The dynamic duo of founder Adam Martel and super angel Christopher Mirabile are back on the podcast to report on the sale of Gravyty and to discuss Adam’s new startup, Givzey. Listen to their previous episode.
Highlights:
Gravyty Created a New Category
How COVID Affected Gravyty
Merging Gravyty and Graduway
Sal Compares the Gravyty Exit and the Mavrck Exit
Selling a Startup to a Private Equity Firm
Adam Martel Talks About his New Startup, Givzey
“Because we're experts in data, we've seen if you make a gift to your alma mater for the last 20 years, odds are that you're going to make a gift in the 21st year.”
“...the ability to understand the market and to understand the timing of the market; is the market ready for this, has been shown to be a very important predictor of success in ventures.”
Sal Daher Shifts the Conversation to the Life Sciences
“...you don't meet many academics who aren't pretty sharp. When you think about it, many of them are really quite good at project management.”
Being Coachable Is Essential for First-Time Academic Founders
“...Michael Jordan wasn't coachable, but I think he would tell you that he heard everything people said.”
AceUp, the Executive Coaching Platform
Purdue University Entrepreneurship and Peter Fasse, Patent Attorney at Fish & Richardson Sponsor the Podcast
Hilltop Biosciences and Founder Amanda Drobnis
QSM Diagnostics
Kalion: Bioengineering Microorganisms to Produce Valuable Compounds
KnipBio – Another Use for Microorganisms
Piction Health – AI for Skin
ANGEL INVEST BOSTON IS SPONSORED BY:
Transcript of, “Gravyty Exits, Givzey Starts”
Guests: Adam Martel and Christopher Mirabile
Sal Daher: This podcast is brought to you by Purdue University Entrepreneurship and by Peter Fasse, patent attorney at Fish & Richardson.
[music]
Sal Daher: Welcome to Angel Invest Boston, conversations with Boston's most interesting founders of Angels. Today, we are privileged to have with us again, Adam Martel, founder, Christopher Mirabile, super angel, board member. We had a podcast a while back with Adam and Christopher. We talked about Christopher's startup, a very successful startup called Gravyty. Now, we're going to do the post-exit, a very nice exit. Welcome, gentlemen.
Adam Martel: Hey, Sal.
Sal Daher: Hey, Adam.
Christopher Mirabile: Thanks for having us, Sal.
Sal Daher: Christopher.
Christopher Mirabile: It's great to catch up with you. Yes. It's great to be here. We appreciate the opportunity.
Sal Daher: Anytime. Anytime you have something to say, you're welcome to be here on the Angel Invest Boston Podcast. Let's recap a little bit. Christopher Mirabile is Managing Director of Launchpad, which is I think easily Boston's most consequential angel group. Adam Martel is founder of Gravyty. I'll let you take it from there.
Adam Martel: Sure. Sal, thank you again for having us. We're talking about this opportunity. We're just so excited. We got so much really wonderful feedback and just really kind comments about the last time we were on the podcast, and you do such a great job. We're so grateful to be here again. Thank you.
Sal Daher: Very kind. Thanks.
Adam Martel: Hey, Christopher, I think this is your fourth time on. Is that right? You and him have been on a couple of times.
Christopher Mirabile: I can't quit this guy, Adam.
Adam Martel: [laughs] The last time we spoke, I believe it was 2019. Christopher had been on the board for a couple of years. We were growing Gravyty. I think it was July of 2019. In November of 2019, we exited the first portion of Gravyty. We sold majority to a PE firm, K1 Investments. It was a majority investment that they made in the company. What they saw was just pure growth potential. We were the first AI-enabled non-profit tech company. We define the market.
Looking back, we created the category. I think Christopher will tell you, we didn't intend to create the category. I think that was a big task that we-- I wasn't smart enough to have the foresight to do it, but looking back, that's what we had done. We created the category for AI in non-profit technology. In the thesis that we started off, we turned out to be right eventually. I think enabling frontline fundraisers to raise more money by utilizing data with the support of artificial intelligence turned out to be right. Built a great team, the board was incredibly, incredibly both impactful and functional.
I'm sure Christopher can talk a little bit about that. We just had a really functional team, a really fantastic team that worked really, really well together. When we sold majority to K1, it was under the idea that this thing should accelerate as fast as possible. We sold majority in November, and then COVID hit January, two months later. You know what? K1 really, really did a great job managing through that process. They supported us through the process. They worked really hard with me and the Rich and the rest of the team.
There wasn't a moment that we didn't feel supported by K1 and by the investment that we got. I think that, as a founder and as an entrepreneur and really as a CEO at that point of a growing company, there can definitely be some tension when you're hit with a pandemic and you just got married. You're in the honeymoon stage, the first month. Christmas is there, slows down, January comes, you pick up and sales fall right off for a couple of months.
In that year, we struggled with churn. We struggled with customers ripping up contracts because they didn't know-- We're mostly higher ed at the time. They were shutting down campuses. It was literally ripping up contracts with tears in their eyes saying, "I'm sorry, I know we did this but we can't pay you right now." That happened for about three, four months.
Then, Christopher and I had conversations about it all the time and he just kept advising me, "Listen, stay true to yourself, stay true to the team. Do the right thing by the team, keep them inspired, keep them positive, keep them together. Do the very best you can." We just stayed the course. By September of that year of 2020, we were growing again. Last year, we had the biggest year we've ever had. We doubled the size of the company.
