Latest / The Inspired Stories Podcast / Servant Leadership in Venture Capital: Inside Toph Day’s Vision for Elevate Ventures

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Servant Leadership in Venture Capital: Inside Toph Day’s Vision for Elevate Ventures · The Inspired Stories Podcast

0:04
Welcome to another edition of the Inspired Stories podcast,
0:08
where leaders share their experiences so we can learn from
0:11
their successes and be inspired by how they've overcome
0:14
adversity. My name is Anthony Cotispodi and
0:17
today's guest is TOF Day. He is the CEO of Elevate
0:21
Ventures, the number one most active seed and early stage
0:25
venture capital firm in the Great Lakes region.
0:29
Recognized as being in the top ten in the US and top 20 in the
0:33
world, Elevate Ventures invest in cross sector innovation
0:38
companies and strives to foster a thriving start up ecosystem in
0:42
Indiana. Under Toff's leadership, the
0:45
firm has helped businesses secure valuable partnerships and
0:48
funding, shaping the future of technology and entrepreneurship.
0:53
Toff himself has been named Indiana's most Influential
0:57
Leader by the IBJ 250 and was honored as Dynamic Leader of the
1:02
Year by the Indiana Chamber of Commerce.
1:05
Beyond that, he's an accomplished best selling
1:07
author, serial entrepreneur and passionate investor contributing
1:12
to sectors like software and healthcare.
1:15
He also played a key role in demand Jump success, earning a
1:19
#52 spot in Inc 5000's Midwest Rankings in 2021.
1:25
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2:09
All right, back to our guest today, the CEO of Elevate
2:12
Ventures, Tofu Day. I appreciate you making the time
2:15
to Share your story today. Thank you Anthony's.
2:18
I'm excited to be here and and excited to get to go deep.
2:21
Let's do it. So you have a lot of waypoints
2:24
in your career path. What first made you realize that
2:28
you wanted to get into specifically the venture capital
2:31
and investing space? So I I never set out to get into
2:36
venture capital. In fact, growing up, I didn't
2:39
even know what venture capital was.
2:41
I'd never heard of it. Will probably get into the
2:44
growing up part a little bit later, but yeah, I, I never, I
2:48
never thought about it. And the way it came about was I
2:52
got a phone call. Well, actually we back up even
2:55
from there. I always say find your, find
2:57
your friend group, your peer group where you can talk about
3:00
anything and everything. Get very vulnerable if you asked
3:04
entrepreneur at cocktail parties, you know, how's it
3:06
going there? Oh my God, it's going great.
3:07
I can barely hold on. And that night they're in the
3:10
fetal position. Not sure they can make payroll
3:12
that Friday. And so I still meet with the
3:15
group and and for 25 seven years or so.
3:19
And Elliott Ventures, the previous CEO was retiring and
3:24
announced his retirement and, and one of our means a couple
3:27
months later, somebody said, Hey, T.O.K, you've talked about
3:29
a lot of these things for that you've been wanting to do for
3:31
Indiana and and investing in companies, etcetera.
3:34
This might be the chance to do it.
3:36
And at first I'm like, no, and I went home that night.
3:40
I laid in bed thinking about I'm like, you know what, I might
3:43
want to take a shot at that. So, Long story short, here I am.
3:46
But what was it that actually transpired?
3:48
Like why then why? Why this approach?
3:51
Yep. So if I go back about 15 years
3:55
ago, one of the companies I I founded was Co founded was
3:59
called Navidar Group, investment banking firm, boutique
4:01
investment banking firm and buying and selling companies.
4:05
And having been an entrepreneur for you know what basically 30
4:08
years, eight companies, 7 verticals.
4:10
When I go to the coast, a lot of the VCs would kind of look down
4:13
their nose at you like where are you from?
4:15
Indianapolis, like where is that?
4:16
They have tech there and they didn't sit well with me.
4:20
And and so I started to develop this, this kind of thesis about
4:25
Indiana called the Nation's Nucleus.
4:28
That's what I named it. I'm like, what?
4:29
We're actually the nation's nucleus.
4:31
And well, if I'm going to make that claim, how can I make that
4:33
claim? And why keep the seven
4:35
ingredients of why? That's infrastructure, talent,
4:37
mission, critical industry, technology, lifestyle, cost of
4:40
living, regulatory environment. And when you look at those
4:43
categories, we have an incredible amount of #1 national
4:48
or global rankings or top five top 10 rankings across all those
4:52
categories. And nobody knows it, nobody
4:55
talks about it. And I'm like, it's, it's time to
4:58
change the landscape like we have it.
5:00
This is an incredible place to start your family, to grow your
5:03
family, to start your business, to expand your business.
5:06
And we produce some of the world's greatest talent, but
5:08
nobody ever talks about it. We just kick ass and that's it.
5:13
So I'm like, we need to get this message out there globally and
5:16
put Indiana its rightful place in the global stage.
5:18
So that's where it started. I end up giving that speech.
5:22
The governor came to sign some legislation at a previous
5:24
business I had and I gave that speech.
5:26
It's like the coming out speech. I've been sitting on this
5:28
thought for five years at that time.
5:32
And now that's morphed into Innovation Capital World.
5:34
And if you don't believe me, just Google it.
5:36
Innovation Capital World, Elevate Ventures will show up to
5:40
the top to the top organic rankings in Google.
5:43
So we are now officially Innovation Capital World.
5:45
We trademarked it. So that's how it all kind of
5:48
came about. And this was a platform to to
5:52
help others. I mean, I've had so much help in
5:53
my life, and this was a place where I could help people at
5:56
scale, help entrepreneurs and families at scale.
5:59
So before we talk about what your investment thesis is, you
6:02
referenced you didn't even know what venture capital was growing
6:06
up. And maybe we would get into
6:07
talking about what it was like growing up.
6:10
So let's go ahead and do that. Let's do a little rewind from
6:13
there and then, and then we'll spring back ahead.
6:15
Sure. So I grew up on a small farm
6:18
about an hour north of Indianapolis here in Indiana, a
6:20
little town called Buck Creek. We had about 100 acre farm.
6:24
We farmed it with 2-3 bottom plows and we were German
6:27
Baptist. So like I always said, how much
6:29
people with wheels, but we'd take a horse and buggy to church
6:31
on Sundays and no TV, no radio, all that kind of fun stuff.
6:36
And I was just always curious, right what what was out there in
6:39
the world. When I'd go down to the store,
6:41
we had a, a place called Meisner Grocery that was probably about
6:45
1000 square feet was our grocery store.
6:46
We had a blacksmith and a green elevator.
6:49
And that's what we did. We we farmed and played
6:51
basketball. And so I didn't even know what
6:54
the Dallas Cowboys and the Pittsburgh Steelers were back in
6:56
the day. But I wanted that color of sock
6:59
because my friends had it. So from a guy that took a horse
7:03
and buggy to church and didn't have ATV in his house to now
7:07
investing in some of the leading tech companies in the world,
7:10
that is quite a journey. You just gave me chills.
7:14
I mean, it's been a fun ride. I'm I'm just a, I'm a curious
7:17
person. I love people and and I wouldn't
7:20
be here if it wasn't for the help of countless other people
7:23
along the way. Just kind of jumping from
7:25
Lilypad to Lilypad. Yeah.
7:27
What was that sort of first big Lilypad jump that you made where
7:31
maybe you rode in a car or, you know, maybe you owned ATV or I,
7:35
I don't know, like what a couple of the big way points here.
7:38
So I, I think life is funny. It's a series of you climb the
7:41
ladder and you fall to the bottom, climb the ladder, fall
7:43
to the bottom as you take steps up, right?
7:46
It's like elementary school, right?
