$100M for infinite recycling, Telstra exits VC & Canva's ESOP clauses

0:00 Will Richards: You're listening to a Day One FM show. G'day and welcome to the Startup Retro, a weekly show where we help you level up on the Australian startup ecosystem by giving you an insider's view on Aussie startups and venture capital.

0:15 Gemma Clancy: The Startup Retro is brought to you by Day One, the podcast network for founders, operators, and investors.

0:20 Will Richards: I'm Will, and I'm joined by my co-host Gemma.

0:23 Gemma Clancy: In today's episode, we're gonna dive into the top news events relevant to the startup ecosystem that happened over the last week., as well as last week's startup raises, including a huge $100 million deal. And Will's also going to interview Kim Hanson from Cake Equity and dive into the slightly controversial topic of those ESOP agreement clawback clauses that we saw in the news last week. We're also going to give you a super handy resource from the Rampersand team for founders looking to raise funds. But first, let's jump into the top startup news headlines of the week. And the top headline that caught my eye, because I can be a little bit of a policy and politics nerd, is the news that the Future Made in Australia legislation is being tabled in Parliament next week. And I think all eyes, especially across the startup ecosystem, are going to be on that legislation because I guess the core of it is that we're going to get a little bit more detail around kind of how that policy or the act is going to work, and also give us an idea of how the government's actually going to make decisions around how they're going to allocate those funds.

1:25 Will Richards: Yeah, how big is it? Because it's, it seems like it's a pretty big amount of money. Like, what are we, what are we talking about here?

1:30 Gemma Clancy: Yeah, I believe it's about $22 billion. So just a, just a small little bit of cash there. Pretty big deal. And I think so far, really, the Prime Minister in particular, he's really been highlighting the investment that it's going to drive into renewables. Because from a political standpoint, we're seeing obviously the government really want to drive the conversation around the energy transition. But the startup ecosystem's hoping that that money going to be distributed into industries outside of renewables as well. And it was kind of cool to see that the PM this week, he was saying things around AI and robotics. So hopefully that's a little bit of a sign that the future Made in Australia fund will be supporting and funding those kind of companies as well.

2:09 Will Richards: Yeah, because when the budget came out, there weren't many specifics around, you know, what's actually happening for startups. Do you reckon we'll sort of get specifics when the policy is announced this week?

2:17 Gemma Clancy: Hopefully. And yeah, there's been a bit of criticism around that. So I think if it's not there, it will be asked for, that's for sure. And I think it was really interesting as well, kind of alongside this legislation which is now coming into play, that there's also a conversation around R&D investment in Australia. So at the same time as the Future Made in Australia Act was introduced, there was also money allocated in the budget to a review of our R&D system. And I've read an interesting article from Innovation Oz this week which was highlighting some things that Dr. Doug Hilton, who's the relatively newly appointed chief of the CSIRO, was saying around kind of his vision for how the R&D system in Australia should be revised. And the crux of it was essentially that he thinks for, for projects where it's going to take about a decade for there to be real outcomes, we need to have a lot of collaboration. We need to have hundreds of researchers working on these things, not having grants allocated to single people or single teams. We need to have it allocated to huge teams of researchers. And I think that that will really underpin some of these investments that might later be made from the government via vehicles like the Future Made in Australia Fund.

3:26 Will Richards: Fantastic. And definitely next week we'll be talking about the legislation in a bit more detail. So one to watch. Two interesting things that really caught my eye as well this week were two new venture funds, or not necessarily new venture funds, but one venture fund in particular rebranding, and that's Telstra's venture fund rebranding to Titanium. It's quite interesting. It's actually a relatively large investor that's been super, super active and The reason it's kind of happened is unfortunately Telstra's going through a little bit of strife lately. So you may remember they cut about 2,800 jobs a few months ago, and this is sort of a continuation of that cost-cutting measures. And basically what's happening is Telstra is getting rid of their stakes in the fund themselves. So it's important to note that Telstra the business doesn't actually manage the money, it's the venture fund itself. So there's a GP that's a separate vehicle. So that vehicle will continue and it'll be rebranded Titanium. And will be continued to be managed. But according to reporting done by Capital Brief and financial reports that Telstra's sort of published and whatnot, they own about 62.5% of the second fund and 50% of the fund 3. And we're pretty sure most of fund 1 has been returned to investors, but it's about $1.3 billion worth of cash that they've got. And there's some pretty interesting portfolios in there as well. So Snapchat was one of them. DocuSign, they took that to IPO as well. Box was another IPO that they had. Farage was acquired, which is, yeah, they've had some pretty good investments. So it'll be great to see that continue as Titanium Ventures. And I think there'll be some pretty big secondaries being sold fairly soon. But Titanium's already off to the races and they've already made their first investment, which we'll get stuck into a bit later in the conversation. And then the second fund is Tenacious Ventures, which is an agtech-specific fund.

