$100M Venture Fund: How to Break Into Venture Capital

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I have my dear friend, Kaitlyn Doyle.

Kaitlyn is the VP at $100 million venture fund called TechNexus. This firm raises capital from institutional investors and then works with them to develop their investment strategies that align with their internal mandates. Not only that, but she's also been a speaker at South by Southwest, while raising over $80 million throughout her career.

So what does this mean? Well, this means that Kaitlyn understands not only how to raise, how to source and how to underwrite deals, but to do it in the way that you can win and win big.

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[THE GUEST]: Kaitlyn is the VP at $100 million venture fund called TechNexus.

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• 10:17 (Cont.) $100M Venture Fund: How to Break Into Venture Capital

Transcript

Ryan Miller  

My name is Ryan Miller, and for the past 15 years, I've helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business, or taking your life to the next level, this show will give you the answers so that you too can enjoy your pursuit of Making Billions. Let's get into it. 

Ryan Miller  

If you've ever wanted to break into VC, then this next show is for you join me in my next guest as we chop it up on what to do to get started, how to do your first deal, and how to avoid those devastating rookie mistakes. All this and more coming right now. Here we go. 

Ryan Miller  

Hey, welcome to another episode of Making Billions, I'm your host, Ryan Miller, and today I have my dear friend, Kaitlyn Doyle. Kaitlyn is the VP at $100 million venture fund called TechNexus. This firm raises capital from institutional investors and then works with them to develop their investment strategies that align with their internal mandates. Not only that, but she's also been a speaker at South by Southwest, while raising over $80 million throughout her career. So what does this mean? Well, this means that Kaitlyn understands not only how to raise, how to source and how to underwrite deals, but to do it in the way that you can win and win big. So Kaitlyn, welcome to the show. 

Kaitlyn Doyle  

Thanks so much, Ryan, I'm happy to be here. I love listening to your show, and I love talking to a community of like minded investors.

Ryan Miller  

Oh yeah, we're here to, Making Billions. It's pretty obvious what we're all here to do, so and you're certainly part of it. Thank you very much, you're very kind, you know, it's certainly an honor to have you. I've learned about TechNexus, and not only the work that you've done, but the investment thesis that you guys do, is fascinating. There is an elegance to things that are seem complicated on the outside, and then you meet someone like you and tech Nexus that simplify a complicated world and make it really easy and that's why you're one of the best to talk about this today. So that being said, let's jump right into it and right between the eyes. So there's a lot of people that they maybe they want to do their first angel deal, or they want to start their own venture capital fund. I've been both, or at least I like to say that over to Thanksgiving dinner, but in reality, people, you got to produce results and in the venture capital space. There's a lot of stuff, like, if you're looking for an easy way to make money, maybe venture capital is not your bag, folks, but for those of you that are nuts, like me and Kaitlyn, we actually want to dive in and help these young people and work on cool projects. It can be extremely fun, there's a lot to do. so maybe you can unwind for us today. What are some of the things that people can do who are aspiring to invest in small businesses? What are some of the things they can do now to get some early points on the board to start making money in venture capital?

Kaitlyn Doyle  

Yeah, that's a great question, and it's something that people often think is complicated, but it does boil down to a couple really simple bones. To go about venture capital, I think you have to do two things, well. I think you have to know how to source deals, and I think you have to know how to pick deals. So once you have source deals, which ones you actually invest in, on the sourcing side, how do you get through that quickly? You build relationships. You got to be able to demonstrate that you know people can get you in good deals, and not only that you know them, but that they want to pull you in deals, that there's a reason they want you on the cap table, and there's a reason that the entrepreneurs want to work with you. I say that simple, but really, those relationships take time, and they take some consistency. Do you say you're going to do show that you're trustworthy, show that you're bringing value, and the sourcing channels should continue to grow. 

Kaitlyn Doyle  

Now, on the analysis side, that's the thing that's really hard to be good at immediately. So the key here is you got to just get started, and you got to put in the reps. But the key thing about venture capital in general is pattern recognition. You have to see a certain volume of deals to understand where companies are likely to fail and where they're likely to succeed. So the shortcut is essentially just getting started and trying to follow as many companies as possible. If you don't have capital to invest yet, that's okay. You can fake this a little bit. You can follow companies on PitchBook, on CrunchBase, heck on Shark Tank, and try and understand what companies would you invest in? Would you not invest in and why? Take a look at some of the top venture capitalist portfolios on their website, and see which companies you think were great investments and which companies you think were awful investments. And track your track your stats, follow it five years down the road, and see where you were right and where you were wrong. And you'll start learning pretty quickly, and you'll be able to hone in on your individual investment, the assess your individual conviction. And as you get dollars to invest, still get better and better at it.

