(upbeat music) - Welcome to Swimming with Alligators. - The VC podcast from the LP perspective. - With your hosts, Alexa Benz. - And Ernest. You ready? Let's dive in. - Today on Swimming with Alligators, we have Derek Tang, Deputy Director of Venture Capital at I Bank, California. Derek was appointed by Governor Newsom to lead California's first public venture fund for underrepresented fund managers. Entrepreneurs and climate justice investments. Derek has a rich background in climate change and investments in both the public and private sector. Derek is coming today to share with us his approach to investing in underrepresented fund managers and giving us a perspective on how fund managers should interact with government as an LP. Derek, thanks so much for being on the show today. - Thank you for having me here. - So Derek, you know, I went over and could have put in a lot more within your rich background of all the things that you've done. Could you just walk us through your journey to being an allocator in venture capital? - Yeah, of course. A rich background is a nice way to put it. Right? I would say nonlinear or circuitous, but it got me to where I am. So in terms of venture capital, I think I kind of got into it like two different times. I started as a chemical engineer. So quite technical working on climate change technologies. But earlier in my career, I wanted to sort of run my skill set beyond the purely technical. So that's how I sometimes managed to join a fund of funds only shortly after learning what a fund of funds was. And I think it was helpful, you know, like growing up in Silicon Valley, or at least I tell myself like it was absorbing what it was like to live in BC land. I don't know that's quite true, but it was definitely a big education with a lot of context working out of fund of funds but investing in where those top tier name brand, Silicon Valley, BC firms and beyond. But after working there, I transitioned to the public sector. So really most and really the second half of my career has been working with government or in government, especially in the context of climate change, but with a focus on increasing access to capital, increasing access to resource for climate startups, especially. So through that work, I was still working, you know, with BC and with co-investors, but more at an arms length. That's really with this role now that I joined just over a year ago, where it feels like a rejoining of BC, but as a different person, having that prior BC as a foundation, but really that public sector work and bringing those two aspects together. But still with that through a line of binding ways to increase access to capital for entrepreneurs at the very center. - With that perspective of kind of the public sector, how has it really informed you now going back into venture? Like, what do you think you've learned or unlocked that could help, you know, within kind of like the things you're thinking about with ROI of both like, not only returns, but impact? - Yeah, I think it's the whole difference really. You know, a lot of the fundamentals of venture investing, especially fund investing, haven't necessarily changed in terms of the types of things you might evaluate in a diligence. Like people say, it's about underwriting people and you're really looking at the team first and foremost and then kind of extrapolating from that. So that part hasn't changed. I think it's about how you apply that. And for government, for a public venture fund, I think the main reason I'm in this is because I think there's a lot of how government has funded innovation and how governments should fund innovation that has really encapsulated in the industry of venture capital. And I think, so to just like give some examples of that, I think the traditional view of thinking is that government funds innovation and like really basic fundamental R&D through grants because it's for the public good. And then the result is that we create things like internet and GPS and these things that are great and they're free. You know, they're free in terms of like open use of technology, but then in terms of return multiple in ROI, it's a zero X return, right? Like it's grants are by definition guaranteed zero X. So then it ends up being the private sector. These companies that develop smartphones using these technologies that make the literal trillions, right? What ends up happening is we socialize the risk of funding innovation, but then privatize the rewards. And I think in many ways, just the design of a public venture fund itself is an equity project because the government is not a separate entity. It's the public. We are I as part of the state of California and representing the 39 million Californians. So the more profit we make as this program, the more reward there is for the public to make up for the risk that we have collectively taken in funding this type of innovation. And by the way, these are not my ideas. A lot of this is influenced by an economist named Mariana Matsakado. And a lot of her work has really led my work and my perspective in working in the public sector. - It's an interesting trend, right? That I think a lot of VCs are looking to piggyback on some of this public grant money, particularly in climate. But as it relates to healthcare, there's other areas where there's plenty of public grant money. How do you feel about that strategy? - I mean, I think I, all power to them, right? Like it's you, there is definitely a need for non-dilutive funding for companies to scale up. But I think it's not, you know, I wouldn't blame them, it's not their fault. It's more of like a broader social societal discussion we need to have. And really about, I think the narrative and reputation of government. You know, government is not seen as a good investor. There's a lot of discourse about let the market do its thing, government is there to fix things. But then if you do step back and start to work at some numbers and compare, like what was the cost of these different types of bailouts? What, how has government performed when it does invest? I think it does another example in the importance of narrative, especially in climate. We think about Scholinger. So