5:11 Gemma Clancy: Great name.

5:12 Will Richards: Yeah, very good name. Very good name, especially in this market, because I think you need to be pretty tenacious to to raise money at the moment, but they've just sort of closed a big portion of their second fund. So they've just raised $18 million to invest in, in agtech. And that cash comes from a few different groups. There's quite a few angel investors, a few exited founders, but also large investors as well as companies who, who work in the agtech space as well. So it's great to see a female, majority female venture fund raising their second fund. They're still looking to raise about another $20 million or so. to get to 35 all in. So we'll keep an eye on that, but it's great to see, um, more agtech investment in Australia.

5:51 Gemma Clancy: Yeah, and by all reports at the moment, it's not just hard for startups to raise, it's actually pretty hard for VCs to be raising. So it's pretty impressive to see anyone kind of raising a new fund, and we want to see more. So hopefully we'll be able to report on more in future. And the final headline, I have to include this one because it's about an Adelaide-based startup. And anyone who knows me, I'm based on the sunny coast now, but I'm originally from Adelaide, and so I love to champion my homegrown Adelaide startups. And so, this startup called Space Machines Company has signed a deal with India.

6:21 Will Richards: Can I just ask, what does Space Machines Company do? What do they build?

6:25 Gemma Clancy: So, they build satellites.

6:26 Will Richards: They build machines for space.

6:28 Gemma Clancy: They build satellites.

6:30 Kim Hansen: Okay.

6:31 Gemma Clancy: So, yeah, they build machines for space. Yeah. So, it's a great name. It does what it says on the tin. And they have a cool new satellite called Optimus that will focus on debris characterisation.

6:42 Will Richards: It's essentially cleaning space, right? Like it's going up there and it's working out what satellites are defunct and cleaning them and sort of pushing them back to Earth, so.

6:51 Gemma Clancy: Yes, debris in space is bad 'cause debris can get in the way of other satellites and we don't want things to get in the way of satellites 'cause satellites are super, super important. So Space Machines Company and their new satellite Optimus, yeah, they signed this deal with India, which is pretty important on a diplomatic level. It strengthens our diplomatic ties with India on that front. And it's supported by an $8.5 million grant from the Australian government. It's good to see Adelaide-based space company making their mark on space innovation too.

7:19 Will Richards: Great to see.

7:23 Gemma Clancy: So there was over $122 million of raises announced this week across the Aussie startup ecosystem. Did you have a favorite, Will?

7:31 Will Richards: I sure did. I think on that $122 million, pretty important to note that one startup in particular definitely took a fair chunk of that, but we'll get to that in a second. But my favorite startup this week that that raised some money was the team at Aquila. So we've been following the startup since they were in the Startmate accelerator, gee, probably 2 years ago now.

7:48 Gemma Clancy: Time flies.

