Ep. 521 w/ David Li Principal Avanta Ventures

Ep. 521 w/ David Li Principal Avanta Ventures

As the venture capital arm of CSAA Insurance Group, Avanta Ventures invests deep industry expertise, resources, and financial support to create products and services that offer extraordinary value.

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Kevin Horek: Welcome back to the show today. We have David Lee. He's a principal at Avantor ventures. David, welcome to the show.

David Li: Thanks Kevin. It's great to be here.

Kevin Horek: Yeah, I'm really excited to have you on the show. I think, well, the types of companies that you guys invest in is different and I love how they're really complimentary to each other, but maybe before we get into all that, let's get to know you better and start off with where you grew up.

David Li: Yeah. Number one, Kevin. Thanks again for having me. My background, I was born in China in Beijing and moved to the U S when I was eight years old and basically grew up in sunny San Diego. I've spent kind of most of my life since in California. I'm based in the bay area now and have been here close to 15 years now. So it's been awhile.

Kevin Horek: Very cool man. You went to university, what did you take and why?

David Li: Yeah, so I went to UC Berkeley for undergrad studied business. There was always interested in business from the get-go. I was the kid who had a lemonade stand during the summers. I peddled Pokemon cards to other kids on the playground. At Berkeley, I studied business and kind of did a series of kind of internships during the summers. A lot of which helped me figure out what I didn't want to do. I started during my freshman year cold calling for Merrill Lynch in their, a wealth management division and was literally dialing for dollars at that point. I don't think I've been told no more in my more times of my entire lifetime. So.

Kevin Horek: You probably learned a ton from that. Sorry to interrupt you.

David Li: No, yeah, absolutely. You kinda learn to have a tough skin, right. And, and be okay with the rejections. I think sales is actually an incredibly valuable skill to build. So, overall I would say it was an interesting experience, but it did leave a, a vivid impression that I didn't want to be a, a personal financial advisor. Sure. It didn't get me really interested in kind of investing and in the finance side of things. Over the course of the next couple years during school, I spent my time trying to understand the space I worked at kind of kick AR for a summer and got to see the inner workings of a phenomenal private equity firm. I worked at a small growth equity fund and at each of these places, I I'd asked for advice and kind of the common theme that I heard over and over again was, Hey, go do investment banking because it really helps you kind of build that foundation and skillset that you'll need to be successful.

David Li: That's how I ultimately kind of started my career. Post-graduation.

Kevin Horek: Okay. Interesting. Walk us through the rest of your career, getting your MBA, and then I want to dive into Avantor.

David Li: Yeah. It's been of a, kind of a winding road and journey to where I am today, but starting my career, kind of doing an investment banking at Lazard in M and a, had the opportunity to kind of work with clients of all different sizes, right? From large multinational corporations to kind of venture back startups and realize pretty quickly that I gravitated much more toward those early stage transactions where it really was about kind of product innovation versus more of what I thought of kind of the financial engineering elements with more mature companies. From there post Lazard, I joined a venture capital fund called longitude capital where I invested mostly in growth stage companies. Kind of series BCD just had a tremendous time there learning venture business from some of the sharpest folks in the field, but also kind of always felt this itch to do something kind of more product and entrepreneurship oriented.

David Li: Post longitude, I made the leap and joined an enterprise software company called pivotal on the product side. There, I spent most of my time working on developer tools back infrastructure cloud Foundry was the product I was working on. During that time, I also got my MBA at Wharton and that's kind of where I met my current partner Sanjiv at a warden event. We just kinda hit it off right away because our backgrounds were so similar. We both did banking, both worked in VC, both spent time on the product side. Since you've pitched to me for joining him was always, Hey, I'm building this brand new venture firm, come join me as kind of one of the very first employees and we'll build this thing together. And that seemed like a cool proposition. The other part of it was kind of the industries that were going to be focusing on.