7:47
You got elementary school and you're, you know, at 5th or 6th
7:50
grade, whatever it is for people nowadays, you're kind of, you're
7:53
the king of the queen, right? You're at the top of the class
7:55
and then you go to middle school and you're back down.
7:57
You're a freshman. You're right.
7:59
So, but, but the path was basically my first official job
8:03
was detaching corn. I rose to crew leader very fast
8:07
the second year and because I was bound determined that my
8:11
rows are I was going to pluck every single tassel I was going
8:13
to miss one of them became crew leader very fast and then I got
8:16
the opportunity to put trash in a dumpster.
8:19
So you know, the role was much lower, but the pay was much
8:22
higher. So I did.
8:23
That guy I worked for had a Bronco in a bag phone that
8:26
looked pretty cool. So I decided I want to be a
8:28
commercial general contractor the rest of my life.
8:30
Started a painting company, had 14 employees.
8:32
I paid my way through college to set out to go be, you know, to
8:36
own my own commercial general contracting company.
8:39
I realized later, about three years after college, that guy
8:41
was actually a commercial developer.
8:43
Oh, my God, I spent eight years preparing for something I'm not
8:45
going to do. I had no money, no net worth,
8:48
really. I had a good salary, but really,
8:50
you know, no net worth. So I end up starting a second
8:52
company, a broadband company with a college friend.
8:56
We end up selling at the Comcast and we end up starting three
9:00
other businesses together. Slow down, slow down because we
9:03
just, we just went really fast there.
9:05
You yadda, yadda, yadda it over. The best part You started a
9:08
broadband company from, you know, corn to general contractor
9:14
to How did you start a broadband company?
9:17
So my friends still make fun of me for that today.
9:20
The Amish guy started a broadband company.
9:23
So, but being in kind of construction real estate, I knew
9:28
how to talk to these developers and owners of like multifamily,
9:31
for example. And so I knew I could get the
9:34
contracts with the real estate folks.
9:36
And then when we went out and hired the engineers from Comcast
9:39
and Time Warner, etcetera to build these kind of new age
9:42
systems. So I, I, I knew I'd be able to
9:45
get the, put the business plan together.
9:47
Our promise was we're not going to string cables across your
9:50
sidewalks, and we can turn on and turn off cable and Internet
9:54
from a remote location. So if the rent check doesn't
9:56
show up, you tell us. We flip a switch and the rent
9:59
check shows up. That was our.
10:02
That was your. Pitch our old thesis.
10:04
And so you're leasing somebody else's lines?
10:08
So no, well, we originally started building a head end on
10:11
every single property, but then we figured out how to tariff
10:15
dark fiber with Ameritech. And as we understand it, we were
10:18
on the first companies in the country to do that.
10:21
So we would take RF signal, turn it into light, you know, down
10:24
fiber and then just Daisy chain. So we, we first built this
10:28
system in Ann Arbor, MI and it's actually the reason we got
10:31
bought by Comcast. But we figured out how to
10:35
basically build 1 head end, not have to pay the right of way
10:38
fees and all the licensing stuff that that master system
10:41
operators have to do. And we just Daisy chained our
10:43
signal around Ann Arbor to all the apartments.
10:47
And Comcast had come in and and bought the MSO there, but didn't
10:51
realize they kind of didn't own the market because we had it
10:53
tied up under contracts. We just hadn't turned our signal
10:56
on yet. So that was our claim to fame.
11:00
OK. All right, let's Fast forward
11:02
now because I want to hear more about what's going on present
11:05
day. How would you describe your
11:06
investment thesis at Elevate Ventures?
11:09
Yep. So our investment thesis is, is
11:12
cross sector. So anything it's innovation
11:15
driven. There's a tale of two
11:17
entrepreneurs by Kaufman Foundation.
11:19
And so if you're an innovation driven company, cross sector
11:23
precede seed Series A $500 million Tam and headquartered in
11:30
Indiana, then we want to talk to you.
11:34
Has to be headquartered in Indiana.
11:36
Yeah, it used to be a significant presence as well
11:38
would qualify. But with a new administration
11:41
change, we have to have a headquarters in Indiana.
11:45
And how does the administration change affect because some of
11:48
the funding is coming from the state?
11:51
Yeah. So we're we're, we're, so we are
11:53
a venture development organization, which means we we
11:56
do both venture development and venture capital.
11:59
So a typical venture capital firm will invest in one out of
12:02
100 companies. We invest in about 10 out of 100
12:05
that come pitch us. So kind of taking 10X the risk.
12:09
And then the venture development component is we try to do
12:12
ecosystem building at the same time.
12:14
So the beauty of it is that returns is not the number One
12:17
North Star. It is it is ecosystem building,
12:21
catalyzing an ecosystem across the entire state, startup
12:24
community, startup community, entrepreneurial community,
12:27
innovation community and doing that cross sector.
12:31
And then everything from pre Rev to entry point companies are
12:35
doing probably 5 million and some of our companies grow to
12:39
be, you know, $100 million plus companies, right?
12:42
But that's our thesis. So help me understand again, the
12:45
connection to the government, are some of the funds coming
12:47
from the government, all of the funds, I'm assuming they're
12:50
traditional investors as well though.
12:52
Yep. So we do manage another smaller
12:53
fund for a corporation, but the vast majority of the funds comes
12:57
through our think of the Indian Economic Development Corporation
13:00
as like our partner, our LP, right.
13:02
And those dollars come from both state and federal sources is how
13:07
we invest. Got it.
13:09
OK. And is this model common in
13:12
other states, other municipalities maybe?
13:15
Yep, I would say probably I don't know exactly how many
13:19
states have venture development organizations.
13:23
We are in our situation, we are a private entity, right.
13:26
So we're not a quasi state agency etcetera.
13:29
We, we are a private, think of us just like a normal fund,
13:32
right, a private entity and that has a professional services
13:37
agreement for how we execute all of this work, all the investing
13:41
functions and ecosystem building.
13:43
Probably my guess is half of the states have some kind of
13:47
version. Probably the states are most
13:49
similar to us or like Ohio with jump start and some of the
13:54
things that they have or similar to us Pennsylvania.
13:57
A lot of states, instead of consolidating the capital, which
14:03
is how you get the flywheel spinning and really make a big
14:05
impact in your state, they will splinter up the dollars into
14:11
really small buckets and send it around to a bunch of different
14:13
cities and towns. It's hard to get traction that
14:16
way. That's one of the the Indian I
14:18
did that was really special 15 years ago when LA Adventures was
14:21
launched. Is is density of capital right?
14:26
What metrics can you share with us to show that this approach is
14:30
working? Yep.
14:32
So I'd look at it from two different ways from an economic
14:34
development standpoint and then from a venture capital
14:37
standpoint. So if we start with the economic
14:40
development components, we've created almost 9000 jobs at 2X
14:44
the state wage. We've run a run rate.
14:48
If you think of a fund life cycle of 10 years, we're on a
14:51
run rate of a $6.5 billion impact to the state of Indiana.
14:55
So that comes from those direct jobs, nearly 9000 of them,
15:00
50,000 indirect jobs. So all those have multipliers of
15:03
teachers and and you know car salesman and all those other
15:06
ancillary jobs, restaurants right, the restaurant workers,
15:09
service service teams etcetera. It's like our annual payroll is
15:14
about 325 million. We've invested about
15:17
$194,000,000 in the market, $2.4 billion of Co investments and
15:23
then about 20 million a year in sales tax in in income tax
15:29
revenue. So that's about a $200 million
15:31
run rate. So if you had all those numbers
15:32
up, that's how you get to 6.5 billion.
15:35
And then if you look at the venture capital side.
15:40
So by taking all that risk, the thing called power law comes
15:44
into effect. So if you place enough bets, and
15:47
I'm going to come back to this in a minute with Angel
15:48
investors, if they're listening, this is a really critical
15:51
concept, but but the whole key is the ability to follow on with
15:56
your investments with the winners of the winners.