7:50 Will Richards: Yeah, I know. I remember chatting to the Startmate team about like who to watch in the accelerator. And these are sort of always like the sneaky, you know, if they can get it right, it could be really interesting. But it just seems so far-fetched that like it just seemed impossible. Anyway, I ended up meeting with the founders and sort of interviewing them and writing a bit of a write-up about their journey. So I've sort of been, you know, personally supporting them for a little while now. It's such an interesting idea, but they're basically trying to create the internet of energy. And by doing that, they're trying to sort of basically create wireless charging technology through laser beams. And yeah, right, it sounds pretty, pretty far-fetched. But I think what I really like about what they're doing is they've made it abundantly clear that they're doing it by sections. So they're not basically saying we're going to build the internet of energy tomorrow. They're going to build little by little. Once they sort of complete a an objective, then they go out and raise some more money for the next one. So we've now seen them raise money, and this is sort of their third external investment. So there was a Startmate one, then they raised $3 million seed, and this is the $2 million follow-on investment. And this is because they've basically just completed the objective of powering a drone, you know, sort of your commercial drone that you might buy from DJI or something like that, from 50 metres away. So they can basically set up a laser beam and charge a drone and keep it up in the air forever now. from over 50 metres away, which beats, you know, previous records, which were 3 metres. So it's really cool to see what they're, what they're building is actually becoming a reality. Yeah. So the funding itself actually came from a new investor. A new investor led the round called Alua Group, but it was also supported by Blackbird and Icehouse, who previously invested in the round as well. And I know you, you do a little bit of work with, with them, Gemma, as well. So chime in if I ever get something wrong, but—

9:33 Gemma Clancy: No, no, they're, they're absolutely fantastic team. Yeah, we've been working with them through Stellar Startups for the last little while, and it's been amazing to kind of be able to send out press releases talking about the amazing milestones that they've achieved. But yeah, we certainly had taken a little while to get our head around the technology. It's pretty challenging copywriting task, writing about a technology that actually, like, you know, pretty much hasn't existed before. So it's pretty cool.

9:56 Will Richards: That's awesome. And they've got some pretty cool trials coming up fairly soon with commercial partners and universities to basically keep pushing it forward. So definitely one to watch. They've managed to smash the goals they've set out so far. I think they're still a little while off, you know, the internet of energy and and having satellites in space that are sending energy all around the world. But yeah, definitely keen to follow them along. Who was your pick of the week?

10:16 Gemma Clancy: So my pick of the week was the big guy. It was the $100 million raise for Samsara Eco, which is one of the biggest, you know, raises we've seen in a little while now. And certainly one of the biggest series, they're calling it a Series A+. There's lots of different, you know, names for these rounds these days. People come up with everything, but this is a Series A+.

10:35 Will Richards: Series A2.

10:37 Gemma Clancy: A2.

10:38 Speaker D: Yeah.

10:38 Gemma Clancy: Yeah. This is a pretty big one. The company's based out of Canberra with the founder Paul Riley. This round has been backed by Temasek, Main Sequence, Titanium Ventures, who we talked about before previously, Telstra Ventures. And one of the bigger headlines is that Lululemon is one of the big backers, and that's off the back of a partnership that they had with Samsara Eco to create, I believe, one of the first actual like commercial products that's out in the market using their technology. So their technology is actually about being able to recycle plastics forever, and particularly those plastics that otherwise have been pretty hard to recycle. And so they have this system that uses natural enzymes to break down these complex plastics into their original monomers. It enables the creation of new plastics as if, you know, they were new without the need for fossil fuels. And so if you're not already aware, right now with most plastics recycling, when you recycle plastics, you can only recycle them a few times before they kind of become unusable, or you need to include new virgin plastics which require fossil fuels to be created in the first place. So this is pretty groundbreaking. It's pretty exciting from, from the perspective of the fact that I think it actually places an increased value on these plastics, and hopefully it will incentivize more recycling. Because at the moment, globally, it's estimated that only about 9% of all plastic waste that's generated is actually recycled. But if now we know that we can recycle plastic infinitely, it's kind of kind of— I think it reframes how we look at plastic as a resource and hopefully increases the value and incentivizes people to actually recycle it because it can be turned into new products forever and ever, which is pretty cool.

12:21 Will Richards: Yeah, it's great. It's really cool to see. And yeah, one to watch.

12:25 Gemma Clancy: Yeah, clearly investors agree.

12:27 Will Richards: Yeah, $100 million.