Ryan Miller  

Brilliant. It reminds me of fantasy football. So you're almost tracking your own but in companies in this way. So that's really good. And so following sources of information that you can trust. So CrunchBase, PitchBook, if you've got whatever the 30 grand a year, whatever they charge only 30,000 but, you know, great source of information. I know there's different magazine publications, podcasters, like Making Billions, but also other ones that are actually quite good and really just absorb the information. I think is what you're hearing is to say, and we have a saying, and maybe you agree or disagree, but we say, really, you know, there's, there's two main ways to consistently achieve alpha and beat markets whatever market you're in. Is superior analysis or superior deal flow and so I think Kaitlyn, what you're saying to the audience here is saying, okay, well, let's start with analysis. So if you actually want to win in this industry, you gotta just almost get that fingertip feel that trigger finger just that feel that you know from enough experience or enough reps and enough information. And that eventually it is this, this unconscious competence that you can achieve and and through that, you can bring that forward and really start having superior analysis. And then I think you keep be honest Kaitlyn, the other one is superior deal flow, which is through relationships. And so through relationships, that could be capital coming in, that can be deal flow coming in. So as we say, the, in this industry, the 3Rs, reputation, relationships and results. And so if you're if you're firing on all cylinders in those three areas, things tend to come a lot easier, would you agree?

Kaitlyn Doyle  

I totally agree on that. I mean, I think the sourcing, especially early on, is going to be really heavy on relationships. But it goes back to your reputation, of, why do people want to have relationships with you? And it goes back to your results, right? What type of value are you going to add after the check? What type of support are you going to be to your fellow investors, to the entrepreneurs, to ultimately get the deal done, first and foremost, but then see the company succeed post investment? So it's definitely a pattern recognition game. It's definitely the long call and being able to show that you can't do deals and that you do them wild.

Ryan Miller  

Brilliant. So you know, getting early points on the board. So building relationships, reputation results, giving people enough reason to want to kick you a deal, want to be associated with you totally love it. But that's not enough, right? That's upside. What about downside? What are some of the things that you've noticed that you can advise some of the beginners in this industry on how not to mess it up in the beginning. What would you say? 

Kaitlyn Doyle  

Yes? So how to not lose as you've taught me, there's some fundamentals you gotta stick to, right? VC 101, is all about portfolio diversification. And if you look at how many VCs actually execute and are consistent with their portfolio diversification, it's not 100% even though that should be textbook, right? You diversify your portfolio. You increase the odds of your returns being at market or above market. So if you want to be successful and you want to not lose, follow the VC techniques and actually stick to them. Where a lot of VCs go wrong is they follow their ego. Instead, they follow a deal where they really, really, really want to get in a deal, whether it's from a really strong co investor or or, you know, it's a oversubscribed round, and they end up overpaying, or they end up writing a bigger check than they typically do, you know, maybe double the size of their their normal discipline check. Those mistakes every once in a while can pay off, but more than likely, they're going to come back to bite you, and those are going to be your big losers because you strayed from what your portfolio diversification, diversification and your thesis was. I've learned over time and honestly through some of my own mistakes that you have to take your emotion out of it. You have to take your ego out of it and stick to the rules that you've set for yourself. I also have been told and given some great advice that you cannot fall in love with deals. As soon as you fall in love with the deal, you will ignore every reason to say no, and you will make an investment that you probably shouldn't because you've already made the decision before you go ahead and do your analysis that we talked about before.

Ryan Miller  

Brilliant. So keep your ego in check and one thing that I've noticed in this industry, feel free to agree or not, but one thing I've noticed is it was a saying long time ago, when I was a young man just starting out in this industry, thought it'd be pretty cool to hang out with Warren Buffett, and we actually negotiated with people that we knew and right. And little did I know that's also a skill in this game, is networking and getting doors to open. And so that was one of those things we did. We actually went to him, I hung out with Warren, and it was, again, just like I alluded to with TechNexus. But other firms and pieces of advice are sometimes there's an elegance to simple advice. And so one of the simple pieces of advice that was very elegant is he said, I make money when I buy, not when I sell. And when I asked him to unpack that a little bit, he said, you know, if you overpay when you buy, then you're just like, handspring to the Almighty of just like, please help make sure nothing in the economy goes wrong and I'm able to get this valuation and you're all nervous of stuff. They said, when you buy and you genuinely get a good price. And if anybody moderately follows Warren Buffett, they know that he's been complaining for a while that there's no good deals out there and everything's overvalued and all this stuff, but he's looking to make money when he buys, and so he's not hoping and praying as a strategy. And I've found that a big part, especially in this industry, is that why do people overpay. We're all professionals we know how to value companies, yet it still happens. And I think it comes back to your critical advice on how not to lose is keep your ego in check. When your ego is involved, you're ignoring the reasons to say no, like you said, you're in love with the deal. Why? Because you think it'll make you look cool or whatever. And you start to cut checks that you had no business writing. You start talking about things you have no business talking about, getting involved in deals that you really don't know well enough, and you're going to get your butt kicked. Can you add to that? Or is that pretty much summarize what you're saying?

