What are VCs Really Looking For? with Alexandra Nicoletti

So it's a great position to be in. You have built your product, you got users, you got some revenue as well. So now you are pitching to raise some capital. But VCs, they nod, they smile, and you're getting a very polite, "Thank you, we'll be in touch." And you're left wondering, was it a pitch? Was it the product? Was it me? Something else? Well, here's the thing. Majority of founders pitch their startup like it's a product demo. But VCs aren't buying a product, they're buying success pattern. And if your pitch doesn't match what they have learned to trust, you ain't getting the check. Hey, what's going on everyone? I'm Mike Sirius, and this is Mastering Tech Growth. Every week, we sit down with industry leaders to bring you no-fluff tips on how to grow. If you enjoy the show, please do me a favor. Hit that subscribe button and send me your biggest growth questions at masteringtechgrowth.com. I'd love to know what you're working on and what keeps you up at night. Joining me today is Alexandra Nicoletti. She's a partner at Camber Creek, one of the leading VC firms at the intersection of tech and real estate. Before this, she was in real estate private equity at Apollo and worked in investment banking at Goldman Sachs. Alexandra have seen every version of a pitch you can imagine, and today she's breaking down exactly what separates startups that get funded from the ones that don't. Welcome to the show, Alexandra.

Mike, great, great to be here.

Thank you for finding time for us. I know you are a very busy person. It was very hard to get through you via email. So I really appreciate you finding that time for us. We'd love to kick off the show with this question. When I say mastering Tech Growth, what comes to mind?

I love this starting question. And I think you ask it to most of your guests. To me, I think mastering is an interesting word, right? Off the cuff, I think about perfecting something, but I actually think in the VC venture-backed and tech world, to me, it's more about optimizing rather than perfecting because in the startup world, everything is a trade-off. Right. I think almost every decision, there comes a trade-off, and particularly in the early stages. And so, when I think about mastering tech growth and what that means, to me, it means how do I continuously optimize my growth of the business at every turning point and with new information inevitably. And we can, you know, we should get into this more, but inevitably that optimization can change and should change. Um, there's a sort of a natural evolution there.

I love how you put that. That's very— it's very, uh, strategic way of thinking about things. Everything is a trade-off, 100%. You're never getting what you want. You're going to be leaving something on a table in exchange for something which makes sense more at this particular moment when you're making that decision. And when you say optimizing, um, Alexandra, what is in your mind when, when you say optimizing? Is it like process optimization for efficiency or something else?

Well, like, yes, I definitely think, um, you know, there is process optimization, but to me it's, it's even more high level than that, right? Depending on the, you know, the product, the market that you are in, uh, and the stage of the business, right? How do I optimize for all, for sort of that next phase or that next, you know, where I'm trying to go from, you know, whether it's 0 to 1 or 1 to 2. And oftentimes that means, you know, that means not growth at all costs, right? Which I think, you know, we've seen companies, certainly seen companies fall prey to that. And often that means, you know, maybe prioritizing other, other other things, whether it's really landing that first customer or executing well with that first customer, developing a relationship with them. It can mean any number of things at any given point in time, but what's going to set you up for success best? And to your point, right, because you've got limited resources, right, it is a trade-off, but making sure you are sort of optimizing the resources that you have.

I love that. That's excellent. You mentioned growth at all costs, and what came to mind is all of these startups just, just effectively not failing, but being put in a very tough position because they overleveraged, uh, debt and took some money in and of course spent all of it, just got a lot of headcount and just aggressively went in the market. And now interest rates changed and everyone is finding themselves in a quite tough situations. From your perspective, you know, as a person and as a, you know, investment expert, let's say like this, when you see startups going very aggressively towards growth and going after the market, is that a good thing or is that like a not calculated risk?

To me, it's typically, and I like the way you put that, not calculated risk. To me, it is typically not calculated risk. Look, I think every situation is different, right? But growth at all costs is never something that we are prioritizing at Camber Creek and as a venture investor myself. So I think 2020, 2021, to your point, was a really interesting time in the market where VCs and capital were okay funding businesses with that mentality. And we've seen the reckoning, um, you know, we've seen that dial back over the last handful of years, uh, and so, you know, I, I think, I think, uh, you know, I think founders are, are understanding that the, that the capital won't be there if that is your approach. Um, and I, and I think that's the biggest thing, right? If we're talking about, um, you know, what VCs are looking for, right? Um, smart— it's smart growth. It's not this growth at all costs. I'm gonna I'm going to burn through all of my capital and just expect that more capital will be there at the end of the day. Because that, you know, I think that is definitely a pitfall and goes into, you know, as the way we think about businesses is even at the early stage, are you a capital-efficient business? And does the founding team have that sort of capital-efficient mentality?

I love that. I mean, otherwise it's a gamble, isn't it? It's almost like I'm all in. Like, I'm— I over-leverage myself. I'm literally at the line. I'm just all in. I'm either gonna be huge, get all the pot, or I'm gonna be burning. So there's no, like— it's very binary in a sense. Like, uh, but what we're saying is that we do want to look at the capital efficiency, how it's going to get spent, and, and be a lot more risk-calculated when it comes how we're spending money. Is that good?

Yeah, I mean, us at Camber Creek, um, you know, we, we don't take bets, uh, to your point. We don't gamble with, with our investors' money. We take calculated risks. We do our work up front. And, um, and then, and, you know, in investing in that growth-at-all-costs type of company would, to your point, would 100% be a gamble.

Yeah. Okay, so we, we went a little bit into these like good, uh, signals or green lights, let's call it like this. So I have this, uh, quote from Harvard Business Review, which effectively says that investors rely heavily on pattern recognition to make fast, high-stake decisions under uncertainty, seeking traits that match past successful ventures. So, Alexandra, when you sitting across a founder at Camber Creek, what are the patterns you subconsciously scanning for?

It's a great question. Um, you know, I think there is a little bit of a misnomer with a lot of, with a lot of founders that they think VCs are chasing the hype or whatever the latest trend is. And we could talk about what those are today, right? Versus a couple years ago and what they might be in a couple years from today. I think the core of it though, right, is that's not the pattern that we're looking for. That's not the trend that we're looking for really at the end of the day. What we're chasing patterns in the founding teams and what we see from them, right? We're investing in founding teams. And so it's, a lot of it is on founding teams, is it focus, discipline, customer obsession, I think is a really important one and an interesting one. And it's almost more about You know, at the end of the day, we're investing in the people, less so, you know, less so the product or, you know, some other trendy or flashy, you know, name.

I actually have this question somewhere down the line in the show, in the back of my head, because I remember a quote and someone said it that, the VCs will invest into B+ idea with the A+ founding team versus an A+ idea but a B+ founding team, which effectively means the idea could be weaker, but if the founding team is quite strong, that will be a better investment than a good idea but quite weak or weakish team. Is that correct? Like, that's the reality?

