The TechEd Podcast
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The TechEd Podcast
The Right Idea, The Right Founder: How Undercapitalized Entrepreneurs are Getting Their Shot - Jennifer Abele & Raquel Filmanowicz, Managing Partners at VC 414
Venture capital is the engine behind many of the world’s most innovative startups—but only 2% of VC funding goes to women-led businesses. Why does this gap exist, and how do we fix it?
This week Matt sits down with Jennifer Abele and Raquel Filmanowicz, Founders and Managing Partners of VC 414, a firm dedicated to funding women, minority, veteran, and LGBTQ entrepreneurs. They break down how venture capital really works, what makes a startup investable, and how educators can help the next generation of founders succeed.
If you’re teaching entrepreneurship, mentoring young innovators, or just curious about how diverse startups get funded, this is a must-listen.
Listen to learn:
- How venture capital works and why so little funding goes to women and minority entrepreneurs.
- What makes a startup investable—from founder traits to market potential and exit strategies.
- The biggest mistakes first-time entrepreneurs make when pitching to investors.
- How AI, workforce development, and education startups are shaping the future of venture capital.
- Why technical skills alone aren’t enough—the key business skills founders need to secure funding.
3 Big Takeaways from this Episode:
- Diverse founders face barriers—but also bring untapped potential.
Only 2% of VC funding goes to women-led businesses, despite data showing they often outperform male-led startups. VC 414 is working to change this by providing early-stage funding and mentorship to underrepresented founders, particularly in workforce, education, government, health, and wealth. - The best founders are coachable, resourceful, and relentless.
Investors look beyond ideas—they bet on people. VC 414 prioritizes grit, adaptability, and strong communication skills when selecting startups. A great founder can stretch $1, adapt to market changes, and take feedback without ego. Without these traits, even a promising idea can fail. - Education plays a critical role in developing future entrepreneurs.
Technical education provides a strong foundation, but business acumen, networking, and problem-solving skills are just as crucial. Founders who lack access to networks and mentorship often struggle to raise capital, which is why VC 414 not only invests in startups but connects entrepreneurs to key industry relationships to accelerate their growth.
Resources in this Episode:
To learn more about VC 414, visit their site: vc414.com
Startups mentioned in this episode:
Are you an entrepreneur? Find out how to get connected with VC 414.
Connect with the VC 414 Online:
LinkedIn | Connect with Jennifer | Connect with Raquel
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Matt, welcome into The TechEd Podcast. It is your host, Matt Kirchner, for any of our young listeners who are interested in entrepreneurship, or for anybody who is mentoring a young person who is that budding perfect entrepreneur wondering about how we generate capital, how we find partners, how we think about technology, how we grow our companies, what personality traits make awesome entrepreneurs. This is the episode for all of you. We are talking with two women who I know quite well. They are the founders and managing partners of an organization called VC 414, if that isn't familiar to you, you will know all about it in just a mere matter of moments, as we go deep on the venture capital model and all of the opportunities available for our young entrepreneurs, and really entrepreneurs of any age. So it is my great pleasure to welcome to the studio of The TechEd Podcast two great friends, Jennifer ably and Raquel. Phil manowitz, thanks to both of you for joining us. Thanks for having us. Thanks for having us. Matt and I know both of you. Well, we're gonna have so much fun. You're just both brilliant people that your mission in the work that you're doing is absolutely incredible at VC 414, our audience is gonna learn all about that before we get to that, though, let's just talk a little bit about venture capital. People hear about venture capital. They hear about private equity. Lot of folks maybe don't necessarily know the difference between those models and others. What can you tell us? And maybe Jennifer, if you want to give us a quick overview of what venture capital
Jennifer Abele:is, sure venture capital is a form of private equity where financers put money into fledgling startups that have little or no operating history, kind of taking bets to see if they will advance. Those companies sell ownership stakes to venture investors in return for money, technical expertise, operational expertise, and then the firm constructs a portfolio of those startups into a privately offered fund that investors can invest in alongside the general partners. So
Matt Kirchner:you're really kind of sitting right at the apex of on one side, these entrepreneurs, these people with great ideas, fledgling companies, to your point, maybe don't have a track record than an established company that's been around for years might have. So a little bit of a risk involved. There a lot of work in making sure that you're understanding what opportunities exist with those potential portfolio companies. And then on the other side, you've got this group of limited partners or investors who are firm believers in either work you're doing, your ability to pick great companies, and really your ability to pursue a mission that maybe is a little bit unique in the world of venture capital. And Raquel, I want to ask you a little bit about that. So VC 414 is certainly a traditional venture capital fund in a lot of ways, but some key differences in terms of the types of entrepreneurs and individuals that you trying to help and serve and mentor along the way. So tell us a little bit about the mission of VC, 4014. And what makes it
Raquel Filmanowicz:unique? Yeah, what makes us unique is that we invest at the intersection of people and prosperity. So we're really looking for founders that are under capitalized, women, minorities, veterans, LGBT, that are building tech companies within five verticals. So Jennifer and I are really leaning into verticals where we have expertise in where we've had experience as being operators. So we like the future of workforce, education, government, civics and health and wealth.