David Li: One of which was, is transportation and mobility. I I've been a car guy for well forever and, getting to nerd out about stuff I do outside of work for work seemed really cool. So I joined Avanti ventures in 2018. It's kind of hard to believe that it's been four years now. It feels like the pandemic has distorted time but it's been a lot of fun and it's just kind of flown by,

Kevin Horek: Okay, let's dive into the types of companies you invest in and then maybe we'll give some examples.

David Li: Yeah, totally might be helpful to just give of background on Avanto as well. Kevin. So, the core of entre ventures is the venture fund of CSAA, which is one of the insurers within the broader AAA ecosystem. Roadside assistance batteries, all that jazz we're early stage investors. Our sweet spot is kind of series a and series B businesses. We tend to be quite focused from an investment perspective in terms of the industries that we invest in. The two primary focus areas, one is mobility. Everything transportation related from connected autonomous vehicles to infrastructure, to supply chain logistics. The other area for us is FinTech with InsureTech being kind of the key pillar there. We've kind of really invested up and down the insurance value chain from full stack insurers like kin to MGAs, like cowbell cyber to mortar, to kind of software solutions like Cape analytics. But, we've also invested quite broadly within FinTech as well in terms of payments, lending, real estate mortgages title, and also love to help drive interesting partnership opportunities for our portfolio companies, whether that's from an insurance partnership side, with CSAA, whether that's, introducing them to the broader AAA ecosystem from a distribution perspective, all of the above we've made 15 investments to date very much actively investing and are now kind of deploying out of our second fund.

Kevin Horek: Very cool. Okay. Can you maybe give us some examples of companies that you've invested in and what they do?

David Li: Sure. One of the more recent investments we made was in a company called overhaul. They provide a supply chain visibility and risk management platform that enables large enterprise customers to kind of manage their shipments more effectively. And, I think when you take a step back to look at this broader space, you'd start to see that supply chains are extraordinarily complex and, we just don't see it. We click the buy now button on Amazon and kind of the package arrives in two days on our doorstep. What we don't see is actually that web of stakeholders and the massive logistics ecosystem involved in order to get that package to us and, a more complicated product like an airplane, for example, the Boeing 7 87, I think has over 500 suppliers across 10 countries working together to source manufacture transport about 2 million parts. That gives you a sense of what, why supply chains are so complex and all of that has only been kind of made more clear over the last two years by COVID and more recently by all that's going on in Ukraine.

David Li: As a result of all this, the supply chain management function has gone from a more behind the scenes department into a board level issue at most of these large companies. What they're looking for are ways to kind of integrate all the systems together across multiple parties within the ecosystem, from the warehouse to the trucking provider in Asia, to the cargo ship, to the trucking carrier in the U S all the way to the end consumer. More importantly, they want to be able to anticipate disruption and handle any issues that arise in kind of an automated fashion in real time. So that is exactly what overhaul provides. Overhauls platform integrates with all of the various systems from the ERP to the transportation management systems, the warehouse management system, to all the sensors that these shippers are deploying. It provides kind of these enterprises with a real time view on location and condition of the shipment, but then they go a step beyond that, to automate the handling of exceptions in real time as well.

David Li: A good example is what happens if they detect a route deviation, and this actually happened to one of their customers where they noticed at 2:00 AM in the morning, there was a detachment of the tractor and trailer, so a separation of the goods, right? They immediately kind of notified all parties involved from the shipper to the trucking dispatcher, to the driver that, Hey, there's something going on here. Because of the integrations that overall overhaul has with local law enforcement as well, they actually confirmed that load was being stolen. They were able to route all of the data in terms of exact GPS, coordinate speed, direction, heading, et cetera, to local law enforcement. And that shipment was ultimately recovered. All of that occurred without the shipper having to raise a finger, whereas kind of pre overhaul. The reality was that shipment probably would have been stolen and gone forever.