100%. Obviously, you know, for If we're picking things out of a hat, we want A+ all around. But the founding team, especially at the early stages, right? That's significantly more important. And a lot of what we look for is ability to execute. Mike, to your point, ability to execute is a huge one. And the second sort of trade I would add, maybe two, if I'm picking, One, I think, is humility and ability to not just be solely tunnel-focused on execution, but ability to stop, pull back for a second, and listen to your people around the table, your personal advisory board, so to speak, and take some of that input, right? And so, When we're investing at Camber Creek, we do like to lead rounds. We like to be a true partner to founding teams. We like to take seats on the board really because we want to help our portfolio companies supercharge growth. But we've also, we've seen this before, we've done it before. We want to partner with our companies to help them do it. And so I think that while that sort of tunnel vision, tunnel focus on execution can be good at certain times or certain periods for, for a company, being able to also pull back and listen to the other voices around the table is also very important because, you know, oftentimes there'll be sort of nuggets of important information there that might be worth sort of incorporating. So I think so, right? It's execution, sort of that, that humility piece, being able to pull back. And then I think also, you know, the, the last sort of trait I would, I would talk about is Going back to optimization, almost the ability, and it's less the ability to like, you know, when I say the word pivot, I think a lot of people think, oh, you know, it's a 180 pivot. We're totally changing, you know, what the trajectory of the company or the product or whatever it is. Less about that, more about the small, small, small, you know, corner turns, right? And constantly optimizing, particularly at the early stage where if you're going to be successful and get from zero to one, which arguably is one of the hardest things to do. Being able to continuously iterate and optimize, and whether that means your go-to-market strategy because you're getting feedback from design partners or whatever it is, aspects of the product, the way you sell into the market, all of those things, right? Being able to continuously refine, I think, is very important rather than that, again, that tunnel vision of like, this is what I thought day one, and that can only be true, right? And that's never the case. Once you get out there and you start selling product, you always get more information, um, to, uh, that, that should help inform and shape, shape the trajectory of the company.

I love you calling that out. I mean, it's never what you imagined before, you know. It's like, it's every 6, 3, definitely 12 months, picture will change and you will be somewhere you didn't even expect it to be, to some extent. So these small corner readjustments or pivots, yeah, that's definitely coming. And I love you calling out that ability to listen. I actually been part of couple very successful startups where the founders effectively being CEOs or any CXO positions were really trusting themselves and their opinions and sort of failed to listen to the board and ended up going nowhere. It's such a hard lesson. And when you reflect back, you know, you go like, oh, such a shame. You know, we have been given advice, which actually now retrospectively was the right advice to go after, but we just went like, nah, we know better. A costly mistake. Right. So hype, Alexandra.

Well, Mike, to that point, I think that's a great point. Right. And I think you get into, right, you go, a company goes through periods of fundraising where you're almost like selling the business, right, to investors or courting VCs. You go through that period of fundraising, but then once you, once you, once you enter the partnership, once you've got investor investors around the table, the, the dynamic should very much change, right? And, and if, and I think if company, the pitfall is when companies stay in that sort of sales mentality to, to the rest of their cap table, right? It's, it's not about selling at that point. We've invested in you. We, we are on your side. We want to or your growth, and it's how can we do that together, right? So when we come, when we or somebody else around the table is bringing an idea to a founder, I think it's generally from a place of we've got the best interest of the company in mind and let's figure this out together, right? It's that partnership mentality. But I've seen it the other way, right? And I think it's hard to switch on and off fundraising mode and not fundraising, right? Not fundraising mode.

I love that. Yeah, it's definitely that. If you're buying into your part, you're taking money, so you raise some capital. So hopefully you did that very well. So you're not only getting a capital injection, you're actually getting a partner, uh, an ability to access more network, you know, more people. There's so much more value than just the pure capital you're getting if you, you know, if you did your investment rounds well. You should listen. I mean, you should take any advice you can and evaluate that, of course, through whatever is your value prism or whatever you need to make decision about. You don't just take it as, you know, as given and you execute on that. You add your own opinions on that. But there's so much you don't know, especially if you're a young founder, right? Like, there's just so much unknown that you're going to learn through failure. So you're going to make mistakes and then you're going to learn your lesson. Someone can come in and just go like, look, I've been in that room. I know what mistakes you're probably going to make. So how about this? So we're talking about that humility to listen. That's a good assessment, right? That's what we mean here.

Totally. And, you know, I think humility is one piece of it. I think transparency, interestingly, is another piece of it, right? You learn by bringing these things up. And so as a founder, I think the more you are transparent with the folks around the table, your investors, and you're really raising kind of like the meaty issues and not just sort of skipping over them because you think you can handle them or whatever. And even if you can handle them, I find it's always helpful to discuss it with more people because you end up getting to a better outcome when you're sort of bringing together the folks around the room.

100%. You're just getting more input, isn't it? More ideas, more different perspectives, which you can distill to a much better decision.

Yeah.

Yeah. 100%.

Yeah. It's interesting. Like, while we're on this topic, you know, you mentioned, like, you know, you go through the fundraising motion and then You got a partnership, right? And if you did that well, I think a big piece of that process, which I'm sure we'll talk about, is it's almost like, I mean, maybe this is the wrong analogy, but it's like dating, right? It's not just one-sided where, you know, you need to sell the capital on your business. It's also you should evaluate the capital and the VCs that you're talking to. Are they a fit for you and the business too going forward? And so, and what type of, to your point, on, you know, they bring relationships to the table. They bring, you know, oftentimes this with, with Cambra Creek, we bring our network of limited partners who are potential customers and partners for the companies that we invest in. So, so we're actually an accelerant for growth directly with our portfolio companies. And so, you know, I think understanding the type of capital too that you're talking to and that you want for the business is really important.

Yeah, worst situation you can be in is to take money and then end up with someone you don't really want to have, you know, in your cap table. It's just, it's such a terrible situation to be in, especially if that relationship as well becomes, uh, not hostile but, you know, unfriendly in a way. You know, you just got like, um, you just shot yourself in the leg. It's going to be very hard to run. I love the analogy of dating, by the way. It is relationship. It is a relationship. You want to be in a good relationship, supporting relationship, empowering relationship. That's a good position to be in.

And to your point, right, you know, you obviously don't want the relationship to go south, but I think you also want to be in a relationship. I mean, everyone's different, right? Sure. But you do ultimately want to be in a relationship. That's why you're raising the capital. And so I think It's something to think long and hard about. If you're out there for somebody to just write a check and walk away, is that really the direction that you want to go in? Because there's so much capital. Well, I should say there is a lot of capital out there. There is less capital that can really be a true partner to you. But I think that's where the real value is for most founders and for most startups, particularly given it's just it's, it's, you're in, you're in such sort of a vulnerable phase at that early stage. Having a, having a, having a true partner alongside the capital is, is, is very valuable.

Increases your odds of success drastically. Yeah. Yes, 100%, right? So you mentioned hype, Alexandra. You said, uh, we don't chase hype, you know, and there's a hype today, and we can come back to this. So I took a note, I want to come back to this. So what's What type of pitches you seeing right now? Like, what's the hype right now?