15:59
And so by doing that, we're sitting in the top 50 percentile
16:02
of all venture capital firms. If you look at the Carta, the
16:05
data that Carta puts out, we're sitting in the top 50 percentile
16:09
of if you look just look at a pureplay venture capital model,
16:12
we're in that top, top 50 percentile.
16:15
So it's like economic development that pays for
16:17
itself. If you look at that, if you're
16:18
from a legislative standpoint, like if I give you a dollar,
16:22
does it equal more than a dollar coming back?
16:24
Yes. And then there's all the other
16:26
ancillary benefits from a pureplay venture capital
16:30
standpoint. So our multiple invested
16:32
capitals, about 1.25 S, every time we get a dollar, we turn it
16:36
into $1.25. From a pureplay venture capital
16:38
standpoint, you'd want that to be two or three X.
16:42
You know, the upper upper echelon of performers is 3X,
16:45
which we could do that too, but then you wouldn't have all the
16:47
ecosystem building, right? The way you build an ecosystem
16:50
is you're betting on lots of jockeys.
16:52
You know, there's a lot of failure rates, but those jockeys
16:55
go on to start another business, right?
16:56
And then that one's successful, they start two more businesses.
16:59
And so we're now really seeing the compounding effects of the
17:04
success of the launch of Elevated Ventures now.
17:06
And what is it that you wanted to say to Angel investors?
17:09
Angel investors, I see a lot of Angel investors that have
17:12
$100,000 and they were going to get into the Angel game and they
17:15
either put that $100,000 into one company or they put it into
17:20
two companies at 1 slug. They've pretty much just
17:24
guaranteed they're going to lose their money.
17:27
You have to put your money into at least 20 bets and you have to
17:31
have the ability to follow on with those bets that win two or
17:35
three times. And we just see lots.
17:38
And this is not just in Indiana, this is all over the country,
17:41
all over the world for that matter.
17:42
But the people that get into the game directly and don't have
17:46
enough capital to make enough bets and then follow on with the
17:50
winners of the winners in those bets, their odds of, of success
17:55
are very, very low. If they're out of the game,
17:57
they're in and out of the game in the matter of 24 months.
18:00
And so we encourage Angel investors, if you want to get
18:04
into the game, get into a fund. So or get into an Angel group
18:09
where you're allocating Korean, you know, SP VS special purpose
18:13
vehicles and putting your money into those so that you can
18:16
distribute your, your dollars however much you have.
18:19
If you got 100,000 or $1,000,000, make sure you can
18:23
get into 20 or 30 deals and have the enough dry powder to follow
18:27
on with some of those winners of the winners.
18:29
That is that it's mathematically that's the only way to get a
18:32
return. Do you have other states coming
18:35
to you asking for help in structuring a similar program in
18:40
their area? We, we haven't had one yet flat
18:44
out ask for us to set one up for them, but we do get a lot of
18:48
calls. There was a study done in 2019 I
18:51
think it was that were the most efficient venture development
18:56
organization in the country. It's we do get a lot of phone
18:59
calls for best practices and those types of things.
19:03
What we've been focused on since I came in three years ago is
19:07
basically building a Sequoia esque, right, Platinum tier one
19:10
level, you'll platform venture capital platform base right here
19:16
in Indiana. And by that I mean all the other
19:18
wrap around things that entrepreneurs expect.
19:20
So anybody can write a check that that's just a small
19:23
percentage, that's 10% of what needs to be done.
19:26
But there's there's how do you bring the right butts in the
19:28
right seats, the right talent, right?
19:30
It's talent and capital. And, and I would say talent is
19:33
more important than the capital. So the right people at the right
19:36
time in that business, you know, toolkits help them get discount
19:39
rates, you know, with various vendors for all the things
19:42
they're going to need workshops. So financial hygiene, data
19:47
hygiene, now jumping into AI and modern technology hygiene, like
19:51
all of these things really going deep and helping an entrepreneur
19:55
get the right resources at the right time if they need to make
19:58
the best decisions. We've we've, we've done a
20:02
massive push over the last 2-3 years to build a best in class
20:06
platform for the entrepreneurs. So I want to hear more about
20:09
this efficiency because as we mentioned in the intro, Elevate
20:13
Ventures is recognized as the most active seed and early stage
20:18
venture firm in the Great Lakes region.
20:19
So what's different about your approach that allows you to
20:22
participate in so many deals and why people are calling you the
20:26
most efficient one out there? Yep.
20:28
So the so that goes back into the the venture development
20:32
ecosystem building mandate that we have along with investing.
20:37
So because we're not measured by returns only right in our
20:43
function, because we're a venture development organization
20:45
that does both venture development and venture capital.
20:48
So think about that as ecosystem building to innovation,
20:51
ecosystem entrepreneurship, ecosystem building and then
20:54
investing because we have that 1-2 punch focus.
20:58
That's what that's what makes us the most active investor in the
21:02
Great Lakes region in one of the top in the country in the world.
21:05
We have two terabytes of deal data.
21:07
So we've Co invested with almost 3000 other Co investors from
21:10
across the globe. We've made, I think we're at
21:14
roughly 1300 transactions with all of those different Co
21:17
investors. And you think about the sheer
21:19
complexity of all that deal making from safe to notes to
21:24
priced rounds to down rounds and bridge rounds, it gets very,
21:29
very complex very fast how we initiate those investments.
21:34
Sometimes we've invested in over the years fund to funds and
21:37
sometimes it's direct investing, sometimes it's investing in in
21:40
someone else's fund. It's, it's all over the board
21:42
the way those have been designed.
21:45
But through all those activities, it's what's made us
21:46
the most active. And that's per pitch book.
21:48
It's not our data, it's it's pitch book data.
21:52
Why have you chosen the particular industries that you
21:55
do Life science, hard tech, product software?
22:00
So basically anything that innovation touches, right.
22:03
So sometimes it's easy to say the reverse.
22:05
What we don't invest in. So our mandate, we we don't
22:09
invest or can't invest in, you know, bricks and mortar or oil
22:14
or gas or insurance other see those are those are some like
22:20
big, big broad brush strokes of what we don't invest in.
22:23
But it's basically anything that innovation touches, right.
22:26
So if you think about some of those from a big a broad brush
22:30
stroke standpoint, you know, software, hard tech, life
22:34
science, you know AG and food, sports tech, etcetera.
22:40
Those are some of the major, major industries at innovation
22:42
touches. And these are all places where
22:44
Indiana, for example, we have the number one valued pharma
22:48
company in the world is right down the road from me here a
22:50
half a mile, Lily. We have the number one pureplay
22:55
AG company, the number two animal health company, the
22:58
number one healthcare systems or #1 advanced manufacturing jobs.
23:04
I mean, the, the list, the list goes on.
23:06
You know, Salesforce or second largest physical presence in the
23:09
world is right behind me around the circle of Indianapolis.
23:12
And so we, we have some major players, major national and
23:15
global players that exist here in Indiana.
23:19
And so it's a natural fit if you think about ecosystems off of
23:22
all these types of companies, it's a natural fit that we that
23:26
we help support all of those. So now I'm going to ask you to
23:29
choose from among your children. Can you pick one or two of your
23:33
investments that you're particularly proud of and why?
23:37
So I love them all, but since you asked I'll, I will share a
23:42
few. So Adranos is, is one of our
23:46
investments and it was solid rocket fuel and motors and they
23:51
sold to Andrel, which is one of the sexiest defense tech
23:53
companies out there today, right, with Palmer Luckey at the
23:56
helm. So we were, we were an investor
23:59
in Adrenos and, and they sold to Andrel.
