Season 2 Episode 9: Trae Vassallo of Defy.VC

Come on into The Room.

The Room is a series that lets you get a view into the room where it happened. If you're a founder facing questions about your first customer, first fundraise, or first hire, this is the show for you.

I'm Claudia Laurie.

And I'm Madison McIlwain, your co-hosts. To close our season 2, I'm honored to have my partner, Trey Visallo, co-founder of DefyVC, on The Room. Trey's journey from the Midwest to Stanford in the mid-'90s is one of dreams as a young woman who decided she couldn't brave the cold any longer and had a heart for engineering. She went on to get a master's in mechanical engineering, landing her first job out of undergrad at the now iconic design firm IDEO. After almost 5 years of shipping product, Trey headed back to Stanford, this time for her MBA. After a fortuitous, bold ask to one John Doerr, Trey found herself co-founding Good Technology on the simple premise that islanded devices such as the Palm Pilot should be connected to the internet. Although this doesn't sound groundbreaking today, it was 20 years ago. And today I think we really take for granted the genius that this was at the time. Eventually, Good sold to Motorola for $500 million. The relationship she built with John through Kleiner Perkins backing of Good Technology led to Trey spending 11 years at Kleiner post-Good. In 2017, she went back to her entrepreneurial roots, co-founding Defy VC with fellow industry veteran Neil Sequera. This is where our paths crossed a few years back. Today, Trey is an active investor through Defy and an advocate for entrepreneurs and investors, helping to found platforms and communities such as AllRaise and Equity Summit. In today's episode, we'll explore topics and themes such as the early days of the internet, the pros and cons of taking venture capital, and how an opening up of the ecosystem has fostered more equity and inclusion across the table. Let's open the door.

First off, Trey, thank you so much for coming and joining us on The Room.

No, it's so exciting to be here.

You were, for the listeners listening in, Trey is my boss and mentor and friend at Defy. And she was one of the earliest advocates for starting the room. So you all have her to thank for our voices over your speakers today. But today we actually get to tell the story of Trey, young girl from Minnesota who moved to San Francisco and really the Bay Area for college and never looked back. So Trey, just wanna set us right around there where, you know, you did grow up in the Midwest and accepted your, your opportunity to go to Stanford sight unseen. Tell us a little bit more about that young decision to move west.

Oh, it's kind of crazy when I think back on it, because when I was a high school student, well, first of all, lots of kids who grew up in my area didn't really go very far away to go to school. And frankly, a lot of people stay in the community and they become farmers and they become part of that local economy. But I sort of always knew I had this draw to one of the coasts. And so, you know, I grabbed, I think it was a U.S. News and World Report magazine that rated colleges. And I had this faint idea that I wanted to study engineering. Didn't really know what it was, but I knew I was strong in math, strong in science. I loved problem solving. And so I applied to East Coast engineering schools, West Coast engineering schools. I actually thought MIT was my dream school ever since I was a little kid. And I got in early. And my parents sent me there. And it's this cold December in Boston. And I'm on campus and I'm looking into these students' eyes and they looked miserable. Epiphany is this kid who's like, my dream was wrong. Oh my God. This, I don't think I can go here. And so when the Stanford acceptance came back, it was like, okay, well, I guess I'm going there. So I never visited it beforehand. It was just the other coastal engineering school that I applied to. And honestly, I had no idea. How awesome a decision that ultimately ended up being.

So the sunshine called and you moved to California. In moving, did you think that you were going to become a founder moving out to the Bay Area? What was the mindset for you in terms of the opportunities that laid ahead?

Yeah, I had no idea what a founder even was. I didn't know what a startup was. So like really putting this in context, I— none of that kind of ecosystem existed for me. I just knew that there was more out there and that I loved building things. And so I came to Stanford, and, and actually one of the things I think Stanford does a really good job of is defining engineering as creative problem solving. I chose mechanical engineering, and I did so because it was this— what I thought at the time, and I still think this now— it was the synthesis of all of the engineering disciplines. So by being a kind of— and it was more like robotics, right? So I got to learn embedded programming, I had to learn how to do basic circuitry, I had to figure out how to put this all together in something that could move and house everything. And so I met folks from IDEO. I met folks who were working on things at Apple and all these exciting companies. And that allowed me to visualize, okay, with this awesome degree, these are the things I can go do. And my experience with the IDEO folks, and, you know, I think IDEO is much more well-known today than it was way back when I was an undergrad. But this notion of being able to think creatively and apply these engineering skills to really cool products that people are using became my passion. And so I was on a mission then to work at IDEO. And I luckily got an internship for one summer and between my, my grad school as a master's in engineering student, and then they hired me. And so I got to work at IDEO out of Stanford.