Last August or September, K1 came to us and suggested that we merge with another company in their portfolio that was in the non-profit technology space graduate. We thought it was a great idea, because both companies were growing really, really well. They were growing at a great pace and really efficiently. In November of this year, we merged the companies. As a result of the merger, K1 gave me the opportunity to step down and start another company.
We had really great conversations about who would run the combined companies. I was talking to a reporter a couple of weeks ago and she said, "Hey, tell me the truth. Tell me what happened. Did you get fired?" Whatever. The truth was that we had a really honest conversation about who I was, who the other CEO was. After talking to a lot of people, Christopher included, I came to the realization that I love zero to one. I love when everybody says that I'm wrong, but in my heart, I know them right. I can get enough people on board to believe in me and my team and the vision to prove to people that we're right.
I wouldn't have been able to do that going forward with a bigger company. I stepped down in November, and I've had about a month and a half off, and that led us to the next company here. It's been a great ride.
Christopher Mirabile: The difference is we better buckle up, Sal, because this time he knows how to go from zero to one. It's going to be a wild ride.
Adam Martel: Yes. [unintelligible 00:05:38]
Sal Daher: Awesome. That is tremendous. Acquisition by a private equity firm, that brings to mind the acquisition of Mavrck. Are we guys invested in Mavrck?
Christopher Mirabile: Familiar with the story, but never actually invested.
Sal Daher: I got in because of Michael Mark, and the Walnut guys were big in Mavrck. They just got acquired by Summit Partners. It was $120-million acquisition. It was actually an investment because, while staying on [unintelligible 00:06:03] Lyle Stephens, the CEO/founder who is such a tremendous guy, he's not just doing zero to one. He's doing one to end. I have a feeling that the 16X that we got as investors, it's going to end up being 160X for Lyle. I [unintelligible 00:06:18] for Summit Partners. Angel investors like to see some liquidity. We're not PE investors.
Christopher Mirabile: It's an interesting deal structure, giving growth VC a little bit of a run for its money. 2019 was a learning year for us. We sold five portfolio companies, SAS software companies to PE that year. Adam was what was one of a group of five CEOs who did transactions. It was interesting to contrast the different approaches, the different sizes of the funds. I feel like we learned a lot and are in a good position to advise both investors and founders about the pros and cons of those deals.
There's no question that it's hard. You've ceded control of your company to some extent, but you're still absorbing a lot of the entrepreneurial risk. Adam never worked harder than after his so-called first exit. Those are some tough months.
Adam Martel: Absolutely.
Sal Daher: Adam was the kind of person reminds me of this woman that worked for [unintelligible 00:07:17] I had the screening desk at a bank. It used to be called the First National Bank of Boston. We were trying to set up a bonus system. She was the top performer. We're trying to justify to management setting up a bonus system. She was just, "I'm happy with my salary. I wouldn't work any harder if I had a bonus. I'm doing 100%." [unintelligible 00:07:37] Adam is one of those people who are just doing a full tilt no matter.
Christopher Mirabile: He was required to keep a little stock too.
[laughter]
Adam Martel: I was. When we closed things up in November, some of the most joyous moments of this entire journey, I've been calling investors to let them know that a check's coming from the merger, investors have the ability to exit [unintelligible 00:07:59] [crosstalk]
Sal Daher:A fat check. You're going to get a fat chick.
Adam Martel: You know what? Every one of the investors, not one exception, said, "Hey, if you're starting anything else, I'd love to put money in." I'd already been ideating. Man, as an entrepreneur, going from scratching to close $5,000 investments to people putting up $150,000, $200,000 in a new company, not even with a deck just because they trust me, that's a moment that you don't forget.
Every one of those conversations reminds you of how far you've come and how many people supported you on that journey. Christopher and I spent a lot of time together. Some of the investors who I don't talk to as much were just as proud and just as grateful, and it wasn't about the money. It wasn't just about the money. There's something to be said about that. There's something to be learned there. You can't overstate how grateful you are for people that changed your life.
Sal Daher: Well, I was that investor of Gravyty by an accident of logistics. You'd be surprised how many interesting companies I missed out on, LovePop, Path AI and Gravyty, just because I was so busy with my buildings and stuff. My sustinence, such as it is, comes from apartment buildings. Apartment buildings could take over your life sometimes. I was too busy to follow up. I saw you pitch at Walnut, and it was very impressive as we discussed in our first interview.
We talked about Gravyty. Anything else do you want to say about Gravyty? Oh, perhaps you could explain to listeners what Gravyty did, how it gave fundraisers and non-profit companies superpowers.
Adam Martel: Yes, of course. The initial thesis was that non-profits have incredible amount of data on their donors. They're always trying to use that data to solicit gifts. We just found that the manual process that fundraisers went through to utilize the data, sift through the data, and then use that to make predictions about which donors might make the biggest gift, it was incredibly inefficient. The magic sauce that we had was the ability to use that data to both predict which donors will make the biggest gift but then take the next step and actually do some of the work for the frontline fundraiser.
Early on, we got a lot of questions about, "Is it really AI? How is this AI?" By the end, we really stopped pushing on or trying to prove that it was AI. We showed that we could expand the workforce of every organization. If you could make a frontline fundraiser three times as efficient, it's the equivalent of hiring two more fundraisers. As we work through that process, you realize that the technology is second to the impact that the products are going to have, and really the ROI that they're going to create. The ability to use data to help frontline fundraisers be more efficient was the thesis and the products were AI-enabled emails that ended up working and being correct.