Kaitlyn Doyle  

It's so true. I actually, interestingly enough, just today, Carta put out a report on fund performance. Believe it's their cue on the 2024 and they were tracking all the vintages back from, I think it was 2017 through 2022 fund vintages, if you think about that time, really interesting macro conditions going on, right, covid, obviously, in the middle of that 2021 was just such a boom of valuations and fundraising, and they tracked fund performance over all of those time periods, both TPI and DPI. To see what's expected returns and what's actual cash returns. And it was a fascinating research report because each and it combined all of the funds through those time periods, all averages and showed medians and ranges. So you could really see kind of the diversification there. The fascinating takeaway for me is in the time periods where we know valuations were way, way, way, way, too high, 2021, we're looking at you. Those funds across the board are underperforming. They overpaid, and they're going to really, really struggle to get any type of return, let alone, you know what used to be median or top quartile returns. This is speaking nothing about any of the fund managers skills or performance or their sourcing. It's it's literally just about the prices that they paid. So I think that's absolutely true of that discipline of entry point is going to determine if you can consistently make money.

Ryan Miller  

Yeah, brilliant. Well said. So you know, a lot of times you talk about not falling in love with the deal. So when? How do you know? You know, I'll be ridiculous here, but how do you know when it's time to break up? When it, when do you fall out of love and you're like, I need to walk. This is not good. This one's lame. What do you see? 

Kaitlyn Doyle  

Yeah. I mean, there could be a million reasons to say no to deal I have a couple hard and fast ones that are absolute deal breakers for me. Walk away, run away. Don't look back, right one for me. And you see this a lot at seed series A stage companies, is debt equity on the cap table. What do I mean by that? I mean, but somebody is on the cap table owning a decent portion of the business that is no longer contributing value to the company. We see this most often where there's a co-founder that is no longer involved, and they maybe didn't have the right vesting schedule, so they still hold 5, 10, 20, 25% of the business. Or we'll see this if there's an investor that came in on an earlier round. Maybe they've closed up their funds, maybe they've changed their thesis, or maybe they've determined that this company is no longer important or relevant for them. So the general rule of thumb for a series A stage company, I don't like to see anybody owning equity over 10% that is no longer actively involved. For later stage companies B or C, that number is a little bit smaller, probably closer to 5% if there's numbers that are bigger than that, I won't invest unless the company is willing to do a recap and write their cap table. 

Kaitlyn Doyle  

And another one that, unfortunately, I have some personal experience with, is I will always run a background check on the founder. At a prior firm we did a background check on every single entrepreneur before we cut a check. And I would always tell them that, and always be upfront of, hey, we're going to run a quick background check. Can you fill out this form? And, oh, by the way, is there anything I should know about that might come up? We had a couple of instances where the founder be like, nope, nothing's going to come up. Hey, okay, go ahead and run it. And unfortunately, something did come up. In one instance, there was a founder that had a prior criminal record that he had not disclosed to us. Did make us feel comfortable, so we walked away. In another instance, there was a founder who was running a real estate technology company. He had his real estate license. Makes sense. In the background check, we were able to find that he had lost his license in actually multiple states, so not just a one time thing for some shady behavior. So those were things that we had run that background run that background check, we never would have known, and we likely would have regretted getting into the deal. But venture, as you know, our own is a long term relationship. You want to know who you're working with, because it's going to be 5, 10, maybe even more, years that you're working with that person.

Ryan Miller  

Man, that's that's one thorough way to date, I appreciate that. So it's sometimes I call that the naughty list. So you definitely don't want to end up on a VCs naughty list, but honestly, the only way to do it is to not tell the truth. So not a deal breaker. If there's background checks and there's some funny stuff on there that maybe you're not proud of, that's not necessarily a deal breaker but what is is not being honest. Would you agree?

Kaitlyn Doyle  

Absolutely we had founders that would disclose things and everybody makes mistakes, right? If you can be upfront them and own them, it's actually telling me something about your resilience as a founder. I think that's, I think that's very mature and very, very gritty of people.

