Abdulaziz M Alhamdan 0:16
Once upon a time, there were 10s of 1000s of makers struggling every day they built for hours and hours, but they didn't chip and didn't earn enough income. One day, the no code wealth podcast came to help them find a way. Because of this, these makers became founders and live the lives they deserve. Because of that, founders live lives of abundance, freedom, and creativity. That's what we're really all about. Hello, my name is Aziz and from being a poor boy born to a single mother in North Africa, with no opportunities, just your hard work to failing multiple startups yet learning a whole lot to barely escaping alive the war in Ukraine even living as an illegal immigrant. I've lost everything twice. And now, I'm rebuilding my life. One more time. 1% a day sharing the wisdom of luminaries have interviewed on this podcast from Google executives through Amazon, Microsoft, Forbes, Technology Council, Harvard Financial Times, and even a priest from the Vatican church. Everyone is welcome, here. So let's begin. My guest today is Jasiel Martin-Odoom. Jasiel, is a Senior Investment associate with a particular passion for impact focused VC investing. This led him to join Unreasonable Collective's deal team that makes Series A and B impact investments into tech companies solving Problems of Climate Change, management, and reporting, built environment, mobility and transportation as well as food and agriculture. As a recent angel investor, Jasiel invests in women and diverse founder led impactful businesses beyond capital Jasiel leverages his networks and expertise to support its portfolio companies to expand their impact further and faster. Jasiel. How are you today?
Jasiel K.N. Martin-Odoom 2:31
Aziz, Thanks for having me on the show today, I'm doing quite well. How are you doing today?
Abdulaziz M Alhamdan 2:38
I'm feeling grateful, lucky to be alive and ready to play. Because although I believe in everything you're doing, I'll play the devil's advocate a little bit. And I will tell you, does investing in impact led companies really work for an ROI Focused world? Or is it the same as those meme companies or whatever, where because of the hype? If a company has nothing to do with, let's say, Blockchain, or nfts, or whatever they added to their technologies, all of a sudden there is an impact on their valuation, but it's all vaporware. What's your perspective on it?
Jasiel K.N. Martin-Odoom 3:21
Absolutely as these enter very great question, I think like everything else, the answer is yes and no, there are some actors in the space who are definitely applying impact lens as a means to differentiate themselves and to get access to higher valuations. However, as a boy born and raised in Ghana, who has had the opportunity to live abroad and study in various places that people who look like me don't often have the opportunities to, I have come to really believe in the power of leveraging capital as a vehicle for driving impactful change. Growing up, I saw often that we as a, as I'm sure, you know, growing up in North Africa, that there is a lot of charity and grant focused funding that oftentimes does not have measurable impact in people's lives, and results in unsustainable lifestyles, and patterns. However, what I love about impact investing is that if done, right, it allows two disparate communities to have a singular language with within which to communicate. I'm speaking of people wild enough to want to believe that they can change the corner of the world in which they exist in and the people who have the capital to be able to support them. As a VC investor. My job is often understanding what is the difference between real impact and those that are with that are just for show how I tend to look at that disease. is to look at how those business models of these companies actually big impact into their business model. And not just the ways in which they message or storytel the impact that they quote unquote claim to have. In addition, I am also a huge believer in evidence based impact investing. What do I mean by that? I mean that for our portfolio companies, for example, we asked them and required them on a yearly basis, not only just report, the revenue metrics that all VC, investors love, but also more importantly in the lives that are truly impacted by the work they do. To date, we have invested in companies that are reducing waste food waste in underserved communities, such as the good company, as well as companies that are thinking through different ways to feed the future of the world, such as a protein company. So yes, to answer your question, I do think that there are some bad actors within the impact space. However, I have come to believe through my own lived experiences. And the work that I'm so lucky to do that impact investing really is an opportunity for us to unlock potential for those who, prior to this time in our in our generation would have not had access to this kind of investable capital.
Abdulaziz M Alhamdan 6:23
Thank you. This makes me think of something very specific. And it was a while ago, I remember someone was giving advice to all the people, especially the good people who think money is evil, and that if you become wealthy, you become a crook and all that. And he said, the best thing you can do for poor people or underprivileged people is to not be one of them. And that was a shocking statement. And then I thought about it first. Look, we live in a world where we can vote with our wallets to shape the future of policies, and the situation and equality or inequality in this world. And therefore, if we're struggling or not using capital in order to shape the future in a way that benefits us, our people and the 99%, let's say, then it won't happen on its own. We live in a world where money is power and money is vote by itself. Did I understand you correctly? Is this the deeper principle you're speaking about?