Scholinger is this one example of a clean energy investment that the government guaranteed with a loan guarantee. And it was like highly public. President Obama went there for the factory tour and everything. And then shortly after that, it went bankrupt. So then all the narrative was run, oh, look how much money the government lost, of taxpayer money by investing in Scholinger. But that, Scholinger itself was part of a much larger portfolio of loan guarantees. That historically actually outperforms many types of public security investments. Even when they created the program, they, the Congress on both parties expected losses. I was, it was designed to take these riskier things, but it ended up actually making money for taxpayers. So then this lack of like portfolio narrative on what the government was doing really made it so that the narrative ended up being incomplete. So I think, you know, there's always gonna be, I think a place for grant funding and basic research. But to me, it's more about just having, changing the framework and how we view the public and private sectors working together. I think especially when it's around mission-driven work. And mission-driven work doesn't mean that it's not also profit-driven. They're not mutually exclusive. I think finding those areas of intersection are the areas where that collaboration and those partnerships are going to be divergists. - That's such a helpful tangible example. Are there others you can share of misconceptions that you find yourself correcting either your compadres in venture or the general public? - Yeah, I mean, people in general, I think in this country more than other countries, like in Europe, for example, people don't expect government to be part of VCs. So that's a bit of a surprise. And honestly, in California, we haven't had a public venture program like this until last year. But then with, so our source of funding is from the federal government. That's part of a $10 billion program called the State Small Business Credit Initiative or SS, DCI for sure, it really rolls up the tongue. So that is kind of like a misconception because most people don't know that exists. And that's starting to change now. But it wasn't really designed as a venture program in the first place. There's like a lot of government's not, never really been very good at marketing or outreach. And often because there isn't a budget for those things. And it goes because there's a conception that taxpayers shouldn't pay for the government to advertise. But I think that the cost of that is that there's kind of a lack of awareness of government programs. So I think the surprise might be that there's actually a lot more out there in terms of how the government is playing in the private sector as a market actor, as a sophisticated investor and as a collaborative partner in ways that might surprise people because sometimes people think about government, they should think about IRS or the police or whatever it is that really made their day worse. And there are many, many more aspects of what government does. - Derek, you mentioned SSBCI and we were talking before we started recording all the acronyms and I get it confused with SBIC. Could you talk about those two programs or if there are even others that maybe weren't originally thought to be used for venture but now are in some ways that states are creatively being a market participant? - Yeah, for sure. Very confusing with SSBCI and SBIC, same letters, totally different programs run by different departments at the federal level. So SBIC, I'm definitely not an expert in that but they also can support venture capital funds. And they've been doing it in the form of sort of a loan with repayments and they recently changed the rules to make it much friendlier and much more aligned with how VC and LP interactions work. So I think that's just been rolled out in the last few months. It's definitely worth looking into if you're a VC. With SSBCI, just to give you context for the California program and many other state programs, our focus is primarily on fund investments. So we're an LP into venture funds but we can also do direct co-investments directly into companies and most states or territories or jurisdictions have similar flexibilities. I think a lot of focus on funds but then the ability to do direct investments. So SSBCI is quite able to do that. And I think it more so than SBIC, enables states to be market LPs or look like other LPs. There are a few additional restrictions and constraints because it is a federal funding. But they're not back considering like in the history of SSBCI, it actually was created as a, mostly a debt and credit program using loans, loan guarantees, participating loans. And actually within treasury, they carved out the ability to do venture capital at all using this program. So there's quite a bit of administrative, like bureaucratic jiu-jitsu to be able to do this in the first place. And that's really why we have some of these kind of weird or restrictions constraints. But I think when you talk to different states that are running their SSBCI programs, really what we're trying to do overall is streamline that as much as possible and translate those kind of the policy guidelines and understanding what the VC market is like to make that process as easy as possible. So with SSBCI, we are able to look as much like any other LPNBC as we can. - Briefly, do you mind touching on what some of those constraints are? - SSBCI, the S and the B, stands for small business. So one thing that is a requirement or restriction on how the funding can be used is that a company is raising more than $20 million in a single round. So as a VC example, if you're raising, a startup's raising a $25 million series B that in those investment rounds, the SSBCI capital cannot be used. And I think, I'm guessing that thinking around that was, if a company is raising more than $20 million, they're not a small business. And that $20 million mark was set about 15 years ago with the first, this is the second version of SSBCI. So the first version of that's when they set that limit, they haven't updated it since then. So like there's no inflation adjustment or anything like