Ryan Miller  

Yeah, yeah. Just to get in front of it and be like, you might see some stuff in there, let me explain. Like I had, I had a partner one time who wonderful person, like extraordinary and, you know, he brought it up before he party even told me about it, and he had a deal went south, and investors complained. It was 08, the big crash. Investors complained and then full investigation, yeah, that's gonna show up and but nothing ever happened. There, right, they just, they just did investigation, they finished it, and there was, like, nothing illegal happened. It was just a bad deal that went sideways. Like, literally everyone tried their best and it didn't and it didn't work out. These things happened, but no crime was committed. But unfortunately, there's stuff that will pop up and so I said, hey, you know what? Get in front of it and show that you're able to learn from it. And to say, well, although nothing illegal happens, so there's nothing to learn, like follow the law, but it is to say, here's how, you know, I would do it differently today, and how I would protect the company a little bit more or protect my investors a little bit more, really, just make sure that you have that compelling story where you can overcome a challenging background. Thing to say, yeah, it's a mistake that happened, I didn't love it either but you know, it's done. It's long past, but here's what I know now, that I wish I knew then. So anything to add to that?

Kaitlyn Doyle  

I think that's great. I mean, it's interesting as VCs. We love to see prior entrepreneurial experience, right? And I liken what you said to me. I don't care if your prior entrepreneurial exchange is a failure, if you can give me the story of what you learned and how you're going to do it better in this time. In fact, some of the best entrepreneurs I've invested in, they started a company before the one I'm in, and it shut down, or one bankrupt, or it didn't work out if they can take that experience and bring it forward. That's amazing. You know what? I mean, they're a step ahead of an entrepreneur who's never been that before, or an entrepreneur who's never made those mistakes.

Ryan Miller  

Yeah, absolutely. And one of those things I think a lot of VCs would say would be term sheets. You know, how important are term sheets as far as not losing and getting knocked out at your first deal, how important is that? And maybe you can point to a few of the beginners towards some terms that you think they should really dive down.

Kaitlyn Doyle  

Absolutely. I love this topic. My colleagues at Tech Nexus will tell you that I can nerd out on legal documents, and term sheets for days, and I'm constantly hammering that into especially on adolescent associates, that this is something that you do not want to be a lawyer to read. You should always read the legal documents. There are some complicated terms that go into venture capital, financing, and both on the entrepreneur side and the investor side, you should read everything, and you should know what you're talking about, know what you're asking for, and know what you're being asked, because these things can really influence the control of the business, as well as the liquidation and the ultimately, ultimately the financial gain. So a couple terms that they should people should be familiar with. So we can start the very basic I had an investor, once an angel investor, that I knew, that didn't understand the difference between common and preferred shares. And so they made several investments on common equity, not the end of the world, but they should have been aware and ask me about what preferred equity was and getting, you know, that preference, that liquidation preference, for their money. Other terms that come up all the time, participation, for investors, this is going to be a really great sweetener. But for entrepreneurs, there's a downside there. Right. For investors, this means that you can get your liquidation preference and participate in the conversion accounting so you can ultimately double dip and get a higher return, if entrepreneurs don't fully understand that they're literally giving away some of their money and some of their exit to the to the investors. So that's something that definitely you want to be aware of. 

Kaitlyn Doyle  

The other terms that people often misunderstand or just gloss over are anti dilution protections. There's a venture capital podcast actually called Full ratchet, another one that is a good one to listen to, that's named after this. And the full Ratchet is an anti dilution protection that can really change control of your cap table in the event of a Dow round, because it will reprice all of your prior preferred shareholders to a new Dow round price per share. So for common shareholders, for founders, prior investors, it can heavily dug with you, just because a down round happened. And we all know down rounds sometimes happen, especially in some macro conditions that we're dealing with right now. So all of that to say advice to both founders and to new and seasoned venture capitalists. Always read the legal documents. Google anything you don't know. If something gets complicated, talk to a lawyer. My favorite thing to say to my team is, I am not a lawyer. I will never claim to be, but I know enough that I know when I needed to bring the big, big guns in and ask for additional help. So always read those documents. Great way to learn about the process, and a great way to make sure you're actually getting a good deal.