Right, AI. AI has been the hype for a long time. For a long time in the VC world means, you know, 24 months, right? But sure, AI. And if you want to take the new flavor of it, perhaps, you know, AI agents and application thereof. And so, you know, I think it's interesting, you know, we, Cambra Creek, plays specifically in the PropTech space, which has, as a specific market, has its own set of nuances. But even more broadly than that, the number of companies that I get pitched where they're the front and center, AI is in the name of the company, or this is solely how they define their pitch. And really when you dig into it, sure, They use AI, which by the way, AI has been around for, for, you know, quite some time. Decades.

Yep.

Right. So, you know, I don't, I don't think there's a need. There's this, there's not this need for every company to solely define themselves by, by these buzzwords. Right. And to be honest, like VCs are gonna see through it. Like, let's get to the crux of the problem that you're solving.

Yeah.

And, and, and is there value there? And I I think that's really the lens that I look at companies through is, are you solving a real-world problem? And is there an ROI for your customers in adopting the product that you're selling? And maybe that means AI is front and center, but maybe that means it's not. And I think that's okay.

From the most recent pitches you've seen and heard, Alexandra, How many of these percentage-wise had AI in it as a core of the pitch? 100% of that?

Oh, recently? Yeah, probably 90% plus. Yes. And look, it's certainly warranted, right? Like I do believe, you know, the tailwinds of AI and, you know, the application thereof in PropTech and outside. You know, I again, you know, still going, still looking through the lens of like, are you solving a real problem? Yeah, right. Because it's actually the baseline.

Yeah, exactly. Like, is it actually— is the AI just in the name? Are you just putting some API calls on top of, you know, OpenAI, or are you actually developing a unique technical solution where you're training your own LLMs which solve a real problem? Like, then it's AI tech, right? I've seen so many of just literally like just a layer on top of OpenAI making some calls, effectively generative AI, and then, you know, huge names, WeAI, this and that. And it feels like the whole market is now just that. It's just everything is just AI. It's becoming old. I don't know, maybe it's me, but, you know, I switched from excitement to skeptical the moment I see that in the name. I'm like, oh my God, you know. It's like, tell me something new. Is it just me, Alexandra? You have the same feeling?

Totally agree. Like, we don't need, we don't need more generic wrappers for ChatGPT. I think what we do need is, is fresh perspectives, right? People coming in either from inside the industry that of the pain point that they're solving, or out, even outside the industry, the pain point that they're solving, and, and doing something differently. They're disrupting a workflow flow. And by the way, Mike, I think, right, we're talking about AI and to some extent I think what we're getting at is the technical moat here. And that I think technical moat as a concept or a term has changed quite significantly over the last 24, 36 months. I think there are other interesting moats to be had on top of that. I think being really clear about that is important for founding teams, particularly given it is much easier to build product today. And to your point around, are you just another wrapper for a public-facing LLM? Is there another moat to be had or is there not? And I think that's from the VC perspective, that's something that we're thinking about. And is important. And I think there are other interesting, there are also other interesting and important ways that companies can be using AI, not just in the product they're selling, but also internally. And so, you know, I think that's another thing we look for as a VC and at Camber Creek is the founding team. Like, you know, a lot of people talk about AI native, right? And that doesn't just mean the product you're selling. I think it also means the mentality of the the founding team? And are you able to do more with less is basically the crux of it, right? And Mike, I know you have a— Mike, you've got a technical background, right? So you could probably talk way more in depth about this, but can your technical team be 1/10 the size of what it historically maybe would've been?

100%.

Things like that.

I can add some context to this. So We just had an episode last week with the PayPal head of innovation, and he defined it that this is an age of solopreneur. And effectively, the idea of the whole episode and the topic we were discussing is one person right now can do so much more because of the AI enablement. So you can do marketing so much quicker, your messaging, the websites, you can code. So much quicker, can prototype solutions effectively alone. You can cover foundation team and you can spin up ideas very, very fast, which means there's likely going to be, you know, a lot more solopreneurish type of ventures coming out, which leads to that, you know, notion of AI native as a team. You likely want to have founding team who thinks like that. Like, why would you, you know, hire someone who can code AI well versus someone who can orchestrate AI agents well. It's, um, exactly. I feel like we're moving into that, you know, agentic, and that's a term, by the way, if you put in the Google, agentic, um, automation, where effectively it's not just generative AI, it's not a single agent, but you have full workflows and in the middle you have multiple agents which take a role such as, you know, marketing or sales and they automate the whole shebang for you effectively, you know, the whole workflow and they make decisions for you as well. So it's just not an input and output, but the AI agent actually is capable to make some calls for you. It's very exciting times to be honest, where we, where we're moving. I'm drifting. I've, you pulled me on the, you pulled me on the right string. I could talk about this for hours. All right, let's back, let's go back on a pitch. So one thing which I wanted to, uh, understand if how important to you is these intangibles, as I call it, like confidence, delivery of a pitch, a story behind, you know, the product. Like, are these things have weight in the sense of success, or is it still like, look, we're gonna go through the crooks, we're gonna look at problem-solution fits and everything, and that is just sort of not that important?

I think that it's a great question. I think the pitch is certainly important, but maybe not for the reasons that you're thinking it is. Right. So it's for me, the pitch is important is because we want to understand how founders are selling their company essentially. Right. And so if I'm sitting there, if you can't sell to an investor, then are you gonna be able to sell to a customer? And so that's the lens that I'm having, right? And you've gotta have deep belief and conviction around the pain point that you're solving to go into any customer, particularly, I mean, if you're a B2B enterprise SaaS company to go into a large enterprise and say, hey, we're gonna disrupt, I'm a— we're, we're a new company. We, uh, have, have a new product and we're going to disrupt a workflow or something else, right? And, and, and, you know, that, that takes, um, a very certain type of articulation and, and, and, and, and sale. Um, and so that's, you know, that's a big thing that we're evaluating, right? Is, is, is the comp— is the Is the management team or the founders, do they have conviction around the product in the market that they're selling into? And so that's a big piece of the pitch and the way we think about the pitch. Does it matter the pictures that you throw on the different slides? Probably not. I want to get to talking about what does the traction look like that is you know, really important. Uh, and by the way, it almost doesn't matter what the answer is. There just needs to be a well-articulated answer as to, right, because every company is going to be at a different stage.

Yeah.

Um, but you know, where being able to, um, being able to explain where you are today and then where you're gonna get to in the next, call it 12 months, with the capital you're raising and have that be realistic, right? I think the realistic piece is the other piece, particularly for us at Camber Creek that we're betting. If you tell me you're going to go raise $1 million to get to $100 million in revenue in a small market, right? I'm sort of like, that's a little bit of a question mark. I'm not really sure. I'm not saying it's impossible, but it's certainly like a yellow throwing up a yellow flag. And so I think, you know, being realistic about, you know, the— just the projections that you're putting forward, right? You can make any— any— you can make any chart that has sort of that exponential growth curve, but it's the devil's in the details, right? And we're paying attention to that.