Which is so iconic for those design thinkers listening. The journey that Trey took from mechanical engineering into design thinking and applying those skills in the real world through IDEO is everyone's dream. Like, I know after minoring in human-centered design in undergrad, a few years later that, you know, David Kelley as like the founder of design thinking is so heralded and you joined his firm just 4 years after it was really getting off the ground, which is pretty epic, I have to say. So, well, tell us about the time of being really on the forefront of what now hundreds, if not thousands, of people use as a framework for solving real-world problems.

And I will say, so David Kelley has been an amazing influence, you know, over my career. And, and even though I joined IDEO in the relative early days, it was a morphing of a previous firm, DKD Design, David Kelley Design, that he had created when he came out of Stanford. So basically, he took his very similar experience to mine at Stanford and said, how can I go apply this cool, amazing skill set in the real world? And, and they really got their start by what are the hard engineering projects that we can work on that the big companies who are scaling can't do themselves. And, and some of those early projects were for Apple. So this iconic tube of foam apple mice that were for the original mouse that they were working on.

And so this was an evolution over many, many years.

And it was part of what, you know, David did a really good job of also bringing that philosophy to Stanford. So part of, you know, design thinking was part of the mechanical engineering curriculum. Now there's the whole D School. For me, I think what it did for me is it trained me to be a thinker that is always First of all, you learn how to collaborate, you learn how to innovate, and you learn how to fail fast. And all of these skills that I learned that apply to products also apply to companies and company building. And so I think what, when I take a step back, ultimately is so cool about this is that this— I was looking at it from this product lens, but then during my time at IDEO, after working with a startup, I was like, oh my gosh, this is the philosophy, but on a much, much different scale. And so now as an investor who gets to invest in companies, it's really design thinking and entrepreneurs that embrace that, I think, that do really well.

You're putting the cart before the horse here on us telling your story, giving the listeners a nod to what you do today. I love the parallels drawn, and I, as I'm, you know, emerging in my career as an investor and having similarly a background in design thinking, I do see the parallels in distilling the how might we statements to to really what is the core problem you're trying to solve. That is so powerful in a world where there's a lot of problems worth solving. So when you were at IDEO, what is maybe the coolest problem or opportunity you worked on during that time?

Yeah, there's so many. When I first started, I got to work on laptops for one of the most iconic PC manufacturers at the time, Dell, which was amazing. For me, the most transformational experience was when my boss came back one day and he's like, "See this Palm Pilot? This thing's really, really cool. And we just got the project to build the next one." And I remember that day so clearly. And I'm like, "I want to work on that." And, you know, this is when Palm was a brand new company. They were a tiny little startup in Palo Alto. They launched their initial Palm Pilot. It was a huge success, and they wanted to follow it up with something that was really innovative and pushed the design forward, but also wasn't just a geeky device. And they wanted something that was going to appeal more broadly. And so they brought IDEO in to really help in a crazy way about what can we do to really make this Product transform. And the amazing thing was I ended up being able to work on that project. The startup CEO was Donna Dubinsky, and this was the first time I had really seen the inner workings of this is what a startup is. This is how a new idea catches on and grows. And it was also, here's this amazing woman who's running this company. And it was sort of turned on a light for me. I'm like, oh, I'd never seen that before, but wow, this is so cool. And the combination of all those things, plus then ultimately, you know, when you see these products in the market, sort of that incredible feeling that you feel inside your chest, you're like, I had a hand in building this. This is so cool. All of that inspired me to basically take what I was doing at IDEO, but figure out how to uplevel it from building the product to how can I be more like Donna? I wanted to to be like her and build a company. Back, this is the mid-'90s, mid-late '90s, the seed ecosystem didn't exist. It wasn't like you could just go network your way into kind of an entrepreneur group. Y Combinator didn't exist. So for me, the answer was, I think I should go to business school, because otherwise people are just going to see me as, oh, she's the engineer. And I wanted to be more than that. And so, you know, Stanford or bust.