Sal Daher: This is all part of software eating the world, Marc Andreessen's expression.
Christopher Mirabile: It absolutely is, Sal, but it's also part of a little bit of-- I think we're going to look back on Adam during this period and recognize a little bit of a theme, which is that, why do the for-profit world get all the best toys? Adam, in some ways, he's really focused on trying to take technology developed in the private world and apply it to the non-profit world in ways that can really make a huge, huge impact. That's exactly what he's doing with Givzey, the new company.
Sal Daher: This conversation about, "Is it AI? Is it not AI?" I think when people say that, what they mean is that you have a proprietary data set on which you are training algorithms that you are actually tailoring for the purpose. Gil Syswerda, who is a prominent AI person, who's had a seminal role in artificial intelligence and the development of these rulemaking algorithms.
We've had this conversation, he says, "There's a lot of stuff that is available open-source or available for use. If you have an application that gets you 90% on target is enough. The stuff that's out there that's open-source, it's plenty good enough. You don't need to go and create bespoke algorithms, have a training set and so forth. But, if you need to go the additional 5% to get from 90% to 95%, it's going to cost you tens of millions of dollars and the talent required for that is extremely, extremely scarce."
The question is, is your use case one where you can do with 90% accuracy or do you need 95% accuracy? For something like this, if you're right 90% of the time on who's the biggest potential donor, gosh, that's a big win. There are thousands and thousands and thousands of those use cases out there, so I think you guys are going to have a good time. Perhaps, it's a good time to talk about Givzey.
Adam Martel: Actually, I wanted to ask Christopher this on the podcast, because I get this question all the time. Christopher, could you talk a little bit about what it was like going through M&A with a PE firm from a board perspective? I get that question all the time, and I think the community could really use your perspective on that.
Christopher Mirabile: Yes. It's different because sometimes, in a strategic M&A context, you're dealing with a CEO who is ego-driven or is an empire builder, or is anxious and nervous, paranoid about losing market share to a competitor, or has a product manager beating them over the head telling him they have to add this functionality. None of that is the case with PE. They're extremely rational economic actors. They have a model and they look through a very black and white lens. They speak very plainly about how they expect to see this thing unfold. They're basically buying an asset for, roughly, what they believe it's genuinely worth.
If times are hot, they'll overpay a tiny bit. If times are lean, they might push harder on price. Their model is to take that asset and take care of it, add value to it, use their staff resources and some of their economies of scale to force that asset to appreciate as quick as possible, and then, flip that asset. Sometimes, they combine it with other things. There's no romance. There's no chemistry
Sal Daher: The green eyeshade types.
Christopher Mirabile: Yes. It's not the same kind of courting that you get in a strategic kind of a thing. Adam, you and Rich reached a point where you decided that this was worth doing. We were faced with questions around harvest now, add capital, get it to another harvest point. I think we talked at the board about these PE firms, and they're coming in and they're starting to invest earlier. You guys were growing really quickly, but you weren't huge. You were probably at the smaller end of the spectrum. In terms of where these deals get done, we encouraged you to look into that. I swear to God, Sal. This would have been like June, and in August, Adam's like, "I'll have three term sheets on the table."
September rolls around, and I'll be damned if he doesn't have three term sheets. It was really just a question of looking at the cleanness of the term sheet, the reasonableness of the price and the amount of value and fit. You get courted a little bit. We went to see the Red Sox in a nice corporate box. Our focus was on figuring out if they really walk the walk in ed tech. Adam and Rich became comfortable that K1 based out of LA really knew what they were doing and had done some smart investments in the space.
It was a pretty cut-and-dried process. I think the board was pretty receptive. The terms were fair. Basically, it was one of those situations, Sal, where investors could keep everything, sell everything or sell a portion. I don't know, Adam. You might have a better sense. I think a lot of investors took a little bit of money off the table. Most of them took enough to be playing with house money and stay involved. It went pretty much according to plan. I would say we might have closed it late. It was maybe a week or maybe 10 business days later than we expected, but it was pretty mechanistic.
Adam Martel: I think the the anxiety as an entrepreneur and from the board's perspective, I think in general, when you're being courted and you're trying to figure out the next steps is really, are these folks going to do what they say they're going to do? In every step we took with K1, they were, like Christopher said, really rational. I think that what we learned was that there was total predictability.
There were high standards. The standards were incredibly high, but I think that that's where we really thrive, just knowing that the predictability of how they're going to react. They wanted a good exit. We wanted a good exit. We were completely aligned there, and I think that alignment is actually what we got right when we had those board discussions. I think that that's what we got right to the process.
Sal Daher: Outstanding. You want to talk about Givzey now, your new venture?
Adam Martel: Oh, yes. I've been thinking about Givzey for a while. The genesis for Givzey was looking around and seeing all the buy-now-pay-later companies growing big. Like Christopher said, looking at a for-profit sector and realizing that none of that technology is coming over to the non-profit sector. I made a gift to my alma mater, and I was thinking, "Why isn't there an option on here for me to split my payments the same way I can if I buy a pair of shoes, or if I buy a sweater online, and I want to split it over four months?"
I did some research, and I realized that the non-profit space had really never been touched by FinTech at all. I started talking to some folks and talking to some friends. I was talking to a president of a college, and I pitched to her on the idea of give now pay later. What if your donors could split their gift to an organization interest-free and make the first payment upfront, but then pay the rest of the gift over the next three months? Would that be a benefit to the organization?
