Jeffery: Welcome to Impact Investing, brought to you by the Supporters Fund from the city with only the only castle in North America, Toronto, Canada. I’m your host, Jeffrey JP Potvin. Let’s please welcome from the city with over 800 languages spoken. New York City and the United States of America. Chris Wake from Atypical Ventures. Welcome, Chris. It’s a real pleasure having you join us today.

Chris: It’s a pleasure to be here. I now feel deficient in my languages. It’s more to do.

Jeffery: That three, four languages and you got to compete with 800. So it’s pretty impressive. And the whole backbone behind that is English. So I guess in a way we can, we can still say that we’re contributing to, a positive society because we can speak at least one language, which is good. Well, I’m really excited to have you here today, Chris, for many reasons, because we get to dive into a conversation. But the way you’re investing is what really excites me, because you guys are kind of pushing the limit. And the line on how investing works and the direction and the types of companies that you look at. So I’m pretty excited to dive into that. But before we do, we want to learn a bit more about yourself. And the way we like to kick our show off is we want to learn more about you. So going back to your background, from your MBA days all the way through, if you could share a bit about yourself and then one thing about you that nobody would know.

Chris: Sure. so let’s see. I, I’m a long time operator. first time fund manager. So only been on the fun side for about, four years and change going on five years. prior to that, was building and scaling companies. so I had a couple of startups of my own. tried a couple of things, learned pretty quickly. I didn’t like being kind of a solo founder, like the head of something. so much as I liked kind of working on crazy, ambitious things. lo and behold, found myself as first employee and then head of operations at a company building and launching small satellites. So literally shoeboxes satellites. the time, it was three founders, two in a garage, literally. working on satellites and talking about launching things into space. so trying to onboard there spent about three and a half years. We went from zero to space and 12 months with our first three satellites. the first one was literally built on a desk that the CEO and I found on the, you know, sidewalk in San Francisco, brought back to the office and jerry rigged, kind of clean box on top of it. And RF build the satellite. we launched about 65 satellites in three and half years. raised a bunch of money companies since gone public. I got to do a lot of cool things. Like looking out rockets with, you know, Elon and NASA and Roscosmos and Jaxa and everybody else, too, traveling the world with a radio frequency test kit to figure out where to drop antennas to talk to space. Got some cool stories about, airport security and, you know, rooftops in various countries and so forth. And then, once I left that, I kind of bounced around to a number of other, mostly frontier companies, still a little bit with small satellite launch vehicles, some autonomous vehicles, a little bit like computer vision for geospatial data. Internet infrastructure. Buzzword. Buzzword. Buzzword. Ended up at a venture firm in the Bay area. as an entrepreneur in residence, which, you know, got to think big thoughts for a year. spend time with, you know, great people. thinking about starting a company. thought I was going to start a cybersecurity company known to hold my wife and I, near the end of that time, decided that we wanted to move from the Bay to New York. When I got out here, it took about six months of, you know, meeting people and, you know, continuing to test out ideas to find that I was more passionate. Picking up the phone every time some random early technical founder was calling, looking for advice and money. that I was digging into my own cybersecurity ideas. and so realized there was, you know, a ripe opportunity for someone with operating experience and, you know, some capital on the East Coast to focus on, you know, real frontier tech. and I had a passion to do it. so if I could be an advisor full time, I would have done that. lo and behold, you know, didn’t have any capital at the time. So I decided to start a typical raising capital and try to back literal and figurative moonshots. That takes us pretty much to today.

Jeffery: I love it, and one thing about you that nobody would know.

Chris: You have one thing. So, back in the day, one of my early ventures, I always knew I wanted to be an entrepreneur or kind of. I was entrepreneurial from the start. I manufactured and imported. Jump to conclusions. Doormats. So if you have ever seen a movie Office Space, is this, jump to conclusions? That’s the worst idea ever. a buddy and I decided that we would manufacture these doormats as a novelty item. Lo and behold, I was told someone about this recently, and I think they now have a market because the people really liked office space are now of the age that they would actually buy doormats. But at the time, it was a struggle just to sell the things.

Jeffery: That’s awesome. It’s a good story, but what I like about the story is that you were trying something that didn’t work. That’s common, is that you were finding gaps, which were the novelty item of something that was interesting enough that you thought, hey, I could turn this into a business. That’s really what entrepreneurship is all about.

Chris: Yeah. Pretty cool. And you kind of serve yourself. You want the thing? Make the thing.

Jeffery: Yeah, exactly. Well, to kind of peel back on your story and go back a little bit to your, operational side when you were starting and working inside of these companies. And not every day that you get a lot of operational people that tend to go into the venture side or become, I guess advisors, coaches and all the great things that support. Can you share a little bit about what that experience was like? You were talking about building satellites and moving that pretty fast. So you jumped in to kind of, I would say maybe a smaller subset of what startups do. I know in Israel there’s, a massive space push to do a lot of stuff in that space, but it’s also kind of built around Army, so it’s not as typical, I guess, across North America or Europe. So when you were diving into this space from an operational standpoint, are there a few things that you learned as an operator that you find that maybe is lacking or could be more pushed with companies today?

Chris: sorry. Can you repeat the question that had a slight gap there for sure.

Jeffery: So when you were working in as an operational in operations over the last, you know, 15, 20 years and you’re working in the startup space, did you find and have you found that today in working with founders, that there is a gap between how operations are looked at, viewed and can you take some of those learnings and share what those are like? What are you finding is the big missed today with founders in the operational side? Are they operational? Are they more? I’m just a founder. I don’t have time for this and try to, you know, surpass it. Like where are you seeing the gaps?