Yeah, I love that. I've seen this, uh, head in the cloud, you know, vision and pitches as well. It's always like I get this like Do you even believe? You know, like, are you saying this because you really believe that, or are you saying this because you think, you know, you'll convince me about some moonshot type of investment? I always get this, like, you know, I'm trying to understand if it's just the words you're saying or you actually have a buy-in yourself. And then you start, you know, asking these grilling questions and you take them into details of how you come up with the numbers, you know, why you believe that's the number, what's your addressable market and all that stuff. And everybody cracks eventually. Like every time you see this exponential curve, once you ask the questions, there's cracks. People are unable to defend that. So most realistic one is, which is actually just a realistic one. So the story matters. We said that. I really love you calling the confidence or the ability to sell. Because effectively what we're saying is that you're pitching to me. If I believe you and you are able to sell, you know, your vision, your product to me, I'm quite confident you're going to be able to sell that to the market, isn't it? That's what we're looking in that delivery.

100%. It's almost like the sniff test, right? And I think that comes back to, Mike, your earlier comment of the sort of pie in the sky idea, right? Sure, it's fine to have a really lofty idea or a lofty goal, but we wanna very quickly get into the meat of what's gonna happen over the next, particularly at the early stages over the next 60, 90, 180 days, right? And what that really looks like. And so I would say the, the, you know, the, the, as we're talking about, you know, components of the pitch, right? Um, getting into the, the, the details of, of, for, as you, Mike, as you mentioned, right, the TAM, right? Being realistic about, being realistic about the size of the market and, and the specifics of the market, right? I want to know I want to know that you are intimately getting to know the market that you're selling to, not just, hey, this is a multi-billion dollar market because ChatGPT told me it is, right? I want to understand the customer nuance. And I think that also leads into even if you're at that sort of stage zero with your company, having put some thought into things like go-to-market are really important. And I think having, again, going back to like the humility piece, for founders. I think it's okay to say, you know, this is the way I'm thinking about the go-to-market approach. You know, we will continue to refine it or, you know, we haven't, you know, it's not nailed down in full. This is the way I'm thinking about approaching it based on, you know, X, Y, Z number of factors. And I think that opens up a great and really productive conversation too for in this sort of like dating game, right? Where you can then get, really helpful feedback from the VCs that you're talking to even before they invest. And I think that's an interesting opportunity for founders to get some feedback on their product, right? Because we're talking about a lot of this is, or I think a lot of the way startups approach fundraising is it's sort of like this sigh, right? It's like, I've now gotta spend all this time fundraising. But I think the reality of it is you can gain a lot out of the process. If you do it in the right way. And so you can get a lot of this feedback from VCs, from, by the way, folks who have seen businesses, built businesses, have exited businesses successfully and get that feedback. Even if they don't ultimately invest, I think there's a way to have those conversations that are productive for both sides and end up by hopefully leaving the founders, right? Our goal at Camber Creek is in the diligence process, we actually do things that are additive to the founders that we're talking to. And so it ends up being a much more collaborative process.

I love that. Ultimately, what you get, even if you don't get the funding, is you get good questions being asked and potentially you don't even have the answers for. So you can go do some homework and just do it better for the next pitch. Or find your new partners and actually get into crooks into good questions and understand how everything will happen. I love you mentioning go-to-market as well, Aleksandra. I want to pick on that and Tam as well. So you mentioned these like being important ones, the total addressable market and go-to-market strategy. What do you like, like when you ask these questions, what do you like to hear? Like how do you evaluate if that's a good answer or not?

Is it realistic? Is the lens that I'm looking through—

is it realistic?

Okay, so, right, and, and maybe I'll give an example, right? Um, so in, in, in the— I'll give an example from PropTech because that's, that's our bread and butter. Um, if you say you're going to sell to real estate organizations, well, there are, um, you know, there are thousands upon thousands of real estate organizations. What is— and, you know, $40 trillion worth of value in, in the real estate markets. What is the subset of the customers that you're going after, and what is the persona of the customers going after? For example, are you selling to the owner of the building? Are you selling to the property managers, the person physically on the ground, on-site at the building that's, you know, doing a lot of the on-site work? Are you selling through the building to get to the tenant or the resident? Are you selling to the, the, you know, the, the broker or the person handling the transaction of the sale of the building, right? So there's so many different components, and this is, this is the case really for, you know, for every industry, right? There are so many different components and nuances, and, you know, it's one thing to say the $40 trillion real estate market and that's, and that's your TAM. It's another, you know, and, and you and to be frank, I would just write that off, right? It's much more productive to say, okay, here's the first iteration of the product and here's the subset of personas that I'm selling to and this is the size of that market. That to me is what I look for, what I want to see and have a, you know, and I think there are ways to have a productive conversation around that too.

So if someone goes, And you ask about ICPs and so ideal customer profile and someone goes like, you know what, we can sell for everybody. Like that's one answer. And then second answer is I'm selling to landlords who own from 3 to 5 real estates, you know, total value of portfolio $25 million and that's their problems and that's how I'm going to solve that and that's how much of addressable market I have. When you compare those two answers, if the first one goes like, well, the product is so unique, we can sell to everyone because it's AI-enabled. That's not a good answer, right?

Right. Immediate yellow flag.

Yellow flag, not a red flag. So you would still dig into it, right? You would go like, well—

I mean, listen, I always like to think that we stay open-minded as VCs, right? And at Camber Creek, we're always open-minded and And, and, but yes, yellow flag, 100%.

It could be just maybe inexperienced founder, right, who maybe didn't do the homework, but they still have something. So you want to dig deeper, but ultimately it doesn't really show that you did the homework, isn't it? No.

And if you, and if you don't have more substance to back up that answer, then, then the yellow, then the red, then the yellow does convert to a red flag.

And then you get, thank you, we'll be in touch. Yes. Right.

Well, and I think, Mike, to that point, right, on the, on the thank you, we'll be in touch. I think the, the, the most, the most direct, and if I'm biased because I think, you know, within, we do a good job of this at Camber Creek, is we'll tell you directly what, what the feedback is. It's, you know, fairly direct as to why we're not investing. And, you know, I would say in that case, you know, you know, I think you need to refine your thinking on the addressable market.

And here's your feedback, which is again a lesson learned, isn't it? Someone can go home and really think about that, right? So, I want to touch a little bit of chemistry around founders and see what you think about that. I personally was in a couple of startups where the chemistry sort of is good, between the founders. And, you know, when I say founders, I mean they have shares in the business, so they're part of the cap table. But then eventually business grow and challenges grow, and then, you know, this— the weight of decisions grow as well. And one wants to be a CEO and another wants to be CEO as well, and suddenly there's clashes. So, you know, it's my business, it's your business, and it just sort of explodes into like a real problem. So in the beginning, when you think about investing, do you look at who the founders are, what are their backstories, how they met each other, you know, is there chemistry to sort of predict potential future problems?