that, but it can be really hard to change these things because they're in federal statute. So that's something that we all have to live with now. And what it ends up doing is it kind of forces us mostly into an early stage strategy, which is probably where we would want to be anyway. But then it does create these things that we just need to discuss with farms so that if they are doing a follow on, it's not going to be uncommon for rounds to be on SARS. And so in California, we've come up with ways to address it and we were actually able to sort of fundraise internally from state funds to say, okay, for those follow ons, we can use a different sorts of funding to participate in those because we want to be able to have our PCs be as unrestricted as possible. But not all states have that luxury necessarily, but there's still other other workarounds. But that's one example of how an SSBCI LP might be non-standard. - Are there best practices traded amongst the different state programs? Like I'm just curious because I've heard from other states being other restrictions on how much capital can go outside of companies from that state. - I think to the credit of US Treasury, I think they actually do quite a good job convening the different states. We have, I think on average, once a week or twice a week, different types of working group meetings with the different states working on just venture capital. So the communication with coordination is quite good. Or just you pointed out like different states have different programs and all of that is actually not related to US Treasury. What we found is that for a lot of different states, it's often like an economic development agency in that state that's taking the funding. And that's where there might be some of the additional restrictions on investing only within the state or a certain percentage of the state. So that's trickier because what it ends up doing for the our customer, the VCs is that when they learn one state's SSBCI program, they've learned one state's SSBCI program. So I think the best practice, I wanna say California has one of the better practices there where we're not as constrained and like we can support fund managers outside of California. We just generally need to show this kind of quality to benefit to the state when we make these investments. So it doesn't need to make sense for California, but once we make the fund investment, we don't wanna require or restrict that our fund managers only invest in the state 'cause they should go where they go. But we still have to follow certain restrictions about overall, what allows us to do that is that we have other programs within SSBCI. So there's like the areas of the kind of state-by-state calculations that would inform a state's ability to do that or not. And I'll read this back. California's public venture fund is for diverse managers, entrepreneurs and climate justice investments. What is the purpose of this pot of money these public venture funds? - Yeah, so I think, you know, beyond the, I think the general purpose of a public venture funds, like funding innovation and all that, in California, we have beyond just participating in venture, this mission to really support a more inclusive venture ecosystem. And just to be clear, I think most of the states and territories working on this have a very similar mission of supporting underrepresented small businesses, either through underrepresented fund managers or funds that support those underrepresented founders. I think the idea there is also that we believe our mission is very much aligned to the public interest. And, you know, VC has a lot going for it. It's very much embodied. The California dream, the American dream, that like with an idea, you can really make it. And entrepreneurship is a legitimate path to wealth creation. So because of that, that path should be, the access to that path should be fair. And the people in the California VC ecosystem it shouldn't be representative of the people in California. So it's really that simple. I think where this is somewhere where the government as an LP is particularly aligned with the public interest because I think it would make sense for the industry to look more like the state you represent. - One pushback could be with already so much VC activity in California, what's the need for this program? - Absolutely. I think that was part of the thinking in the first version of "SSBCI" back in 2009, 2010. It was like, there's no need for VC. But I think you just look at the numbers, right? Like even within California, wherever you look, the numbers are not representative of any reality of like when you walked out of the street, right? So clearly the need is still there because left to its own devices, things haven't changed that much. You know, I think in terms of... Like I was first in venture about a decade ago and I kind of came back with a different lens, but then I was actually kind of heartened to see how things had changed in terms of organization and community building. You've got these groups like Black VCs, some of these VCs all raise like just a really strong sets of networks that I don't think I saw before. But what hasn't changed is the dollar amounts or the percentages. I mean, they've changed like a little bit, but really on the margins, nowhere near to again what's representative of California. So, and I think I'm also hearted to see more LPs have this as part of their mission. But again, those numbers and those percentages are still quite far away from where the population numbers might be or whatever type of benchmark you might use. Any type of comparison, then there's still a huge gap to cover. So I do think part of the role of government is to try to cover those gaps. - And I can, from that answer, I can picture myself like as a fly on the wall, seeing like, okay, you got approval, the pitch, the data's there, the reason there, we got the funding. Now you've been, fast forward, you've been on this journey for about a year. What surprised you on just like, where they could be the mission, the market, what surprised you the most on this journey? - I think, again, I was like, I think the good surprises were the organization and the