After business school, you ultimately founded your own company called Good Technology. And for our listeners who take smartphones for granted, remind us of what Good Technology did.

Yeah, it's actually funny to talk about it now because people are like, you had to have a company for that? Really? And just to clarify the story a little bit, this was actually during my second year of business school. I co-founded the company. And by the way, it's end of 1999. So just to set the context. It's insane. And we do have a lot of people leaving business school to start companies. And, and, you know, meanwhile, people who weren't in business school were becoming millionaires overnight because of sort of the frothiness of the market. All going to business school is to figure out how to be an entrepreneur. And I'm not answering your question exactly, but I just wanted to sort of lead it into, you know, why good technology. And the story I think is so iconic for me because One of the things that I was really terrible at as an engineer, and even as a student before that, is I was super shy. And I think Madison knows this about me, but I was painfully shy. I hated public speaking. I was not the kid who was raising their hand in class to talk to the teachers, but I was getting great grades. And so I knew that, look, if I'm going to be able to be a leader and be successful as an entrepreneur, I have to get over that. I have to learn how to put myself out there. I have to learn how to network. And so my goal at business school was figure out how to get comfortable with that, go up and talk to people, learn how to ask for what you need from people because people want to help you. And I was always trying to push myself. And I saw John Doerr on campus one day, and this was before class, and he was speaking in class. And I walked up to him, and I remember being terrified and basically said, John, I'm so excited to meet you. I am just coming off of an incredible experience and shipping this product for the Palm team. And I want to build on that in my next adventure. And I want to figure out how I can help connect these devices because the Palm Pilot— I worked on the Palm V and the Palm Pilot was not connected to the internet at all. It was an organizer, which is sort of crazy to think about today. And so I asked John, I was like, you know, you see a lot of what's going on. And by the way, at the time it was a lot of just internet companies that didn't have you know, would not have built on my skillset and what I just learned how to do. And, and so that was important to me. And John said, he's actually, I do know a small team that's trying to work on an idea that is about connecting these devices to the internet. And let me connect you. I followed up with him and he connected me and that led to us co-founding Good Technology in March of 2000, before the crater. To your question, what does good technology do? It was a company whose sole purpose was to connect these islanded devices, these organizers to the internet and sync email. So it was enterprise class email experience. So think of it, it was like BlackBerry, but on a different platform. And so yeah, that's what we founded in March of 2000.

That's pretty revolutionary and also quite iconic to have John Doerr basically be the founding team matchmaker. Maker. Could you tell us a little bit more about the founding team?

So what was really cool about that is John— and this is sort of one of the fun things about venture— a lot of times venture investors sort of catalyze ideas that they want to happen. And his associate at the time was a guy named Dave Wharton, and Dave had the itch to go build a company. And so Dave's idea was connecting these handheld devices to the internet. But, you know, Dave had been in the venture ecosystem. He, he was our CEO, our founding CEO, but he needed someone like me who was on the product side, who was able to kind of help pull the pieces together and really be the product driver and leader. And then our third co-founder, Joel Jewett, was just legendary. How to think about Joel? He was sort of a business development matchmaker, years and years of venture experience.

That's incredible. And I think what's so fascinating with what Good Technology did was that it really was one of those companies that shaped how we today really think about physical goods and the internet and how it all comes together. One of my friends and I would, you know, just the other night we were looking at photos of like our old cell phones from even, you know, like 2005 and how wildly different things were back then. Could you tell us a little bit more about building IoT and hardware in the early 2000s when that was actually like easier?