100%. I mean, founder-to-founder relationships are one of the number one reasons why down the road, uh, companies run into issues, to your point. And, uh, and so, you know, It's not just how did you meet your co-founder? It is have you sat down and had some of those difficult pointed conversations with your co-founders? Everything from what are your finances like? How do you think about spending money on a personal level? What are your upcoming expenses on a personal, right? Getting into that person because when you go into starting a business, it becomes personal. It is your life. And so, I think there is this sometimes this sort of lean to try and separate work and personal, right? I think that's natural, right? But when you're starting a company and you're going into business with somebody else, I think it's very important to have some of those deeper personal conversations so that you really understand where the other person is coming from. What their constraints may be, how they approach working, right? Working styles, I think, is very, very important too. And all of those components. And so we're not just evaluating, you know, each founder, co-founder individually or in their own silo. It is very much, you know, what is the relationship? And, you know, we, you know, I think also how they interact and how they complement each other is really important. So You know, I think an important thing when, you know, if you're going out and looking for a co-founder, for example, you know, what are the, you know, what are the personality traits or, you know, working style, you know, complements to you? And so that, you know, no one person is going to be perfect. But if you've got two co-founders coming together, I think you can often have a really— it can work in the you know, we talked about, you know, what happens if things go awry. It can also, it can also work to the benefit of the company too. You've got two complementary personalities. Sure, sometimes that creates a little bit of healthy friction. I think also that, you know, another, you know, important distinction is friction that detracts from the company and then healthy friction, right? And I think that healthy friction is actually quite productive. It's a nice check and balance. At times. And so, you know, I think being very intentional about that too, as you're building a founding team, is important.

Is that later down the process or is it part of the pitch? So I'm just thinking from a perspective of a founder, I'm gonna have a slide about the team. I mean, everybody has a slide about the team. So probably I will show the team, I'll show the founders. Do I care to say that during the pitch in the sense like, hey, you know, we've been best friends for 12 years and, you know, we did some other businesses. So we tested by trial and error or something like that. Like, is that an important message to put in a pitch or is it like really doesn't matter that much and you will figure those details later in the stages?

I think if you have, I think if there's a positive story to share, it's to your benefit to put it in the pitch, right? And to mention it, right? So if you've, If you've successfully, if you had another successful company with your co-founder and now you're going at it again a second time, that's fantastic data to be able to share with investors, right? Or prospective investors, because that to me, that says you've weathered that potentially strenuous relationship over the life cycle of a company. And by the way, now you want to do it again, right? So I think That speaks volumes. Not every situation is going to be like that, but there's, you know, I think, you know, a little bit of flavor context for, you know, the relationship is always helpful and then, you know, digging into it more and then we'll always dig into it more throughout the process down the road.

What if I'm just random, you know, like I just got my co-founder like 6 months ago because I put a job listing on LinkedIn and we just came together and we just built this tool. Is that like a yellow to reddish flag instantly, or, or you give a chance if the—

let's say, yeah, I have encountered situations like that. Um, it is— it's not a red flag, um, but certainly something that I will spend more time on as a potential investor. And so I would look to understand why are— like, why individually are you both trying to solve the same problem. What is resonating with each person? And I'll spend more time probably together with the two founders to really get a feel for their dynamic, get to know them personally, get to know their style. And so, yeah, so for you, it's not a red flag in my book, but certainly something I would think think harder about.

It elevates risk profile for you, isn't it? Which you need to effectively assess risk around that.

Certainly, certainly. And, and to be honest, right, you know, with any, you know, even with any first-time founder, right, there's a little bit of an elevated risk there because, you know, they, they have not built a business before, and, and, um, you need a, you know, very certain type of, um, you know, person to say Hey, I'm going to come in and disrupt something in the marketplace and execute on it and execute on it well with limited amount of capital. And so I think, yep, it just, we would not be anywhere without first-time founders. We need them, we encourage them, but certainly, you know, vetting a lot of the things, Mike, that we talked about earlier, you know, about personality traits and things like that are very important.

Okay. So I want to read this quote from TechCrunch. Early-stage investors consistently point to traction, not vision or product, as the top reason they say yes or no to a startup. And you did mention traction. So let's imagine this now. How small is the traction that can still be considered attraction?

A good, good question. Um, well, look, certainly, uh, certainly pre-revenue I think can be considered traction if you've got, you know, I think it's one thing. So let's, I'll give it, I'll give an example. If you've got it, you know, you've got 2 companies, they both have MVPs that are up and running, are usable, but you've got one of them that has put it in the hands of 3 to 4 potential customers. And you're getting real-time feedback from those pilots versus one that just has this MVP, hasn't gotten any feedback yet. I think That to me is very different, right? And I think to me, the company, right, the company that has those pilots underway, that is actually testing it and trialing it with potential users is further along in the process from the traction standpoint. Neither company, by the way, has any revenue. So.

Okay. So it's possible then it's pretty revenue affected attraction, right? So we're saying If you have a product which is getting tested, and in B2B market, I, I guess, uh, 3 to 4 companies testing your products is, is a good number. Can you still raise money on that? Like, is that still, um, let's say, because you're getting a lot—

are you going to get paid for it? Is it right?

Yeah. So I'm just—

evaluation going to reflect that? Yeah, yeah, I think it's that. Yeah, yeah. Um, that's a good question. Like, I think I think the question is, I think the answer is it depends. Typically no, though, right? At that stage, you are typically still considered pre-seed, a seed stage company with no revenue, right? And that, the valuation band on that is within a very specific range. And so, it certainly does help. I think it also helped helps as you're, you know, talking to VCs, even land a lead VC, right? And so there are other perhaps intangibles that it certainly helps with apart from valuation.

Um, uh, do you even want to raise, Alexandra? So sorry to jump in, but do you even want to try to do this? It's like, if you're testing, you know, you're pre-revenue, should you just maybe wait until you're actually getting some revenue and then do the raise? Because I, I see people going after the raise before they get any revenue, and that was very, very popular, you know, like 3 years ago when there was abundance of capital and, and everyone was giving money right and left. And I've been part of so many pitches where it's like, look, it's just an idea you're pitching. Like, you don't, you don't even have a product. Like, that's, that's what the market was. So from your perspective, it's like, is there like a sweet spot where you go like, look, this is how much money we're making, this is the right time, like that's the best time to raise right now? You know, we're in a good spot, we're making enough, uh, we're gonna get a good exchange of, of, of, you know, equity to, to raise capital. Like, like, what is the best part over here?