Chris: so it’s an interesting question. I think that you continue to have deep operators, going to starting companies, which is great. the gaps that I see, one I think there’s the reality of entrepreneurship. which is that it’s hard. and, you know, the reality of it is most things will fail. now, we could get into kind of the semantics of failure. And failure to some extent is your willingness to give up, as opposed to persist. but some things that ultimately will define kind of product market fit. And so I think, you know, there’s the gap around execution. that, you know, entrepreneurs really need to kind of figure out how to execute and find the one thing that will move the business forward and almost kind of wake up every single day with that mentality in mind. What is the single most important thing that I could do to move this forward or to, you know, invalidate my assumption as quickly as possible so that I can kill this idea and get on to the next one. if that’s the case, there’s the flip side of it, too, which I think is, good or bad, insofar as we, I’ve heard at least that we’re in kind of a lull for overall entrepreneurship. you wouldn’t know it to kind of sit in the startup ecosystem and kind of see ventures kind of popping up here, there and everywhere. I think we’re seeing a bit of a renaissance where people are kind of launching brand new companies. but within that context, there’s been, you know, the story of the lone genius creating a great company and then selling it for massive dollars. And that’s driven a lot of people kind of into the, appeal of entrepreneurship. But they may not have kind of the, the grit or determination to put behind it. They kind of see it as, you know, test. so maybe I can do this thing and maybe I can have a quick exit. you’re not really going to succeed if you come in with that mentality of just trying to go after a short term or transient goal, like an exit. You really have to have belief, and grit, determination behind what it is you’re doing. and understand that it’s hard, and it’s going to take some iterations and what you think may be the thing today may not be the thing in a week or may not be the same thing. And even six months. so at least for us, a typical a lot of what we end up focusing on in evaluating founders is really not what they think, because that will change five times to Sunday. but it’s how they think and how they apply different mental models, to what it is they’re doing. And that gives us a greater understanding or belief that, you know, what is true today may be true in five years. That kind of how you think, as opposed to, you know, what it is, you know, to be true, quote unquote, today. So make sense?

Jeffery: It does. and there’s lots of things there that we can unpack, which is, you know, I think it’s fascinating that when you look at, the way media has media ties, entrepreneurship over the last, say, 5 to 10 years, it became almost, media was pushing people to become entrepreneurs and to go into this space. And almost everybody had the profile that said, you know, entrepreneur, entrepreneur. I think people realized to your point, it was a very difficult spot to be in. But now I’m a loan shark and I’m trying to build this company. I don’t understand what I’m doing. Which then kind of foster doubt accelerators, incubators. And they started to build up a lot, bigger in this space as well, because everybody realized that all of these founders need some sort of help. And how do we help them? So going back to your days when you’re starting and working on this with three founders, did you find that having three founders in a business actually made it easier because you could bounce ideas off? You’re all in the same garage. You were working together that this was more conducive to the environment of creating a company than it is today. Where you were talking about, I had to move from being a solo founder because, you know, you just your mind goes, you want people to be around or you want to interact and it’s not there. Are you finding that that’s kind of where the world is sitting, is that we’ve created this isolation and we’ve told everybody they got to go here and now whether they’re they’re kind of, wow, wait a second. I don’t know if I can handle this. I don’t know if I should be here. And then you reflect back when you were working as teams, do you find that that you kind of push your way into that with founders as well? Look for co-founders, look for businesses that fit that thesis because you had a better experience. Or do you focus just on great companies and great people?

Chris: So we tend to focus on great companies and great people. there’s no there a lot to unpack. And like you said, there’s no singular way to success. and you really have to be specific to the type of venture that you’re going after. and also, every individual is unique. some people can really handle the, you know, what I would classify as the loneliness of being a solo founder? and the uncertainty that goes along with that. so, you know, you’ll go through peaks and valleys of, you know, elation one day and then complete sorrow the next day. And, you know, it’s tough. that’s hard being a solo founder. If you have co-founders, it’s a little bit easier to balance out emotions, because oftentimes when one person’s high, the other person may be low. And so it kind of balances out over time. with the satellite company too. It was really expertise. so in that case, we had, you know, mechanical engineering, electrical engineering, basic physics, and also business understanding. And so it was kind of this amalgamation of expertise that really came together around something that required all of those. so I think depending on the venture, you really want to have, the right kind of skill gaps filled, and again, this kind of goes back to, with a typical when we look at kind of founders, we have this archetype where we only invest in kind of a singular archetype of individual, what we classify as an engineer with empathy. So really, what that means to us is we’re looking for the raw IQ to build the impossible thing. combined with the intellectual humility to recognize that they don’t know all of the answers, nor should they. and they’re a bit more of like, a learning machine where they’re always trying to kind of, learn from others and pull in the best of the best kind of solutions to apply to the problem at hand. And oftentimes, that means that they’re pulling together other superpowers from individuals and inspiring a team of people around them, as opposed to kind of this, you know, idea of the solo technical genius that, you know, creates a massive company that doesn’t really exist. we think it does. And it’s easy to kind of point to the one person, but ultimately it always comes down to a team effort.

Jeffery: I like that, and I like the part that you meant by you shared on the inspiring side. So I’ll take that in a second. But when you’re looking for engineers with empathy, it’s fascinating because over time of myself and other investors, of course, come across a lot of founders that build in the hardware or software space on the engineers side and they, you know, tend to be maybe disconnected from, the team or the environment that they’re in. And I think that sometimes is off putting to investors because they’re looking for it seems like, oh, I need friends, I need to invest in people that are like me or whatever that might look like. So it tends to kind of, put them into a different path, and maybe it makes it a bit more difficult for them to, to hire, to, raise funds, all of those things, when you take where you’re sitting right now and how you’re doing this, it sounds like you’re also looking for that inspiration, that these founders carry something which is the empathy side, but they’re able to inspire people through their learning. So it sounds like kind of like this mature founder that’s being able to, do a lot with a little and kind of build from there. And is that a fair statement? And are you finding that, again, this person that carries this inspiring notion that they’re doing this in a larger team, like they’ve already come in with co-founders? Or do you see this in solo founders?