Matt Kirchner:So certainly, right in the sweet spot of The TechEd Podcast when we talk about anything related to education, anything related to the future of workforce, huge, huge topics here at The TechEd Podcast, in as much as we are all about securing the American Dream for the next generation of STEM and workforce talent, lots to talk about there as well, and in that government and civic space, as in healthcare too. So really, really interesting and in many cases, emerging market spaces that you're spending time in. And that's certainly one of the things that makes BC 414, unique. You talked about the underserved populations. Tell us a little bit more about the individuals you're serving on the entrepreneurship side, and why it's so important to both of you and Raquel. Maybe I'll pose that question to you again, why it's so important to you to be specializing in focusing on those particular populations. Well,
Raquel Filmanowicz:we know that only 2% of venture capital goes to women, so 98% of venture capital goes to men, and that's a missed opportunity, because they're building really strong companies. They outperform their counterparts, and we just realized there was a market gap as far as that first check, that first access to capital for some of these startups, where we can help in a lot of different ways, given our operator experience, and it's proven true, we've closed down 12 deals, and there's no shortage of great companies coming out of the US, and mostly within the Great Lakes region, is an emphasis of where we're investing in. It
Matt Kirchner:fascinates me. In fact, I don't know that I'd heard that statistic. Recall that 2% of venture capital is placed with women owned businesses and with women entrepreneurs. The very first company that I worked for after my time in public accounting was a tech company in the RFID space, led by a woman entrepreneur. In that particular case, I think the two of you know that we've got several led tech businesses that I'm involved with. My wife Renee is actually the CEO of several of those companies. So huge, huge fan of women entrepreneurs, of the creativity that can certainly come from those types of investments and that type of leadership, and so super, super important that we're finding these individuals that maybe haven't been focused on in the space of venture capital in the past, and making sure that those opportunities are available to anybody with a great idea, anybody with a great future ahead of them on that topic. Jennifer, I know there are some challenges that are faced by the individual entrepreneurs that you're serving and working with, certainly the availability of capital being one of them. Raquel touched on that. What are some of the other challenges for underrepresented populations when it comes to starting a tech company,
Jennifer Abele:right? So I mean, oftentimes these entrepreneurs are solving problems that they know, and those problems might not be the same problems that typical investors are focused on investing in. So one of the things that we look at first and foremost is, does the founder have a personal relationship to the problem, or some domain expertise related to the problem? When I started investing, I was hearing the same story over and over again that women were having a harder time getting access to capital, even though they were building almost the same business as men who are similarly situated. So that's what sparked my interest in investing, but one of the things that I think we bring to the table that solves a problem for them is access to a big business network. Raquel and I both have extensive experience working with many corporations, many organizations, local governments, state government, members of Congress, where we can really bring kind of access to a network to the table that some of the founders don't naturally have just because they, you know, didn't grow up with that wealth or an Ivy League education. And so one of the things that we really try to lean into is, how can we get them access to that network so that they can build more customers and build stronger partnerships so the business can be successful? You
Matt Kirchner:know, that was one of the things growing up that was just obvious to me. I grew up in and around Milwaukee. I grew up in a suburb of Milwaukee, but spent a lot of time in the city, a lot of time around underrepresented populations. We went to church. And what is, you know, now, the central city, if you will, very urban area of Milwaukee. I was in Milwaukee County lifeguard for six years, and had an opportunity to work in a couple of cases at locations that were, you know, in some of those underprivileged, underserved communities. And you really get a sense for, you know, a young kid growing up in the suburbs that not everybody starts in the same place and giving these opportunities to folks that give them, you know, raise the floor and give them that chance to have an opportunity, to grab the brass ring, to be successful, to change lives through the work in the businesses that they are involved in. Really, really important. But nobody is going to necessarily take a chance on an individual unless they've got subject matter expertise, experience a personal relationship, to your point, Jennifer, the problem, or to that business itself, so really interesting that that's something that you focus on as well, is having somebody that really understands the market space that they're getting into, so that they get a head start and they maybe they know Some of the challenges that need to be overcome, or some of the tricks of the trade to be successful. What are some of the other standout skill sets or character traits that you would point to in successful leaders of companies, particularly those in your portfolio.