You do have to put the context. iPhone was 2007. So this is 7 years before that existed. StarTACs, I think, are the rage at the time. And I remember one of the big things we innovated on was the keyboard, right? This is back well before, you know, this notion of typing on glass, but how do you build a really functional keyboard? The interesting thing about hardware, it's, and this was this was back before AWS existed. This was back before all these incredible infrastructure pieces that allow companies to get kind of these basic building blocks put together so fast. We had to build every single piece from scratch. And so when you're building these sort of integrated software hardware companies, you've got to have teams that span incredible breadth of abilities, from all of the, from embedded software through the website to the hardware, which involves the ability to not just design it, but prototype it and then scale it up for mass manufacturing. It's really, really expensive. And I think this is ultimately why in kind of 2002, the firm, the company basically said the hardware side of our business is consuming a lot of cash. And there were new devices like the Trio that were being launched. By the way, this was Donna Dubinsky and Jeff Hawkins's new company. So we got to collaborate again, but we made the really hard decision because it was hard to get funding in 2002 to basically stop being an integrated hardware-software company. Good Technology is just going to focus on the software ecosystem and the enterprise-class syncing of email, and we're going to run on other people's hardware, the Trio primarily. And, and so that was a big strategy shift that the company did. Late 2002.

Could you talk us a little bit about that first fundraise?

I would say the first fundraise was more of a, it was kind of an incubation, right? It was an idea that we had and it was a good team. And so it was, well, we didn't have that terminology back then. It was a seed investment, right? So it was a, hey, this needs to happen. You've got a great team. And John Doerr was, was already leaning in because of the relationship with his associate who was going to be the CEO. So I remember being in the big conference room. And by the way, I had food poisoning, so I was like, I think I just thrown up in the bathroom because of like, I had a Jamba Juice or something that made me super sick. So like, I threw up in the bathroom and the Kleiner room where you pitch, vaulted ceiling, it's super overwhelming and impressive. But I just remember like You've got nerves. And then I had this like stomach issue. And so there was so much going on, but in the end it was sort of a, it wasn't a super hard pitch because it wasn't like we were asking for a ton of money. It was a little bit of money to get started and push the idea forward. Obviously, you know, more money came over the years and fundraising got subsequently more complex and harder, especially through the crash of 2000. Cause I think the market started crashing in June. We really leaned into raising more money early so that we could get through the long drought. The company was ultimately able to thread that needle, survive, and then we sold to Motorola for about $500 million a few years later.

It's incredibly impressive. $500 million back then is truly a feat, to say the least. And you eventually left Good Technology to work for your then investor, John Doerr. Uh, walk us through that decision.

Yeah, well, so it's actually, it was funny because it wasn't exactly a decision.

It was a feat of the The company hit a time where we strategically needed to make a move and get rid of hardware and focus on software. And that happened at the end of 2002, early 2003. I was focused on hardware. So when it came down to it, I didn't really have a place in the company after we unloaded our hardware strategy. I had also just returned from maternity leave. Another crazy story about all of this is co-founded Good Technology in March of 2000. I got married in July and we bought a house and I was in a hurry to have a kid. I sort of— my, my take on this was like, easier to have kids earlier than later. And so, so let's have a kid. And I didn't do the math because if you did, it would scare you to death and you wouldn't do it.

But I also was just like, yes, I've co-founded this company.

Yes, I'm shipping a product, but whatever, we'll make it work. And I remember she was supposed to be born before the product shipped. Of course there were delays. Um, she was born and then the product shipped, whatever, a month or two after she was born. And I have this like picture of her as a newborn sitting in her little pillow thing holding the product. Like shipping my, my two like big creations sort of very near time to each other. And so much going on. New mother, the product shipped, I was just getting back from maternity leave. And the company was basically, and rightfully, we're not sure we should continue doing hardware. And so it didn't make sense for me to stay. And John Doerr thankfully said, "Trey, do you know what you're doing next?" And I was just like, I have no idea what I am doing next.

And then somehow this popped into my head and I said, but if I were working with you, I'm sure I could figure that out more quickly.