Jasiel K.N. Martin-Odoom 7:26
Absolutely. So even though I would not frame it the same way, something that I realized really quickly when I moved to the United States for college, was that there were so many people who look like me came from where I came from, who did not get the opportunity to even dream of becoming founders of companies that could impact the world in which they lived in. Why not because they didn't have the talent, not because they weren't as smart as the people I went to college with. The only difference was they did not have access to the same amount of capital that allows them to be able to dream big. So yes, I believe that as we add the world in which we exist now, money is like you mentioned being used as evoked. And until we intentionally start to direct the conversation, beyond just investing for returns, as has been happening in the world. So far, we will find that we'll continue to have issues where capital is going into areas that don't really add much to the average person. I'll give you a good example. We are always clamoring about the impact of climate change on the Earth. However, the study show that this conversation has been going on since the 80s. How is only till recently, when we started to really put capital behind some of these innovations, that in fact, we began to see unlocking of great value. A good example of that is our portfolio company, air protein. Air protein is an actual fact unlocking technologies that were designed by and abandoned by NASA to now create air base proteins in the lab. Why this is interesting is because Dr. Lisa Dyson has had many years of research experience, but being able to have access to capital to unlock the opportunity that this technology provides is where we began to see the potential to feed the future generations in a way that is less harmful for the earth down the ways we currently do right now. So yes, even though I would not frame it that way your guest framed it. I do believe that we we have an opportunity to leverage capital as a resource to build the world, a world that is more equitable, that is more sustainable, and that is more impactful. Not only For us, but for the generations that will come after us,
Abdulaziz M Alhamdan 10:03
thank you, then I have to ask many questions. Because you deal with series a and b, where a lot of it, there is a lot of failure, a lot of ideas that won't come through, and all that. So you're speaking about the future impact, I want to understand, because we live in a world where entrepreneurs are encouraged to do what works to copy what works to be not really innovators, because on an individual scale, one person has like a 0.1% chance of being a pioneer who creates something that is absolutely life changing. And often people will say, if you're a pioneer, you end up with arrows in your back. But at the same time, you know, there is this dichotomy or tug of war, even in the VC realm, between going for companies that have found product market fit that are already going to scale so that your investments are more secure, or going for the crazy idea of you know, like what you spoke about, or the apple? What is it 1984, or whatever, advertisement where they have that quote about, it's the people who are crazy enough to think they can change the world? They're the ones who do. So for you. How do you deal with that? Is it that if let's say one in 100 of your investments, if one changes the future, somehow and 99 Fail? That is okay. Or how do you deal with like the stakeholders? And does everybody understand that the failure rate is stratospheric and astronomical? Or like, how is it I want to understand because in most parts of the world, people demand results in a way that is unrealistic. But in your world dealing with such long shots, it's like failure is your you're living in an ocean of failure and possibility of failure with the small grains of success?
Jasiel K.N. Martin-Odoom 12:05
Absolutely. And you're absolutely right that in traditional mainstream VC, we find lots of thinkers who subscribe to the power law model. However, I'd love to address the very first thing you say, which is that there is inherent risk at the earliest days of these potentially life changing ideas. As an angel as an investor in series A companies. Our difference maker is that we predominantly invest in founders founders that are underrepresented and overlooked. Why is that important? It is important because the metrics and the data which which you're referencing, where it says that 80% of a portfolio, returns will be only given by 20% of the fund has historically been only focused on companies that are predominantly white and male, and a reasonable collective, for example, our portfolio companies is 70% women or people of color, that is not something that is common in the VC space. So how we measure success for us, is almost bucking against the current trends of VC. Because if you look at Latin X populations, peep women people of color, you find that aggregate li in VC funding has gone to less than 10% of those populations, which adverse which in which also means that 90% of VC funding has gone to one particular majority group. So yes, there are potential for astronomical losses. However, for us, people like me, who are focused on investing in underrepresented and overlooked founders, the game we're playing, it's a different game. We believe that for so long, the narrative that has been written has been determined by those who have gotten the privilege of access to funding. My role as an investor now is to change the narrative. And the statistics bear me out. Women led companies return high at higher rate at higher returns and exit than male companies that have solely male founders. Companies that are founded by people of color, tend to be more focused on improving the lives of the communities in which they work and live in, as opposed to companies funded by people from majority populations. So is there at their astronomical levels of failure? Yes. However, for the last 1020 years, the the people who have been allowed to write these narratives have predominantly been a one group. And for me as an investor, my focus is to bring the same rigor that VC investing has been known for, and has been responsible for much of the innovation of the last Two decades or so, bring that to people who predominantly are left out of the conversation around VC funding, would a lot of them fail, probably. But my belief is that if there's the person who is wild enough to look at the VC funding numbers to look at how hard it is to be a woman or a person of color rate, building out a company, and still continuing to want to build that out, I believe those people deserve to be backed, because for so long, and as we can see now in the markets in which we live in, lots of people get funding for ideas that have not, that do not have sustainable basis. If you look in the markets today, there is widespread conversations in the private markets around valuation, downturns, violation, compressions, layoffs, etc. However, I challenge you to look at companies founded by women or people of color. This quote unquote, VC slowdown, which we're living in now, is not a different for founders who look like you and I, because over over time, they have not been getting access to this, quote, unquote, glut of funding that was going on the last five or 10 years, and have still managed to go and call it back to my earlier point, return, bring forth returns that I had at a higher rate than male only, and white men only led companies. So will they fail, probably. But I'm willing to bet that the people who continue to build even in the face of the statistics that say they won't get funding, those are the kind of people I want to support. And I want to back,
Abdulaziz M Alhamdan 16:43
thank you, I will again play the devil's advocate a little bit I interviewed a while ago with a VC who cares a lot and is focused on underrepresented founders and what his conclusion was this, look, money is fungible in that if you have the right ROI, the VCs will want to back you up. But the problem is, most of those underrepresented fractions don't network enough to build the relationships with the people who open the door will open the doors for them. They stay within their communities, or they stay within people like them, and all that. And therefore, the problem is not some kind of arbitrary discrimination or boys club. But it's more that they did not invest the time those founders required in order to build prior relationships and networks that when they will need the VC funding, they will already be vetted and known and all that. What's your perspective on this?
