surveillance and mapping, Jovian system development, which is the idea of looking for water. Because remember, even if Elon gets to Mars, he still needs water. He still needs water. And where is water? Water's on Mars, water's on some of the moons in Jupiter and so forth. We're looking at solar cell tech improvements. We're looking at nuclear power and propulsion.
We're looking at radiation protection. No one's talking about radiation protection. That's great. We can go up into space. But what happens to humans in space? You know, what happens when they get to Mars? And then finally, we're looking at human life support systems.
So in summary, thanks to my colleague, Jeff Thornburg, who's former VP of propulsion for SpaceX, is now a GP with us, who has the technical background, who's built the new space economy, and was originally tapped by Elon to help build the original rocket systems. We have really taken this due diligence approach to be able to say like, propulsion is great. What Jeff and Mr. Musk are doing are really great. It's moving things forward.
But for us as investors, we need to find the business models that are going to make money and build the scaffolding so that this new economy, this trillion dollar economy that everyone keeps talking about is a reality. It's no different than what we did when we came to America, to Canada, came to Europe, and we started building roads, and we started building the infrastructure that was required for commerce to take place, this is still where we're at and this is our focus. Does that make sense?
Yeah, no, it does. I think that's a good universe of like the entire space ecosystem, and I think it's awful for people to kind of just get that lay of the land, you know. But you kind of came up with that thesis and then that kind of was the scaffolding for your framework to launch a fund. And and I think that makes perfect sense. So when people are kind of thinking about the same process, right?
They have an Angel track record, they've they've built communities, they have a they have an expertise. What advice would you give to somebody? In terms of. Putting that together, right? So you you know, let's say for example, you you worked in accounting for a long time and you really understand financial systems. You really understand, you know, CFO tech, and that's your that's your niche. So you're you know you want to build a fun thesis about that.
So how how can other people take an interest or an expertise and and build a fund around that? I guess what would be the first steps that you would advise somebody to do? And I'll kind of tee it up a little bit with an interesting post that I saw. So obviously everyone thinks about portfolio construction, but there was recently like a tick tock video that I saw from a fund manager that that I think raised like 20,000,000 for her fund too, and she did a whole post on LP construction.
So it's pretty interesting. I mean, most people do this, but I think it's also just a good exercise to really map out if you have a $5,000,000 fund. I think it was Nicole Wishoff, so she closed. Think her second fund, correct? So she she initially did a $5,000,000 fund and she did a really interesting post. I shared it, but it was like, you need to think about LP construction.
So model out, hey, you know what, like to close your, you know, starting out small, you know, to close your $5,000,000 fund, you're going to need probably like, you know, 10 to 20 angel investors that are that are writing these size checks. And then, you know, maybe a stretch goal is to possibly build a relationship with the family office that can probably do a $2.50 ks to $1,000,000 check. But you want to map that out, right?
Because those checks are going to add up to that that 5 to 10,000,000 fund one. But if you don't see that math adding up, and it doesn't seem realistic, that's a good mental note for you. So those are like two things that you could do, but maybe tell us kind of how you map this out in mind. Obviously you had the vivid vision, but then tactically, You gotta think about fund admin.
You gotta think about, you know, relationship management, building a pipeline, closing capital, kind of all those things. There's so many different components and and things that need to happen. But somebody that's just got one skill set, they have a thesis. How do they turn that into an actual institutional fund and start going about it? Yeah, it's a great question. The first thing was that, is a personal thing.
I was fortunate to get married to an individual that thought the same way that I did. It was really about risk and really about consistently pushing oneself to be the best version of themselves, and still with a significant focus on monetary development and building a generational wealth for future families and so forth. So that was really key in initial stages to say, I have support at home to be able to go and do this. This was important. Because that is the most trusted advisor.
She's the most trusted advisor in my life. The second was then going and executing, which was thinking through what that vivid vision exercise, that was my first step as I developed the vivid vision, was three pages of what I thought this fund was going to look like.
And then my third step was I went to one of the closest mentors I've had since I was about 21 years old, who just coincidentally happens to run one of the largest climate tech funds in North America and sought his advice on what I was doing. And really started with, okay, what is the persona type of the LP that I want to be able to have there? Who do I want to talk with?
Because the key for me is not only making our investors significant amounts of ideally above average returns, but also there's a journey involved here, which is I don't want to just work with anyone at this stage in my career. I believe that what we have and the team that we're building is very unique. I believe that we have to protect that uniqueness. Working with my mentor, I started to isolate just the types of value sets that I needed to look for when I was chatting with LPs.
It wasn't just about whether or not this individual was part of a family office or part of being a high net worth individual or an operator. I read that post and would 100% agree with the breakdown of that. I think it was very beneficial. Thank you for sharing that because I saw that from your post. I think that was really great. I think portfolio construction needs to happen that way.