And again, I'm just like, thank God I said that. I don't know what overtook me, but John was like, well, yeah, why don't you hang out with us and you can be an entrepreneur in residence. And I wasn't getting paid as an entrepreneur in residence. So it was a really amazing way to think about what was next. But okay, this isn't happening. The economy is not great. We're paying to put spouse through business school and support the family. I probably should just go get a stable job at this point. And given my experience, and, and some of my friends who I knew from IDEO were at Apple at the time working on this new kind of cool product called the iPod. And this is again 2003. And so this is when it was first launched. And so I went and interviewed at Apple and they offered me a job to work on iPod. And I told John, thank you, this has been lovely. I really appreciate this experience, but I need a salary, like a job, and I'm gonna go do this thing at Apple. And John said, oh, wait a second, we actually really enjoy working with you. Why don't we convert you to an associate? We'll pay you, and, and then you can go from there. You know, in the beginning it was literally just helping John and in his ecosystem. And talk about an incredible person to be able to shadow and learn from. You know, he was on the board of Amazon and Google at the time, which is crazy to think that you could even have a person. And to this day, I still think he's one of He's the most amazing people I've seen in a boardroom. And we had all these other incredible personalities around the firm who all had very different skills that I got to get close to and learn from, and then ultimately start taking my own baby steps to figure out what's my style of investing and what are the companies that appeal to me. And then that led to working with Nest and Dropcam and Opower. Those are probably the three most interesting companies that you would've heard of and that I was super involved with during my time in Kleiner. And then I left in 2014. So that was quite a run.

Now, what is your career as an investor? Which, and today we talk a lot about when we pitch Defy to entrepreneurs about that we're operators turned investors and how that's really valuable to our ability to help you build a business. But back in 2003, there weren't that many operators turned investors. So you're kind of the OG operator turned investor and I think that is really powerful. Claudia, you could speak to why you would want that on your board, but I think it does uniquely qualify you to understand the pros and cons of venture capital as a funding source. And having been on both sides of the table, I'd love it if you could share with the first-time founders that we often have listening to the room a little bit about why you would capitalize your company with venture capital.

A great question. I actually wanna just go back for a moment and say folks in venture, at least when I was at Kleiner, most of them were actually operators. In fact, I think it's kind of gone the other way in that venture, the average age of a venture person has gone way down. So younger people are getting into venture, may have less experience, but you know, John Doerr was a salesperson working for Andy Grove at Intel and Vinod Khosla founded Sun Microsystems and helped build Sun before he came to Kleiner Perkins.

So what I'm hearing you say is what was old is now new again, because we went through this, this, everyone was operator and then everyone was an investor and now we're all operators again.

I think part of what you're raising though is that when I work with a portfolio company, an important thing is for me is the empathy, my ability to connect with what is this team going through, what is the CEO going through. And, and I think we see a lot of investors and board members out there who are— think they have maybe the answers or know how to run something, when I think my take is more of, here's my experience. It's more of the, how can I be the best coach to the entrepreneur? Ultimately, I'm a fiduciary to the investment dollars we're putting in, but the power of being a great board member is the— I think the power of really helping push and support the CEO. And I think— and so my take on that is how to do that in more of a coaching style role as opposed to the board member that has all the answers.

I think today Claudia and I have a lot of our friends who are interested in raising and they're asking Claudia, what was it like to raise? And then they're asking me, how do I raise? And I'm curious because it's not always the answer to raise venture capital, but it's so front and center and splashy across the country today. It feels like the only way to build a company. And I would love to just double-click into what I give up or what I get And you've already kind of answered that second half by taking venture capital money.

Mm-hmm.

I think this is such a good question because venture has become this cool thing, but I firmly believe that there are so many companies, incredible companies that shouldn't take venture capital. Venture capital, when you do take it, you are giving up a lot of ownership of your company. You're giving up a lot of control ultimately of your company, no matter what, you know, you could put in kind of crazy voting privileges to maintain control, but you're setting expectations for investors that they're going to create big returns on their capital. And so you're committing to a growth path that you then have to be able to support. And so a lot of technology companies that can scale in a compounding way can achieve this sort of growth and create venture-scale returns. A lot of businesses that with a little bit of capital and bootstrapped in the right way can grow and become massive, you know, really good businesses, but don't necessarily need venture capital to do that. And so, and I think the biggest lever for that is, is this something that's going to kind of achieve that compounding growth? That will outstrip, that will allow these new investors to get their returns. And if that, if you do see that potential in your business, then getting the equity from venture to go do that makes sense because achieving that growth more quickly is hugely meaningful. But if yours is a slower growth business and you can sort of run it more profitably and invest those profits back into the business and yet still own a ton of it, and not necessarily have all of the weight of these investors who have a certain need for a certain return. There are advantages to that as well. So I will often tell a founder that I see them, this is a really cool business. I'm not sure I would raise venture capital to do this. There are other ways you can raise capital or maybe take some seed money to get started, but like you might consider funding this by driving to profitability, keeping your options open, and going from there.