David Li: So, we think overhauls building something really unique and compelling here. The last thing I'll add is that because of overhauls kind of market positioning and the ability to integrate across all of these systems and aggregate all of these various data sets, they're now able to create new products and new services that are kind of built on top of their platform. One of those products is trucking insurance because overhaul is already monitoring these shipments from a visibility and safety perspective. They actually have a direct line of communication with the drivers as well. What's really interesting is that they're now able to leverage their platform to kind of impact driver behavior with kind of proactive warnings, right? They there'll be able to tell a driver that, Hey, you're entering a, a geography or area that's known to have nuclear verdicts. Kind of insurance verdicts over a million dollars and just be careful and what they're starting to see as a result of some of this is that they're reducing the risk of accidents.

David Li: Anyhow, all that says, we're super excited about the company we invest in overhaul series B last year, and the company has just done phenomenally well, couldn't be more happy.

Kevin Horek: No, that's really cool. I love technology like that. That solves a real problem. I think that, well, obviously what you just outlined of, like something's getting stolen, that you can alert everybody. Like that to me is so cool that you could do something like that these days.

David Li: Yeah, absolutely. There's this actually, there's this theme that runs through all of our investments, which is really around kind of data driven control point businesses. What I mean by that. This starts to get into your point as well, Kevin, around solving a customer problem. These are companies that are able to leverage data, to create a unique barrier to entry of defensibility around themselves. That actually starts with solving a real customer pain point, which in turn enables you to access and acquire data. The best companies are then able to position themselves as kind of that central control point within the value chain, similar to what overhaul does and build a network or ecosystem around themselves. Ultimately because they have the product that solves the customer need the market positioning. They're actually able to deliver some really interesting, unique insights on an aggregate level that solidifies that differentiation.

David Li: That theme of kind of that data enabled control point really flows through all of the investments that we make as well. I think overhauls is a great example of that.

Kevin Horek: Not very cool. Maybe do you want to give us a couple more examples, just so people understand the types of companies that you guys invest in?

David Li: Sure. Another good example, and this is another one in the mobility space, and it's actually an area that we think kind of flies under the radar . I think folks within the ecosystem, a lot of folks focus on kind of the autonomous driving side, the electrification side, but one of the spaces that we've dove pretty deep into is actually the connected vehicle space. We made a bet recently into a company called motor work and what they are is a data infrastructure platform that enables fleets and other commercial applications to access real time data streaming from the vehicle without the need for any additional hardware or devices. The key insight here is that vehicles are becoming connected. In fact, nearly a hundred percent of new vehicles launch for the past couple of years have been connected. Right? The challenge has always been though that OEMs have been extremely guarded with this dataset and rightly so because of kind of privacy and security concerns for their customers, what moot work was able to do, however, was to really form some pretty interesting partnerships with OEMs, by bringing OEMs and their largest customers who are the fleet management companies that buy thousands of cars from them every year and actually need this data to better manage their own operations.

David Li: Mozart brought them together at the same table and also kind of painstakingly built those consent and privacy mechanisms to make sure that, everything was being handled in a compliant manner. They actually work with Metorik actually works with nine of the 10 largest OEMs one side and a range of fleet management companies, as well as other commercial applications on the other side. It's actually this interesting win-win for all parties involved for OEMs. It allows them to begin monetizing this vehicle data. And, they've been talking about this for years in terms of shifting their business model from a one-time sales of the actual car to a more recurring revenue stream for fleets and other commercial use cases like insurance, tolling parking, whatever it might be with a single API integration, they get access to not only a wide breadth of vehicle data, but also kind of the best quality as well.

David Li: There's no need to deploy any aftermarket hardware, use a phone, any of that. Motoric sits at this kind of unique position as that infrastructure layer that powers this entire vehicle data ecosystem. And, this gets back to some old were just talking about Kevin around that kind of control point thesis, right? What we see Mozart doing is bringing together kind of these disparate stakeholders on both sides and delivering some real value for all the parties involved. We invested in real talk series aid back in 2020, over the past two years, they've seen tremendous growth and validation on both sides of the market really kind of positioned themselves well to become the leader in the space. And, they raised a series B round pretty recently. And, broadly speaking, we think this is a really interesting space and are always kind of thinking about the applications of data and some of the new products and services that enables as well.