Ryan Miller  

Yeah, I love that. So understand your terms, and you know, I'm reminded, and you're right down rounds, meaning your company was valued high, and then today you're raising and now it's valued at less, and so that dilutes the value. So a VC is going to say, well, if that dilution happens, likely it's because of your choices, I'm not going to let that harm our firm or our firm's investors, and so you're going to have to make up the difference. So full Ratchet is just there to protect the investors, just in case the valuation of your company drops, which it shouldn't, but if it does, that's in place. If it doesn't, then it literally does nothing. But I'm reminded of a story that I've only heard and the internet's going to keep me honest, or it's going to make sure that I know I'm a liar, but either way, I'm just saying I've been told this story in a circle and heard it a couple of different times. There's a story about Jessica Alba and the Honest Company through these terms that you're talking about, make sure you understand these terms, both as a VC, but also as a founder. So we got both listening to the show. The story was, is that and please email me if I'm wrong, everybody. But the story was, is that she sold her company, I think it was like 100 million, we'll say, I might not be right on that, but she sold it for a lot, and there was a small investor group that had participation rights, which means they they got to not only get what they had, but they also got to participate in what she was entitled to. And it turned out that she got nearly nothing for the company she built when she tried to sell it and exit for whatever reason, doesn't matter, but she was ready to to hand over some control and sell some shares, and she got almost nothing because she agreed to some participation rights that allowed investors to not only get what they were promised, but also get a little bit of, if not all, of what she was promised. So just because you have shares, it doesn't mean there aren't clauses in your legal agreements that mean like, oh, you can hold those shares, but all the value of those shares go to me. Well, why do I even hold the chair for the voting I guess. So really, I can't emphasize what Kaitlyn is saying enough here is the term sheet, make sure you understand the terms that you're agreeing to. And that's not just venture capital, it's real estate, that's hedge funds, it's debt funds, restrictive governance. I mean, there's all kinds of things, but the legal documents, that is where you really need to understand what it is. And I tell everybody if you really want to move up and learn read your legal documents, circle, literally any word, decimal, spacing, anything that you don't understand, make sure you do. You will move up faster when you understand your legal docs. Anything you can add to that?

Kaitlyn Doyle  

Talk about a painful mistake, right? Like you, you will not make that mistake twice, but hopefully you can listen to Ryan and listen to me and not to make it the first time around. 

Ryan Miller  

That's right, absolutely. So I hope that's not true, but if it is, Jessica, come on the show and you can tell us all about your story and and provide that how not to lose a segment of your show. You know, we wouldn't have a great show unless we talk about the market. So the market, of course, it's broken into many segments and tranches, but in the VC space, what are you seeing out there? What's going on in the VC sector right now?

Kaitlyn Doyle  

Yeah, it's an interesting time VC. It almost feels like a little bit of a wait and see period right now. We know it's not the heyday of 2021. I don't think anybody fully knows exactly how bad it is, or if we hit the bottom yet. There's a lot of investors I'm in the US that are still holding out to see what the election is going to look like and what impact that's going to have on interest rates, on the economy, and, quite frankly, on their fundraising abilities. We're still seeing LPs that are pretty conservative of investing in venture funds. So VCs that fundraised in 2020 or even 2021 and deployed capital quickly, and they're back in the market. Some of them are having a harder time fundraising, even with decent returns. So that trickle back is definitely rolling down to entrepreneurs. Just speaking about our portfolio companies, we're seeing more and more founders that are doing bridge rounds, trying to extend their runway and hit a little bit of higher milestones. You know, we just talked about anti dilution and full ratchet provisions. Founders are rightly so. They're afraid of down rounds, so they're trying to do what they can to avoid that, to avoid those, you know, punitive terms that might dilute them. So we're seeing a ton of bridge rounds. We're still seeing a ton of stake notes and convertible notes, trying to get companies to that next milestone about Series A, Series B, Series C, or an exit. That's the other thing that is still difficult right now, the exit market is not great. We know the public markets have been pretty dry and pretty tricky in the last several years, but private market, private acquisitions, have not really returned. A lot of corporates are still being very conservative with their cash, very conservative with their capital, because their investors are looking at them pretty strictly. So all in the market's a little bit turbulent right now. I think a lot of people are still waiting to see how it's going to shake out and whether, like I said, whether we're at the bottom or whether on the upswing.

Ryan Miller  

All right. So singles, calm waters do not make good sailors. So those who can navigate the choppy waters of VC these days. You the the idea, or the hope is that you will come out as a better business person, better venture capital, better investor, hopefully a better human being as a result. It's, it's definitely choppy waters out there right now, people are holding out. We're an election year, people are like, how do I value this thing? Obviously, we're not in 2021 so we can't overvalue it. But what does that mean, like for today, to say we're not in 2021 that doesn't necessarily help me. So valuations are up in the air. People are holding out on capital and doesn't mean deals aren't getting done. It just means that the fortunes will be made by those who are hungry enough to go get it. And so there's a lot more scrutiny, a lot more DD that's going into these deals, that's fine. If you got a good deal on your hands, you're going to be going to be back to the original point you want to make alpha. You either have superior analysis, superior deal flow, and investors are asking for both right now, the best deals with superior analysis. So that's a complete no brainer for them. 