Yeah, there's one company that I know that had, you know, one very, very small seed fundraise, and one of my friends saying, oh, you know, we looked at them on Crunchbase, they're probably tiny, right? They had one seed raise in like 2015. And I think what's not known is, no, they just became incredibly profitable, kept on investing that money back into the business, and are now a huge business these days. And so just because you didn't go through like the Series D doesn't necessarily mean you're not hitting those incredibly large numbers and still growing for the very points that you mentioned.

Taking a step back and looking at the macro environment today where a lot of people are getting venture capital right now, we were talking just the other day about frothiness of the market and at, at DeFi, which, which I should touch on briefly by saying you co-founded it 5 years ago with your co-founding partner Neil Sequera and have been growing the company ever since, company and firm. Now at our second fund, which is very, very fun. And I have the pleasure of being your now partner alongside the table here.

But we're so thrilled to have you on the team, Madison.

Well, thank you, Trey. I appreciate it. It's cool to see these different phases of your career, from operator to investor to investor-founder. And I know there's going to be so much cool things ahead, but you have this perspective that I don't have, which is having lived through multiple downturns and being an active both operator and investor in the situations. And so we were talking just on Friday about how this is some of the frothiest times, you know, other investors I trust have seen in 20 years. And you said to me, it's not frothier than 1999. That was just so interesting, because I couldn't say that I wouldn't know better. Can you dig in a little bit to What are some similarities you see in the market today and then the differences from that iconic period?

It is a funny question because I remember I was looking— so we've had a real problem with the public markets, right? So, you know, when you've got companies like Uber that are waiting until they're ginormous to go public, it sort of makes you wonder, why is this the case? And I don't have the numbers in front of me. I can look them up. But, you know, when Amazon went public, joke, you'd go, that's like a Series C. It was like a $50 million fundraise. You're like, that's not even a growth round. That's like a Series C. And it was really early and companies were able to access that capital and go public. And then that sort of went away. And so I'd say what's interesting and similar now about this current period of time is, and I think this has been adding to this frothiness, is that you've got this thing that everyone's been talking about, or these SPACs, right? And it's all of a sudden enabling this kind of new, not necessarily liquidity, but the ability for these companies to raise large sums of capital and get out on the public markets. And so I think one of the interesting parallels here has been this access. One of the things that was troubling about what was going on in 1999 is the companies that were way too early didn't really have a business model, didn't necessarily have any real revenue, were going public at large valuations and raising a lot of money. And so looking today at the SPAC ecosystem, I, I think there's a spectrum. There are companies that look a lot like 1999 that don't have a lot of revenue, don't necessarily have a dialed-in business model, who are SPACing and going out. And that's a little scary because that may not end well, but then there are also companies that are really well positioned with really interesting technology and great businesses and growing businesses that deserve this capital and could raise it in other ways, but are using this mechanism to more easily access the public markets. And that is exciting. And so I think there's another part to this frothiness though, that we're seeing on the early stage side. So, you know, at Defy, we're, early stage investors. That means we're writing $500,000 checks, $6 million checks. You know, we're on the seed kind of A side of things. And so I think what we've been seeing as active investors in that part of the ecosystem is this acceleration of timelines like I've never seen before. If you're a founder right now and you're raising money, you can do 8 back-to-back fundraising pitches in one day. And then come back 3 days later and be like, I got a term sheet. Are you in?

Are you not in?

Are you going to do your work? And so I think what's been nice about especially the evolution over the years is how much more control founders have in fundraising. There's a lot of capital availability. They get to choose who to take money from.

I think fundraising during a pandemic was definitely one for the books.