Kevin Horek: No, I think that's really cool. It's really cool that you got all these OEMs to actually play nice together because the reality is I think the only way, well, not the only way, one of the big challenges of autonomous vehicles down the road will be what you just, what they basically solve for fleets is every car needs to talk to each other in some way, right. For it to be completely safe. If they've already cracked that in one vertical of driving, that's actually really fascinating. I had no idea that was, they were doing that.

David Li: Yup. This is why I was mentioning kind of Kevin, that it kind of flies under the radar because so much attention within this industry is paid to kind of autonomous vehicles and the development of those kinds of technologies, as well as the electrification side. What's really interesting is you have kind of connectivity, which is here today. What we love about is that they're now enabling kind of access that data to allow new products and new services to be built. To your point, absolutely the vehicles will need to communicate with one another kind of in this autonomous world. We think that most work is well-positioned to, to become a major player there as well.

Kevin Horek: Totally. The other thing too, that's interesting about that is it took kind of an objective third party to bring all those companies together, Which is actually really fascinating. I actually, I think that maybe gives people a way to think about some of these problems in the mobility space and look at them as a different angle than I think how we've been traditionally doing it because you mentioned like, yeah, they might, it's not, as, it's not as cool as like, look, I'm building this self-driving thing that every car on the planet could just bolt on. Right. I know that's not possible, but like, right. There's a lot of actual problems on the flip side of that really needs solving because like the autonomous vehicle example I just gave is already basically happening. Right. Companies are sorting that out, but if they don't all talk to each other, that's the biggest problem with that.

David Li: Yeah. The interesting part of this is also around the fleets in terms of the fleets don't have the ability to do one-on-one integrations with every OEM. That's actually, what's been holding some of this industry back as well in terms of the connectivity side of things is because a fleet is not homogenous, right. In the sense that they run GM vehicles, they run Ford vehicles, there's Toyota vehicles. There's no way that they're going to be able to do integrations with every one of these OEMs. They actually do need that neutral platform that does it for them and abstracts away a lot of that complexity. We think Metorik is really well positioned as result of that. What's really interesting is that a lot of these fleet management companies are now saying to well, can I white label, right? Your cloud platform and deliver insights to my end customers.

David Li: You w I'm able to leverage kind of much work to access data. Now with this platform, I'm able to then use that data to say to my end fleets, you're your mom and pop type of drivers or the, those folks that have maybe one or two or three fleet vehicles and say, Hey, I can help you manage your fleet better and help you understand the location help you manage, fuel efficiency, whatever it might be. A lot of those solutions are coming into play as well here.

Kevin Horek: Very cool. Do you want to give us one more example?

David Li: Yeah. Happy to another one that is more on kind of this infrastructure layer we invested in a company called car IQ. They are a payment platform for vehicles and what they do is they authenticate the vehicle itself to allow that car, to pay for transactions in the S without the need for a credit card issued by a bank. One of the interesting use cases here is actually around the electrification side in terms of charging the charging experience is great right now, if you have a Tesla, it always works. You pull into the Tesla charging station, there's no kind of credit card involved. The charger recognizes your vehicles. You plug in and you're done in 20 minutes or whatever the timeframe is now for everybody that doesn't own a Tesla. Can't pull up to a, a supercharger station. The experience is awful. Half the time the charter doesn't work, you're having to sign onto multiple apps to pay.

David Li: And it's just a very poor experience. With Cray queue, the they've built an interesting kind of model whereby it provides almost some of that Tesla kind of payment experience for everybody else. With cardiac queue, you can pull up to a, right now, you can pull up to a shell station, and this is more for kind of a fleet vehicle side, but the car actually recognizes that you are next to pump five activates that pump and authorizes that transaction for you. It's very similar kind of payment mechanism and experience. Now they're starting to work with a number of these large OEMs to actually provide that as an industry experience for fleet vehicles. It's another one of these kind of infrastructure plays that we think is quite powerful and also flies under the radar in some sense, Kevin. We're quite excited about the company we invest in their a about two years ago, since then they've added new merchants like shell and others to their marketplace are continuing to grow their fleet and vehicle managed on platform and just doing really well.