Jasiel K.N. Martin-Odoom 17:48
It's a great point, a wrong point. But a great point. There's a lot of conversation out there and lots of people way smarter than me who have done some really great in, in research into the VC landscape. One lady in particular Gary que lo que la over, put together a report that showed that VC enmeshment, which is the intersection of the same group of VCs, investing in a particular set of companies is really high. I believe carta inks q1 report says something to the effect of 20% of VCs i Team personal LPs are invested in 80% of VCs that are backing the 126,000 Plus private companies in America. So yes, it's an easy answer to say that underrepresented founders do not network enough, do not hustle hard enough, did not preemptively make connections. But I'd like to challenge that. If you look at the schools that the most funded companies come from a look at the school that VCs went to, you'd find that funding concentrates in a very small sector of university backgrounds in America effect that is also seen in Europe and other parts of the world. The issue here is not found is not founders who do not hustle hard enough. In fact, the issue, I believe, is that the VC space in general is committed to its continuous insular approach to funding companies. What do I mean by that? I mean that currently the VC space, like you rightfully mentioned, is focused on networking and warm intros. However, these approaches have not worked. Why do I say that? Because over and over, we continue to see year over year that the number of people underrepresented founders that have been backed continues to decline or remain flat on in a good year. It stands to reason that if we keep Doing the same thing over and over and getting the same result. Perhaps there's a better way to do it. And I'd like to posit that the better way to do it is not to take the the easy road of saying that underrepresented founders do not hustle hard enough, but rather look into how are we funding companies, a very great venture capital firm that I'm quite a fan of, is overlooked VC, their approach is to invest in companies that apply to game to accept investments from overlooked, overlooked reviews, every single company that comes in and makes decisions based on that submitted forms. Because of that, they are able to give more founders that who may not traditionally have the quote unquote, networks to get access to fund to founding even further, let us look at places like North Africa, where you're from, or West Africa, where I'm from, to say that a founder in Egypt or a founder in Ghana, who is looking to build a company that could change the ways that people live in the UK, India, countries should somehow have the networks and hustle hard enough to know people in this space is inherently exclusionary, because even beyond the larger conversation around who gets to travel, and who gets to meet these VCs, practically speaking, warm intros do not work for those founders that are not based in these, quote unquote, hotspots. So yes, there has been a lot of conversation around hustle, and how much underrepresented founders do not hustle, I will direct your listeners to check out Shirley Nieves Medium post where she talks about hustle, because she makes a very good point, I will show you that all the funds that she knows that I know, are very hard working people that are speaking to hundreds of investors, and are still not getting funding for great companies. However, we want things you've seen, especially the last two years, has that a lot of white male founders have built and funded companies that have gotten VC backing, some of them not with without any revenues on the books, I'll give you a very clear example, a company that is in my pipeline that we're quite excited about has been out to market since October, they have 1.5 million ARR in revenue numbers that should have any VC knocking down their doors. Yet still, traditional VCs continue to say that the problem they are solving is only fake focus on a very, quote unquote, small subset. And so they are not interested. So to conclude, I have seen several opinions about this concept of founders need to work hard on their networks. However, I would push back and say in fact, VC needs to reimagine the way in which we take about funding companies. And some people way smarter than me, Dell Johnson, for example, have written multiple articles about the different ways in which VC and measurement continues to systematically whether intentionally or not keep out funding founders of underrepresented on non traditional backgrounds.