Can speak to that directly, Claudia. So, yeah, it's That was you. That is you.

Yeah, I think it was definitely a lot more efficient from a time perspective and just being able to chat with so many folks, but you also kind of lose that in-person connection where I think it's harder to really build that relationship with the person you're eventually going to be taking capital from. And then I think vice versa, I think there's little things that maybe don't translate as well over Zoom that gets lost out on. But overall, I think it's been kind of an awesome experience insofar as being able to pitch so many people and really see kind of what the feedback is and iterate much more quickly throughout the process.

In fact, Madison McIlwain and I were just talking about the importance of not moving too quickly and how this idea of a shotgun wedding and hurrying up and forcing some kind of time pressure, because I think there was a term sheet a company had that had like an exploding expiration date. And my point was, look, if an investor is doing that to you, is that someone you want to work with? Right? Is that someone who's giving you the time to make sure that you've got the working relationship with them that you really want? At the end, as you're dialing in who you want, spend the time, do a socially distanced meeting, do your diligence.

It's awesome that we're having this conversation. I'm just realizing that it's, you know, two female investors and one female founder. I'm sure 18 years ago, conversations like these probably were not as frequent as they are today. Still not frequent enough, but would love to ask you how the ecosystem has evolved for female founders and funders through your time in the industry.

It's changed so much, and I would say it's changed not just for female founders, but for, for founders, period, in general. I think things have become so much more transparent. There are so many more choices. There's so many more resources. Because, you know, back when I got started, and I'm sure you could go back even further, weren't a lot of firms that you get venture capital from, and it was very opaque. And the firms that were successful, like, people just went straight back to those firms. So there were these closed little ecosystems that were really hard to break into. And so that meant that, you know, when it came to diversity, if you weren't in those networks or in those ecosystems, good luck. I think for me, I started to notice the change when sort of the seed ecosystem really started emerging. And that happened along— I think we talked about the emergence of the iPhone and AWS and how that created the ability for entrepreneurs to be able to stand up, you know, an app or an MVP without having to go raise $5 million to do it. And that created a whole new opportunity to put in smaller dollars up front to test an idea, to see if something could work, to then build a big company on that. And so that seed ecosystem kind of really started emerging in the mid-2000s. And that was the first time, at least it felt like to me, where there was this big creation of new firms and the chance for new kinds of investors with new backgrounds to come in and bring that experience. And And I think that directly translates to how we've seen underrepresented founders and investors get into the ecosystem. It's happened in earlier parts of, you know, the seed investors that I think have done. And there's so many more options. If you want women on your cap table, you can absolutely find incredible investors now. And if you're a woman founder, underrepresented founder, one of the most important things you need to do is make sure you're networked into the community. I don't think people realize how network-driven this industry is. When you're an investor and you're looking at a portfolio or a potential company, yes, you're looking at the merits of the company, but you're also looking at, does this person have the ability to tap the right networks for advice, recruiting, business development? And so if you're getting a person who comes to you to raise money and they don't have any of those connections, it's an additional huge risk and you have to figure out how to get those connections into the, into the company. But if that founder's coming in and they're already connected to people in the ecosystem, it's a huge plus. And so it's important for founders coming into this ecosystem to, to really build these networks and networks across women and men and as far as you can go. Getting back to my big learning when I went to business school, it was network, network, network. That is super important as an entrepreneur. And I also hear a lot of entrepreneurs who are scared to share their idea. Oh, I don't want someone to take my idea. I can't share it. Well, the ideas— John Doerr used to say, ideas are easy. It's execution that's everything. And it's so true. It's like, the more you share your idea, the more you're going to get really great feedback, the more you're going to get connected to people who are aligned with your idea. And that, in order to be a really great entrepreneur, you have to do a lot of that and you have to put enough out there that people can respond back and give you that help.

Trey, you've been a founder in so many ways, from not only building a multimillion-dollar tech company, but also a venture firm, but also initiatives bringing more women into the ecosystem, such as AllRaise and Equity Summit. For our listeners, definitely check them out. What's next for Trey?