24:02
And, and so by default, we, you know, we, we have some equity
24:05
in, in Andrel, Adipo Therapeutics.
24:08
So we've heard a lot about GLP ones, but Karen Wurster is the
24:12
CEO of Adipo and, and they're, they're getting, they're still
24:16
somewhat early in their journey, but things look very promising.
24:20
But they're basically supporting healthy weight loss by
24:22
increasing your energy expenditure, like through the
24:26
unique benefits of brown fat. And I find this compelling
24:29
because it's, it's orthogonal to traditional GLP ones, which
24:34
suppresses your calorie intake, right?
24:37
So I'm really excited. I think that's a real game
24:39
changer. And this is going to be like a
24:41
pill or an injection or a patch, OK?
24:45
You know, I'm, I'm really fired up.
24:47
I'm really excited about her company and she's been at it for
24:50
four or five years or so. Still some years away.
24:54
Yeah, several years, some still several years away.
24:56
Pretty interesting. OK, go ahead.
24:58
But it's looking very promising. She came from Lily, right?
25:00
Lily, the talent that they have there, it's just insane.
25:04
And then a company called Frozen Garden.
25:07
And this is when it's near and dear to my heart because I've
25:10
always wanted to drink smoothies but I'm too lazy to make them
25:13
consistently, I guess. I've tried to buy all the stuff,
25:17
the kale and the whatnot, and then it goes brown in the fridge
25:20
and gets nasty. But it it took her a number of
25:24
years to perfect harvesting fresh, you know, vegetables and
25:28
fruits at at the point of harvesting and freezing those,
25:32
but then making the recipes in a pouch.
25:35
And so literally take the pouch, you throw it into a blender.
25:37
You can stick water, almond milk, whatever you want up to
25:39
the fill line and you can make a smoothie inside of 60 seconds.
25:43
And it's legit. There's no added sugars.
25:46
It is. It's the closest thing I have
25:48
found from straight out of the film.
25:51
So basically she's taken the the freshly grown produce, frozen it
25:56
right away, and then mixed it all together, the kale and the
26:00
berries and whatever else so that you're getting your
26:02
nutrition and it tastes good but without the added sugar. 100%.
26:06
OK. And like, I tried messing with
26:08
this for 10 years and when I when she came in and pitched,
26:11
I'm like, if Dill just checks out right, we're in and it's and
26:16
it's awesome. It's amazing.
26:18
Talk to me about servant leadership.
26:20
What does this mean to you? Why is it important?
26:24
You're my customer. So I think that everybody is
26:28
everybody's customer. And it doesn't matter if, you
26:32
know, it's the valet, you know, parking at the office building
26:36
or a restaurant or the, the janitor, the, the, the CEO of
26:40
the largest company in the world, everybody is, is
26:43
everybody's customer. That's, that's what I believe.
26:49
And we should always be looking to serve each other.
26:52
And that could be something as simple as a smile, or it could
26:56
be if you're preparing a bunch of papers for a meeting and you
26:59
need multiple copies of that and people are using 3 ring binders,
27:03
you 3 hole punch them in advance so people can easily stick them
27:06
into their binders. Just anticipating the needs of
27:10
others and trying to deliver value.
27:12
That's what I think that means. How does that show up in
27:17
interacting with your portfolio companies and their employees?
27:21
So I think it's a lot of things that we've built on this
27:24
platform that I mentioned a little bit ago, but but what are
27:29
all the other ancillary things that entrepreneurs need?
27:33
It's so hard starting a company, right?
27:36
And building a company. You've got to be, you know,
27:39
maybe slightly bipolar, manic, ADDADHD, whatever.
27:43
All the words are, all the phrases, all the acronyms, but
27:46
it's just so hard. And So what can we do without
27:51
them even asking for it, but what can we do, what can we
27:56
build to provide them that helps make that next decision a little
28:02
more clear, right. So that's that's how I think it
28:06
manifests itself and that and that's why we went to build that
28:09
best in class platform of all those other ancillary services
28:12
to support them. Tell us about rally largest
28:17
cross sector innovation conference.
28:19
You're the what is it the chief? What's your role there?
28:24
Well, it's another thing I laid in bed at night thinking about
28:27
for a long time in the context of like, you know, Indiana and
28:30
technology innovation. So I don't, I don't really
28:33
believe in sectors anymore. Honestly, I don't we, we still
28:36
will classify things as life science or sports tech or
28:39
whatever. But if I'm starting a company,
28:42
I, I, somebody may put me in a box right in a sector, but for
28:46
that widget, that product, even if it's software, if it's hard
28:49
tech, it often involves 3 or 4 or five sectors in one launch in
28:55
one company. If I'm, if I'm building a, you
28:57
know, something on my wrist, or is it sports tech or is it
29:00
healthcare, Is it software is a hard tech?
29:02
It's all that stuff. And so I have learned.
29:06
So I, I've had eight businesses and seven verticals.
29:10
I will learn more from talking to you than to people who sit
29:14
next to me because you don't do what I do.
29:17
And you're going to have a different viewpoint on whatever
29:20
it might be, right? How to manage people or how to
29:23
get customers or how to do marketing or you're doing
29:26
certain things in your world, they're not exactly the same as
29:29
mine. And those things might be better
29:32
than mine because you're thinking about something
29:33
differently. And so the, the short story with
29:36
Rally is cross sector, disparate stakeholders in one place at one
29:41
time, sectors, silos, those lines are melting.
29:45
And if we don't get out of our boxes, if we don't get out of
29:48
our own way, we will never achieve the greatness that we're
29:51
destined for. And so, and this can be personal
29:54
or business. And so that's the idea for
29:57
Rally, a big melting pot of innovation, cross sector and
30:01
disperse stakeholders. I always like to say it's not
30:03
just the investors and the entrepreneurs that make
30:06
innovation happen. It's our policy makers, it's our
30:10
educators, it's our economic development leaders, it's our
30:12
philanthropist. All these people have an
30:15
innovation, a finger in the innovation pie.
30:18
And So what would happen if you get them all in the same room at
30:20
the same time? And and that's why we started
30:23
Rally. And so somebody who's attending,
30:26
what is this look and feel like? What are they getting from it?
30:29
Yep. So if they're if they're looking
30:33
for if you're a company, if you're a startup, you're a
30:35
founder or a scale up, if you're looking for investors, for
30:38
customers, for partners, perfect place to go.
30:42
If you're looking for ideas on how to grow your business,
30:44
perfect place to go. If you're a policy maker,
30:47
perfect place to go to find people who can educate you on
30:50
policy. You're thinking about crafting
30:52
and passing. If you're, if you're in wealth
30:57
management, great place to go for customers.
31:00
If you're an investor, it's a it's a very economical way for
31:03
you to go see and, and have 101 on one meetings in 48 hours.
31:08
So there's it's something for everybody.
31:09
I had even for personal, I had a lady run up to me in year 1.
31:13
Oh my gosh, it's the best conference I've ever been to.
31:15
Like what happened? And she said I just met such and
31:18
such who's apparently some world expert on cold plunges.
31:22
I don't know, but she wanted to get into that.
31:25
That was really important to her and she met some.
31:28
I don't even know who it was, whoever was there.
31:31
And so it could be anything. We had people who meet their Co
31:35
founders there. There's a local founder who
31:37
needed a technical Co founder, met him at rally and he's from
31:40
Silicon Valley. And so it's just all these, we
31:43
call it collisions, right? We had creative collisions,
31:47
creative convergence. And this year is creative
31:48
curiosity. We're trying to figure out what
31:50
next year is. It might be creative
31:52
destruction. And so it, it's, it's just all
31:56
like, come in with an open mind, think differently, and people
31:59
are just blown away. And for folks who want to learn
32:02
more about it, you can find them online.