To a large extent, I think that's a, you know, that's sort of the million-dollar question, right? And, and to me, um, I always— I mean, I'll tell, I'll tell founders this directly: if you don't— if if you can execute on the next, on your plan over the next 6 months without capital, there may not need, there may not be a need to raise to your point, right? Like you should not just raise for the sake of raising. And I go back to the trade-off conversation that we were having, which is everything's always a trade-off in the early stages of a startup. And so if you feel like additional capital can come in and make a meaningful difference in terms of accelerating the business forward. And again, it's also capital and partnership, right? Not just the dollars in, but also the partner that you're bringing to the table. If you feel like that relationship can meaningfully accelerate your growth, then yes, then I do think there is, you know, I think there is a, I think it's important to go out and really think hard about, you know, do you raise now or later? And the answer may be now if the answer is yes, right? But to your question around, should you wait until you've got some amount of revenue coming in the door? Yes, I think it always helps the story and the conversation to say, hey, I've got customers actually paying for the platform. So yes, but not necessarily a full, I would say, a requirement, particularly in the, in the, you know, B2B enterprise world.

Okay. Do you ask a question during the pitches like, why are you raising money right now?

Yes. Usually, usually like the third or fourth question that we will ask. And it's funny, the answers to that, that I've gotten range quite a bit. Yeah. I think it's important to have thought out that answer. And to my earlier comment, I don't want to say that there's a right and a wrong answer, but there is a right and a wrong answer. And to me, it's really about the accelerant piece. And is now the time where you feel like capital can truly be— are you maximizing the acceleration of the capital? People coming in.

Yeah. So effectively you're saying, I'll give you a pound, how confident are you, and are you able to defend the fact you're going to give me 4 pounds back? That's pretty much— that was what we're asking. And you said this is your 4th question, plus minus. What, what are your first 3 questions?

Good question. Um, you know, one is, uh, I start with why, you know, why are you solving this problem?

Behind the product? Yeah.

Okay. Yeah. And a little bit about the product, but more around the pain point that the company's trying to solve. Why are you, why have you identified this as a pain point? And what is the pain point, right? Why have you identified that this is a pain point and why are you trying to solve it? Okay. And then I would say my second question is, What, how much efficiency do you think can be realized here by a customer down the road? And so I'm sort of getting at with that one is what is the, how much better is what you are building versus the status quo? And to me, you know, especially in the world, I mean, I think for everyone, right? For a consumer, for an enterprise, You're not going to change a workflow. You're not going to change a habit if the alternative is, you know, 1 to 2 times better than what you're doing today, right? It's got to, to me, it's got to be 5 to 10 times better to warrant that habit switch. And so, if I'm, you know, and we've seen this numerous times, right? The— and I'm talking about in B2B enterprise SaaS and in the prop tech space inclusive, the almost the pain, right, an organization has to go through of introducing a new software or introducing a new workflow or changing a workflow and training and getting the team onboard and fluent with that, right? It's got— you've got to— the product has to be a number of times better than what's in place.

Um, I do agree. I do agree, very strongly agree. I work for enterprises and tool change is such a pain. Like, people think 7 times before they actually pull the plug. I mean, I'll be honest, cost is probably the number one at enterprises, uh, for the change. It wouldn't be— I mean, you always look at the feature parity, of course, but With enterprises, because you have thousands of people, eventually, you know, you reach a level where you go like, okay, well, the licenses we're being offered is just, just way too expensive. So then you look for alternative. But when that takes place, uh, the change of the tool, it's just so much pain for everybody rolling out change management. No one's happy, everyone's annoyed for at least the next 6 months. So in B2B enterprise enterprise world, your tool has to bring something very, very worthy of that change to take place.

Yeah. And unfortunately, the change management piece is just, it's just human nature, right? And so that's never going to go away. And so that's a very important piece that we spend time on. And then the third question, we, you know, I ask about traction. And, you know, I think with those three questions, I can oftentimes Myself, well, I don't want to, I can oftentimes answer the fourth question without hearing it from the founder, but I do ask it. And that helps sort of, I think the understanding the answers to the first three questions really help VCs understand that, why are you raising capital question, right?

I love that. Alright, so let's talk about the importance of thinking about the exit or how they will return capital to you. So I have this quote from Crunchbase News which goes: Founders who can speak clearly about exit strategies early on tend to inspire more confidence because VCs must plan liquidity events before they invest. Is that Is that true?

It is true that VCs need liquidity events. Yes, that is true.

Do you think about this from the geckos? Like when people pitch, do you actually like the fact that they go like, look, I'll take your money and in, you know, 3, 5 years, I'll give you 6 times, you know, back. And then this is how I'm going to do that. Is that important?

Yes. Look, I think the exit is always important and it's something that we as a VC are thinking about even before initial investment. Um, but however, to your question on do I want to hear a founder— how do I want to hear a founder, um, talk about it in that initial pitch? And, you know, I think there is a right way and a wrong way. Um, to— and, and, and this more goes, goes back and speaks to the personality of the founder and also the thoughtfulness of, of the pitch and, and what put into, uh, you know, the company today, right? And so if I hear, if I hear, if I hear a founder that says, you know, 100%, we are going to IPO in 5 years, I mean, we're talking about going back to yellow and red flags. That is a red flag.

Yeah, it's not even yellow.

That is a red flag.

Thank you, we'll be in touch. All right, why is it a red flag? Because, because they just It's just not realistic to IPO in 5 years, isn't it? From, from early investment, is that, is that why it's a red flag? It's just like you're not being real, like you're so outside of the realm of reality that I doubt you even know what you're talking about. Is that pretty much what's happening?

Yes. Yes. And you know, it's one thing to convey conviction about what you're building, but there are a lot of other ways to do that. And to say with certainty that you're going to do something that, you know, 99% of startups Startups don't ever achieve is I think that's just over the top with hubris. And so I think also being realistic about what type, what are you building? What is the pain point you're solving? What type of company and what is the long-term margin profile of the business. That's how I would articulate it, right?

Okay.

And that, I think, talking about it in that way then allows the VC to refine their view on the exit alternatives, right? Without the founder saying, you know, we are, you know, 100% gonna go public, or, you know, we are 100% gonna sell to this strategic, right?

Okay.

To me, it's more about what are you working towards and how does that translate into the key metrics of the business longer term.

So effectively, we're saying it's not needed to talk about the exit in a pitch and show that we're thinking about it. We're saying that show enough understanding around how you're going to utilize the raised capital to just grow and we will infer the exit ourselves? Or is it actually healthy to say like, look, we are thinking about the exit in 5 years? Like, which option is better?

To me, you know, to me it doesn't matter. It doesn't matter. I think, um, I, I think it's, it is, it's a little bit like gambling when I hear, you know, we're going to exit in 5 years. You put some sort of predetermined, right? Like, right. First of all, 5 years is a really long time. Exactly. You don't have any revenue right now. So, you know, I don't know what's going to happen in 5 years, but you also don't know what's going to happen in 5 years. So, you know, it's sort of just a waste of time, I think, to spend, to, for, you know, to talk about it in that, in those, in that you know, sort of certain way. So again, to me, that's why I go back to let's talk about how you're thinking about building the business long term. What is the vision long term? And, you know, and this is getting into, you know, what type of company are you, right? Are you, you know, pure B2B enterprise SaaS, or is there a services component? Is there a hardware component? Is there a B2C component, right? And how does this long term translate into the sort of the margin profiles of the business. Um, that is a much more productive conversation than saying, uh, you know, we're going to exit in 5 years, and, and, and then the, you know, the, the VC on the other side of the table has no idea what to do with that, and, uh, and frankly, it's gonna just tune you out.