12:29 Gemma Clancy: So there are also a few other raises this week that we'll cover quickly. So a company called Kleen have got $750K of pre-seed funding for their e-commerce ESG platform. DIRAC, which is aiming to create one of the world's first fully error-corrected quantum computers. And if this sounds familiar, they are directly competing with PsiQuantum, I believe. So they have landed a $10 million Series A round to expand their efforts there. Then Offinder, which has been around for a while, Will. I think they founded in 2012.

13:01 Will Richards: Yeah, so they, they bootstrapped for about 10 years. They've got a really interesting story. They were almost my pick for the favorite of the Favour of the Week, but the founders themselves are a pair of brothers and they're actually related to Helen Toner, who was the board member of the OpenAI board that kicked Sam Altman out. So, she's no longer on that board anymore, but the family obviously has been into AI for a while now.

13:25 Gemma Clancy: Imagine their Christmas dinner conversations. They're pretty deep into that AI conversation. Love to be a fly on the wall there.

13:33 Will Richards: AI-generated Christmas cards and Christmas cracker jokes, all that sort of stuff. But yeah, so their business, they basically, you can analyse documents and extract data from it and put that into your system. So, you know, driver's licence and contracts and all that sort of stuff. I think they've basically seen the horizon of what's coming in AI for probably 10 years now and they've been building towards this. And now that it's a commercial reality, they've just raised their second round. So, this $10 million raise is at $120 million valuation. So, really cool to see to see that happen from a bootstrap business. And they've got some pretty, pretty awesome customers that we all use. So they're definitely powering a few systems that you use every day. And, Gemma, just fresh off the press as well, I've just been sent a press release from, uh, Investable's Climate Tech Fund.

14:16 Gemma Clancy: Oh, really?

14:17 Will Richards: Yeah, the National Renewable Network— that's the startup— has raised, um, $1 million in pre-Series A funding.

14:23 Gemma Clancy: Amazing.

14:24 Will Richards: Which is good to see. So I'm not sure if you've heard of them before, but they help homes and sort of small communities get sustainable. So they, they sort of do an assessment of your house and work out where a battery might go and where the solar panels might go as well.

14:37 Gemma Clancy: Great.

14:38 Will Richards: So they sort of get you off the grid and onto a renewable grid in a small little ecosystem.

14:42 Gemma Clancy: Sounds great.

14:43 Will Richards: So cool to see that. Yeah, so Electrify Ventures was also in that round with a few angel investors too.

14:48 Gemma Clancy: That's amazing. Doesn't get fresher than that. Literally while we're recording the podcast, getting an email about a raise. So that's pretty cool.

14:58 Will Richards: The Startup Retro is supported by Teamified. So I'm super excited to be joined by Simon Lee, the co-founder of Teamified. Simon, I'd love to get your thoughts on the rise of fractional roles for startups in Australia. It's a trend that I'm seeing really start to kick off lately. How do you sort of see that in the market at the moment and what does Teamified do to help?

15:17 Kim Hansen: Yeah, I don't know about you, but everywhere I'm seeing fractional everywhere now. If you actually look at the biggest cost on people's balance sheet is their labor costs, right? And 90% of businesses, it's their labor costs is the biggest cost. And so building remote teams is a great way to reduce the cost, but fractional services is also, you know, if you're a small business, do I need to hire a full-time CFO? Do I need a full-time CMO? We'll hit $18 mil revenue this year and I've still got a fractional CFO and a fractional CMO and they do an amazing job. When you're trying to start a business, trying to find who should I partner with, and having someone that at least a vetted CMO or a vetted CTO is just gonna make it that much simpler.

15:54 Will Richards: To learn more about how Teamified can help scale up your business, head to teamified.com.au. So Jem, last week we saw Canva in a bit of hot water over equity share clawback options.

16:09 Gemma Clancy: Mm, yeah.

16:10 Will Richards: Where basically they're able to take back shares of employees who've left the company. Basically they sort of have clauses in contracts which I think sound very scary and I don't think sit very well with a lot of people. But it's the same callback option that we've seen discussed in companies like OpenAI who've now since removed them.