She said, "Oh, yes. The biggest problem that we have is that there are small donors who either don't make gifts because they want to make a larger gift than they can afford in the month, or they make a pledge. We have to spend all of our time chasing down smaller pledge payments, for $2,500 to $3,000 gifts from younger donors." When you look at the data of give now pay later and combine that with the need of the non-profit space, the actual idea was that FinTech had never come over to the non-profit sector in a really tangible way.
As I kept researching, I just realized that there's never been a button on a website that allowed donors a flexible giving option. That's what Givzey was sort of founded on, and the thesis is that if you can give donors a more flexible giving options through give now pay later, you can help them increase their gifts because you're taking a one-time gift and turning it into a subscription.
The bigger picture here is the answer to the question of, can you use data at a non-profit organization to predict how much the organization's going to raise throughout the year and eventually give non-profit organizations credit at the beginning of the year to help smooth out their cash flow? Because we're experts in data, we've seen, if you make a gift to your alma mater for the last 20 years, odds are that you're going to make a gift in the 21st year.
If you make that gift in December, your alma mater has to wait until December to receive that gift and use it, they might need it in March. Why can we collateralize data to give loans earlier on throughout the year to smooth out the cash flow. Short term, give now pay later has been sort of the right path, but long term, it's going to be, can you provide flexible giving options in really loans to non-profit organizations to help them do things they've never been able to do before. It's been a wild ride over the last couple of weeks, but it's been right.
Sal Daher: It's funny, the analog for that in banking is factory or-
Adam Martel: You got it.
Sal Daher: -discounting receivables. That's not exactly receivable, but it's very similar. It's existed in finance for hundreds of years, and it's now going to come to the non-profit sector. The idea that, if you have a pool of donors who donate on a regular basis, predictable basis, they've donated for 10 years, chances are they're going to donate for the 11th, 12th, 13th and 14th. Then you can give funds predictably too. That is amazing.
Adam Martel: Yes. There's two unique aspects here. One is that we're doing something that's never been done in the non-profit sector, so it's category-creating. When I was talking to Christopher about this early on, I think that's something he pointed out was category-creating for me is a really good place to be. It's a really powerful place, because I thrive on the competition of everybody's either not understanding or saying that I'm wrong, and inspiring enough people to believe that I'm right and then proving I'm right.
Then the second part is just being able to truly change the world again in the non-profit sector. The vision here is why can't non-profits get a Brex Card that's collateralized by data as opposed to cash in a bank. That Brex Card has worked for startups, non-profits need an equivalent and its right.
Sal Daher: Really interesting.
Christopher Mirabile: You can imagine that, when Adam asked me if I wanted to get back on his new board, I didn't hesitate.
Sal Daher: That is tremendous. What's the timing of the company is? Is the company up and running?
Adam Martel: Yes, the company's up and running. It's a funny story. Well, I left Gravyty the middle of November. A journalist called the beginning of December and she asked me, "What happened? How is everything going, because they heard about the merger? They wanted to write a story on it." The next day I'll be damned, it was "Adam Martel leaves Gravyty to start an AI-enabled FinTech company," and I showed it to Christopher and he said, "Wait, congratulations, but what are you doing?"
I didn't expect for it to start that fast, but this was like two weeks later. I wanted to take a few months off to spend with my family and just take some time off. Then I had to have those investor calls. Like I said, there's no more joyous moment than calling investors, telling them they're going to get a check and having them respond with, "Well, can I put something in your next company because I just read this article about you," and it all sort of spiraled pretty quickly.
The company's launched it's up and running. We're closing on a pre-seed round next week. That's been oversubscribed since the first day that Christopher and I talked about it. There's one more board member, Jay Love who was on the last board as well. I think we all feel really grateful that this is like just a continuation of the team building that we have built before. We don't have to learn each other. They know exactly what to expect from me. I know what to expect from them. I know the standards that I have to keep with the company.
Sal Daher: Who are the co-founders this time? Are you doing it with Rich again?
Adam Martel: Not Rich on this one. He's doing some investing now, so I'm doing this one by myself. We have six people on the team right now, a couple of developers. We're just bringing on a marketing person now, but we're closing the pre-seed round next week. We're trying to accelerate this as fast as possible while making sure we don't rush it, because there's some regulatory that we're working on.
There's some different things that I have to learn, and I'm certainly humble enough to know some of the things that I don't know. I think we keep trying to remind ourselves that we have a lot to learn here because we're category-creating. We don't wanna get this wrong.
Sal Daher: Outstanding.
Christopher Mirabile: Obviously, Adam has something that a lot of founders don't have, which is proprietary market knowledge. His Rolodex in the non-profit world has really become quite large, and so he's not taking quite as much risk as you think because he had a lot of smart people he could talk to about this, and whether this would actually be something they would want. His ability to market test this before even really getting out of the gate was pretty significant.
Sal Daher: Yes, the ability to understand the market and to understand the timing of the market, is the market ready for this, has been shown to be a very important predictor of success in ventures. This is really interesting. I'm tempted because, given your success and-- The listeners who are not familiar should listen to the first episode. It launched in July of 2019, and it's an evergreen episode.
It featured Adam Martel and Christopher Mirabile and it told a story of Gravyty until that point of the mistakes, the pivot that they had to do, the third screen, the fourth screen, and all that stuff, so really useful stuff product for understanding platforms, understanding co-founders. Listeners should know that Adam is an exceptionally capable founder. This is a company that starts out with a board. Launchpad has process and resources and are enviable to any other Angel group.