David Li: So that's another great example.

Kevin Horek: Very cool. How does that technology work though, without getting too technical? Like, do I need hardware at shell and hardware in my car? Or how does that, how do they talk to each other?

David Li: Yeah. W w we actually generally shy away from kind of the hardware side of things. None of our investments actually require additional hardware in that sense. What car Q does is they are able to leverage in-car sensors, meaning that they understand kind of exactly, kind of GPS location coordinates, and they also integrate with the vendors. In this case, shell, but, in the future of kind of ed charging stations, to understand that your car is actually at, pump five or charging station and authorize that transaction, and more importantly for fleets, what's actually really important for them is preventing fraud. Meaning that when you fill up that tank, that fuel actually goes into the car, or when you're charging it, actually, you're not just charging another vehicle, you're charging the fleet vehicle. Car IQ is able to authenticate that transaction. Based on the sensors within the vehicle, understand that, Hey, there's actually fuel being pumped into the car, or the car is getting charged, whatever it might be.

David Li: So everything is integrated. There's no additional hardware required. It's all based on vehicle sensors, as well as kind of integrations with their merchant network.

Kevin Horek: No, that's actually really fascinating. You brought up something that actually, I didn't even Dawn on me until you mentioned it, that you could solve this, what you just outlined without hardware. Cause I think a lot of people, if they came up with this idea or something similar, they'd be like, well, we need to put a little, like, I don't know, some device on each pump at shell, every car needs to have some device, right? Like I think that's how a lot of people would approach this problem. I think the fact that they took just a software approach, obviously you don't need to raise as much investment going through the hardware, software space. Not saying it's not doable because people have done it, but it's way more costly than just doing a software play. Do you agree with that?

David Li: Absolutely. The challenge with kind of needing to Deploy devices is also from the distribution side of things. A good example here, the reason why kind of tell, I mean, telematics from a vehicle perspective has been around for a long time, but it's very much kind of relied on aftermarket devices being installed in those vehicles. That's why telematics actually hasn't become kind of prevalent within this industry. I think right now the stats are maybe 10, 15% of cars are equipped with a fleets, are leveraging telematics to manage their vehicles. Part of that is because they can't afford to take down those vehicles to install those devices. And they may not want to, right. They don't want to pay 300, 400, $500 for a device and then can't use their cars for a day or two while that device is being installed at a shop. And that makes a challenge.

David Li: I think with a lot of these software solutions, whether you're you think about crime queue, whether you think about load torque, the software only solutions actually makes it substantially easier on the customer's perspective as well in terms of deploying these, the solutions and the products and services built on top of them.

Kevin Horek: No, totally. Well, and the other thing too, is just the maintenance, right. Something sensors can handle the freezing cold or snow and ice and right. And, or extreme heat, right. Where software, none of those are issues.

David Li: Yeah.

Kevin Horek: Exasperating. Interesting. Okay. No that, okay. Maybe give me another one or two companies, because I'm curious about just the angles that the companies you guys have invested in is actually really fascinating.

David Li: Yeah, sure. I'll, I'll give you one, not on the mobility side, then I'll show you to kind of our other focus area, which is around kind of FinTech and insurance. We invested in a company called blueprint title. They are a title insurance company direct to customer. So not going through agents. What blueprint has done is built an end to end technology that enables an extremely efficient and fast closing. And, maybe I'll actually take a step back here, Kevin, because I think title insurance is one of those industries that most people know very little about it. It just kind of comes with the closing paperwork, right? When you do a real estate transaction, most people, don't even think about it. That actually creates this interesting dynamic where the buyer of title insurance is actually not particularly price conscious in the sense, right? Because if you're buying a million dollar house or a $500,000 house, what's another, a thousand dollars, $2,000 tacked on top of that to ensure you have a smooth closing.