16:30 Gemma Clancy: Yeah, I read that too. It was really interesting. It made me think like, how pervasive is that? I don't really know. Is that like— I just would have assumed that a company like Canva was following fairly standard best practice for those kind of agreements, right?

16:41 Will Richards: Yeah, it's interesting. Like, it's definitely more common than you think, the sort of open source contracts that you see online, you know, a few of the big VCs like AirTree have them available for all founders to download.

16:53 Gemma Clancy: Mm.

16:53 Will Richards: They actually include them. So, you know, a founder who's new, who's never sort of been in this world before or is just taking advice from a lawyer might just send them that as the template to use. But it basically just means that a lot of these startups that are getting founded or using these resources online that are sort of free for everyone and get recommended all the time have these sorts of clauses. So, I think it's a really interesting topic and it sparked a pretty big debate. And I know I'm out of depth because I'm not a lawyer. So I decided to call on a friend who plays in the space a fair bit, Kim Hanson, the co-founder of Cake Equity. And Cake is, they basically do this for every startup in Australia and going global as well. They help manage equity cap tables. So Kim's a perfect person to have on to discuss this and get his opinion and thoughts. Super excited to bring Kim Hanson Jason from Cake Equity on to chat all things ESOP and equity. There was obviously a bit of news recently with clawback options coming from a particular startup, Canva, but I think it's, it's something that isn't at all focused on, on them. It's something that exists all across the startup ecosystem. And I, I sort of thought to myself, who's the type of person you want to, to bring on to discuss this? And Cake Equity is an absolute no-brainer. 11,000 companies use Cake and they're currently managing 135,000 stock option plans in 50 countries across the world. So Kim, maybe do you want to introduce yourself and, and say a little bit about what Cake Equity does as well?

18:17 Speaker D: Yeah, absolutely. I'm the CEO and co-founder at Cake. We're on a mission to use equity ownership to accelerate startup team motivation. So it's really all about the belief in that, that team and what they're capable of. And you put that in a, in a startup structure, it's incredible the positive impact they can have on the planet.

18:35 Will Richards: So I think it's good to go back to basics to kick off the conversation around maybe what is an ESOP, how does it benefit an employer, and how does it benefit the employee as well?

18:45 Speaker D: Yeah, startups have the potential to become really big and have a big financial outcome, and we want to see that that financial outcome is true everyone that is part of that journey. You know, obviously the employees are often there, blood, sweat, and tears every single day. Often startups can't compete with the really high salaries of other companies, so it can be a really good benefit to use that to drive the motivation. It's a very powerful tool for startups to have the best people, which is needed to succeed.

19:15 Will Richards: So to save on expensive salaries and help employees basically get ownership of the startup that could potentially increase in value exponentially, they give a little slice of the cake. Is that Yeah, absolutely.

19:27 Speaker D: So it's a way you can give ownership without having to pay tax right away. You can delay that to the future if there's a positive outcome for the startup. Often it's a more flexible, simple structure than pure ownership. You're not officially a shareholder when you have options, which means, you know, the shareholders' resolutions and things where you need to do governance and you have to ask investors to do this and that, you don't actually have to. You don't have as much paperwork. So it's much more Simple, flexible structure. You can define the rules, so you can kind of set it up according to like an ongoing vesting or milestone-based. If you want to drive with incentives to let's hit this big target and everybody kind of gets an ownership bonus. So it's quite flexible to set up.

20:13 Will Richards: I think you raise an interesting point there. So you don't get granted the shares instantaneously as you work there. It's an option and a right that exists over time, which I think is important in the context of this bigger conversation. How long could it potentially take for those shares to actually become real and tangible and the employer actually take advantage of them?

20:31 Speaker D: Yeah, I mean, every, we see crazy growth sometimes in startups, but ultimately they become valuable once either the employee exercises them, which can have a cost attached to it, and then they become a real shareholder, or typically when there is an exit, so the company gets acquired, Or, you know, the startup managed to become a publicly traded company. Typically, that's the point where the shares are worth more than the exercise price, which is the cost for employees to convert them into shares, and the financial gain can be quite significant. But it's kind of like you have the opportunity to buy them, but you don't have to. So if there's a financial, big financial outcome for the startup with the options, you know, all employees can participate in getting a share of the cake, if you will.