Well, first of all, continuing to make Defy an amazing place for folks and continuing to invest in incredible entrepreneurs is super important. I think things like Equity Summit and AllRaise, to your earlier question, are really huge projects of mine. AllRaise was founded by an incredible group of GPs, and the whole goal is to basically increase the number of women founders and funders in tech. And a few years back when this was started, I think the number of women writing checks in the venture industry was, I think, on the order of like 9%. And by the way, I think another stat that always flabbergasted me was 75% of venture firms have no women. And the goal was to change that, make a dent, and it's happening. And so AllRaise has been doing an incredible job of bringing women into the industry, surrounding them with a network, helping them find opportunities and roles. And getting them out there. And I think today this number is 11, 12%. So huge movement in only a little bit of time. Now Equity Summit is something we founded at AFRAS, but the thesis— and my co-founders on that are Mar Hershenson and Katie Ray, both who've created their own investment firms as well. And our idea there was just as an investor who's investing in an entrepreneur, the relationship, and if they'd known them before, like it makes investing in them so much easier. Now, LPs, when they invest in a venture firm, it's a 20-year relationship. So if you're going and you're pitching your new firm to LPs you've never met before, it's going to be a really hard— it's going to be hard to get a yes. And so how do you network into this community so you can become known, you can get feedback, so when you do raise, you have a set of relationships of people who know you, they've seen you grow, and they want to invest in you? And obviously, you know, this has existed for a lot of men who've, who've raised venture firms, but women don't have these sets of relationships. And so we created Equity Summit as a way to really get all of the up-and-coming women and underrepresented GPs in the industry together with some of the most well-respected and most amazing limited partners in the business, with the idea of Simply creating the relationship and changing the dialogue around diverse firms and diversity in venture funds, it should be equated with improved performance. This is not about, we should do this because it's, it's the right thing. We should do this because it's strategically the right way to make money for LPs. And so making sure that the dialogues that are happening at the limited partners and their investment committees is all about What are the firms that are set up for success and why is diversity an important part of, of success in the future? And, and that dialogue is starting to happen and the data is starting to come out and show how important that actually is. And so, yeah, so we'll be doing our third Equity Summit in January.

And we have one final question, which is our hero question for the room, which is, who is a woman in your life that has had a profound impact on you and your career?

Oh, goodness. Well, I hope I can answer this in a multiple choice way. Because there are so many. Like my mom, who proved to me that it was okay for me not to be liked by everybody and that I was going to do things that people might not appreciate, but that I should follow my own kind of goals and hopes and dreams. Because I think without that, I wouldn't have pushed forward in so many hard male-dominated industries. To Donna Dubinsky, who inspired me in a huge, huge way. In fact, I ran into her a few years ago and I'm like, Donna, I don't know if I've ever told you this directly, but you inspired me to do this, this, this, and this. So I have two girls and it's so awesome to raise a girl right now, but you also see firsthand the challenges that start facing girls from middle school to high school to college. And watching that and helping empower them in a frontline battle kind of way, again, is, is something that really inspires me.

Well, if I'm ever asked this question in a future podcast, I definitely know who my answer would be. Trey Visallo. And I'm just so grateful to have the opportunity to work with you every day. Thank you so much for sharing your story on The Room and imparting incredibly helpful advice and wisdom to the founders of the future.

And I just wanna thank you too. For doing this podcast because first of all, I thinking that I just getting in the middle and hearing what people went through to kind of confront fears and build something and show that things are not always up and to the right and doing that through the eyes of, of two, you know, women coming up in their career in different ways, I think is so wonderful. So I'm a huge, huge fan of what you're building and thank you for having me on today.

And that concludes season 2. Thank you for listening to this episode of The Room. If you enjoyed our conversation today, or hopefully the whole season, please like, follow, subscribe, talk to us in Clubhouse, and share with your friends. We'll be back April 20th, 10 AM Eastern, 7 AM Pacific, with season 3 and a whole new lineup of inspiring guests. Be sure to mark your calendars and keep a lookout in the meantime on our social channels for some more exciting news regarding Team The Room in the weeks ahead.

All opinions expressed by Claudia Madison and podcast guests are solely their own opinions and do not reflect the opinion of DefyVC. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.