David Li: So, but as a result of that, the title insurance industry is actually dominated by four large players that holds kind of 80 to 90% market share. They haven't really innovated for the past decade, probably more than decades, but it's a very manual process. On top of that, it's very profitable for these large folks because there's almost no claims because what title insurance guarantees or insurers is that there are no past claims against your property and it's required, right. To get a mortgage and all of those elements. While an auto insurance or an in home insurance, the loss ratios, so kind of how much the insurance company is paying out for every dollar that they take in is it can run up to 50% or even higher title insurance has a loss ratio of 4%, meaning that for every dollar that they take in of premium, they're only having to pay out kind of four or 5 cents on that dollar.

David Li: Wow. It's an extremely profitable business and where all of the, kind of the remainder of that premium goes is to pay insurance agents. It's the insurance agents that are kind of selling to realtors at the end of the day and making sure that consumers buy their title, insurance blueprint is turning that paradigm on its head. They are working with largely kind of investors and purchasers of residential real estate, but going direct to that customer and the value prop here is really one of efficiency in terms of allowing you to close rather than in 30 days in substantially less time. Also reducing the price, meaning that because blueprint doesn't have to pay kind of title insurance agents, they're actually able to pass on savings that end customers and reduce price by oftentimes up to 40% against, some of their incumbent competitors. Again, this is one of the industries that, has some really interesting dynamics that people don't often realize, but we think there's a huge potential within the space.

David Li: We made a bet on blueprint earlier last year, the company is growing really well, has expanded into a number of new states, and this is also a Nashville based company, but the company is doing really well growing tremendously. So we're super happy about that. It's a good illustration of one of the investments on our kind of FinTech and InsureTech vertical.

Kevin Horek: No, that's actually really fascinating. I, I know, I love the idea of just, and maybe it sounds bad to say, but those kinds of like archaic companies that are just making a ton of money just because they can and like software coming in and just like wiping them out. I don't mean that in the sense that like people lose their jobs. Cause obviously that's terrible, but I really like that, like innovation where something is so broken or so kind of outdated and technology can just like come in and solve a problem. Right. Make it better for individuals and companies.

David Li: Yeah, absolutely. There's so many of those industries, Gavin, in terms of that really haven't kind of experienced a lot of that change or have adopted software solutions. Title insurance is a great example. There's so many kind of sub verticals within supply chain. All of these industries tend to have some interesting dynamics, like what we talked about within title. Oftentimes they also tend to be regulated, meaning that there's high barriers to entry. It actually takes folks with kind of some really interesting insights, but also experienced to be able to navigate some of those regulatory elements in order to build a successful business in those spaces.

Kevin Horek: Totally. I think in a lot of cases, a lot of those archaic companies that have an innovated end up buying these innovative companies because they realize how much of a threat some of these will be. Right. The in hope that, a bunch of people don't end up losing their jobs over all that stuff. Right. And, but I also think too, the reality is software is going to be basically in every industry and vertical inside those industries, it's just happening. No matter what I would assume you would agree with that.

David Li: Absolutely. I think to your point, Kevin, the kind of leaders within these fields are actually thinking about how do I bring in kind of external innovation. Right. Totally. Because you, it actually, isn't possible for one company to build all of the solutions out there. So, venture capital is actually one of the mechanisms and levers that some of these large corporations, including CSA use to insource innovation, as well as to understand kind of disruption that's coming down the pike to.

Kevin Horek: Yeah, no, that makes a lot of sense. That's, that's really actually quite fascinating. We kind of covered it very quickly early on in the conversation, but I want to reiterate it again. What stage do you guys invest in and how does somebody go about actually pitching you guys?

David Li: Yeah. In terms of stage, we tend to be a early stage. That's a, a loose definition, but for us, what that means is series a and series B.

Kevin Horek: Okay. So no seed or pre-seed,

David Li: We tend to do less on the seed and pre-seed side. Although we do have a Avantor studios program that works with much earlier stage companies, oftentimes pre institutional financed, but pre-seed seed stage companies where we'll write a smaller check compared to our venture site. The idea is to work with those startups, to help them from a product market fit perspective, to help them introduce them to the right folks within CSAA, but just help them kind of grow their business. It's less focused on the investment side there and a lot more on kind of a strategic partnership for those businesses, but for the VC, the venture side, it's very much kind of series a series B.