community building. Not as surprised as like maybe like where the numbers still are. But I think one thing I've noticed is that sometimes perhaps the expectation is that a underrepresented fund manager should also have an explicit investment thesis to only invest in underrepresented founders or have like explicit targets related to diversity or something like that. And I don't hold it against funds that have that. I just want to make sure that they don't feel that the pressure is coming from something else or some more now, right? Because our thesis is around backing underrepresented investors with the idea that they are much more likely to invest in underrepresented founders. So by supporting the decision makers, you're giving, really empowering them to make what they think is the best choice. But then there's data to support that that's a really effective way to get more access to capital to ultimately the founders and those small businesses. So then when we do decide to back a fund manager, we're relying on a thesis. And then we want to give them the best chance to succeed, which means not raising any additional or unnecessary barriers that may distract them from what's, what's usually their life passion to do what they do and invest in finding the best founders and companies. I have had the luck of getting to work for one of the very first female GPs specifically investing in female founders, Jesse Draper. And the portfolio had co-ed teams. Like when you look at who is a female founder, every company has people of all gender. And so it's interesting to sort of think of many, she's a solo GP. So she is a female solo GP. But the portfolio is full of fantastic male and female co-founders. It's kind of ridiculous to assume there's going to be businesses built by just women, like Amazonian. - Yeah, there are plenty of businesses that are, right? But then like it doesn't, it's not necessarily a strong investment strategy on its own, to invest only in those teams, just for the sake of investing in those teams. If you have some data, - Eventually you're going to work, eventually there will be a man run onto the team. - Yes, some way. And I think the idea that really I think most people embrace is that the more diverse team you have, the more options you have, like the more things you think about. And there's ways to help that team grow in ways that a more homogenous team might not be able to access. So I think that part, like most people will generally agree with that. And so if that's true, then it's really about backing the decision makers and giving them that freedom of saying like a week, we trust you. You're going to do what you're going to do. - Now we're going to take a quick break to speak with our sponsor. - Next up, we have our industry expert and sponsor, Dave Thornton, co-founder, CEO, and chief investment officer of Festive. Festive provides funding to exercise your stock options. Thank you so much, Dave, for joining us. Who else would you consider competitors, like fund of funds or other indexes? And this is a chance to maybe talk about how you're a little different. - Yeah, the truth is I don't really consider any of the folks that might be on paper competitive to be true competitors. I guess the best like straw man competitor is a fund of funds, in the sense that you can write one ticket and get diversified access to venture. The way that we differentiate from a fund of funds is actually a couple ways. So one is fund of funds tend to have stacked fees whereas we don't. One of the benefits of our sourcing apparatus going directly to employees is that we don't need to pay somebody else for the right to do the sourcing. And so one layer of fees instead of two is a big deal. Another is that fund of funds tend to have higher look through concentration than investors are aware of. So like you may be invested in 10 managers and they're probably all in stripe. So you have a significantly more concentration in a couple of the names than you all end up wanting. And yeah, those are the two largest differentiators. The other, assuming that we pop up the new business model is that we're gonna be able to be programmatic and present you something rather than be reactive to whatever deal sourcing happens through the funds managers. - Yeah. And on the LP side, how do fees work? - So historically we've done two and 20 funds with an 8% preferred return hurdle. We believe that the upgraded to business model where we're gonna be able to curate these portfolios and drop them into funds is going to be, we're gonna be able to access things in a better way and more efficiently and we're also gonna be able to drop the fee structure. So we haven't decided what it will be dropped to and a little bit of that is to be determined by some research that we need to do, but it'll be cheaper going forward. - And the fees for the employees? - So for the employee, we're just buying shares from them until they have the amount of money they need to do their full exercise. There is a commission that's charged by an affiliated or a wholly unbrokered dealer that we use. But at the end of the day, the way that the employee conceptualizes the fees is they're selling some subset of their shares in order to own the rest. And there's no set number of shares you need to sell. Like you might need 100 grand. And if the current fair market value of your shares is $5, then we might need to buy 20,000 shares. And if the current fair market of your value of your shares is $10, we only need to buy 10,000 shares. And so there was no set split with the employee. - What are some of the sort of trends you're seeing from folks who are coming to you interested in selling? - Interestingly, all right. So a couple of things. One is we will typically buy at the existing, which is a price that every single ventureback startup will have associated with its common stock at every moment. And so we're usually not price setting independently. And relatedly, we have a volume business and it would be impossible for us to kind of sit down and analyze each individual company on the basis of whatever the management can produce for us. And so like it's a fairly take it or leave it off for because of the business