32:04
Rally innovation.com. Rally innovation.com.
32:09
Now what you do? Venture capital involves a lot
32:13
of high pressure decisions. Can you think about a story when
32:19
you had a tough investment decision which really tested
32:22
your resolve and how you navigated through that?
32:25
Yes. So here's, here's what I have.
32:32
This is from my, you know, from personal experience and how that
32:34
is carried over to, to here at Elevate.
32:39
I believe in transparency and, and I've always appreciated a
32:44
fast no versus prolonged silence.
32:49
And so I just think people react well when you're just honest and
32:53
upfront. And then then maybe one out of
32:55
100 times is an adverse reaction.
32:57
But the end of the day, you know, companies go through
33:01
difficulties. And so if you're if you're, you
33:04
know, if you have to recap a company, this happens with all
33:07
VCs and a lot of them don't like to talk about it, but most of
33:10
them want to prop up the value on paper, you know, until 13
33:14
years out. But all companies go through
33:17
ebbs and flows. And so when it comes time for a
33:21
recap, right, the company didn't do as well as.
33:24
Recapitalization. Yeah, recapitalization.
33:27
And so let's say on paper that company was going to grow to $10
33:31
million in revenue, but they only got to $4.7 million and
33:37
they need another round. And they're just so far off the
33:40
mark that the previous valuations not going to hold up.
33:47
And you have that difficult conversation and you, you map
33:52
out, you can kick the ball down the road and, and try to raise
33:54
just enough money to survive for four months, but that's not
33:58
going to get you out of the problem where you're upside
34:00
down. So for example, venture
34:02
capitalists when they invest at the next milestone of
34:07
investment, they need to see at least a 3X step up in valuation,
34:12
if not 4, let's just call it 33X or greater.
34:16
Most entrepreneurs don't run the math and understand that once
34:19
you jump on that hamster wheel, you are part of a mathematical
34:23
equation moving forward. And there's no way to jump off
34:27
that hamster wheel unless you want to buy them all out at at
34:30
some premium, which is not going to happen.
34:33
So we really encourage founders to to look forward and then
34:38
build backwards. And so we have had we work with
34:43
companies all the time to help them lead a recapitalization of
34:47
their company or to lead a bridge around.
34:49
But whatever is needed to put them in the best position of
34:52
surviving in the long term versus throwing some some money,
34:57
throwing good money after bad in essence.
35:00
And sometimes those conversations are unpopular with
35:02
other investors because other VCs would probably rather hold
35:07
that value, rather hold the current valuation, even it has
35:14
to stay flat. They don't want a down round
35:16
because then they have to write down that investment.
35:20
But that's not the best thing for the company.
35:23
And so we always try to think of what is the best thing for that
35:27
company to survive and to thrive and and try to make decisions
35:31
from that point of view, because most of the times I'll keep you
35:33
out of trouble. But I've just I found one more
35:35
honest with with entrepreneurs and we literally white board
35:39
out. Here's where you are, here's
35:41
where you said you were going to be, here's where you want to get
35:44
to. There's no path there.
35:46
So the only option is to go to do this, you know, wind around.
35:52
And to do that, we got to make two or three really tough
35:54
decisions here. And this is what that's going to
35:56
look like. Do you want to do that or do you
35:59
want the company to die? It's your choice.
36:02
So in your mind, the decision is let it die or recapitalize in
36:07
this particular situation, recapitalize at a lower
36:10
valuation. You don't see it as a good idea
36:13
to kick the can down the road and try to keep the same very
36:17
similar valuation in that funding round.
36:20
Because the you're saying, you're saying at that point
36:22
you've identified that this is just not sustainable for the
36:25
company. It's just not sustainable.
36:27
And if you kicked it down the road, then the entrepreneurial
36:30
also loses negotiating power. So like do this stuff early.
36:34
Like think, think through these scenarios early and do them six
36:38
months or nine months or 12 months in advance instead of 30
36:40
or 60 or 90 days. Then it's too late.
36:44
Then you're going to get, then you are going to get crammed
36:46
down and the only winner is the investor and you're, you're
36:49
going to get crammed down to nothing and, and nothing good
36:52
happens after that. Yeah, I've got another question
36:55
that comes to mind and it's similar to the one I asked about
36:58
sort of picking from your children, you know, sort of some
37:00
of your favorite investments. But I wonder if maybe there's
37:04
something that you guys have invested in that's an area that
37:07
the general public just isn't aware of, doesn't know is a
37:10
thing right now that at some .0, this could be big, this could be
37:16
a common household thing like like the GLP example, like
37:19
everybody knows the GLPS, right? And and you've got a different
37:24
approach here. But I wonder if there's
37:26
something that maybe would just blow people's minds.
37:29
Like I didn't even know that was a thing.
37:31
Well, there's a company called true essence that is about
37:35
flavors. And so I, I, I never would have
37:38
thought about flavors and, and flavoring.
37:41
But when you when, when, when you try to preserve a flavor to
37:46
inject into to foods or or even to preserve flavor in a, in a
37:51
food, also when you're extracting that flavor, you're
37:56
extracting the water out of it. And they have a method that
37:58
they, they have a methodology that keeps the hydration, which
38:02
basically keeps the original flavor.
38:04
And when you sit down and taste what we all know to be flavors
38:07
today versus its actual origin of flavor, its natural origin,
38:14
it's mind boggling. So that's that's one example of
38:16
a company that is trying to do some really cool wacky stuff
38:22
that's behind the scenes that you would that you would never
38:24
think about. What does some fun?
38:28
Let's talk about your book pillar Based marketing.
38:31
Well, where did the idea come from?
38:34
So the idea came from being frustrated with SEO.
38:38
You know, SEO originated back in the day of the, at the outset of
38:41
the Internet, right? And, and everybody got
38:44
accustomed to keyword stuffing and, and backlinks and, and SEO
38:49
kind of, if we're honest, back in the day was kind of a Black
38:52
Hat kind of a initiative, people trying to gain the system.
38:57
You know, it wasn't authentic. And so anyways, I never really
39:01
thought about it for many, many years.
39:04
But then, you know, I had my own frustrations with marketing
39:06
with, with previous companies, etcetera.
39:08
And I met, I met a gentleman, Sean Schwigman, who was the
39:13
previous CMO and he had kind of the CMONCTO roles at Overstock
39:17
back in the day and was there when it just had crazy growth
39:20
from like 3 million to IPO. And Sean is this kind of a mad
39:28
scientist, kind of a technical marketer.
39:31
But we, but we brought in a couple mathematicians and the,
39:35
the concept was that the Internet that our, you know, our
39:38
smartphones here, that, that we had trained the Internet to
39:44
basically be the human brain. So we brought a mathematician
39:46
that had a background on neurosciences.
39:49
And the, the concept was that we have fed the Internet now
39:53
through our brains, down our arms, out our fingertips onto a
39:56
keyboard, into the Internet, all these words and groupings of
40:01
words and how we think about things.
40:04
And so the concept was if we could basically map the Internet
40:09
and how words are connected to each other then natural nodes.
40:15
Would evolve where these super highways connect and and so
40:20
think about our Interstate systems, right?
40:21
You have your highways, your interstates to get us from, you
40:25
know, from here to San Francisco.
40:27
The fastest route. Well, I could go to San
40:29
Francisco a whole bunch of different ways, but the fastest
40:33
way is for me to jump on the Interstate and start driving,
40:35
right? Or actually, if you want to take
40:37
it up a level, just jump on a plane and fly there.
40:40
And so our whole thesis was could we map out the Internet
40:44
and how the words are connected to each other, how people find
40:47
my website. And so we, we built this, it's
40:52
called pillar based marketing. And so the concept is if, if I'm
40:56
selling a coffee cup, then I would enter coffee cup into this
41:01
platform, my website, my competitors websites.