Kaitlyn Doyle  

Yes, the best deals are definitely still getting done. And I think the smartest and most consistent and consistent investors, they're still in the market, and they're still actively sourcing, actively analyzing. I think those investors also know that this is the opportunity for them to pay an appropriate price. They don't have to pay what the market set in 2021 they have a little bit more power. So they can be consistent in their valuations. They can be consistent in their risk analysis, and they can lean in and really follow that portfolio diversification on thesis. So we talked about way up at the top right of actually, this is where you can make some of the bigger returns, even if it does seem a little bit scary on the front end.

Ryan Miller  

Yeah, absolutely. So it's not enough to know where we are, where do you think the market's going? Just an opinion, obviously not financial advice here, folks. But where do you see the market going? Where are the smart opportunity? Is a smart money. What's the future hold in your opinion?

Kaitlyn Doyle  

Yeah, there's a lot of interesting opportunities right now. Artificial Intelligence is everywhere. I think that is coming. My I guess skepticism is I don't know the right timing of that. And I guess I'll say an aside. I think folks that think they can time the market are oftentimes over optimistic. I'll go back to consistency here, consistency and investing is going to be key with AI, AI is going to change the way that we work, but I don't know when, and I don't know exactly when corporates and larger institutions are going to be ready for it, both in terms of the computing power and in terms of changing the way that humans work. But I think where money is going to be made is from investors that are consistently investing in these technologies and understanding that fine lines market. So that's definitely one big investment theme that we're looking at. 

Kaitlyn Doyle  

I also think there's a lot of really interesting deals and really interesting innovation in clean tech. At TechNexus, we do a lot of investments around electrification, around mobility, around some climate solutions. That's just logic. At this point, we all know what's going on in our environment. We all know the bad news, right? And this is an investment in what in the world that we want to hand over to our children, right? It's how do we make this world a better place for all of us to live, a more sustainable place for future generations? And again? Back to timelines, this is going to happen. It's a matter of when, and it's a matter of how much catch up we need to do to get us to a place where we can literally survive as a human race. So that's another word. I think there's a ton of innovation going on. There's a lot of urgency, there's a lot of money going into that, and there's a lot of regulation that's following that. Europe and Canada are definitely leading the US there. But there's going to be, there's gonna be some carrots, and there's me some sticks that are pushing large corporations, large institutions, and obviously early stage innovative startups to figure out solutions in in clean tech and in electrification, for sure.

Ryan Miller  

Brilliant. Yeah, I'm big believer in clean energy. We talked about my deals that we got going on, and we actually did a soft pitch to BlackRock. And when the eyebrows go up in a good way, and they're like, wow, this is really good. Please come to our office in New York, and let's talk about this more in serious like building that is a huge opportunity. And there are monster funders and funds that are looking for those deals. They have the problem on the other side, they got too much money and they got to put it to work, that's still a problem for a fund manager. And then for the emerging ones, they're saying, we got no money and we need to raise it. So I think those two can come together all on the best deals, which, in your opinion, which I totally agree, AI, and electrification, clean tech, all of these great things that are happening, that's where I think a lot of the money's gonna go and it's gonna happen. Makes sense, because we've got, not only AI, quantum computing, electrification, of pretty much everything, even cars, and it's like, do we have enough power to come online? A lot of experts think we don't and so building out power generation, but in a clean and sustainable way, I think that is where a lot of people want that, tons of innovation, which that I word, gets us, VCs a little excited, but a lot of innovation in the energy space, and ironically, it's coming from a lot of oil and gas companies have created some phenomenal breakthroughs in extracting and producing energy in a cleaner way. Absolutely love that couldn't agree more. As we round third base and we look towards the future, and just leave our listeners with our time together. Let's leave them with some unfair advantages from your perspective, what are two or three things that you can provide to our listeners around the world to give them an unfair advantage, just to really help them to be the best in this sector. What would you say?