But when you break down family offices, high net worth individuals, operators, fund of funds, venture, family and friends, which I think these are all the categories that she had listed. I then have a second category, which is who do I know there? Is this person being referred to me by someone who's super close to me, who will protect me in all areas of business and wants the best for me as a human being first. Because again, am on my first fund.
So it's very important for me that the first LPs come into this, they support me mentally. They support me from a tactical perspective. You talked about the operations of the fund. Unfortunately, again, my mentor is now in his third fund, he has a huge team. He has coached and explained the idea of intimate meetings, networking, building a list of being able to get referred to entries.
So when I have the categories of investor types, I then have a list of who do I know that's going to refer me to that individual. And then what is the due diligence I'm actually looking to do on that LP potentially? Because again, I don't want to take money from anybody. That's really important because I want to understand that journey.
And as we know, whether you're on the founder side or you're on the emerging fund manager side, if you have a non sophisticated investor who just is on board, that might cause you a lot of havoc down the road from an IR or investor relations perspective. So in summary, the three steps were checking at home, making sure that I've got the 100% support of my family. The second was building that vivid vision and saying in three years, here's what I need, but this is a living document.
And then the third was going to somebody that knows me intimately very well on a professional level, and has perhaps mentored and coached me for a long time, and who I actually want to be like when I get older. Because this individual is just a wonderful human being who has really just done actual really amazing investments that have really systemically changed, I think, climate tech for the good and reverse engineer what my day day to day ops would look like based on, you know, his feedback.
Tell me some stories, you know, being out on the being in market, Talking to LPs, maybe some bad experiences. You don't have to list the names, but you know to to your point, a lot of times it's important to vet LPs. Sometimes there's people that position themselves as LPs that have never invested in a fund, right? So I launched a new program called the LP accelerator to apply. There is a process where you have to like list if you, you know, number one, confirm that you have invested in a fund.
And then number two, like which funds have you invested in? It'd be good to actually get some feedback from those funds and number one confirmed that it did happen. And then you know how you interacted with them. So to your point, vetting is really important. I have a few friends that are super rigid when they look at family offices and LPs as far as like their background, they look up their investing activities.
So I think it's super important to preserve your time and make sure that you don't take meetings, even though somebody positions themselves as that if they're not really invested, if they've never invested in a fund. You know, that's that's one tell, but there are people that are emerging LPs, they they haven't invested in funds. They've invested a lot of companies and you could be their first opportunity to get exposure to the space industry.
And I think that's a great way to lead as far as co investing, but maybe share a couple good examples of how you were able to build those relationships and build trust. Then and then you know, maybe maybe some learnings in terms of wow, you know, next time I'm going to be a little more careful when I interact with LPs because they, you know, they're just not really an LP.
And sometimes there's brokers in disguise of allocators that's just trying to get in the room and solicit all the other allocators that are there. But you know, I'd love to hear any anonymous stories if you got any for entertainment. Yeah, for sure. The first in terms of like the best experiences have been those individuals that have been referred to me. They've also been the hardest experiences because those individuals that have been referred to me have been sophisticated investors.
Let's just say I had a conversation with an individual that's been in sensors for fifteen years. Great person on the value side, integrity side, has access to capital, has an investment track record. Extremely, extremely blunt in terms of just his own expectations of what he was seeing, say, in that sensor market.
And it left me in my first interaction with him, it left me in a positive way, but it leaves you flat footed because there are some investors who are so sophisticated that they truly understand a vertical just infinitely better than anybody else. And when you're starting out, you're asking yourself, well, how much do you know? How are you building your team to ensure that you have the appropriate due diligence and the appropriate technical talent to be able to kind of guide you.
And that is all part of the journey. You know, that conversation early on helped me define out and say, you know what, not only, you know, we need the right due diligence, we want to be known as the organization, the fund that has the best due diligence in space than ever. And it was fortuitous that I ended up, you know, running into Jeff. And the vision of what humanists stand for, I think really resonated with him.
And we're able to kind of work with him and him coming on board now to be able to cement because of that early conversation that our mode is the idea of being the best at due diligence moving forward. So those initial conversations, the first one, because it's being referred, you're in a safe place. You can just have a nice conversation. It's not about pitching, it's about getting to know each other.
And then because that person cares, can get you deeper questions and help you expand on what you need to know, what you need to build within your own organization to be able to come back and be more prepared.
Some of the craziest conversations I've had are individuals who are working for major banks, who are, you know, I remember sitting, you know, on Bay Street, Downtown Toronto, you know, in a major bank in in the downtown area and the individual basically just, you know, stated that what I was saying didn't make any sense. You know, based on his models and his mathematical evaluations of X, it just it just is improbable of what I'm trying to do.