41:06
And by my, by the way, my competitors might not be people
41:09
who sell coffee cups. It does include them too, but it
41:12
might include Starbucks. And so they're not my
41:16
competitor. But on the Internet, when it's
41:18
talking about mine's share of coffee, they are my competitor,
41:21
right? I want people to find me.
41:23
So basically you put put these words in there and it maps out
41:26
the Internet around you in that cluster, that word or cluster of
41:30
words, that keyword short tail or long tail.
41:34
And it literally would show you this is the content to write for
41:38
how the human brain operates on the Internet.
41:41
And so innovation, by the way, innovation capital world, how
41:44
are we on page one for that color based marketing?
41:48
And it happens like this and. When When was the book written?
41:55
We started writing that. I wrote that with Ryan Brock,
41:58
who is also on our team, and we wrote, we published it probably
42:04
3 years ago. So that means we started writing
42:06
it four or five years ago. And there's a platform, there's
42:09
a website people can go to and use this service.
42:12
What's it called? Yep.
42:14
So so that was demand jump and then demand jump sort of demand
42:19
science. And then Sean also built another
42:22
tool called Co content dot AI. They can go do a version of this
42:26
through Co content dot AI or reach out to Ryan Brock on on
42:31
LinkedIn. So there's probably several,
42:33
several places they could go access it through Demand
42:35
Science, through Sean Schwegmann and Co content dot AI or through
42:40
Ryan Brock, who I think is separate consulting company.
42:43
I was going to ask if the principles in that book were
42:47
still the same today. A lot has changed just in the
42:49
last few years, but it sounds like this isn't your core focus.
42:54
Correct. Yeah, yeah.
42:55
But the principles will exist there because it's, it's, it's
43:00
all math. It's just math.
43:02
Anything but the Kevin Bacon 6° of separation.
43:05
Like connection points naturally follow and it ebbs and flows
43:10
right how it works. So it's not like you can just do
43:12
one done. You're always writing content.
43:15
But if I'm gonna write a piece of content for someone to find
43:18
me, what most humans do is write about how great they are.
43:27
And that's cool. That's natural, right?
43:28
I'm not. That's just, that's natural.
43:31
But gosh, if you could, if you could write your content from
43:36
the context of how the Internet is actually connected with words
43:43
and then tell everybody how great you are once they once
43:45
they get to your website, that's a lot more productive way to do
43:48
it. So it's this idea of identifying
43:51
the right word clouds, if you will, sort of these cluster of
43:54
words together and then string those words together into an
43:59
informative article that will help you rank.
44:02
Got it. Yeah.
44:03
And what we found was, so back to those words we used earlier,
44:06
keyword stuffing, backlinks, etcetera, What we discovered is
44:09
that's all garbage. So like literally we found that
44:14
if I remember the numbers correctly, that there might be
44:16
only 5 to 7 keywords in anyone give an article that would be a
44:21
focus of that article. No backlinks were even
44:24
necessary. That's a big change from how it
44:29
started years ago. Oh my gosh.
44:31
Yeah, yeah. Interesting.
44:34
All right, let's shift gears. So if I want to hear about big
44:37
serious challenge that you've overcome in your life, personal
44:40
or professional, how you got through that, who you land
44:43
leaned on? What did you learn?
44:45
Yeah, So, yeah, most people that I run across when we start to
44:52
talk more and more, they they think I grew up with a silver
44:54
spoon in my mouth and I didn't. I grew up with a dirt clod in my
44:59
mouth, right. I mean, from farming and, but I
45:04
grew up in a very abusive environment, physically abusive
45:07
environment. And, and so, you know, we can,
45:13
we, we can take the bad and, and let that drag us down, right?
45:17
Or we can choose the good. What?
45:19
So the flip side of that is I, I learned work ethic and how to
45:22
think ahead 3 steps. And so I think it's, I think
45:30
it's what we, you know, it's a, it's a, it's a mentality of
45:33
choosing to be a victim or a victor.
45:37
And I chose to be a victor, right?
45:40
And I didn't know how, but people knew what was going on
45:43
when I grew up. And, and so, you know, my 5th
45:46
grade teacher was very influential Missus Rice
45:49
wonderful. She was very strict, but she was
45:52
fair and I had a high level respect for her.
45:57
And so she was very, very helpful.
45:59
She just did it in a very silent way.
46:03
But I but I knew she saw me, if that makes sense.
46:07
In the next person was, was my ninth grade football coach.
46:10
Coach Meneer was very influential and, and you know,
46:15
and would would stand up for me. So I think it's like, it's like
46:18
fine. And then as opposed to, you
46:20
know, my junior high principal that told me I was going to be
46:23
in jail the rest of my life when I was 16 years old and my my
46:27
computer coding class teacher that told me I was a cop out.
46:31
My was it my junior my senior year, while I was in advanced
46:35
calculus right next door, which also was a great gentleman.
46:40
Mr. Chastain was an was an awesome, awesome inspiration.
46:44
So I think the, the, the story of all that is, you know, I, I
46:49
don't know what it's sort of like to grow up in a community
46:51
where bullets are flying right. And so there everyone has a back
46:58
story. Everyone has a set of
47:00
experiences somewhere in their life.
47:02
It, it could be, you know, it could be abuse, you know,
47:05
physical abuse, sexual abuse, it could be, you know, divorce, you
47:11
know, death, health issues, everybody, you know, poverty,
47:18
everybody has a back story and, and a set of experiences.
47:24
And everybody's back story instead of experiences are the
47:27
most important in the world to them.
47:31
And so I back to the guy told you about that group I've been
47:35
meeting with for for 2527 years. It's like find your tribe, find
47:39
your people, find your peer group, find people who will
47:42
believe in you because they're there, they're sitting all
47:44
around you. We just have to pick the people
47:47
out of the crowd that want to be helpful and pull us up versus
47:51
push us down. And, and I don't know where I
47:57
learned this. And, and I'm not saying this is
47:59
good. This is how I dealt with it.
48:00
So this might, I'm not a psychologist.
48:03
This might not, this might be good advice or bad advice or
48:06
experience sharing. But if people are causing drama
48:11
in your life, it don't means you can't still, you know, love them
48:18
if they're a family member, for example.
48:21
But it also doesn't mean that they have to control your life
48:25
and you don't have to engage with them.
48:27
You can choose not to engage with them.
48:30
And so now I had to to a certain to a certain point, right, to to
48:35
survive. I guess maybe I could have
48:38
explored other things. I didn't run away from home when
48:40
I was 16. They had the sheriff take me
48:43
back home several months later. But I don't think I've ever said
48:47
that story publicly, by the way. So we're going deeper, Anthony,
48:52
but it just is what it is. Like, I don't hide it anymore.
48:55
It's actually a badge of honor like for me.
48:57
And, and so I've just found that when we have these kinds of
48:59
conversations that we are now and you start to open up with
49:02
people about what your background is like, what your
49:04
experiences were, they're like, holy cow, I never knew.
49:07
Can I tell you 25 things now we're getting somewhere.
49:12
And, and, and when those conversations are asked to keep
49:14
them in confidence, keep them in confidence, right?
49:17
Don't be a, don't be a jerk and, and, and go tell your, you know,
49:20
30 best friends. But obviously I'm saying this
49:24
publicly so you know, it's going to get shared wherever it gets
49:26
shared. But, but I think it really comes
49:28
down to like, we can make things really complicated or we can
49:31
simplify them. And so it's slightly repetitive,
49:34
but like just shed the noise, put it put up on the shelf.
49:40
Doesn't mean you suppress it, but stick up on the shelf.
49:43
It doesn't control you and go find people who add positivity
49:48
to your life because they're all around you.