These guys know their stuff. They really know what they're doing. Right now, my focus is on the life sciences. I kind of stumbled on to the life sciences 12 years ago. It was like the second life science investment that I made. The company has just listed this week in the New York Stock Exchange, a company called Gelesis. It's a product that I use. I've lost 90-something pounds and the Gelesis product, the Plenity, was very helpful.
Over the years, I've noticed that my portfolio is going in the direction of the life sciences. The successes that we've had or the valuations and so forth are going up. I'm dedicating my focus to a particular type of life science company, where the founder is an academic or an industry expert, but most usually an academic, who's going to be the CEO of the company. Somebody like Christopher who's looking at this and saying, "Oh, no. No, no, we need somebody who is-- an academic as a CEO, oh," but you'd be surprised.
I invested in a company called Savron Technologies and the founder had no business experience whatsoeverm but he's a very, very high functioning academic. Basically now, they're at the point where they've developed 1.8 use cases. They're having very serious conversations with strategic players, and the company also has a technology that's very developed. It kind of opened my eyes, if you have a high-functioning academic founder, you can substitute for that experience, because to get a biotech executive to work on a startup, you're going to eat up half the raise just for the salary of the CEO.
Christopher Mirabile: Well, Sal, it's not as crazy as it sounds, because you don't meet many academics who aren't pretty sharp. When you think about it, many of them are really quite good at project management. Project management is a really big part of the job in the early days, when you're managing the regulatory process, you're managing the science process, you're managing the company growing process, but you're not really going to market yet. It's premature, so there's actually a pretty good fit.
Sal Daher: It's an extension of the research activity.
Christopher Mirabile: Many of them are lifelong learners, and they understand the value of learning. They understand the idea of testing hypothesis. Once they kind of have the technical risk conquered and they've got a pretty clear shot at the regulatory, it does become business centric. They can either learn that or they can bring that talent in at the time.
The big challenge for the early-stage investors is the shifting, so the moving goalpost. In the old days, you could get an idea a little bit validated, and they could get acquired before having to prove that there was real poll from the market. Those goalposts are way down beyond the end zone now. You really do need to validate pretty meaningful market poll.
Sal Daher: If it's a therapeutic, basically you have to be down to a phase two trial, clinical trial.
Christopher Mirabile: Even med device, like getting VCs to invest in med device, they need you to do some of the work and proving that there's actual poll for the product.
Sal Daher: What I look for in my screen is a technology that is enabling to some strategic player, and for whom that technology is going to save a business, it's going to 10X the business that they have already. That can be a shortcut that can get their attention very quickly. It's part of a due diligence, is to look for that kind of life science technology that is an established player who's going to look at it and say, "I got to have this company because, if I don't, a competitor is going to get it, and they're going to eat up this really important market for me."
Christopher Mirabile: I only invest in life sciences if they have cryptocurrencies in their pitch deck.
[laughter]
Adam Martel: In AI [unintelligible 00:29:02]
Sal Daher: Our biotech investing is perfectly complementary because, if anything has cryptocurrency in it, I don't invest in it.
Christopher Mirabile: Just refer to me, I'm sure that'll be a great [crosstalk]--
Sal Daher: Yes, I'll refer all of the bio crypto deals [crosstalk]--
Christopher Mirabile: Great investment, I'm sure.
Adam Martel: How important is being coachable?
Sal Daher: Well, this is the whole thing that Christopher is pointing is, is the academic coachable? One of the problems that you can have with academics, academics are always bright, it's the attitude of, do they know at all or are they willing to listen? Do they understand that their amazing knowledge is the main specific, and that for someone who perhaps is not even as bright as they are might have something to teach them in another domain, a very mundane thing? That's the big question to ask.
I have invested in a biotech company where the technical founder was absolutely brilliant, but a know-it-all.
Christopher Mirabile: Absolutely brilliant. Just ask her, right?
Sal Daher: Yes.
[laughter] Sal Daher: In this case, a him. He knew it all. It was frustrating because it was very interesting project in many ways. I think that was not the deciding factor. There were a lot of other things. A raise would have been easier, a lot of things would have been easier if the founder have been coachable. This is a very important part of the judgment about the founder, is this founder coachable?
Christopher Mirabile: It's a fine line, though, because--
Sal Daher: Spot on. Adam has a nose for this stuff.
Christopher Mirabile: We've all run into those founders who just pare it back, the last thing they heard, and they really don't have. I don't know, Adam, whether you would say you're coachable or not. I think you've found that right mix between the courage of your convictions and being unbelievably goal-centric and being absolutely convinced that you are going to find a way and you're going to make it work, but maybe not necessarily certain how.
You were very open to feedback and idea generation and, ultimately, you made the decision. I can remember we went through a couple back and forth around hiring sales talent, and there was a lot of learning that went on there. Ultimately, you knew where you were trying to get, and your board gave you as much help as they could, but that was something that you had to learn on your own.
Adam Martel: I think one of the things that is striking to me now, particularly over the last couple of weeks as I've been talking to investors, is that I'm almost in a position where you got to say, like, "Listen, I still need your help. I still need to be coachable," because as an entrepreneur, it's trying to get money for the first time, you're always coachable. You're doing anything you can to close money because your life is on the line, your family's life's on the line, your team's on the line.