Chris: You could see it in solo founders. so, you know, when we talk about founders in a company, really what we’re talking about is kind of the risk reward. So the equity benefit that you get alongside how much risk you’re willing to take, that doesn’t always work out for some people. And so, sometimes you do have a solo founder that has to kind of take the reins and be that that individual lead to take something to a certain point, and then they’re able to bring in people alongside them who take meaningful stakes in the company. but it may not be, you know, the 5050 split or the 6040 split or whatever it is that we kind of commonly think about as, like co-founders. so you could have that, I think the yeah, the uniqueness really does come down to this ability to inspire and pull people in. And it’s kind of funny because our job becomes that much more easy in a way. because, as you called out, rightly so. there are a lot of technical geniuses who you talk to them and you’re in awe of kind of their technical brilliance. but their ability to kind of pull you in to that story, or to kind of bring you into it in some way, shape or form of to see that you have some value to bring isn’t always there. so going back to my satellite days on the operating side, I mean, I literally interviewed thousands of engineers across the country at some of the US best engineering schools, looking to build out a talent engine for our satellite company. Ultimately, we hired less than 1% of applicants that came through the door that we identified. and part of it came down to this similar rubric of IQ, EQ, and passion. And so, you know, I’ve spoken to my fair share of PhDs who need to be locked in a closet in order to produce good work. That’s not an individual that we can really back. And in part, it also goes back to the, and the thesis for our investment, which comes down to, you know, we don’t want to just make bets. We ultimately will only invest where we believe that we can impact the outcome through more than just money. And so that requires a bit of that, you know, back and forth partnership with our founders in the same way that they may have a co-founder or they may not have, but they need to kind of have it with us such that they recognize that there’s something that we can and want to bring to the table beyond just giving them a check and saying, you know, bye bye, see you later. You know, when you have a big exit now.

Jeffery: And that’s fair to say. And it’s interesting that you’re, you’re kind of seeing where the shortcomings are. And you’re ensuring that throughout all that time from when you were hiring and going through that process, you saw where maybe you did take a leap of faith and saw it didn’t work. So you start to build your own, matrix on what works, what doesn’t work based off of the people that you’re associating with. So in this case, you’re going to be investing in them now, whereas before you may have been hiring. So now that you’re investing, you’re looking for that same dynamic because you saw the troubles you had early on and you want to avoid those, those pit stops. But to your point, you also can still the teams can still hire those people because they can still do great work. But you have to look for somebody that is more dynamic, that has more of that sales front, that can be just as smart and inspiring, but also has to have a background in communications per se. and being able to, get everybody around them moving and building the same business and getting behind that same thesis.

Chris: Yeah. I think the, most concise way that I’ve kind of heard it, but and this is a slightly different element versus, you know, how I think about empathy, but ultimately these are learning machines or individuals who don’t think about it as I have all the knowledge, but their growth mindset, and they believe, like, I can find it, and they’re desirous to actually go out and find that knowledge and that kind of comes out and not just kind of the things that they consume and read and try to learn, but also the people that they try to surround themselves with because they do believe that they can actually pull something meaningful from those individuals, that they pull into their close cohort.

Jeffery: Yeah. That’s a that’s a very valid point that, you know, when you’re building and growing your business and inspiring the team around you as a founder, you still also have to be invigorated and driven. And those people will bring a lot of value and you’ll learn from them. But there’s also another side which is where is the founder gaining their creativity, their knowledge? Who are they surrounding themselves with? is it just investors or are they going out and being part of different groups and our those groups generating value for them? So it’s very valid. You don’t always think of that. what is the founder doing to obviously drive themselves and become better. And you mentioned you’re interviewing flying all over the world. So you’re meeting different people. You’re part of different networks. So what is the network that that person’s part of. And I think that does become valuable. And maybe maybe founders need to share, hey, I’m part of a wine club or I’m part of this. And maybe those types of things will also help. investors like yourself better be able to explore that. They have a different side to them. Not just business, not just, you know, these little buckets.

Chris: Yeah. you know, you bring up. It’s funny. You bring up Wine Club. I mean, we have a big focus internally at atypical on the idea of type to fun. so there’s a thing called the fun scale type. One fun is, you know, things that are, you know, sitting out with a bunch of friends on a patio, having a drink and just kind of conversating. That’s just fun. objectively, type two fun is the type of thing that is, gruesome or arduous in the moment. But afterwards you feel very rewarded for having done it. So running a marathon and climbing a mountain, etc. and type three often is just the, the thing that’s never fun to begin with and you would never want to do it. and so for us, internally, you know, myself and, Lily, who I work with is, we’re both type two fanatics. I, you know, randomly decided to run for marathons, and, two years, she climbs mountains, and we’re always kind of going after the next thing. And, it’s funny to kind of draw the correlation with talking to our founders and seeing that they are the same type of crazy that we are. and there is something to this notion of the way you do one thing is the way you do all things. And so starting a company is literally type two fun. Starting a deep tech company is the epitome of type two of fun because whole wow, are you going after all of the complexity? and so we’ve found that there’s, a lot of similarity in the folks. In fact, we’re, running the Brooklyn Half Marathon next month with, you know, one, a couple of our founders and a couple folks that are within our network, as one way that we, like, pull people together and have a whole thing around atypical athletes and pulling people into our overall wild and crazy different explorations of kitesurfing or mountain climbing or running or whatever the case may be.

Jeffery: Now that’s brilliant. And in one of the other podcasts that I was, was doing, they mentioned that, you know, a lot of the founders tend to have this structure where individually they’re doing outside crazy things. So maybe a marathon is crazy, but, you know, climbing mountains and doing things that have this extra level of, solo because they spend the rest of their time being programmatic. So that’s kind of how I, I understand it, is that you look at everything like, I have to be here, but I have to do this business. So I need to take myself out of that element and to be able to, challenge myself individually. I have to go do something that’s more extreme. So kite surfing or jumping out of bass diving, whatever it might be, it sounds like you have to take yourself out of that environment in order to really drive yourself even more in the space that you’re currently in. So you’re invigorated every day. But in order for myself to have that focus, I go do something that’s more extreme. It energizes me, and I come back and I’m even better than I was when I left. I’m guessing that’s kind of a similar aspect to what you’re sharing on this fun one, two, and three side.