49:50
You just have to choose to engage with them versus the ones
49:53
that they want to push you down. So tof, when you were growing up
49:56
in this environment, was there a point where you realize that it
50:01
wasn't normal? Or did you realize that from
50:04
early on? I don't know if I ever thought
50:12
about it that way. I thought that for whatever
50:16
reason that that was just, that was the environment that God
50:19
placed me in for whatever reason, because we would
50:23
sometimes get to go to a friend's homes or whatever.
50:26
And you could definitely feel a different and, you know, a
50:28
different energy, so to speak. And I'm sure all those folks had
50:32
issues they were dealing with too, right?
50:34
But I don't know if I ever thought about it as normal
50:37
versus abnormal. I think I just thought about it
50:41
more of this is this, for whatever reason, this is the
50:43
journey that that God has placed me on and, and let's go explore
50:50
that journey and some of the things I wouldn't be able to get
50:54
out of for a while until I got old enough and, and it was kind
50:56
of like just deal with it. We, my brother and I, when I was
51:01
a sophomore in high school, there was a situation that
51:05
started to happen. And I'll just say my brother and
51:08
I gave my father a choice that he could continue to do what he
51:14
was doing or something different was going to happen.
51:17
And luckily he chose to stop because I don't know what would
51:21
have happened if he had kept going because something was not
51:23
going to work out very well for somebody.
51:25
Well, that was him or us, I'm not sure.
51:26
But so yeah, I just don't know if I ever thought about normal
51:30
or not normal, but I knew it was bad.
51:34
And that choice that you're talking about, how did that
51:37
coincide chronologically with your decision to run away?
51:43
So that's a great question. I cannot remember if that was
51:46
before or after. That was before.
51:49
I'm pretty sure. I'm, I'm pretty sure that
51:52
happened. It was close in timing, but I
51:56
believe that happened. Maybe I honestly, I can't
51:59
remember if it was before or after, but it was in close
52:02
proximity. I know, yeah.
52:04
And where did you go? A friend's house.
52:07
A friend. I don't know why his parents
52:08
agreed to this, but a friend's house and I negotiated rent with
52:12
them. I bought my first car, bought my
52:14
own. I worked a lot, you know so but
52:17
I bought my own first car, 1976 Dodge Charger for 150 bucks.
52:22
I bought my own motorcycle, bought a motorcycle for $400.00.
52:26
But I was living there at their house in their basement.
52:27
I can't remember I was paying them in rent, but I remember I
52:29
paid them something. It was literally like maybe $100
52:32
a month or something plus pitch in for food or something like
52:35
that. But I had a whole set up in her
52:37
basement, you know, it's a concrete floor, but through
52:40
piece of carpet down had a bed. And yeah, and Goblin was going
52:45
to high school and going to work.
52:47
So that's a situation you don't wish upon anybody.
52:51
But I'm wondering, as you look back in the rear of your mirror
52:54
toe, do you think you'd be where you are today if you hadn't gone
52:59
through those hardships? Are you here in spite of that,
53:04
or maybe partly because of? Yeah, I asked that question a
53:09
lot and I, I don't know, that's the answer.
53:12
I think that I think that hunger, you know, maybe related
53:20
to, I think hunger can inspire or destroy.
53:26
And in in my case it inspired and I don't know why that is,
53:35
but for some reason here I am. So, you know, a couple of things
53:40
that you mentioned there that I think are worth repeating.
53:45
You know, this idea of focusing on the people that can help you.
53:50
There was lots of drama in your life and up until a certain age,
53:54
there was no escaping that. Rather than that being your sole
53:58
focus, it was who around here can help me and support me?
54:03
And you mentioned a number of teachers and coaches along the
54:06
way. I think it's a big life lesson,
54:09
you know, whether you've got family members or Co workers or
54:13
quote UN quote friends that are drama in your life, can you put
54:18
less attention on them and more attention and focus and
54:21
gratitude towards your tribe, towards the people that are
54:25
helping to uplift you, right? How did you find your tribe?
54:29
Because this is something I like to talk about on the show a lot,
54:33
finding a, a peer group that you can exchange ideas with, that
54:38
you can be open about you, you can learn from.
54:40
And this is a group that you've been cohorting with for a long
54:45
time now. How did, how did you guys first
54:46
come together? Guys and gals maybe?
54:48
Yeah. So for for us it was guys and
54:50
gals, for us it's it was EO entrepreneurs organization and
54:55
there's multiple types of organizations like this.
54:57
But I always and and I know people who are part of other
55:01
other groups, but never heard the exact set up as, as EO and
55:07
then YPO young presence organization.
55:08
And they used to be called WPO, which meant you got old and he
55:14
wrote YPO anymore. Now they call it something
55:16
different. So for all the WPO is out there,
55:19
I'm teasing you about being old. I'm probably in that category 2
55:22
now. But what I really loved about it
55:25
was the the format was was pretty basic.
55:32
So you have a forum and that forum is 8 to 12 people and you
55:36
get together once a month. And those are at least 4 hours,
55:39
right? Maybe six hours, but at least 4
55:41
hours. You have a presenter every
55:44
month. But you talk about the 5% best
55:46
and worst. The most important thing is the
55:48
worst in your life, personal, family, business.
55:52
And you also cannot give advice. You you get, you share
55:58
experiences. And if you don't have an
56:00
experience to share, you pass. But you do not give advice
56:04
because a lot of people actually don't like advice.
56:06
It kind of creates interesting. It creates, you know, divides
56:10
like, whoa, what do you mean telling me that, you know, so,
56:14
so it is amazing, even if your experience isn't like spot on
56:20
with whatever the presenter is sharing, if it clicks some other
56:24
experience in your life, you share that experience because
56:29
somewhere there's a parallel, there's a, there's a, there's a,
56:31
an interconnectivity of thought. And when you walk out of that
56:35
meeting, you're, you have anywhere between 1 and 20
56:42
experiences that were just shared with you.
56:46
That helps to create a road map of how you might navigate this
56:51
issue that you're dealing with. It is so powerful I just can't
56:55
even describe how powerful it is, but it's awesome.
56:58
That's really interesting. Do you approach life outside of
57:04
your peer group in that way? Somebody comes to you with a
57:07
problem? Are you less likely to offer
57:10
direct advice and more likely to give a a shared experience?
57:15
It's a great question. I, I, I maybe 5050, I, you know,
57:20
I still tend to do the whole human thing of like, let's just
57:23
fix it right now. Here's what you need to do.
57:24
OK? I, I'm sure somebody's gonna
57:27
listen to this and be like, well, he's given me advice
57:29
before. So to be honest, probably 50-50.
57:32
But I do find myself trying to think of experiences and and
57:35
share those for sure. Yeah, but.
57:37
Probably 5050 if I'm honest. What's something fun you like to
57:41
do away from work? Hanging out with my son.
57:46
How was your son? He's a senior in high school and
57:49
he's just awesome. What do you guys like to do
57:52
together? Anything from nothing, staring
57:55
at each other. No, I'm kidding.
57:56
But like, but like just hanging out, watching the game or
57:59
something. And then for vacations I always
58:02
ask him like where you want to go to, where you want to go,
58:04
what you want to go see. He started trash can cleaning
58:07
business this summer, which was a lot of fun.
58:10
I try to expose him. I take him with me to a lot of
58:13
work things and just expose him to various things.
58:16
We do that a lot. I had a great moment a few
58:20
months ago where, you know, when you teach your children all
58:23
these things, you're like, yeah, dad, yeah, mom, whatever.
58:25
I know everything. Stop telling me stuff.
58:28
We had a wonderful moment where he came home after he started
58:31
his trash, trash can cleaning business, and he started to
58:33
educate me on how entrepreneurship works.
58:36
And I'm just like, wow, I didn't know that.