Jennifer Abele:So, you know, Raquel and I both have served in executive leadership roles, and in those roles, we have both interacted with CEOs and high level C suite officials, and we've also hired individuals into executive roles. And so both of us have pretty extensive experience being able to evaluate what it takes for somebody to be successful leading a company. And when we're investing in a company, we're thinking about, can this person lead a company that can grow to 100 million or more in revenue in order for us to meet sort of our returns test. And there are some skills that are common amongst those individuals, coachability, the ability to be nimble or adaptable in their decision making. There's just like an executive presence that you can feel are they making smart decisions? Are they collaborative with their staff and their team, and then one of the things that we really think about is because it's a long term investment for us. You know, is this somebody that we can work with and we can consider working with side by side for the next 10 years? And if we don't really see all those things coming together, then those are signs that it's not a good fit for us. Raquel, do you have other pieces you want to add to that? Yeah,
Raquel Filmanowicz:just good communication skills, resourcefulness, they have some level of grit to them. You know? They can stretch $1 so, and we can assess that pretty early, because we've hired so many people, right? And that's really the bottom line at this stage of where we invest in it's all about the founder, because they're just kind of building the company at that point.
Matt Kirchner:No question, you think about a. Fledgling company that's really starting in bootstrapping itself, figuring out a way to make something out of nothing in a lot of cases, which doesn't happen on autopilot. And then with that, I too, cannot be $100 million company. And obviously that isn't anything that's easy to do, necessarily. It takes a lot of what we just talked about. It takes a lot of grit. I love the idea of, you know, Can you stretch $1 I think a lot of times people think, Well, I'm stepping into this venture cap world, and I'm going to get all this cash, and I'm going to have this glamorous entrepreneurial lifestyle, and that may come at some point. That might be the goal, but certainly that is not what it feels like right out of the box. It's just a lot of getting up in the morning and grinding. And do you get a sense, is there like a litmus test of people that would meet those character traits, Raquel, or do you get a sense just kind of by the feel and meeting with them? Or how do you assess that?
Raquel Filmanowicz:Well, we dig into their backgrounds. Are they second time founders? We, you know, call on their references, and we spend a lot of time with them. This is a long term relationship, so we're very methodical. And, you know, we have investing with other people's money, so we try and make sure that we do all the diligence involved to make sure we're making a good bet. That's
Matt Kirchner:a good point. You know, you're certainly making your own bet on these individuals, and I know firsthand that both of you have significant capital and assets invested in the deals that you're doing, but you're also a steward for other people's investments, right? So does that add a must another layer, Jennifer, of kind of responsibility or pressure on you, knowing that it's not just your own personal net worth that you're investing in these companies, but you've got investors that are banking on you and counting on you, and in the same way that you are taking a chance or investing in these entrepreneurs, you've got people that are doing exactly the same thing with the two of you. Is that right?
Jennifer Abele:Yes, that is right. I mean, we are entrepreneurs as well, and so in that way, we can really relate to the entrepreneurs that we're investing in. And it is a lot of weight on your shoulders when you're thinking about being a responsible steward of somebody else's investment, and we take that very seriously. We do a very extensive diligence process on every company that we invest in. We actually just finished a diligence memo right before we logged into this call, and it's 19 and it's 19 pages long, just as an example, then we dig into everything from market sizing to the strength of the team to the financial viability of the company, the financial or the viability of the technology. And we do that because we want to memorialize our decision making so that if the company does fail, and some of them will, we can go back and look at where did we go wrong? Did we not identify a risk, or did something really catastrophic happen in the market that brought it down? And
Matt Kirchner:that's a really important distinction as well for people to recognize as you invest in, you know, a dozen companies, or a couple dozen companies, you're not expecting every one of those to be a grand slam home run. That's kind of the beauty of the model, right? But the hope is that there's a certain percentage, a significant enough percentage of them that are and that you've got some really good singles and doubles, and you are going to have some that for whatever reason you bet on that maybe didn't work out exactly the way that you expected. And that's the nature of the model. I do want to talk a little bit about some of your portfolio companies, and I've had the opportunity to meet a number of your founders, fascinating people, all of them different. What's a company Raquel, that you've invested in that has a story that you'd like to share with our audience? Yeah,
Raquel Filmanowicz:one of the early investments we made was an Latino gentleman from Milwaukee named Matt Rodriguez, and he built a super fan app. It's basically technology for emerging and established music artists to release their music before it goes to streaming, so it gives them an opportunity to make money off of their art. And he's doing very, very well. He's grown his company, and we're so proud of him. He's running the company out of New York now, but he's been super as far as building out the team and the customer base, and he's got some major, major name artists right now on the platform, and
Matt Kirchner:he said yes to a lot of artists. And is there any that he said no to that you want to highlight, or you can highlight on the podcast, or not so much. He has
Jennifer Abele:declined at least one sort of controversial major artist, but right now he's onboarding 8000 artists a day. Wow. So there is really high demand, and they are doing no marketing, so there's no customer acquisition costs. All of these are inbound. It's very exciting to see what's happening. What's
Matt Kirchner:the company's name? Even, even Awesome, yeah, so when you started building that relationship with that particular entrepreneur, what were the things that jumped out at you that said, this is a person whose business we want to be a part of, that we want to we want to bank on and bet on. Yeah,
Raquel Filmanowicz:he was so excited. He has great domain expertise. He's worked in the music industry for a very, very long time. He's very well known amongst the music labels, and he was very particular of who he wanted on his cap table. And he made a point that he wanted women, and particularly a Latina woman, on his cap table. So we were very happy. Yeah,
Matt Kirchner:awesome. Cap table would be kind of the financial structure the business is correct, like, who's investing in at what levels is that is for folks that may not be perfectly familiar with that term, right?