Kevin Horek: Okay. Maybe let's step back a second and dive deeper into studios. I have a company I apply or walk us through that journey I'm early on from maybe a napkin idea, or maybe I have a rough prototype where can I apply to actually go to studios and then, well, let's walk through that.

David Li: Absolutely. I think in terms of studios, in terms of ventures, it's very much pretty similar in that we're always trying to find interesting companies, right. Ones that we want to work with, ones that we want to invest in. For studios, any of your listeners can feel free to reach out to me or any of the folks on the Avanti team. If they're billing an interesting idea within kind of the mobility and FinTech InsureTech spaces from there, we typically do a pitch session on a bi-weekly or monthly basis, and our program is more rolling rather than kind of time delineated. During those pitch sessions, we'll invite the companies to come present us. The whole team will be there as well as some of the mentors that we've built. We built a slate of mentors to help a lot of these studios companies as well. It will be an opportunity for them to kind of share the story with all of us and for folks to ask questions and understand kind of what they need help on as well.

David Li: From there we quickly make a decision about, is this the right kind of, is studio is the right fit for the company and vice versa. It's a pretty fast decision making process as it relates to studios through the venture side of things, we are writing larger checks and as a result, we will do more diligence in terms of wanting to talk to customers, kind of understand their financials, their go to market strategy, all of those elements.

Kevin Horek: Okay. So rough. Okay. There a range for a studio's kind of investment or what's the kind of minimum maximum you guys would put in a company there?

David Li: Yep. For studios, we, it tends to be more programmatic. We will kind of two $50,000 safe notes for the companies. Again, for studios, it's less about kind of those small checks and more about delivering value in other ways to the companies, in terms of helping them find customers, helping introduce them to folks at AAA and et cetera, et cetera.

Kevin Horek: Got you. Okay. On the venture side, I'm assuming that if a studios company is looking promising, you would potentially move them to the venture side and actually put in a bunch of more capital, or how does that work?

David Li: Exactly. So, you're starting to get into some of, why we do studios as well, right? Kevin, and one of our big motivations is we want to get in early, right. And in a secure.

Kevin Horek: Spot,

David Li: When exactly when the company is starting to raise the series a so absolutely we love that. There's been a couple of examples of that and our kind of venture check size for series a somewhere between three to 5 million and then for series B companies kind of five to seven, but very much loved invest in studios companies on the venture side. What's, I think great about the studios program is it allows us to start engaging and building a relationship with the teams at a very early stage. Oftentimes by the time that they get to that series a round, we've known these teams for a year or maybe longer. We have a really good understanding of kind of the product of the team, how they execute, what the challenges are and where we can help. Post-investment.

Kevin Horek: Fascinating, actually, that's really smart because one of the challenges, and I've talked to a number of investors in a bunch of different verticals, and they all have their advice on basically how to build relationships with them in their company before they put in money. It's really smart to get in front of you guys as early as possible, right. And start building that relationship. Also, you could also validate the team and how well they work together and not because, well, we both know that being an entrepreneur is not for everyone.

David Li: That's right. Absolutely. And, look being a founder is hard, right. One of the things that we always think about is, and this actually gets to some of our investment process as well, but is how we can help in terms of post-investment. We tend to, and this is another reason why we tend to be quite focused from an industry perspective, because we know these industries in and out, we tend to build investment theses around these industries as well. W we understand kind of the customers, the ecosystem and how we, what we can do to help make things easier for the startups that we invest in terms of introducing them to the right folks within this ecosystem to drive those partnership opportunities. Hopefully from a customer perspective as well, introducing them to customers that can add value and ultimately revenue for the company to.

Kevin Horek: No, that makes a lot of sense. I'm curious then with ventures or studios, or both, do you prefer like a warm introduction? Are you fine with the cold kind of email or phone call? Like what are you kind of looking for with either one, if you have no relationship with that person or company early on?