Kaitlyn Doyle  

Yeah, I can definitely come up with at least three. I think the first, the first misnomer that I'd love to get people around is venture capital as an industry, is very learnable. I think there's this misconception that venture is scary finance, and if you're not in it, if you don't have a banking background, it's nothing that you can catch up to. I want to squash that first and foremost. And I talk with this. I talk to my analysts and Associates about this all the time. You can learn venture capital. You just need to put in the work and put in the effort. It goes back to some of the simple things we already talked about, read the legal documents, go through the financial model, get a mentor, right? VC is very much described as an apprenticeship business, and I the more and more I work in it, the more and more I agree with that you need to find somebody that's been there, done, that that's willing to take you under their wing. Show you what they know, show you the mistakes that they've made, and help coach you along the way, tag you along in deals. Get get you to kind of just see in the room where the discussions are happening. You can do that if you know somebody in the industry. You can also kind of create an artificial mentorship or apprenticeship opportunity. There's so many courses online right now, Ryan, I know you run one. There's a ton of free content, or lightly paid content, where you can learn the basics of venture capital, learn the basics of fund modeling, financial modeling, term sheets, legal documents on your own, and get to know as much as you can about the industry. 

Ryan Miller  

It reminds me of, you know, I don't know the name of the fish, but you almost be that fish that swims on the belly of a shark, and they're well fed, and they just add value in a certain way. And that's literally, I don't know your origin story as well, but I know mine when I started that was it. I the first guy that I finally got a shot from and keep in mind, this is still the Great Recession area. Not a lot of stuff happening, very frozen capital markets and deal flow. But I met a guy building 132 megawatt power plant, and I was like, I just finished grad school, I can build you the best financial model you've ever seen, I won't even charge you. I would just love to work on this deal with you, learn from you, learn from your partners, and really just participate in a big deal, right? I was in that first half of my career where I'm building my resume and being able to do that and build financial models and they were, I met billionaires. I met finance emissary, the Saudi Crown Prince, and all these people that are like, I got a ton of value. It wasn't a paycheck, but I think I got something that worked out way better. And so doing these deals is kind of like I in my infancy when I was starting on this industry, I was like that little fish cleaning the belly of these sharks, and they're like, you're great. You can come with us as long as you want. And so still, I consider him a mentor to this day, but he even calls me for advice these days now, but it's just, it is a great I couldn't agree more. Kaitlyn, that is one of the best pieces of advice is just get close to people who are already doing the deals you want, whether it's real estate or venture or whatever it is, and see how you can add value and participate anything to add to that?

Kaitlyn Doyle  

Yeah, absolutely. I mean, I think it's so sometimes getting in that room and being able to witness and see how things happen and ask those questions is extremely important question I get asked a lot sitting where I said, you know, venture capital is a very male dominated industry, most investment, most alternative assets are and I sat on a panel maybe two years ago, and the back of the back of the room, there was a young woman who raised her hand and straight up asked, it was a panel full of women. Straight up asked, how do all of you deal with operating in a room full of male investors, often is the only, the only woman in the room? And my response was two simple words, extreme competence. And I don't say that from an overconfidence perspective, but what I mean by that is you need to know what you're talking about. Because if you're, if you give any people any reason to doubt you, they will. So you need to ask the questions that you don't know. You need to get over the fear of looking stupid or looking silly and educate yourself when you have the opportunity, because you won't have that opportunity again, right? It goes back to googling everything you need to know about legal documents, asking the question when somebody's using an abbreviation that you don't understand, or when you're not following along, asking the super technical entrepreneur, hold off. Explain that to me again. What's the science behind that? How does that work? What's the IP here? I got over that really quickly in my venture capital career. I think I had a little bit of imposter syndrome. And in the first several months, or maybe even the first year, of being an investor of I can't show any doubt. I can't show any sign that I don't know what I'm talking about when really, I flipped that pretty quickly to show I need to ask the questions, because if I don't know what I'm talking about now, I need to learn it so that extreme competent, competence is is so important, you need to figure out what you don't know and be resourceful and find a way to educate yourself, to constantly better yourself, whether that's through mentorship, whether that's through courses, whether that's through Google, whatever you need to do, I think that should always be a priority.

Ryan Miller  

Yeah. And with that competence, people will, you won't have to ask anymore, when, when, when the secret's out and that you actually know what you're doing. They'll, they'll come to you, they'll, ask you that is really good. So VC is learnable, so just make sure you in the one of the best ways is do a deal with people. Don't lead the deal. Just do it on the belly of the sharks, on your first deal or two. Just really be able to participate without leading and it's that will that'll take the weight off your shoulders, and you can just be in the deal, add value, but also still take your time a little bit, because you're the small fish, so you can actually take time, look around, understand what's going on, and, most of all, learn how to do VC deals. I love that. What's the second thing?