So, you're going to have these complete clashes of how mindsets are and how one looks at investments, how one develops internal processes like investment memos, how one develops their own ability to dive deeper into valuations and due diligences. And in that case, I was just saying, Okay, well, thank you for your feedback.
I actually look forward to having more of your feedback, because I know that there are more individuals that are like you that I would love to have in terms of as a sounding board from an operational perspective. I've gone into family offices where they're saying, You know what, your fund is too small. Why don't we jack it up? That means literally coming out of a conversation going to a mentor saying, This individual said that the fund is too small. We should jack up the number.
So, again, what are you doing as an emerging fund manager? Where is your flag in the sand in terms of what you're doing and what you're building?
And in summary, all of those experiences have allowed us to simply focus in on doing what we do best, which is find the best LPs that resonate with our thesis, resonate with the focus of trying to have an emerging fund that is focused on due diligence as their differentiator, and actually have talent on the management team that has actually built the technology and raise a smaller round rather than go and raise $100,000,000 round and focus on just being experts at that.
And with the belief that the future LPs are going to come for referrals for fun too. They're going to be more sophisticated, but we're going to have their initial LPs that will help us vet the future LPs or institutions. Hopefully that makes sense. No, that's helpful. I think a good technique also is warehousing deals. So what's the balance for you in terms of warehousing deals co investing before the people coming in, you know, with a larger commitment?
I guess, you like to, you know, recommend that to build momentum and have people do a couple small, you know, co investments with you and then kind of bring them in to just get exposure at scale? Yeah, it's a great point. It's something that's been coming up in a lot of conversations where individuals might have their own fund, but they want to be a part of the journey. Language being used in those calls is like, you it looks like you're looking at something.
We would love to look at it with you and love to be a part of that. So 100% from a professional relationship development perspective and also from a risk mitigation perspective, it's something that I would suggest individuals too. Yeah, and I think having a few high level stats just from running, you know, my platform, I've seen that as pretty helpful.
So obviously you wanna wanna call out your focus and then, you know, if you have some warehouse deals, possibly call out a couple top level stats or kind of things to note to highlight. And I think that'll definitely get like their attention and then hopefully have them lean in more to kind of get closer to the closing stage. Have you seen a lot of LP commitments, you know, get reneged and, you know, slow down? And if so, you know, when has that started?
I mean, I've seen a lot of it happen, you know, right around Thanksgiving. So that's why I did my allocator summit, you know, the week before Thanksgiving because I just, I just expect that everything to slow down and, you know, what I've heard, you know, just through the ecosystem is that people have actually reneged because of their strategy. But you know, any kind of macro insights that you've seen as far as kind of the momentum with LP checks? Yeah, I'd concur on that.
I'd say also go a step deeper. It depends on geo. I've been having calls with colleagues other in San Diego, Florida, in a number of different countries as well, that some of those geos, LPs are renagging and some are doubling down on investments that are actually making money and have a line of sight to maybe breakeven or profitability. So I think it depends on the geo.
I think what we're doing is we're reevaluating our targeting or geo targeting, and looking to set up in Q1, intimate events and specific geos where we know the doors are open still and people are looking to still deploy that capital. And tell me a little bit about the ecosystem in Toronto versus Vancouver as far as just where people are investing? Guess is a space community pretty big there?
Do you feel it's more robust in US as far as kind of number one portfolio companies and then also just healthy interest? Canada is a wonderful country to live in. We made a conscious decision to stay in Canada and have our family here. In terms of the history of space for Canada, Canada has a long history in space. The development of the Canada arm is something that we are known for internationally.
We have fifty to sixty years worth of significant amount of engineers and scientists that have been working with the Canada Space Agency for fifty years and so forth. And so you have this history of space within Canada. From the new space economy, we are starting to see organizations like Space Canada, we're seeing privately or now publicly traded companies like MDA Space, We are seeing the Toronto Stock Exchange get involved in space tech.
We are starting to see certain investors just come to actually events and start to learn a lot more. We are seeing family offices of significant tech families starting to invest in space. We're even seeing some family offices who built Canada, who are now being run by the next generation actually investing in space. There's a deal that we did out of Ottawa where we had a pretty well known family office of a family that has been around since 1850.
In their boardroom, it's literally every family member. It's like something straight out of a movie. And so in terms of activity from startups, we're seeing every province start to have an anchor startup who's either been through Y Combinator or some major accelerator, which has given them access to additional funds through equities.
And then also, again, the government and the Canadian Space Agency and large organizations like MDA Space have started to create an ecosystem where these startups in Canada can get access to grants and get access to funding. And that's helping them move the innovation needle and allow them to start developing technology while they are still sorting out their business models, while they are still waiting for launches to take place, and so forth.