Chris: Yeah, definitely. the two that I think the structured versus unstructured and kind of, reliance on the self is a certain piece of it. I think the delayed gratification and working towards a goal that is, worth the risk and worth the work, is another piece of it, too. So being able to kind of overcome something that, is far enough out that you actually have to work and continue to persist, is very similar to the same thing that you see in kind of, you know, startup culture and launching a company, Yeah, there’s definitely a number of kind of corollaries there between, like the individual, the structure and this piece around kind of the persistence.

Jeffery: And one of the other things that you talked about on that persistent side is you went into execution. And I think from an operator standpoint, their whole end goal is to make sure that they’re flawless on execution, or they’re not going to be very good. Operator. So I would, make the assumption. So on that execution side, the business and what we find is, when you’re investing, the whole thing for me is execution is primary. It’s if you can be a great execute or as a business, then that creates, you know, that repeat motion. People want something that’s executed and flawless. How are you finding that today with the amount of micro companies that are out there and trying to grow and, and, jump on funding is one of them lacking execution or abilities or understanding of smooth operations, or are you finding that everybody’s really good at operations? They’re just not great at building the business, which is generating the revenue for the problem they’re solving? Like, is there a disconnect between one versus the other?

Chris: So you’re not explicitly asking that question, but I would, say that the disconnect I see perhaps around one of that execution piece is, It relates to the goal. So what is the goal that you are, pursuing? And I think there’s too much focus or there has been too much focus within the startup venture ecosystem on transient goals, specifically fundraising as a next goal. I mean, the very fact that we celebrate fundraising as a thing just doesn’t make sense. It’s congratulations, you took on more money and gave away more of your company, and now you need to do the work. The work is the thing. The work is the win. and yet we celebrate the fundraising, as kind of the milestone. I think specifically from, you know, my standpoint, a lot of what we focus on with our founders is trying to not go after the transient goals. I don’t really care if you raise more money. in fact, I love free money. I don’t think we get enough focus on non dilutive capital or on tax credits, or on actually getting revenue from customers. Those things are fantastic. You turn my $1 invested into 3 or 4 net effective. Amazing I love it. Let’s do more of that. but instead we have this kind of, roller coaster focus on what is that next round and how do we prepare you to raise an up round such that we can put a mark on our books and suddenly have more capital to do more things? But are you doing the right things, or are you just going to the next subsequent round? And so I think, you know, when we think about operating and really execution, it comes down to this idea of, you know, picking the right goal and trying to strengthen the business and find ways to kind of execute on things that will ultimately have reciprocal value. Back to the business to make that, something that persists not just through, you know, subsequent rounds of financing if you need to raise more financing, but ultimately, you know, becomes a long term, sustainable business that actually creates net new value. that’s another thing that, you know, I think is maybe slightly unique around our focus is that we like things that create net new value as opposed to going into an existing market and just trying to figure out how you can extract more than the next guy.

Jeffery: I like that you’re taking the execution and you’re kind of converting it to metrics or a more of a metric based system, and saying that your goals have to align with the business outcomes and the value that you need to create in order to grow. And the raising funds becomes or the number of people on your team, a thousand people on my team that is also like those two things seem to be the benchmark of how successful a company is. And when you look at it and the numbers, I’ll have to validate. But I think it’s something like of the fortune 500 companies, only 20% of them are actually profitable. so the metrics don’t exactly align to what you’re told and how you’re taught how to build a company. But if you take how you’ve just shared this, that if you can align your business with the right goals to the outcome that your business requires in order to grow, then maybe that would change that. You don’t need to say, we raise this much money and use that as your goal, and that everybody gets excited about. You can start to shift it and say, company in the last 12 months hit our goal. Revenue targets of X, our growth targets of Y, our sustainability target of of T whatever those are. But those metrics would then be more aligned to what people want to see in a company and be able to gravitate more to that, which would then increase the value of the operational side of it, because they’re aligning to the initial actual initiatives of the business versus as you said, hey, we took out more debt, everybody, let’s have a party or a we use our company ownership by 60%. So now let’s celebrate. So it kind of does make sense.

Chris: Yeah, I mean, it also, if you think about it, we’re investing at the earliest stages in these companies at least, you know, a typical we invest, you know, pre-seed seed, whatever that is. Now, at the earliest stages, the timeline to see something from these companies is, you know, five, eight, ten years, you know, within kind of the fund life cycle. so those kind of interim steps on valuation don’t make a difference. Like we’re going for the ultimate outcome. Like that’s what we want. So we want a really strong business that can produce a meaningful like outcome. At the end of the day, if they raise more money in the interim, it just means our stake is lower and the outcome has to be larger. That’s problematic. So let’s figure out like the right goals to pursue. And you know, everybody wins.

Jeffery: I love that. And you’re right. You’re like we’re diluting ourselves every time you go out and raise funds and celebrate this. So, how do we kind of align all of our goals, which is let’s build a sustainable company, that’s based off different principles. And I guess that goes back to the type of founder that you’re looking for. At the same time is what are their goals? And are they regulating these goals throughout time? Are they trying to get the team aligned every year? Are they creating the right strategies and the right way to to build that efficiency, that operational efficiency, that execution? are they building those things in and are they doing it on a regular basis?