model. However, I can say that fair market values have dropped in the last year and a half or two years. And mostly it's just reflecting that we don't live in the super high times anymore. I would say that across the board, they probably dropped by about 50%. But late stage companies have had their fair market value dropped by quite a bit more than 50% and earlier stage companies by less. The dynamic there is mostly that there were some venture capital firms that were really bidding up the late stage companies during the go-go times. So like SoftBank is a well-known example and maybe Tiger. And those companies had further default to correct. Thank you so much, Dave, to start working with Vested. You can please email investors@vested.co and mentoring this podcast. And now back to our LP interview. - In the beginning, we spoke about the fund is on focus on diversity and climate as well. Could you share like kind of what, how do you envision the breakdown percentage wise? Is it, is there a specific kind of metrics of like, hey, we're gonna have this half is gonna be for diversity, half for climate, or is it more opportunistic? - Yeah, there isn't a specific allocation. So we have 250 million overall to deploy. So within that, we actually do have an allocation about 200 million of that for fund investments. And then the remaining 50 million for direct co-investments. And then with those direct co-investments, they're likely gonna be co-investments into funds that we're in. It doesn't have to be the case, but that will be much more opportunistic based on GPs that we're familiar with. And then when there's co-investment opportunities, we have a pot of money for that. So we don't have a specific climate allocation. So overall, we're a generalist program. How we build climate into it is that our mission has, there's basically four ways for a fund to be eligible or qualify for a mission. So one is that the fund management themselves is underrepresented. The second is that the fund has a focus on underrepresented founders. The third is the fund or is focusing on underserved regions of California. So areas that don't traditionally get a lot of VC in terms of geography. And then the fourth is that climate justice and climate equity aspect. So how it ends up playing out is that if you don't meet any of the other criteria that you're a climate justice fund, that would still qualify for a program. And any one of those for criteria, you don't have to check all the boxes. Doesn't matter how many boxes you check, but climate is one of the ways to qualify. So it's there, but there isn't a specific allocation around it. - Derek, what's your definition of climate justice? - Yeah, climate justice to me is different, interesting from just climate tech. So they're both within climate change and how to address it. But climate justice has a focus on the people that will will be and are already the most severely and disproportionately impacted by the effects of climate change. And it's trying to address how to bring about equitable solutions to address that disparity. So things like renewable energy and batteries, definitely critical to address climate change overall, but then climate justice would frame it in terms of who's benefiting and who's being burdened by given technology or innovation. - Is there an example you can share, maybe an investment that-- - Yeah, I think it's, I honestly think it's kind of rare to see this in VC. And the example I always end up giving feels kind of outdated now is the company BlockPower, where they have the fundamental technology of heat pump or the types of materials you need to weatherize at home. They have, I think aspects of AI to identify buildings that are really ripe or ready for decarbonization or electrification. But then there's this model, the purpose is around bringing energy and cost improvements to tenants. So people who don't typically have power to change their environment of where they live. So they also develop a financing package to make it really easy for the landlords to take on these projects. And they also bring in aspects of local workforce development to implement those projects as well. So it's technology focused, there's hardware and software, but then the business model focuses on the tenant themselves and how to bring them both financial and environmental benefits in terms of literally cleaner air to breathe. Solving that by creating a financially attractive package for the landlords and who are then intentionally or not passing those benefits onto the tenant. So I've been using that example a lot. I think there's more out there. So if there are people, climate justice, funds or companies listing out there, please like prove me wrong and tell me how outdated I am 'cause we definitely wanna hear about those examples and especially in the context of VC funding. - So climate has, you have a lot of experience in climate and it's been hot as of late, maybe currently not as hot as it was a year ago. What do you think is unique about investing in the space today? - Yeah, I think a lot of like more frontline investors can speak more directly to the VC landscape here. Maybe I'll say that the thing about the climate change crisis is that it's extremely time dependent. So everything is about how quickly we can act. So that's gonna make every time period quite unique. And I think we're at the point now where there's greater recognition and acceptance of the various different types of funding mechanisms, both diluted and non diluted that many climate startups will need to be able to access to scale. But it's also, I think there's ever increasing clarity that around the type of markets that are going to be disrupted in really major, major ways. Now people use the word unprecedented a lot. I think climate change might be one of the most things that one of the things that we really don't know what's gonna happen to our systems and what's gonna change. And like everything, the scale of everything we're talking about is gonna be so much bigger than anything we've ever seen, I think. So in those cases, in those really major shifts, there's gonna be a lot of wealth creation, which is great, but I don't think we really succeed if we