I would say that we still need to continue to have early stage investors in the Canadian market space, pre seed and seed. I started and continue to start in the pre seed world where we still need to cut small checks to get people motivated. I believe there is a strong ecosystem of government money that can provide the timeline that's required for this deep tech to get developed. The US is further along, The UK is further along in terms of opportunities.
But when you look at the accelerators like Sarah from Capital, you look at CDL, which is here. CDL has, I think, one of the best space streams in the world. I feel that it even beats Y Combinator space stream. The deal flow is very robust. These vendors are highly technical. Where they need support is they need support on the investor side and the operations side. And so in summary, we are taking LPs across The US and across Canada.
And we are looking for deals globally, essentially at this point. Yeah, no, that's helpful. Well, I'll let people shout out if they got questions. I know we got about five minutes left. I always like to ask if there's been any life lessons. I think you're very fortunate that you got somebody that's a partner to be on that journey with you.
And I think look, I mean, as you, as you grow in your career, and people have, you know, life partners, they want to think about their probably their like life portfolio construction. Yes. It's a life portfolio. Yeah. So it's if you. So who's at the dinner table portfolio is a question.
I even thought about like, you know, as a software product, always thought it'd be really interesting to, to kind of map out, I think I don't, I still haven't seen this and maybe there's some people that are more plugged into like the software tools, but I would say it'd be really cool to see if there's some tool where you can kind of like at a macro view, like map out your life, right? Because if you're, if you're in your mid thirties, you know, you got probably another forty years, right?
So I wonder if people ever think about a road map out like, hey, what's what are the next three years looking like? Am I going to do some angel investing and hope for the best? Do I want to stay in corporate America? Do I want to build my own firm? I think if you really like take a step back that puts things into perspective and you and you road map that out because if you start a company. You know typical companies to get to liquidity, it's about seven to ten years.
So if you really think about it, you only have five chances to hit a home run at a company and a fund is the same thing, right? Most funds go to like fund eight and some people don't live to fund eight, right? I mean, some of these franchises have been around for generations, so so it makes you kind of put things into perspective as far as like your your life's portfolio construction.
Know how much capital do you think as a as a. Family fund right can be deployed overtime and you know two things that while wealth managers are going to tell you is how do you grow your wealth and then how do you protect your wealth? Protecting your wealth is normally done with insurance products and then there's some insurance products that allow you to draw a loan and then that loan could be used. It's you know there's no tax that you have to pay on the loan.
Infinity banking model if you will. Infinity banking. Yeah, so that's kind of been been a big thing and everyone's got different thoughts around that, but you know, maybe some thoughts on just kind of you and your wife or your family's life portfolio construction and how you thought about that to ideate the concept of a fund and then and creating generational wealth.
And then the other piece is just any life advice you know from mentors or you got people from SpaceX that are that are in your ecosystem. So maybe any learnings from those people in the industry or just coaches and mentors? Yeah, the first is try and act like an institution. I want, you know, I pay homage to my family, my mother and father who basically came to the country from a third world country.
And that's what drives me is to be the best version of that version of what they've raised, which is really important, I think. And then if we are, you know, I want Humanis to be the fund in space tech, right? I want it to be the fund that is known for its commitment to impact, sustainability, and technology and innovation. And the vivid vision that you're outlining, that portfolio construction of your life, you have to really dive deeper into the nuances of it.
If you look at the three year and we will release next year the three year vivid vision for the fund, which we'll be transparent about, there are specific specificity, there's specific names of people that we need to be connected with and be a part of. There are other institutions that we believe that we need to be a part of. Moreover, we need to act like the institution that we want to be in the future.
We haven't raised $100,000,000 or $200,000,000 But as far as we're concerned, we are looking to act like a $100,000,000 fund right now, which means we start off by developing the appropriate processes and internal mechanisms to reduce risk, to build efficient and automated operations to ensure our time is being spent wisely.
And then to your point about the portfolio construction, we have specific people in the ecosystem that not only value our time but are giving us additional foresight into the future. And that from my perspective, consider the dinner table. I think that is really the key question that one has to ask themselves. In twenty years, who do you expect to be sitting at that dinner table? Or not to sound morose, but if you pass away and you have a family, who do you want to be their aunts and uncles?
Because this is what happens, whether it be Silicon Valley, or Hong Kong, or Stockholm, there are great leaders who have built great companies, who, you know, everyone talks and they spend time with each other, right? We see Warren Buffett and Bill Gates obviously having spent a lot of time over the years together and their families know each other and so forth. So I'd urge fund managers to really think through who they want at their dinner table in the future moving forward.
Yeah, and it's really good feedback. You and you listed some good books and some posts. I'll throw all that in the notes as well. But this was super helpful. Really appreciate you being generous with your time and, hope you have a good, you know, holiday weekend. Yeah, thanks so much. I appreciate that. Yeah, it was a lot of fun. Thanks a lot, Jason, and, we'll catch up soon. Thank you.