21:18 Will Richards: For some employees who, let's say, have worked at a business for years and it's, you know, they've had a good relationship and they completed their OKRs and the company's doing really well, but they've actually now left the business, can there be a period where those shares, you know, aren't actually, you know, theirs yet? They haven't exercised the right, but they're just sort of, you know, in this contract. There can be a state where the person has left the business but still has the option to exercise their rights in the company?

21:42 Speaker D: Yeah, the devil is in the details, right? So it's how the contracts are formulated.

21:46 Kim Hansen: Yeah.

21:47 Speaker D: We are on a mission to kind of remove all the complicated jargon and try and make this super simple to understand, both for founders, employees, and everyone around, because else, you know, a lot of misunderstanding can drive misaligned goals and all of that. But as you're saying, typically one of the things that matter if you're an employee and you've, you know, you worked there the first 5 years and then you left and maybe 5 years after, the startup actually becomes really valuable. One of the parameters in the contract is the exercise period. Typically what we see in the US, it's much, much shorter than Australia. At Cake, we want to see very long exercise periods, especially for the early-stage startups. Again, it's up to each startup to figure out. If we look at startups in general, have a general opinion about every startup is unique, but it's make or break to get the right team as we know, and early employees can have added so much value that it actually made it possible for the startup to continue and become big. And then it's other people that continue the journey, but they were there, they made it possible. And I've seen that in Cake as well with some early employees that left, but they still have ownership. And for those people, I want a very long exercise period. Now this, we are talking also, if you look at a startup, they change a lot over time. So the stage they are, it matters a lot. So in the beginning, you know, you're trying to get to product market fit and you can't be slow. Go down too much. Things need to be ultra simple. And this is where we need really standard contracts because if you screw up a bit too much there, then later you're gonna pay for that. It's gonna be difficult to untangle some of that. Now, in a later-stage company or startup, you're gonna have also more influx and outflux or hiring and laying off people. It's more normal. You might have downturns that is needed to lay off bigger portions of people. And there, you might need to change the rules according to that stage you're at. So we can't really fully generalize what's right for early-stage startups and later-stage startups. In general, it is finding that balance between protecting the company and protecting the employee. There's no perfect there.

24:00 Kim Hansen: Yeah.

24:00 Speaker D: I think we wanna shift as much as we can towards really making it available for the employees without making, you know, huge friction and making it even harder for the startup to succeed.

24:13 Will Richards: When you have startups who potentially come to the Cake Equity platform, because I assume it's, you know, the team's growing, we need a platform to manage our equity, and let's use your platform for example, is seeing these sort of clawbacks in the contract, is that something you see quite common at the moment? Is it a normal thing to see, and do you sort of suggest, oh, maybe don't include those or do whatever you like. Where do you guys weigh into that conversation?

24:39 Speaker D: Yeah, I would definitely say again, if we look at the stages, for the early-stage startups, there's less of that because in the end, the contracts are there so that you don't need to use them. It's more like, you know that things are going to have a way of being solved, but ultimately, I think it's company culture and all of those things that really matter. Now, so for early-stage startups, this is not something that is really needed a lot. For later-stage startups, I think we are seeing some trends towards maybe more US standards. The US is a more mature market than Australia, and it's quite efficient in suing each other, suing companies and employees and all of that, you know? So people are quite scared there. And in Australia, we see with later-stage companies probably pushing a bit more for more governance and more kind of control structures. But I do think that again, it comes back to how you treat people ultimately. And, you know, good communication, transparency, all of those things.

25:47 Will Richards: Awesome. So it sounds like when you're at the early stage, it's all about making sure you sort of trust the people around you, which I think is what it has to be 'cause you're moving so fast. And when it gets to the later stage, that's when you can be a bit more litigious when you're expanding to the US make sure you're protected and those sorts of things. So I think that's kind of reflected in, in the actual reporting we're seeing as well coming out of companies like, like Canva, for example. They're obviously at that stage where they need to be like this. Well, really appreciate your comments, Kim, and your expertise. That's been fantastic. So Kim from Cake Equity, really appreciate it.