When you have the luxury of being able to close money a bit quicker, I think what makes you great is the humility to know that, you know what, you actually got to be more coachable in these moments. There's more for me to learn, more for entrepreneurs to learn sort of the second third, fourth time around. Christopher, I think the balance of being coachable, but also having convictions is--
Most people would say Michael Jordan wasn't coachable, but I think he would tell you that he heard everything people said. He just didn't always do what they said. I think that's the difference. If you can find a way to win, you just find a way to win. That's all that matters at the end.
Sal Daher: I think that, to a certain extent, Adam's openness to being coachable, that was driven by the fact that he was involved with sports a lot, coached, was a coach himself. He understood the difference between being a coach and actually telling people what to do. Coaching enables the player.
Adam Martel: You would be surprised though. If I had a nickel for every time Christopher reminded me that I probably need to be a bit more coachable, and I can listen as much as I can talk and I have two ears and one mouth for--
Sal Daher: Well, Christopher is the first with high standards.
Christopher Mirabile: I don't know. You're being too hard on yourself, Adam. Every conversation, we would circle up after an executive session on a board meeting, or every time we would have-- you'd say, "Thanks. I appreciate the nice words, but I can do better. How can I do better? Tell me how I can do better? Let me go to the next level." The drive was just so intense. I think that you started to value input more and more. The more you learned, the more open you were to inputs.
I think, in the beginning, it's scary, and you're trying to keep control of your company. You have imposter syndrome. You're a first-time CEO, and you got to want to walk the walk. It can take humility to look for input. The better you got and the more you learn and the more confident you are in the role, the more able you were to assimilate input and seek it out.
Adam Martel: That the more you know, the more you know you don't know, right?
Sal Daher: Exactly. It goes all the way back to Socrates. The only thing he knew was he didn't know. This is funny because you guys, you're coaching me on what I'm trying to do with biotech founders. This is a really important part of the screen, that biotech founders are supporting them. Podcast, for me, it's a learning vehicle and that it is a coaching vehicle. I have my guests coach me on this one, because I proposed this problem to every guest nowadays.
I'm a complete bore. I have one note, the one note sound bite that I play here always hitting my guests with this question. It's surprising which direction to go to. Some people talk about the risks. Some other people talk about the screen. Christopher and you as well, were very helpful zeroing in on the coachability. This is coaching for me. This is really awesome. Have you guys invested in the AceUp?
Christopher Mirabile: Yes. I'm an investor personally, and Launchpad is a pretty significant investor. Aileen Rudin is in the boardroom there helping out. We just think Will is a terrific, terrific founder. It's satisfying just to see those big logos. That is really escaping and becoming enterprise scale. He's doing very big contracts now for big brands. Adam, are you familiar with this? This is basically management development and executive coaching as a service.
Adam Martel: Oh, yes. I think you were telling me about that.
Christopher Mirabile: It's not just the C-suite, it's the people managing people in your business, who need a resource to develop themselves and to better managers and better coaches. Just terrific founder and a great opportunity.
Sal Daher: Here's an interesting little side, little comment here, the people who are being attracted, and Will is able to attract to AceUp, I have a personal knowledge of one of these guys. He used to be a trainer at a gym where I worked out. His name is Bryant Mitchell, and he is just a fantastic coach, phenomenal coach. He is at AceUp now. He joined up with the AceUp. This is the kind of person that Will is attracting at AceUp, someone like Bryant Mitchell, who is just very inspiring person. He can get you run upstairs and do all kind of things. He's providing a lot of great leadership. Also, a Babson alum. Go, Bryant. I'm glad to see you at AceUp and go Will.
Christopher Mirabile: It's interesting how the pandemic sort of-- AceUp was a company that benefited from the transition into virtual interaction, virtual management. They were one of the lucky ones that wasn't hit as hard by the pandemic. It's also that that's a certain kind of person that coach, high empathy, maybe even hyper empathic, tend to be extroverted. They tend to get energized by their interactions with people, as opposed to depleted.
It's fascinating to watch how this pandemic is cutting through things. In some ways, the darkest of these lockdowns were the introverts' revenge. The introverts were thriving and the extroverts is dying on the vine.
Sal Daher: Well, the introverts getting what they want good and hard, that's the thing, because they need the human contact. They're not energized by it, but human beings, without it, they shrivel up.
Adam Martel: You know what? I think we'll look back, and particularly as CEOs, we'll look back and realize that it was the best time to learn how to deal with some of the folks that you didn't quite know how to deal with. I know, as a CEO, I think I did a really good job dealing with the people that live like me, and that they're extroverts, that they could connect with people. I didn't do as good of a job connecting with our developers.
As a CEO, going through the pandemic, the lessons I learned about kindness and empathy in pushing and not pulling, and giving people what they truly need. Everybody's a little bit different. I think that was a really great gift that I got as CEO, and I think I'm a better CEO because of that experience.
Sal Daher: Outstanding. Hey, now I know that Launchpad is active in the life science area. I think we have some things in common, some companies in common. What are the life science companies that you guys are working on right now, Christopher?
Christopher Mirabile: In a lot of ways, our thesis is similar to Adam's with bringing technology. It's the intersection of technology and healthcare. We tend to be fairly thoughtful about it. Angels are at the bottom of the cap table, and they already, even on a good day, have long hold times. Drug development is a risky game. We don't do a ton of therapeutics. We tend to look at medical device diagnostic, healthcare IT, digital health.
We do do some biotech, some interesting companies. I know we're in one together, Sal, which is Hilltop. They are the folks using birth materials in the equine space to promote rapid healing of horses who are often injured. Amanda Drobnis is a great CEO.