Yeah. Well, I've wrote this AI agent whose predictive analytics is out of this world, so I'm predicting my 5-year exit. Is that a yellow flag right there? Yellow or red flag?

Well, if AI said it, then—

It has to be true, right? Right. That was awesome, Alexandra. So let's go into rapid questions. We have the segment just before the end of the show, just quick answers and hopefully, you know, pick your brains and give some value to our listeners. So the very first one is, how can pre-revenue startups show traction? Pilots, talking to prospective customers, customer interviews, prospective customer interviews, user base, maybe getting some newsletter subscriptions or some trial accounts or something like that.

Yes.

Yep. Pre-revenue. All right. What's the best way to demonstrate product-market fit signs to investors?

Great question. Um, again, I go back to number 1, right? If you've got, if you've got some of those components on number 1, you are starting to get actual market-level feedback on the product. And that's the best way, you know, to get, to get a feel for product market fit is direct feedback from the market.

Ultimately, what, how is the market fit? Let me rephrase it, not how, but when can you say that you have market fit, product market fit?

Oh, I, I think, um, That answer depends, and it's not, it's not a, it doesn't come with a, it's not a binary. If I have revenue, then I have product market fit, because frankly, I know companies that have some revenue and I, I don't think they have quite yet found product market fit.

Okay.

So, um, you know, to me, it, it, it often comes down the road, um, again, depending on the pain point that you were solving and the product. But just because you have revenue, I would not assume that, that you have a market, that, that means you have it, right? Especially at the early stages.

Okay. What are the common mistakes in a pitch deck for investors? So we talked about everything what should be there. What are the one, like, red flags you see where, you know, people come in and do the pitch and, you know, before they even finish, you go like, nah, nah.

So this, this might be, um, this might be a, a, um, an unpopular opinion, but I do not want to spend time watching a video demo of the product.

Okay, you don't want to watch.

I am—

I see what I mean. So in the middle of the pitch, they go like, in this slide, we're going to show you a video, and they click play.

Yes, happens quite often, frankly. And, uh, I'm on the— I'm on, you know, I'm, I'm in the meeting because I want to be talking to the founder, I want to be talking to the team. I, I don't want to watch a I can do that on my own time.

Yeah, it's such a— like, it's so— it's such a no-brainer that it's very surprising you still see that, which probably leads to this realization that lots of founders don't know what they don't know. The pitching is new process to them, and they're gonna effectively make mistakes, right? Should we— should we allow them to make that mistake and go like, okay, fine, I'll watch your video, let's just continue with the pitch? Or, you know, from your perspective, Alexander, you just go like, oh my God, Nope. Red flag. Bye-bye.

No, Mike, listen, like I'd never— and we know we talked about a lot of red flag things today. You know, I, with even with anyone in isolation, I never am going to write somebody off because of that. Right. Because to your point, like everybody is coming in. I think that's one of the best and most exciting things about startups, the startup community and world that we work in. And and in venture capital is you've got people coming from all walks of life, all different backgrounds, and that's the opportunity. And so, no, I'm never gonna write somebody off for one of these single, perhaps if you wanna call them missteps, missteps. But hopefully in talking through this, we're sharing some things that then founders hear and can apply going forward.

Do you watch the video until the end or do you go like, hey guys, like, um, can we just skip over that slide and just move on? Like, what's your answer? Like, you know, when they launch the video, you're like, how many minutes is that? 7 minutes? Oh my God, okay, can we just move on? Like, do you shut down that slide like that, or do you like patiently watch the video and take notes?

Oftentimes I, I will say, hey guys, can we just— can we talk through the product? Or, you know, can we move on to the next slide? And, and I'll say, hey, you know, I want to be talking to you. I can watch the— I'll watch the video after. And By the way, I do watch the video after, but I do it and it's more productive for everybody, I think.

Yeah, I do the same. I'm like, just send me the bundle. If I'm interested, I'll take a peek. Right. So what do VCs look for in the due diligence process? So the number 1, 2, 3, the top 3 is like when you're starting the due diligence, what are the main things?

Thanks. Great question. We're looking to vet traction, so go deeper in traction, more deeply understand things like a company's pipeline, their approach to go-to-market, and the team. I would say the team is very important. And so we're not just, depending on the size and stage of the company, we're not just looking at the founder, the founder, the two co-founders, whatever it is, right? We're looking at soup to nuts, the entire team. What's the structure? Does it make sense? What is everybody's role? How efficient is the company? And so, we're digging into those components in addition to, if you, again, depends on the stage of the company, right? If you're a more mature company, you've got a year and a half worth of P&L. We'll spend time on components of that and some of the KPIs and key metrics. But at the early stages, I would say it's those handful of things.

Okay, excellent. How should a startup present its go-to-market strategy in a pitch that it actually lands well?

The go-to-market, good question. So, you know, I think it can be, you know, woven into the TAM conversation, right? And as, you know, you're talking about TAM, ICP, and then what does that go-to-market look like? And why for this ICP. I think that's a really sort of natural evolution of the conversation.

Go ahead. What are the components of go-to-market you care about? Like marketing, buying ads, or like any components you go like, that's a good go-to-market strategy.

How you're doing it. The cost, the team that is required to do it, and why you think it will be effective. So, okay, I think those come up, right? So if I've got a company that says, you know, we're gonna, you know, our go-to market is, you know, we're gonna buy a bunch of Facebook ads and, you know, we need a team of, you know, 3 people to do that and, you know, $5 million a year to do that versus, you know, a company that says, I've got a team of, you know, 2 sales leaders that have relationships in this industry, and we're going to go sell this, you know, B2B enterprise product. Different approaches, different companies, you know, something to, you know, to talk about and evaluate. But I think the efficient, you know, perceived efficiency about around go-to-market is very important.

That's an excellent answer. What are the effective ways to create social proof for startups?

Great question. If I'm understanding correctly, around sort of social—

social recommendations. No, it's just like, you know, yeah, you know, we got some people telling us how great our product is.

Or more like, yeah, I think, I think organically is the best way. If you've got, if you've got an early trial, you know, user or customer, and they've been a, you know, they've helped you give it, they've given you advice about the product, um, you know, from the outset. I think, um, building those relationships early on is very important. And, and then being able to— oftentimes you can go to them and say, can, you know, can, can you, um, can you be a reference for— can you be a customer reference for me? Can you, you know, can I share a quote on, you know, on, on my website from you? Right. So I think, you know, if you can develop those relationships in the right way, then that, then that social proof thing, I think, comes more organically.

Is that a good proxy for the traction as well? Just getting those social proofs?