David Li: Yeah. I think the short answer there, Kevin is that a warm intro is always better in the sense that if we get an intro from another investor that we know well or have invested with, if we get an intro from a portfolio company, a CEO that we've invested in well, a hundred percent, absolutely take those meetings and be extremely responsive. We, we try to be as responsive as possible to call that outrageous too, because we understand that, a lot of times a startup might not have a direct pathway to get to us and that's okay. It just tends to sit in the inbox for longer. Right. Instead of replying kind of the next day, because we have to sort through all of those companies, it might take us a week to get back to you type of thing. And, and I will say that we also try to kind of be pretty outbound, outward facing as well.

David Li: We understand kind of the limits within our network, especially, kind of minority founders, right. Who may not actually know folks within our network. We actually work with different partner organizations. One good example is an organization out in Atlanta called startup runway that whose sole mission is to connect kind of founders of diverse backgrounds and help them access capital. We partner with these organizations to reach other networks that we simply don't have to date. We can always better, but, that's one of, kind of our initiatives for the year as well.

Kevin Horek: No, that's actually really cool and makes a ton of sense. I'm curious then what advice do you give to people basically looking for investment in this space? Because we all know how challenging getting investment can actually be.

David Li: Yeah, absolutely. I think building a relationship with kind of that investor is important, right? Sometimes, we chat with entrepreneurs and they tell us around is, is closing tomorrow. And, we say that's great and we probably won't be able to get all our diligence done in one day, but we wish we had, kind of met you earlier. Right. Helping from a timing perspective, it makes it easier to have those relationships. The other element that we kind of look for and, this is probably more specific to a Vonta, but we often like to talk to the founders about what the key insight is within some of these spaces that they're operating in. Again, we've kind of talked about kind of mobility and kind of FinTech, and some of these other spaces being pretty regulated, being pretty kind of the dynamics within these industries, aren't just kind of direct to consumer.

David Li: We like to see kind of what experiences that the entrepreneur has had that has helped them kind of develop that key insight for their business. That's one of the things that we look for in terms of kind of other elements of advice.

Kevin Horek: Anything that you'd expect somebody to send you in that email, whether it's cold or warm, because I find some just like, it's hard to say, like, what do I send you? What, what do you want to see in that email?

David Li: Yeah, I mean, in terms of kind of the fact, so we do typically ask to see an investor deck. Us of time to get prepared and have a fruitful kind of in-depth conversation, right. Not just a, an intro, here's what I do type of thing, but to allow us to kind of understand the business in more detail, so things like what's the market opportunity, right? That's not just pulled from kind of a Gardner report, but it's more thoughtful in terms of kind of price times, quantity, how much do you think you can get to in five, 10 years, right. What's the, what's the challenge that you're trying to address some of the industry dynamics, competition, business model, all of those things that gives us a kind of overview of the business so that when we have our first conversation, it can go deeper and we can ask those questions that help us understand kind of what's what some of the core challenges are, and really dive deeper into the business rather than stay at kind of a superficial level.

Kevin Horek: No, I, I think that makes a lot of sense and, but we're sadly out of time, I feel like we could probably go on another hour, but how about we close the show with mentioning where people can get more information about yourself, of Monta studios and any other links you want to mention?

David Li: Absolutely. You can find most of, kind of our portfolio companies as well as more info around Avanti ventures on our website. So Avanti ventures.com is the website. I'll throw a shout out to any of the founders listening within kind of mobility and FinTech InsureTech. Please feel free to reach out. My email is just David Avanti, ventures.com and would love to chat with all of you.

Kevin Horek: Perfect. It's a V a N T a ventures.com. Well, David, I really appreciate you taking the time out of your day to be on the show. I look forward to keeping in touch with you and have a good rest of your day, man.

David Li: Absolutely. Thanks for having me, Kevin. It was great to chat.

Kevin Horek: You as well. Thank you. Okay, bye.

David Li: Bye.

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