Chris: Yeah. Part of it, goes to this idea of you know, are they in this for the mission or are they in this to be an entrepreneur? because to some extent, being an entrepreneur, quote unquote, has kind of taken on this, notion that you continually raise capital. but I’m really looking for someone who’s, you know, in this for the mission and trying to build the thing. And oftentimes, particularly in capital intensive industries or areas, those founders, and specifically the ones we look for having almost supernatural understanding of the downstream funding risks and also the opportunities to understand how much capital needs to grow to the business. They understand where they need to go to get that capital and who the potential next set of investors would be. and how they will have to kind of, execute in order to maybe unlock that capital. But then on the flip side with the opportunity is they also understand there’s a lot of places to get down, a little funding. You can get grants, you can get government program funding, you can get, you know, tax incentives, R&D tax credits are amazing. I don’t know why more people don’t talk about R&D tax credits or about, you know, qualified small business stock. That’s free money. People. It’s just, it’s an interesting space. And, again, the founders that we look for tend to have an understanding of kind of the total cost of what it will take to get to scale and how they can potentially, you know, think through ways to, also maintain their own ownership stake in that business and to really build something meaningful.

Jeffery: I like that. And you mentioned earlier on just about the risk factor and the types of risks that they’re getting in. And now what you’re sharing is that these founders, are looking at all different means of raising funds from non dilutive to obviously the investor side. I’m sure there’s debts. There’s all these things that they would be looking at. You coming from a high risk building satellites. It’s not exactly no risk in that standpoint of what you’re doing. So you’re kind of extremely looking at a business model. So today the way your fund operates, are you looking for that same structure where people are really high risk doing everything they can to push the envelope, or is it more processed where you can kind of, you know, align to what they’re doing and understand where they’re going because it’s written down, it’s in the charts, in a graph. Or is it? No, it’s high. This guy, man, just go after it, break down every barrier, do what you have to do because you want that extreme risk, high risk side. Because that’s how we invest.

Chris: Good question. It’s a hard one to answer. I say it’s hard to answer because there’s a misconception that when you do frontier deep tech, it’s just inherently expensive. And I think that, that isn’t always the case, particularly when you do have founders that are focused on kind of what that total cost will be and how they can unlock funding. I think it also comes down to the problem that you’re solving. So, you know, our overarching thesis for the fund is plausible science fiction. Plausible science fiction. You know, we don’t just pursue kind of novelty for novelty sake. We’re really going after things that kind of, push the boundaries of what is possible. And oftentimes that means we’re trying to solve foundational problems. And the other net benefit of foundational problems is that they’re, persistent across multiple industries. So that gives you some optionality and kind of how you’re going to market and where you can potentially sell the thing based on how, burning that need is in one market versus another. it also means that oftentimes these things end up looking like critical infrastructure, or like opportunities where the government is desirous to actually, fund some portion of that development or industry is desirous to fund some portion of that development through actually being an early customer, because the thing just solves a problem they never thought could be solved. so, I think for us it’s, we take we take some crazy risks. I mean, a month ago, one of our companies put the world’s first data center on the moon. So we invested in people who thought that they would just, you know, launch something to the moon. Well, low and behold, they did it. and so we now have a data center on the moon. well, within that, I mean, we took a big risk. It’s, you know, expensive proposition, a long time horizon. Your customers are really, ultimately governments and large institutions, which don’t have short sale cycles. but the interesting thing on that one is that once you get going, with relatively low, amounts of equity capital or financing for some kind of venture, you can finance a lot of that through debt. And so your cost of capital actually goes to the floor, essentially, because if your customers are literal governments, there is almost no better kind of credit risk for a debt finance or to step up, and start to provide some sort of debt financing against that before you ever even leave the pad. so before you ever launch something into space, ultimately you can start to pre-sell every single one of those missions. and that becomes quite interesting.

Jeffery: I guess, in a way, as you start to make that risky choice of investment, you’re also mitigating the risk later on, because you can start to envision where this is more applicable and who would eat the risk because you’re solving such a large, anomaly that you didn’t think was possible?

Chris: Yeah, I mean, risk has been around for eons. And and if you can identify the risk and you can quantify some level of risk, there’s someone willing to underwrite it full stop.

Jeffery: There. So now taking well, my last question before we dive into the 62nd rant, how do you mitigate the fraud that comes with these high risk ideas? How do you determine that when they’re coming to you and take their notes as an example, only because it’s top of mind is that the idea was sound logical, but because everybody wants it as well. I think taking a small amount of blood in to be able to provide a lot of data from that. I think that everybody would love to see that happen, but being able to do it, I think is a totally different ballgame. How would you do this? Could you do this and you’re going after people to invest in you that believed in the hype of the fact that getting a lot of data out of something really tiny makes sense, because everybody that was investing was saying, yeah, you know what? This is something that’s needed. How do we do this? How do we reduce the amount of volume that if we could solve this mic, God, we would be able to do these things in seconds and that would open up other industries. So I think the mind started to go and trace that. So that’s why it became this, doable concept and the risk. But on the other hand, it was also the people that were really into this space. They were like, no, that’s impossible, can’t be done. But everybody else wasn’t feeling it that way. They were like, this is incredible. Yes, we need this. So how do you and these are the ones we’re usually people that invest are the ones that don’t have the knowledge because they’re not in the system and they’re not part of that. And they weren’t pulling those people in. They weren’t getting the, obviously the person that was running blood every day and saying, getting them on a foghorn and saying, hey, this doesn’t work. So they were avoiding those people, an investor standpoint. So how do you guys look at this and say, hey, what they’re saying is it’s doable or it’s not doable, but you’re also foreseeing ten years from now. So maybe this company came to you three years ago and Elon hadn’t actually been to the moon yet. So you have to project. Could we actually get a data center on the move that they would let us sit there and would this be able to go up and say, one of Elon ships that aren’t really going anywhere right now? So you’re kind of projecting, is this even feasible? And do you want to invest today to see what the outcome is in five years? Because it could be nothing because we’re not at the frontier in five years. So that might be 10 or 20 for now. So there’s a, you know, heavy hitting question, but how do you avoid the fraud, which is you’re building on the hype versus on the reality that this could be something solved.