Sal Daher: She's been on the podcast a couple of times with Jess as well. We have one of these founder board member podcast.
Christopher Mirabile: I think the world of both of them, and Jess has been a friend for over a decade. I just think the work she does is fantastic. Amanda was an interesting case study because she's a little bit like Adam, in that Adam was also a first-time CEO, but like Amanda, he'd been in the role and he knew the market. He knew what fundraisers were going through. Amanda had been selling to these key opinion leader vets and really understood her market, and I think that gave her a real leg up.
Sal Daher: Let me just recap a little bit. Hilltop Bio, what they're doing is they're taking material from afterbirth, which has been used for like 100 years to help promote healing in the joints of injured animals, usually working animals such as horses and large animals. This process requires capturing the afterbirth and then processing it and cleaning it and all the stuff. The reality is very, very few veterinarians are able to do this. What she's doing is she is using a patented process, I think her father has patent on this, for humans. She has a license for animals.
She has created a shelf-stable product based on this so it has all the essential compounds. She's also created some studies around the efficacy of this. She has created a biological product that allows veterinarians to have an improved solution for the problems their animal patients have. It's created a revenue stream for them. This is a company that is very, very interesting because of that. Along the same line, I'm also an investor and I don't know if you guys saw it, QSM Diagnostics?
Christopher Mirabile: Yes.
Sal Daher: I saw them present several times. I saw Ed present several times. [unintelligible 00:40:53] time he just refined his pitch. This is an academic founder, who learns, this is a high-functioning academic founder. Now, he has a COO who's a very experienced business person. They are providing a quick diagnostic for dog ear infection and cat ear infection.
Christopher Mirabile: I think at one point early on, they were looking at Lyme disease too, weren't they?
Sal Daher: That's probably in the roadmap because they're using-- the platform is something called quorum sensing molecules. This is the stuff that happens only in biology. The scientist circa 1970, has these bacteria that live in the very deep ocean, and he makes a culture of them, puts them on a petri dish, agar and so forth. When he comes back, they're glowing. He says, "Why are they glowing?"
It turns out that these are bacteria that glow when there's a certain number of their kind in an environment. The way they do that is they transmit to each other using these molecules called quorum sensing molecules to say, "Hey, guys, let's all glow together when there's enough of us for it to matter." You see, why is there evolutionary pressure for bacteria to grow, bacteria to live in the dark? It's fascinating answer. This is discovered in circa 1970, is that these things are called Aliivibrio fischeri.
The answer is that these microorganisms like to live in the gut of fish that live very deep in the ocean. Living in the gut of fish is a very unstable environment. If you can imagine this [unintelligible 00:42:26] and they get flushed out regularly. They have a strategy for getting back in, which is to get together and to glow. When they glow, they attract edible animals. The edible animals come to eat them because they see the light in this very dark environment. These edible animals then are eaten by fish, and then they get swallowed back into the gut. Just fascinating stuff. I can't get enough for it. Anyway, tell me more life science companies that you guys [unintelligible 00:42:54]
Christopher Mirabile: There's a couple that I think are worth highlighting. Calyon and KnipBio are both companies that are using bioengineering microorganisms to create something of value. In the case of Calyon, they're using the bugs to grow a substance, very high purity glucaric acid, which is used in all sorts of things, making Adderall in its very pure form, but also in water purification. That's been a story about trying to scale the biotech up to get production quantities that are commercially viable and lower the cost.
Whereas, KnipBio is a company where the bugs themselves are the process. I know Jess probably talked about it, right?
Sal Daher: Yes.
Christopher Mirabile: They found a microorganism that naturally has that pigmentation that makes for very healthy salmon meat. What they've bioengineered is a microorganism which can be grown at scale, harvested, dried out and added as a very, very high-quality additive to commercial aquaculture feed with the result of much, much less environmental impact. It doesn't foul the inlets and the base. The fish have a much, much higher chance of living from small fish. It's a superior solution, also a challenge scaling upright. Those are really essentially both science-oriented manufacturing challenges.
Sal Daher: It's also part of Blue Investing. I had Adam Pool on. It's very important part of fish farming. I looked at Knip as well, but I didn't invest. Also, one of these logistics problems, Knip is pink spelt backwards, the pink of salmon, big salmon pink. Fascinating stuff. If you harken back to the Adam Pool, he's investing in all these companies that have very similar things. They're doing really, really cool things with microorganisms or related to the oceans.
Christopher Mirabile: The other company I'd mentioned, that are more in keeping with Adam's theme, is bringing high tech to a very common medical problem, and that's a company called Piction Health. Susan Conover was the founder.
Sal Daher: Oh, I love Piction. She's been with the podcast several times. I'm an investor, yes.
Christopher Mirabile: Yes, it's just a really cool-- For those who are not familiar or don't remember that episode.
Sal Daher: That's an AI company.
Christopher Mirabile: Exactly. The most dermatological issues are misd or misdiagnosed or take a lot of guesswork or referrals to specialists, and maybe in a city like Boston, where there's hospitals on every street corner, you can navigate that.
Sal Daher: Even in Boston, there's a shortage of dermatologists.
Christopher Mirabile: It's just specialist care is a crisis at many places, even a developed country like the United States. What she's doing is she's put together one of the largest datasets of dermatology photographs, and she's essentially empowering general practitioners to get smarter and be able to add value to their patients. It's giving them a line of business, but it's also allowing them to not miss issues, to manage their malpractice costs and to make those referrals on a timely basis and frankly save lives.