26:17 Speaker D: Thank you so much for having me. I really enjoyed it.

26:22 Gemma Clancy: So each episode we're going to leave you in the same way that we actually wrap up our weekly newsletter, which is with a section that we call KaaS, which is of course Knowledge as a Service. I think Will coined that term, uh, when he first launched the newsletter a couple of years ago. And Knowledge as a Service is where we share our favorite startup-relevant read, listen, or watch of the week. So this week, Will and I both landed on a similar KaaS. We usually have to fight it out to pick our favorite one. Often that we end up picking the same one. And this week it's actually one from our friends at Rampasant. covering how Rampersand invests. Will, what did you find interesting out of the article?

27:01 Will Richards: Yeah, I thought it was, it was really transparent actually. So it kind of goes into the way they sort of think about their investments and basically how they assess startups. Not in the sense of what are the metrics that the startup's hitting, but more from a fund perspective. So this is a venture fund who does pre-seed and seed investment sort of talking about what do they need to believe for the investment in your startup to actually make sense for their fund to return. And it's quite interesting because they invest so early and, you know, relatively small check sizes as well, but they can turn that into good returns, which is good to see. So, what I found most interesting about this article is they really go into the weeds of what it's like to be a VC and get sent, you know, 2,000 pitch decks a year and how it fits their investment mandate.

27:49 Gemma Clancy: Mm.

27:50 Will Richards: It's interesting to sort of see, you know, a fund like this sort of open up their marketing funnel and be really transparent about it.

27:56 Gemma Clancy: Yeah, love a marketing funnel as a marketer myself. I saw that, that funnel graphic that they've got in there, and they've got about 5 different stages that kind of break down that funnel, right? And this 'what do you need to believe' component is actually the 4th stage of this overall funnel. So it's just one component. But yeah, I found it really interesting. It's not necessarily talking about you need to hit this certain metric or anything. It's more about their overall way that they think about filtering down from that 2,000 startups that they receive pitches from each year right down to about 5 that they might invest in.

28:28 Will Richards: Yeah, exactly. For a startup founder who's submitting a pitch deck or wanting to speak to one of their investors about, you know, potentially getting investment, it's a great resource to sort of look through and sort of see, you know, where would my, you know, investment or where would my business fit into this funnel? And I think everyone submits a pitch deck to an investor thinking, yeah, I'm going to get an investment here, or, you know, I hope to get an investment here. But it's really important to think about, okay, at the top, you know, do I actually fit the mandate of the fund? Am I at the right stage? Am I in the right location? Am I, you know, similar or close to investments that they've done previously? When I keep going down that funnel, does my pitch deck, you know, answer the questions that they need at the stage? Once I pass that phase, then when I have a meeting with their investors, Am I, you know, answering the right questions the right way? Is it what they want to hear? Those sorts of things. And then it's quite interesting to see that 50% of startups, they reckon, don't pass due diligence once they get to conviction that it's, that's going to fit their mandate and their belief patterns.

29:25 Gemma Clancy: Yeah, it's a really great resource for founders to check out and potentially other investors to maybe compare how their approach to investing compares to the Rampersand team's. So you can check out that resource in the show notes. Thanks for joining us for this episode of The Startup Retro. We would love to hear what you thought of the show, so feel free to reach out to us directly on LinkedIn with your feedback. That's Will Richards and Gemma Clancy.

29:52 Will Richards: And if you've enjoyed this episode, we would love if you could follow us on your favorite podcast player and leave us a review so more people can find us.

29:58 Gemma Clancy: Catch you next week.

30:06 Kim Hansen: Listen to the Unfunded Podcast, brought to you by the Day One Network and hosted by me, tech writer Joan Westenberg. We're sharing the no-holds-barred untold stories from entrepreneurs who have decided to build a business on their terms. I'll be interviewing successful founders and operators on the grit and ingenuity it takes to build and scale independent startups without the support of traditional venture capital funding. Subscribe to the Unfunded Podcast now, wherever you get your podcasts.