don't make sure that that wealth creation happens in an inclusive way. - We've talked a little bit about the, it sounds like three out of the four focus areas. The one I'd love to learn a little bit more about is the geographic diversity or like where our other VC capital is not going. - Yeah, I think again, it might be hard to find a whole fund dedicated to this. But I think we've seen promising examples of at least four photo companies within funds that are finding these companies, like really, really good companies that are just not in the major VC hubs. So the idea is like, it's not all about Silicon Valley or LA or the major metro areas. I think to the extent that, again, we're representing all of California. It's a big place, lots of different regions. A really vast state university network. So I think there's a lot, and we see this on a national level as well, which local economic development efforts. So I think it's similar to that within the state. And there might be good opportunities on the direct co-investment side to find these types of companies in the Central Valley that are working on really interesting things that have really tailored solutions to the local economy, but have a really strong opportunity to scale beyond that as well. 'Cause ultimately, I think all this is a matter of law, local economic development, good paying jobs, and just bringing the aspirational qualities of VC to small businesses no matter where they are. - No, it's like agriculture or water. We have plenty of forest fires to address. There's a lot. - Absolutely, yeah. So again, I think it'll be quite feasible to find that too far in terms of an underserved region. That's also finding really creative solutions to address climate equity, climate justice. - Are there other things you find yourself just explaining to people that we would all be lucky to hear from you, given that you've got this unique seat I mean, you've got the Horsley Bridge training and now the public sector perspective. Like, what else do we get wrong? (laughing) - A lot of, and we've talked about aspects of this, but I think part of what we're trying to prove about is kind of goes back to our metrics for success as well. We're trying to make money with this. And again, feel weird if you think about or to hear government talking about making profit. But the way we've designed this program is it's an evergreen program. So as we make VC investments, all the returns go back to this program for further reinvestment in the same mission in inclusive VC. So we do have this like kind of goal in our heads to approach it from two or to 15 million today to a billion dollar fund over time. And I think it's really important for us to, you know, I see a lot of overlap between us and like impact investors. I think that the term impact investing can be kind of a loaded term. And we wanna make really clear that we have this mission and we're looking for those top tier market superior returns that venture is associated with. And that they're not mutually exclusive things. I think if we're seen as concessionary in any way, I think that could actually hurt our mission because we're saying words, you know, that there's a cost to having a mission around inclusive investing. I think it's quite the opposite where inclusive investing means that you are finding differentiation, right? Like literally differentiating the deal flow and alpha is generated from that kind of differentiation. So I think it's important to prove that we can do both, that we should do both. That inclusive investing is a means to generate better returns. And I think that various audiences have different thoughts on that. And some of these do have a more of a concessionary impact focus and I think there is a place for that too. But if you're a VC talking to us, just know that we care about the return profile. Like that's really important. And it's not, it shouldn't come at the expense of what the mission is. - Derek, how can fund managers get engaged with your program? You know, what's the best process? - Yeah, so that is where the disclaimer comes in because we do have Cambridge associates as our partner. So they lead all of our diligence. And so if you could just go to the research for iBank VC, you'll find our website. It's a really simple process. You just send your pitch deck to the email address there which goes directly to the Cambridge team we work with. So we've got $250 million that we're really trying to deploy in the next three, four years. So we're probably one of the most active alligators out there right now 'cause we're looking for all new managers starting for the portfolio of zero, currently there's two fund managers in it. So lots of new funds. And then so based on that, you know, we're looking to write five to 10 million dollar checks in these funds, which means the fund sizes that we're looking at are in the 50 to 250 range. So that's kind of our sweet spot. I think things can evolve over time, but based on some of the intricacies of how our federal funding works, we do need to get it out sooner. And then the idea is that with this ever-being structure as the distributions come in, we grow our base to work with and we also grow our flexibility in the types of funds we can support. But right now that's the focus. We do have a lot of overlap with other these are kind of emerging manager initiatives and the universities that they're working at. I know some can do smaller and I know that's a point of like complaint for a lot of fund managers for sure 'cause it's 50 is a lot, right? But we do have to start somewhere and right now deployment is a big priority for us as well. - Any last thing, last parting thoughts for our audience of GPs and allocators? - I think just to reiterate that we are in business, you know, we're very active allocators. So come talk to us for both GPs and LPs. And not only are we in business, we're also here to change the way we do business in VC. So to try to work toward this idea, I'm not always doing things the way they've always been done. So if you share that vision, please, let's find a way to work together. - See you later, allocator. - After portfolio tile, investing with a smile. (lively music)