Sal Daher: And to avoid referring cases that don't need to be seen by a dermatologist.
Christopher Mirabile: Yes, which can save a tremendous amount of money.
Sal Daher: If listeners want to look up, it shows up as LuminDx, which is used to be the name of the company, and they've rebranded Piction Health.
Christopher Mirabile: Yes, they've rebranded pretty recently from Lumin to Piction.
Sal Daher: Susan is an amazing front of to amazing founders, and they've been on the podcast several times. Susan's [unintelligible 00:46:45] to be back on soon as well.
Christopher Mirabile: She just did. She just delivered an update to Launchpad as part of our annual portfolio summit, and she's doing great. Talk about a founder, Adam, who's been on a steep learning curve, a lot of people told her that what she was trying to do couldn't be done because the datasets were so big and so many different base skin tone, skin colors and she said, "Yes, well, you're wrong." You'd love her.
Sal Daher: She has my skin tone because I've contributed images to their datasets. Everybody, she talks to, she's getting pictures for everybody.
Adam Martel: I love it [crosstalk]
Christopher Mirabile: She was tenacious in raising her money just like you and Adam, and she's proven people wrong.
Sal Daher: You talk to Susan, she's calm, she's low key. Let me tell you, she is made of steel.
Christopher Mirabile: Don't be fooled, yes.
Sal Daher: She's got steel in her, just amazing. Just amazing person. Just focus, not much waste of motion there. Another really outstanding founder. Amanda is a tremendous-- Well, Amanda being a writer, I think really gave her an insight into this thing. The reason she decided to-- it's a problem when she saw firsthand.
Christopher Mirabile: So Sal, we got a lot of going on in Boston. There's lots of great companies. We need to get you to stop paying so much time to your real estate and get focused on helping these founders who are saving the world.
Sal Daher: You know, a Boston company is helping me do that. Boston company called Buildium. Last year, I got on the Buildium platform and it's saving me a lot of time. I have some ideas of how I could make building better. Let me tell you, they're 90% there, in terms of what an owner and operator of multifamily properties can do. Just mundane stuff that they just take off your plate and make your life a lot easier.
Going forward, I'm going to have more time, after all the hassles with COVID and so forth and owning apartment buildings, but hey, it's just part of software eating the world.
Christopher Mirabile: That's for sure. I think Marc Andreessen is a pretty smart dude, and I think he called that one right.
Sal Daher: Yes, it's still going on.
Adam Martel: Oh, yes. There's still a lot of room. There's still tons of room. A lot more [crosstalk]
Sal Daher: Well, gentlemen, I invite you to give your parting thoughts here.
Christopher Mirabile: My parting thought is for Adam to tell Sal where to send his check.
[laughter]
Sal Daher: Okay. Spot on.
Adam Martel: Oversubscribe but always a spot for yourself.
Sal Daher: No, no, I'm serious. Send me your pitch deck and the terms. By the way, we don't want to get you in trouble here. This podcast is going to launch on the 23rd of February. I assume you're going to close by then?
Adam Martel: Oh, yes. We'll be closed probably next week or week after.
Christopher Mirabile: We're joking because we go way back, but this is not intended to be a solicitation at all, so just that--
Sal Daher: No, no, no. Sorry guys, by the time you hear this, the funding's going to be done. It's after the fact, but you should definitely follow up. If you're an Angel, get in touch with Launchpad. Those guys, they're really outstanding group. I salute you once again, Adam. Any other thoughts that you want to leave us with?
Adam Martel: This is a team effort. It always has been and I think it always will be. We had a good exit in the first one, and I think we can just keep getting better. The rally call here that Christopher and I talked about the time is, the last one was good, can we make this one great? We can get better. Truly, we say it all the time, but there's a thousand ways we can do this better and I don't want to miss one of them. We're really excited, super grateful to have been on. It's always so nice to talk with you, Sal. Christopher, thank you for joining tonight.
Christopher Mirabile: My pleasure. Sal, thank you for everything you do to make this community strong. I think this podcast is a tremendous resource, as always a pleasure to connect with you. I'm glad to hear it's thriving. We talked a little bit about the growth you're seeing in your subscriber base. I think that's because these conversations are really essential. I really enjoy having them, and I'm glad that you're doing what you're doing.
Sal Daher: You know my listenership is amazing. One of the things that's been happening is I'm getting more and more listeners calling and some of them have been interviewed on the podcast as well, like Robert Nagel, lots of people who listen to the podcast. Every time I talk to one of these listeners, I'm like, "Oh, somebody like that is listening to my podcasts. I really, really need to up my game, talk less. Yes, this is for you [unintelligible 00:51:19]."
I get emails from him, it's, "Sal, you talked too much in that podcast," but he listens. Anyway, I'm always really impressed when I talk to my listeners who are just phenomenal people. We're making the improbable happen. Thank you so much. [crosstalk]
Christopher Mirabile: Well, Happy New Year to you, Sal, and to your community.
Sal Daher: All the best. Awesome.
Adam Martel: Thank you, Sal.
Sal Daher: Adam Martel, founder of Gravyty and also now founder of Givzey. Thanks for being on and Christopher Mirabile, co-supremo of Launchpad, super Angel, and just a tremendous resource for Angels in Boston. Thanks, both for being on.
Christopher Mirabile: Pleasure, thank you.
Adam Martel: Thanks, Sal.
Sal Daher: This is Angel Invest Boston. I'm Sal Daher.
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Sal Daher: I'm glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.
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