Chris: so there are a couple of rules of thumb, that I’ll throw out that I can give you more of. and so one, we invest in quietly awesome people. And I say that because there’s, oftentimes an imbalance between work and talk and those who can talk. A really good game. not always, but, you know, oftentimes you’ll find something deficient in the work. and those who put in a lot of work and find, you know, value in the work itself aren’t always the best at talking about it. and so this kind of goes back to the archetype of founder that we look for. And, you know, engineers, are inherently rational. beings. They focus on, oftentimes building a rational argument for why this thing should exist, and they walk you through the logic of it, that that’s very different than how investors tend to look at things, and just people in general. I mean, human beings inherently feel before they think. And so rational arguments don’t always land. so we find ourselves oftentimes looking at, decks and materials and almost acting as forensic scientists to pick apart what actually is special and what’s going on behind the scenes. and we spend an awful lot amount, an awful lot, of time talking to the founders and going into deep technical detail to really understand the nuances of what’s happening inside the black box. as opposed to kind of taking it at face value that this thing can exist. so there’s, Dan Golden, from, NASA has, create kind of meme around, you know, I’m waiting here for the physics. so show me the physics and actually walk me through how this works. that’s a bit how we approach things. So we really want to understand, like, is this, scientifically possible? And, yes, you may be pushing the boundaries of what’s possible today, but, we want to understand, like, is this something that can happen within, A12 year time frame, or is this something that we’re talking about and, you know, 10 to 15 years, like the oft quoted thing of, you know, fully autonomous vehicles will be five years out. It’s five years. It’s five years. And we said that for like 15 years, there’s just nobody really had a good idea, around when it would actually happen. so we dive into the technology, we try to look for those places where we’re not investing into hype. and we understand that when there’s a really good kind of pitch or story that we really probably need to dig a little bit deeper. That’s one rule of thumb. and similarly kind of to the third most comment, and we don’t invest in, things that are well, it just said it, we don’t invest in hype. So if somebody comes to us with a lot of kind of big name investors, that’s actually a knock against them in a way where we want to dig in deeper and understand what’s actually going on, because I don’t trust other investors. I trust myself, so I trust myself and I trust the people that are within our network that, you know, we call in to help us with technical diligence at times. and I want to know, is this thing real? and is it, you know, plausible, or is it just novelty for novelty sake or something that we hope could happen, but we still have no idea how it’ll actually come to be?

Jeffery: In a way, it sounds like. Outside of projecting and being able to visualize where the possibilities are is that at the same time, a lot of these types of innovations you might be investing in to create the innovation that it is, you know, the I always say there’s two ways to sell a business. You sell the dream or you sell the data. And a lot of the time you’re investing in the dream. The dream hasn’t fulfilled its purpose of data yet because it’s too early on. And like you said on deep tech, it can take a long time before you’ve produced something. But the vision is there, and you keep writing it and you keep doing things to get yourself to that execution point. But there are companies that have generated and raised hundreds of millions of dollars that haven’t even made it to market yet, because it’s a backend code or it’s backend, functionality. And it hasn’t got to that stage. so, you know, take Elon Musk on the, on their side. It’s not like they built a rocket in five days and put it on the moon. And we’re like, yeah, we’re good. This is rocket. It took a long time. Right. So there was a vision and you had to buy into the founder that had the vision. The risk was there at the beginning, when he first came up with the concept now being different. He’s been a founder many times. But if it was his first time doing that, with the risk of being there for you to say you know, this guy’s the perfect fit, that’s all the things he says he’s been executing and he’s going to be on the moon. So those are, you know, who knows? I guess at the time, we could never say that. But I guess with him. But there’s other ones that you would see where you are betting on the jockey and you’re saying, you know what, I think this is possible and is the time in the world ready to accept that person to do this in the next 5 or 10 years?

Chris: it’s funny, Elon often comes up, in the context of implausible science fiction. understandably so. the question I usually get is, what do you backed Elon in the early days? And it’s funny because, logistically it just wasn’t possible. He self-funded the thing. And so you didn’t have the opportunity to invest in him, and he wasn’t seeking money. but then, you take a step back and you look at kind of our thesis and the idea of engineers with empathy. People always kind of hone in on that and like, well, what about Elon? and they try to say that he doesn’t have empathy. And I think the, difference is actually just the scale. And this kind of comes down to, you know, we don’t have all the answers about how to identify empathy within individuals, but it’s a question that we find, fascinating and worth pursuing, and we continue to iterate on how we think about it. But Elon hasn’t empathy around the human race and moving the human race forward, and believes that the, scale of that is important enough that the risks need to be taken and the execution day to day needs to happen. And one individual person is kind of, feelings around one particular role don’t matter in the grand scheme of kind of moving humanity forward. And so it’s inter it’s interesting just because most people are like, well, he doesn’t have empathy. So like, well, you wouldn’t invest in it. You know it’s like no. Well let me tell you. Like it. Logistically it couldn’t happen. And then secondarily like it becomes this nuanced conversation of like, is that a person that you can work with? And is there a relationship that you can have a back and forth, where again, we can provide value beyond just the dollars or are we literally just a bank or an ATM for an ATM, like go somewhere else, just not what we want to do?