Abdulaziz M Alhamdan 23:23
I love this. So let's say I am a founder of, you know, an underrepresented founder. I'm a woman, I'm someone who doesn't look like ivy league, or those people from the few universities who you said, there is a big concentration of VC money going to their graduates, their alumni, their students, etc. What should I do in order to give myself a chance and that opportunity, as well as Can you speak about your work, the VC firm or your angel activity in order to inspire some ideas or people who would like to support the work you do? They can do so?
Jasiel K.N. Martin-Odoom 24:04
Absolutely. As is. I would say that there is no one size fits all. However, a few things that I've seen have often been very helpful are one targeting founders, funders that understand the story and their backgrounds from where you're coming from. Unfortunately, as much as I'd love to pretend that Vc as a whole is a quote unquote, meritocratic society. The numbers do not bear me out. So my often My advice to founders is, first of all, look to find investors who are believers and understand where the problem you're trying to solve. The second thing I always encourage my found my founders to do is think through how best can you start to build an actual business that can survive with or without VC funding. Why is that important? Because if over the last decade or so, an average only 5% of VC funding has gone to non white founders, both male and female, it stands to reason that you have to find another way to survive. So I often tell my founders who are starting out that you want to always be thinking, How do I become resilient? How do I become sustainable? How do I become anti fragile? VC funding is great. And there are found their funders like myself, like overlook DC, like Rare Breed ventures, like hustle fund, that are focused on investing in in underrepresented founders. However, they are still few and far in between. So my very first recommendation founders is find an investor that believes and understand your story. And to build a company that can continue to succeed and grow. Even if VC funding is slow to come by. A good example of that is one company in my in our pipeline, that has been out to market looking to get VC funding to continue to scale, as it's a black of black owned woman owned company. And as like every other founder in that demographic has experience, they continue to get very spurious reasons from VCs, why they cannot be backed, or are offered terms that are frankly speaking, abysmal. For for those founders continue to be able to build a business that is self sustaining, and resilient is how they have continued to succeed. And I believe it's also why when you look at the statistics, women led and diverse led companies continue to return at higher rates than your traditional VC companies, and also why emerging funders that its funders that are not in your traditional VC format or framework continue to return higher IRR as compared to traditional mainstream investors. The work that we do at unreasonable Collective is to be the support to two founders that are looking to build sauce on the world's biggest problems. And the way in which we do that adequate, reasonable Collective is by leveraging our over 150 Plus member LP base, who come together with us to invest in an SPV alongside alongside us into the company that we back. What that allows us to do is that we are able to not only provide capital, but also channel support to continue to help these companies scale their impact further and faster. As an angel investor, that exact same ethos is what i It's my approach, even when I am just in the diligence and phase of a company, for example, there's a company in Nigeria that I'm looking at currently, even though I'm just in the diligence and phase, I have sent it the founder who is a black woman, at least three different other funders that I know, could be of help to her. And that is how we continue to add value to the companies that we back because as these the problem that we're trying to solve is a is a larger problem than just funding one company. It's really pushing an ecosystem to over on his head, and challenging it to think about reimagining the ways in which it has defined funding in the past. The ways I believe your listeners could be of help in this in this area is to continue to help share with us funders that they know that are committed to backing underrepresented founders, I personally keep a database of such founders that are looking to back women and people of color. And I'm oftentimes sharing that out to the different companies that come across my radar as and when it's relevant. The more the more of these companies that we have access to that we can share with funders founders from underrepresented backgrounds, the more we'll be able to have that conversation around changing the way VC looks like on the on the on the other hand, I believe there's a call to action for all VCs, to start to think about the different ways in which we have funded companies in the past. Right now there is a lot of hubbub around a VC, quote unquote, slowdown. My challenge to people who have who pushed that narrative is to look at fun at founders who are from underrepresented backgrounds. The VC funding glass that happened over the last decade or so, these founders did not see it, but they have continued to build amazing companies, VCs missing outsized opportunities for alpha. And we have to reimagine the ways in which we think through things like warm intros that continue to allow VC fund funders to keep their industry insular and delete
Abdulaziz M Alhamdan 30:00
Thank you so much JSL that was a thought provoking conversation. It really opened my eyes and there is a lot more to be learned to be explored to be changed. I thank you so much for this, I'll make sure to write your Twitter in the description. And I wish you to keep going. You're doing great work.
Jasiel K.N. Martin-Odoom 30:21
Aziz, thank you so much for having me. I do not say this ingest. This has to be the best podcast I have recorded in some time. I appreciate your thought provoking questions, and I hope your listeners appreciate the answers and the discussions that we've had today. I look forward to continuing to do this work and continue to support funders of underrepresented backgrounds. Thank you.
Abdulaziz M Alhamdan 30:46
You're welcome. And thank you too!