58:39
Yes, tell me all about it, right?
58:41
It was awesome. That is great because when you
58:43
can explain something to somebody else, when you're able
58:46
to teach it to somebody else, you understand it better.
58:49
You really codify it in your brain more.
58:50
And how great of you to set your ego aside and allow him to, and
58:55
I'm using air quotes for those who aren't watching, allow him
58:58
to teach you about entrepreneurship.
59:01
I think that's. Great.
59:02
It was so awesome. So those are some of the things
59:04
we like to do. What advice would you have for
59:07
somebody who's getting started in the investing space, whether
59:12
it's Angel PE venture capital? Yep, so I think several things.
59:22
So, so number one is making sure that you can place enough bets
59:25
and then have enough dry powder to follow on with enough of the
59:28
winners of the winners to, to mathematically put your,
59:32
yourself in a position to succeed.
59:35
Is #1 #2 is, I think the days of used to have a lot of, you know,
59:43
SAS Series A funds, for example, or, or growth, you know, series
59:47
B, you know, SAS funds. I think the days of that those
59:52
narrow sectors are over. And especially with software,
1:00:00
things are moving so fast. I just think it's a dangerous
1:00:04
spot to be in, to be single threaded, quote UN quote.
1:00:07
I just think there's a lot of these, these lines are melting
1:00:10
between sectors and. I think we're going to see more
1:00:14
of a proliferation of generalist investors and generalist doesn't
1:00:18
mean everything, right. It might mean 3 or 4 things, but
1:00:22
but not one. I think it's a much smarter way
1:00:26
to go. Another thing I I think will be
1:00:29
interesting to see is fund life. Will we, we'll have any a 10
1:00:39
year closed in fund. Will that because like Evergreen
1:00:43
historically has been a very, it's a thing of the minority,
1:00:46
right? There's hardly any Evergreen
1:00:48
funds out there. Meaning that Evergreen you just,
1:00:51
you hold the company instead of, you know, most investors, hey,
1:00:55
you've got some sort of a 5, seven-year plan that you want to
1:00:58
turn this around and make a profit from it.
1:01:00
Yeah, Yep, that's exactly right. So I think it'll be interesting
1:01:03
to see to watch how that plays out and how that morphs.
1:01:08
There's regulatory things involved in, in, in that as well
1:01:11
and what you can and can't do. And so I think it'll be
1:01:13
interesting to see if we see some of those regulations loosen
1:01:15
up to enable more flexibility with an Evergreen concept.
1:01:20
You'll see some of the big funds today doing, you know, becoming
1:01:23
RI as you're right, getting registered with FINRA and, and
1:01:27
become registered investment advisors, which opens yourself
1:01:31
to a whole, you know, regulatory, you know, back
1:01:34
investment making days, for example.
1:01:36
You know, we, we remember FINRA and I took all the tests and all
1:01:39
that kind of fun stuff. So we, we might see that morph
1:01:43
into investments or we, or we might see more flexibility with
1:01:48
how you set up a fund. I think I'll be interested to
1:01:52
see how the SEC reacts to, to some of these changes.
1:01:57
Those are a couple things I would I think I would share at a
1:01:58
high level. What's the regulatory free up
1:02:03
that needs to happen to make the Evergreen more popular?
1:02:09
So there's a lot of, there's a lot of regulation around you
1:02:16
like the Spacs, for example, like which, which Spacs don't
1:02:19
have a great history. But if you, you know where you
1:02:23
can't raise money blindly to go buy something that's unknown.
1:02:29
And so, and then also accredited investors like why so you or I
1:02:35
right now can go download a gambling app and invest wherever
1:02:41
the heck or not. I'm sorry, not invest.
1:02:43
We can gamble whatever we want to, but if we don't have
1:02:48
$1,000,000 net worth, excluding our home or primary residence,
1:02:54
or make what, 200 is a single or $400,000 household income, then
1:02:59
for some reason we're not considered smart enough to
1:03:03
invest in alternative investments.
1:03:05
But we can go do gambling apps all day long.
1:03:08
That's making sense to me. And so.
1:03:11
I've not heard it framed like that before.
1:03:14
Yeah, it's just like the purple commercials, right?
1:03:18
Just mind blows. And so I think that they're
1:03:23
starting to become, I think people are starting to get this
1:03:25
more. And by that I mean regulators
1:03:27
and, and legislators are starting to understand this
1:03:29
actually doesn't make any sense. And so I think that's really
1:03:33
exciting. That's that's an opportunity for
1:03:34
innovating policy making to enable more people to get in the
1:03:39
game for wealth building. Yeah, Tof, I've just got one
1:03:45
more question for you today. But before I ask it, I want to
1:03:48
do 3 quick things. First of all, anybody who wants
1:03:51
to get in touch with Tof can find him on his LinkedIn page,
1:03:56
Tof Day or Christopher Day and Elevate Ventures, and we'll also
1:04:00
include a link to it in the show notes.
1:04:03
Also, if you go directly to elevateventures.com, there is a
1:04:07
portal there where you can submit your decks if you think
1:04:11
that there might be a good fit there.
1:04:13
And as a reminder for listeners, if you want to get more
1:04:16
employees access to benefits that won't hurt them financially
1:04:20
and carries a financial upside for the company, reach out to us
1:04:23
at Add Back benefits.com. And finally, if you'll take just
1:04:26
a moment to leave us a comment or review on your favorite
1:04:29
podcast app, you'll hold a special place in my heart
1:04:31
forever. Thank you.
1:04:33
So last question for you Toe. You and I reconnect a year from
1:04:37
now and you're celebrating something big.
1:04:39
What's that big thing that you hope to be celebrating one year
1:04:43
from today? Then we've launched the first
1:04:46
ever growth fund in the state of Indiana.
1:04:49
And what does that mean? How is the growth fund different
1:04:51
from what you're doing now? So today our entry points are up
1:04:54
through Series A, So those are companies you know roughly
1:04:57
$5,000,000 or less in revenue from an entry point standpoint.
1:05:01
And so we don't have the ability to write the big enough check to
1:05:05
enter at the risk adjusted portion of the funding continuum
1:05:08
which is Series B. So those companies are raising,
1:05:11
you know, 205075 million, having the ability to lead, if
1:05:19
necessary, investments into Series B companies.
1:05:24
And how will that come about? Is that all funding through the
1:05:27
state? So, so no, so that would be
1:05:31
that'd be a a separate fund, a separate for profit fund, so
1:05:34
returns driven. And so this is going to prove
1:05:38
the original fund got approved to go do it like back in 2021.
1:05:42
It just takes a lot of work complications of documents and
1:05:45
stuff getting to set up, but it all got approved late last year
1:05:49
and, and then just get ready to, to ramp up and go to market.
1:05:53
So, but there's a $25 million anchor from the returns that
1:05:57
that we've driven over the last 15 years.
1:05:59
So there's a $25 million anchor. And then we got to go out and
1:06:02
raise another 50 million to get to a $75 million first close and
1:06:06
then hopefully raise it all the way up to 200.
1:06:09
You'd like to do first close around 100.
1:06:12
So that'll be a lot of work to pull off, right?
1:06:14
To get to 1st close will take every bit of a year, maybe
1:06:18
longer. We'll make a note to follow up
1:06:20
with you and check and see how it's going.
1:06:22
That sounds great. Tough day from Elevate Ventures.
1:06:25
I want to be the first to thank you for sharing both your time
1:06:28
and your story with us today. I really appreciate it.
1:06:30
Enjoyed it. Anthony, thank you so much for
1:06:32
the invite. Really enjoyed it.
1:06:33
Folks, that's a wrap on another episode of the Inspired Stories
1:06:36
podcast. Thanks for learning with us
1:06:38
today.