Jeffery: Agreed. I think also he’s a marketing machine, so I think he learned, oh yeah, and he learned to be the outspoken, which is kind of against your thesis. You’re not looking for someone that’s just all hype and talk and they’re not doing anything. And he’s had lots of companies that were hyped and never did anything. So, I think there’s a middle ground of for sure for everything. But he also learned that if I want to bring value and I want to have these things, I need to hype the hell out of it. And he’s obviously became the best at it. Right? Like when his company was doing poorly, he came out with a flamethrower. So, you know, like diversion tactics. Hey, don’t look at how bad Tesla’s doing. Look how great this flamethrower is. I call it the Elon Musk effect. And it’s just it was a way to divert you from what the truth was because, hey, we’re still building here, and don’t beat me up for what we’re building. You’re you’re cutting our timelines too short and we need to get X done. So I think yeah, a lot of smarts to how we did everything. And maybe people overlook that because they look at it him as being crazy. I look at it as it’s methodical. He literally was looking at we’re going to have a downside. I’ve got these other products. It’s throw it out there and you’re seeing other people starting to do that. Now. take Trump as an example. I’m going through a tough battle with all of these things. And look, I’m selling, what was he selling? Bibles. So he came up with Bibles, and in order. It’s a diversion tactic from everything else that’s going on. But it also is empathetic to the people that are saying, hey, wait a second. I need a Bible. This is a good idea. So then it diverts and diffuses the situation. So I think that’s actually just a smart marketing tactic of somebody that has a goal of where they’re going. And these are just elements to get you there.

Chris: Yeah. You hone your craft over time for sure.

Jeffery: And he’s been doing it a long time. Both of them have obviously. So it’s pretty fascinating to watch and read up on. And if you start to see those nuances, I think founders could pick up on these and start to realize that there’s a lot more out there. On how they can improve their engagement, not only with their teams, but obviously outside their networks. And, you know, those guys seem to be honing on that skill. So but I want to switch into, rapid fire. Drive here. So the way it works is, it’s a rant. Oh, sorry. Before the rapid fire, there’s a rant. 62nd rant. So how this works is that you’re going to rant about anything and anything that’s on top of mind. You’ve got 60s. No pressure. No one’s ever hit 60s. So it’s, over to you. I will flash five seconds, but I’ll let you finish a thought and then I’ll jump in with, a quick rebuttal. So when you’re ready, you’re like, you’re on.

Chris: Oh, man. pulling a rant out of nowhere. It’s tough. But, so I say my rant actually comes down to, good and bad, but mostly the bad, around how we’ve thrown this veneer of deep tech or frontier tech. on to so many things. And you have a lot of investment dollars and interest kind of going into frontier and deep tech, in part because of all sorts of market dynamics. But, a lot of it is focused on just this notion of, is it, not even is it possible, but it’s novelty for novelty sake and going after things that, you know, have no place or purpose necessarily, but we’re projecting out what we think the future should look like. And, you know, we should have the Jetsons tomorrow. And so, you know, we should go about building The Jetsons, when in reality there’s so many kind of real problems that we could be solving. a lot of what we end up focusing on in a typical is really around this idea of, like, where technology is caught up to solve these foundational problems, and it’s like the balance of the two, as opposed to, like sitting in our ivory tower or somewhere pontificating about what the future should look like and then trying to throw dollars at, you know, things that may or may not actually have any possibility or fruition around, and creating that future and rant soapbox over.

Jeffery: No, I love that. So my counter to that is that that’s this whole movement of all touristic value and how all touristic sort of thing can drive and build something for the future and plan for the future and, and get everybody tied into it. But I think to what you’re your driving at is that I think there’s just a lack of understanding with deep tech is what frontier tech is, what it actually means. Is it machine code learning? Is it the ten steps of decoding that there is a a step to process that can tell you if this deep tech so or is it one of these facets that actually make a deep tech. But at the end of the day, some of these businesses have gone 510 years without generating any revenue, have taken over half $1 billion in in money that’s gone into the company, two companies worth 2 billion. It’s a securities company, and it’s never even generated revenue because it’s this altruistic view that this company is going to change the way we do something, and we really need this, and let’s just keep dumping money on it, which then kind of seems like it’s a Ponzi scheme. So I don’t know if it just Larry layering up on how you make your money. So is it really that we are overusing the word, or is it that we just don’t understand what deep tech and frontier tech investing really is?

Chris: Oh, we’re totally overusing the word I got. I tried to get schooled by some kid who was in his first job outside of school, investing in deep tech on how to think about satellite constellations. I lived and breathed the thing for a three and a half years. but this person was in deep tech, and that’s great. That’s fantastic. Like, invest in deep tech. but come to it with some expertise or experience to actually evaluate the thing. So you don’t have kind of Ponzi schemes like you mentioned with at Theranos or otherwise, like you have to be able to evaluate the technology and understand what’s going on behind the scenes in order to invest in it. and at the same point, you don’t sit there and try to project out, you know, what the future could be like. none of us are really good at forecasting what the future is going to be. Let’s focus on actually solving real problems today, using really hard technology and pushing science forward in some way, shape or form, and go after things that are worth the risk, like focus there, put more dollars there.

Jeffery: I love it and agree with you. All right. We’re going to switch over to the rapid fire business questions. If you’re ready, pick one or the other. As an investor, ready to go.

Chris: sorry. Pick one or the other investor. Operator.

Jeffery: Yeah, so you choose from your end because you’re the investor. Which one fits best for you? Who would you rather invest in? You’re a founder or co-founder?

Chris: a founder or co-founder? founder.

Jeffery: Okay.

Chris: co-founder. Two people.

Jeffery: Unicorn or four year ten exit.

Chris: literal and figurative moonshots. I’ll go for the unicorn.

Jeffery: Okay. Tech or CPG.

Chris: For tech.

Jeffery: Tech NFTs or web 3.0.

Chris: NFTs.

Jeffery: AI or blockchain?

Chris: AI

Jeffery: First time founder or second or third time founder?

Chris: First time.

Jeffery: First money or series a

Chris: first money.

Jeffery: Angel or VC? Ooh.

Chris: That’s a tough one. angel.

Jeffery: Board sear or observer.

Chris: Observer.

Jeffery: Safe or convertible? Note.

Chris: To, convertible.

Jeffery: Leade or, follow.

Chris: Lead.

Jeffery: Favorite part of investing.

Chris: Working with really badass people. Doing cool shit.