Kaitlyn Doyle  

Second thing narrows down to storytelling. And I think from a venture capital perspective, you're in the in between, right? You're raising capital from LPs. You want to deploy that capital and to launch entrepreneurs. I think as the venture capital investor, you need to make that connection. You need to understand the story of, why do LPS want to invest in you, and why do entrepreneurs want your money? I'll give one example for TechNexus. Almost all of our LPs are large corporations. They invest in us because they often sign five some extra cash. They see innovation going on in their industry, and they don't know what to do about it. They don't speak the same language as entrepreneurs, so they need somebody as the middleman to build an entrepreneurial portfolio and help them invest in those companies. That's where TechNexus comes in, and that's why those LPS invest in us. 

Kaitlyn Doyle  

So on the flip side, entrepreneurs, they have a lot of institutional investors around the table. Often now they'll have institutional firms that have investments from pension funds, from government, et cetera. But when they look at TechNexus and they see that we have corporate backers, they think that's pretty unique, and if we can sell them on, hey, do we have this corporation that's backing us, that wants us to invest in you because there's a strategic alignment, and they want to look at you for a proof of concept or Technology co-development or an advisory relationship or potential acquisition down the line, the entrepreneur's eyes light up. They see that as a unique advantage, as a diversification on their cap table, and they want to work with us. They want to take their take our money. Now we have a deliver on that, right? It goes back to reputation, doing what you say you do. Bring. In the results. But if post investment, if we can make that collaboration between corporate and startup happen and increase the value for both of them, show that there's some strategic alignment. For the corporation, bring them some innovation, bring them some financial returns, and for the entrepreneur, bring a great corporate partner that's going to drive their business forward. That's a win-win for us. And if we can appropriately tell that story and connect those lines, that's where we as an investor can be successful. Every VC is going to have a slightly different story. But if you can weave that throughout, that's where you can ultimately make it all work and make the broader ecosystem be successful.

Ryan Miller  

Brilliant. So just make sure that you can demonstrate value that you add to the deal. I love that you said you had three what would be, would be a third piece of advice, an unfair advantage in this industry, to really help people nail it. What would you say?

Kaitlyn Doyle  

Yeah, the last one is almost so simple, but it's unfortunately overlooked a lot, and that's, be a good person, right? Ryan. You say it all the time that relationships are being in this business, and I can't underline that enough, now founders and investors ultimately want to be aligned, and they want to work together. I think when I started in venture far too often there was this power struggle where the investors were the ones that had the money and entrepreneurs were the ones looking for it. So entrepreneurs often got written off. They often got ghosted. They often got no response from investors, or they got brushed over, right? Your business isn't important. It's not that impressive, et cetera. That is reputationally killer, because entrepreneurs talk, investors talk, and if any investor treats an entrepreneur or Cohen Lester or an LP like that, worth sending it around. So not only is it the right thing to do, but it's the right business advice as well. My analysts and associates will tell you that I'm a stickler about this. I tell them that if they if they talk to an entrepreneur, or provide an intro call with an entrepreneur, and for whatever reason, they determine it's not going to be something that we invest in, I demand that we send an email. The littlest courtesy you can give right, send a two sentence email saying, hey, great to chat with you. Unfortunately, we can't move forward. It's not gonna be a fit for our fund. Thanks so much, the big of mind is people that will just ghost you and waste your time with an intro call and then you never hear from them again. It's a common courtesy. I think communication is absolutely key, and I think it goes and builds the reputation that you as an investor should want to have. 

Ryan Miller  

Yeah, brilliant. So as we wrap things up, is there any final remarks, ways people can reach out to you or connect with your company. Closing remarks, anything at all?

Kaitlyn Doyle  

Yeah, absolutely. First of all, Ryan, really enjoyed chatting with you. Thanks so much for having me on if anybody wants to learn more about TechNexus, you can check us out on technexus.com, you can check out our portfolio, we're on LinkedIn, or also on X or Twitter, on @technexus, and if you're interested in connecting with me, I'm Kaitlyn H Doyle on Twitter, you could find me on LinkedIn. You can also shoot me an email, it's Kaitlyn@technexus.com I'm always happy to chat with folks and continue the conversation.

Ryan Miller  

Brilliant. So just to summarize everything that Kaitlyn and I spoke about, just remember VC is learnable. Get a mentor, work on deals with the sharks, and you will learn faster by full immersion and doing those deals. The second thing is just be clear on your story that showcases the value that you're going to provide. And finally, as bad or as good as this may sound, if you want to stand out in this industry, be known for being a good person, and build your reputation off that you do these things, and you too will be well on your way in your pursuit of Making Billions.

Ryan Miller  

Wow, what a show, I hope you enjoyed this episode as much as I did. Now, if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better, and make sure to come back for our next episode, where we dive even deeper into the people, the process and the perspectives of both investors and founders. Until then, my friends, stay hungry, focus on your goals and keep grinding towards your dream of Making Billions.