You know, I think it can come in a lot of different ways. At the early stages, having, you know, one or two people as design partners or bringing them into the fold to say, you know, we're going to give you access to this product, maybe even for free, but in exchange, we would we would love your feedback, give us your feedback, right? And, you know, having a way to make it, you know, make it somewhat give-take and as a good way to develop some of those relationships.

I love that. How does a founder's story influence investor decisions? So, let's say I'm alone, you know, maybe it's a couple of us, but there's a very clear story why we're building what we're building versus we, we see a niche in the product and we very, uh, in the market and we are very business-oriented so we think we can, we can capture stuff. Like, does it matter, you know, why we're building this, the story behind this?

Not necessarily between those two examples, but, uh, this, but But I don't want to say the story doesn't matter, right? Because it does, it does. I think you can approach it in different ways, and I think, always want to know the truth, right? We don't want a contrived story. But I think there are multiple ways to recognize there's a problem and try and go after it. And so understanding how you've done that is important, and there's sort of one, one story that will only resonate with VCs.

Okay, I love that. So we talked about traction quite a lot and a lot of proxy numbers was given. I'm very interested to know which is the most important, but not the revenue.

Ah, in terms of metrics?

Yeah, like traction metrics. You can't choose revenue. What's like, what's the second most important?

Cash burn.

Cash burn. Why is that?

Even if you have no revenue, presumably you are spending money.

Yeah.

And I want to know how much you're spending and what you're spending it on.

Yeah. So if I'm giving you a million, I just want to understand how quickly you're going to spend it and why and where, right?

Well, I want to know, yeah, how efficient, how efficient you are and how efficient you can be with the capital that, that we'll be investing in you.

So you just want to know if they buy in cross hands for the team in the Breakfast. Such a cliché. Such a cliché. So how should startups frame their total addressable market to appeal to VCs?

You know, I think we talked about being realistic about it. You know, maybe that's, you know, to, to this non-technical answer, right? But I think being realistic and also Also being focused, I think, is a good sort of framing for it, right? Being focused in terms of your addressable market and what that means. So, I think to some extent, the detail matters.

So, we touched on being overoptimistic to the point where it's just not realistic, being a red to yellow flag. Can you be the same on an opposite side? Can you be so pessimistic that you're not giving yourself a good chance and you're not presenting a real potential and a real opportunity in your pitch?

Yes, you can always be too, too detailed, particularly in an introductory pitch. You know, I think there is certainly a balance, um, right? Because And, and I, you know, I think it's important to understand, you know, take 3 minutes before the meeting, um, and I, I, uh, you know, I, I tell, you know, all the founders that, you know, I work with to, to do this, I recommend it, is, you know, understand who you're talking to, what is their background, how much do they already know about the market. And so, you know, if you've got, if you've got, you know, us at Camber Creek, we're prop tech, prop tech focused, so all, you my bread and butter is real estate technology. I know the, I know the real estate space intimately inside and out, and, and we do as a firm. And so, uh, I don't need, uh, you know, you know, 30 minutes spent on understanding the nuances of the real estate market. I think it's, you know, give me the, you know, give me an understanding for, you know, your ICP, what you think, um, you know, what, what segment of the market you were going after, and then let's move on. And so, you know, I I, I recommend that for, you know, across, across any industry, any founder that's talking to an investor or potential investor. Understand that investor's background. How much context do they have for your, for your business, your market segment, your industry? And, and, you know, I think tailor the conversation slightly to that, right? So if you've got somebody that might not have a lot of context, sure, spend an extra minute or two going into a little bit of the nuance of the market. But if you've got somebody right? You're talking to somebody that knows the market intimately, has maybe invested in 3 other companies in a similar or adjacent space. You know, I would, I would, I would frame that conversation differently, and I would, uh, you know, spend time on, on, uh, on, you know, less of, less of the framing, right, on the market side.

That's brilliant advice, right? So if you can disclose, what was the latest investment you guys did and why?

Uh, yes. Um, we, uh, we recently invested in a company called Twid Knowledge. Um, the company is in the construction tech space. Um, they allow large AEC firms, so architecture, engineering, and construction firms, to do everything from, you know, what a great example is versioning of construction documents, looking across, you know, multitudes, so hundreds of pages of construction documents on a project, and making sure that they comply to corporate-level policies and procedures, as a great example. So something that, you know, typically a construction firm would have, you know, 2 to 3 physical people doing manually checking construction documents. What TwinKnowledge is able to do is automate that to close to 100% accuracy.

Automation tool. Okay. What was there? Just a good business profile or was there some like big thing why you invested?

It does involve AI. Yes, Mike. The founder built and sold sold his, his last business to Autodesk, a large construction software company. I know, um, second, second-time founder, um, you know, has, has, you know, experienced relationships in the space, uh, and, you know, we, we believe in him.

Just strong profile. Yeah, founders get backed, especially the ones which has, you know, good success. It's almost like, I don't care what you're doing, here's money because I know you're gonna be successful. I heard that story. I think it was Robert Kiyosaki, you know, the guy who wrote the Rich Dad Poor Dad book. I think that's one of his rules where he has a network of founders and entrepreneurs and he doesn't really care what they're building. They just come to him and go like, I'm building something new. And he's like, I know you, you built already a couple of things and you were successful. So here's money, go build it. Right. So that was excellent, Aleksandra. And so people listening, they go like, look, I want to just come in and try to pitch for you because I'm in the prop tech or potentially some other questions. So how can they find you? What's the best way to reach out?

Email me. I always respond. an@cambercreek.com. Even if it's, even if it's not a fit, you, you will hear back from me. I always love to, and we always love to talk to founders who are in, in the prop tech space.

Can people find you like on LinkedIn or through the website? Because I'm very cautious about adding your email in the show notes. Notes, you're going to get spammed. You're going to get spammed.

Yes. Connect with me on LinkedIn, Alexandra Nicoletti, and you can see my profile and background on our website, cambercreek.com.

There you go. We'll put your LinkedIn in. I think it's going to be more safer. Now with the AI, Alexandra, actually now with the AI, I'm quite sure the spammers will take the transcript of the show and they will just shove it in LLM and they will go like, did emails got mentioned in this?

I'm just thinking about this and realizing that probably I actually hadn't, I hadn't even thought about that, but you're right.

Yeah, that would be quite easy. You know, I'll do this test myself. I'll just take a transcript, put it in ChatGPT, and I'll see if it's going to pick on your email. Right. So that was excellent. Thank you for joining us today. For all the listeners, if you're raising money right now, um, or potentially thinking about raising, especially in a proptech, I do encourage you to reach out to Alexandra, see if you can find a time to pitch your product. For the ones which are thinking about non-profit tech but still about investment, share the episode with your network. I think there's an ample amount of great tips from Aleksandra in this episode which will help you to make your pitch better and hopefully perform better and hopefully raise that capital. Good luck to everyone, and as always, until the next time, stay safe and see you online.