Jeffery: Well said. Number of companies invested per year for perfect verticals to focus.

Chris: Hard problems.

Jeffery: Two qualities for a startup to stand out to you.

Chris: technical mode, and, foundational problem.

Jeffery: Okay. What is a piece of advice you give founders nine out of ten times?

Chris: Human beings inherently feel before they think.

Jeffery: Okay. What tech will define the world in the next five years?

Chris: Synthetic biology.

Jeffery: Like it? Who is your hero mentor, and why?

Chris: Oh. I have an answer to that one. My, pithy response will be Batman. yes. He made he made his technical reality.

Jeffery: That’s actually part of the the personal question. So I love that. All right. Before we jump into that one, I will ask one. One. That’s, because it’s really it’s focused on what your, your background is and what you’re doing. So, what is the most important technology that’s been built by humans, either in the past, present or in the future?

Chris: Oh. So, I’m colored by what I’m reading right now, and I’ve become obsessed with Donald Brayton and his works around the institution of science. And he has a hypothesis that he talks about and, pioneering research that, humans should, not be called Homo sapiens, but should actually have a different name, because sapiens means, totally wisdom. and his belief is that the thing that makes us unique is actually our ability to dissent. and so I would point out the printing press, because I think from a point of view and our ability to dissent, a lot of that relates to our ability to communicate and our ability to communicate has been fundamentally altered by our ability to actually write, the words that we have in our heads.

Jeffery: Well, shared. I love it. All right. We’re going to move on to the personal questions. Pick one or the other. Well, except for the for.

Chris: Me or somebody else.

Jeffery: The most famous person that pops in your mind.

Chris: Oh, sorry. Cut out there for a second.

Jeffery: Most famous person that pops in your mind.

Chris: Barack Obama.

Jeffery: All right. What first branded pops in your mind?

Chris: Coca-Cola.

Jeffery: Book Booker movie.

Chris: Book.

Jeffery: Batman or Superman?

Chris: Batman.

Jeffery: Fortune cookie or birthday cake?

Chris: Fortune cookie.

Jeffery: Five minutes with Bezos or Oprah.

Chris: Oh. Damn. That’s hard. I’m going to Oprah.

Jeffery: All right. Mountain or beach?

Chris: mountain.

Jeffery: Bike or run?

Chris: Run.

Jeffery: Big Mac or chicken McNuggets.

Chris: Neither

Jeffery: bear trophy or money.

Chris: money.

Jeffery: Beer, wine.

Chris: Wine.

Jeffery: Ted talk or book reading.

Chris: Book.

Jeffery: TikTok or Instagram.

Chris: Neither

Jeffery: Facebook or LinkedIn.

Chris: Neither.

Jeffery: Favorite movie. And what character would you play?

Chris: Oh, back to the future Marty McFly.

Jeffery: Nice. Favorite book? I think you just mentioned one, but maybe you have a favorite.

Chris: one that I probably gifted more than any other would be, Growth or Mindset by Carol Dweck, which talks about the growth mindset.

Jeffery: Perfect favorite sports team?

Chris: Chicago Cubs there.

Jeffery: Okay.

Chris: Yeah.

Jeffery: What is the meaning of success to you?

Chris: Do. Honestly, the work is the win that’s doing hard work that has some net new value creation behind it.

Jeffery: Great. Love it. What is your superpower?

Chris: distilling incredibly complex things into understandable bites.

Jeffery: I like that, and being able to break down those bites and help everybody else align to it. So it’s brilliant. Well.

Chris: That’s the hope.

Jeffery: That’s the hope. Well, Chris, I would say it’s been a pleasure getting to deep dive with you, taking lots of notes. What I appreciate all your time today and the way we like to end our show is the we’d like to give you the last word. So anything you want to share to investors or the founders or the business people, like we turn it over to you to share. And please share how people can get Ahold of you as well. But I want to thank you again for, spending time with us and sharing all this great insight.

Chris: JP thank you. It’s been a pleasure. I like the rapid fire questions, too, sir. I was, I did catch you on your toes. getting old is easy. Chris, at a typical.com, it’s pretty simple. keep us in mind for all those plausible science fiction things you may come across. Send us your crazy. We love it. and and dream big and go after things that are, you know, worth the risk. Spend your time and effort, because you only have so much time on this earth to focus on things that, you know, mean something to you.

Jeffery: I love it, 100% backed, stamped red button, I love it. I. Appreciate it. Thank you.

Chris: Thanks, man. Preciate it.

Jeffery: Perfect. So there was some really great insight there that was shared by Chris. And you know, some of them I like the idea of, the business creating the right direction around the goals and then having everybody on the team focused on those goals. If it’s not right for the business, not right for the goals of the business and where they’re going, then it’s not worth driving down that direction. And it’s going to take the focus off the business, celebrating different types of milestones. Instead of always focusing on how much money we raised, why not celebrate things that, you know, non dilutive funding or, KPIs that you hit and utilizing those as ways to generate more value around yourself and your business? delayed gratification. I like this whole idea. And looking at founders from a type one fund two and three, and they fit into that second phase, you know, looking for that founder that is the engineer with empathy and that they’re inspiring and they’re helping others grow. But at the same time, they’re also building their own networks of ways to learn from and gain and get around people that are educating them and learning. So I think there’s so much there that you can break down and really get into and invest in that quietly honest people. I really like that, and I think there’s some really great insights into to what Chris shared. So thank you for joining us today. If you enjoyed the conversation, please feel free to share it with your friends. Subscribe to our YouTube channel and or please follow us on Spotify, Amazon or Apple. Feel free to share an audio clip or video clip here on our show, and we may include it in one of our future podcasts. If you can find us on all social platforms, including LinkedIn and supporters Fund, your support and comments are truly appreciated. Please visit us at Supporters fund.com, where startup events at Open People now Worldcom. And thank you and have a fantastic day.