Jennifer Abele:It's basically a spreadsheet that shows who owns how many shares of the company
Matt Kirchner:got it. And so this is an individual that loved what you were doing and wanted to have you be a part of his company, and you had the opportunity then to invest. And you know, obviously, with an eye to 8000 performers that he's engaged with, and you've got to love the idea that he's kind of born and bred Milwaukee person as well, right, right from your own backyard. Yep, 100% All right. Well, thanks. Raquel, that's a great example. Even other ones. Jennifer, which ones would you call out that you think are really interesting, or our audience might have an interest in learning more about
Jennifer Abele:Sure. I think one company that the audience might be interested in is recent investment of ours called Master tech AI. So AI is all over the news, as we know, and you know, the world is changing quickly because of, you know, the implementation of AI across many domains. In this case, Master Tech is a vertical AI company that creates an assistant for individuals who are auto technicians. So they take all the data from all of the OEMs, as well as data from service bulletins and repair histories, and sort of combine that into an AI model that's proprietary to master tech, and that model enables that auto technician to very quickly find the resolution to a problem with a vehicle, so they can quickly search, quickly resolve what the challenge is, and then it can go one step further by also recommending additional repairs that might need to take place for that specific make and model. So we're really excited about this company. They're selling to independent auto shops right now. We think there's a very large market opportunity. It integrates well with other technologies that auto shops use in their tech stack. And the founder has a wonderful background working for Niantic and Microsoft as a software engineer, and she's just highly technical. She lives in Seattle, and we're really excited about what she's building. So her name is Linda gray. She's actually been on many podcasts as well talking about the company. So if you look that up, you'll be able to hear it directly from her.
Matt Kirchner:Yeah, shout out for Linda Gray, that's awesome. You know, you think about the challenges in workforce, and one of the things we hear about more than anything else, is the fact that we're not going to have enough individuals to fill all the jobs. In fact, we already don't, and I suppose, especially the more technical it seems that the job is, the harder it is to find great people to do that. You think about taking your vehicle to an independent service station 15 years ago, all the things those technicians had to know about so many different vehicles. And obviously that creates a level of education and experience that's required to be effective in a role like that. And certainly, the advent of AI isn't going to take that skill set away. But you think about being able to create it sounds like a large language model from all of these service bulletins and other collateral that are available to mechanics and to people working in the auto industry. And being able to in the same way that I can ask pretty much any question of clot or perplexity or chatgpt, and it'll give me an answer to be able to do the same thing. But in this particular case, focused on the auto space. Really, really cool. And I could see what you would absolutely be attracted to a business like that. So that's a company that you said is in Seattle. I know you have a focus on kind of the Great Lakes region. How did you go about connecting with a company that's all the way out on the West Coast.
Jennifer Abele:Yeah. So that company was introduced to us through a group called Launch. Launch is led by a gentleman by the name of Jason Calacanis. He's also a very popular podcast host, and I had previously co invested with Jason on another deal several years ago, and so I kind of got into the deal pipeline, and so that's how we learned about it, and it's just been really exciting to see it grow. They ended up CO investing with us in the deal, so she closed out her pre seed round in October, and we're looking forward to seeing what happens with the company. I also just want to, like, emphasize a little bit sort of the workforce element of this. We really love the fact that this is serving a blue collar workforce, a frontline workforce and providing them with a tech tool that might only normally be available to those in more white collar professions. Sure, there was some question about whether they would adopt that, but what we have found is that auto technicians are really technically savvy, so they actually are adopting it quite easily and are excited about having that kind of a tool available for them.
Matt Kirchner:Well, in that technology, you think about it giving just a tremendous competitive advantage to a dealership, I shouldn't say a dealership, but an auto shop that is utilizing it, because the fact is that if they can get to an answer quicker, if they can troubleshoot faster, they're going to provide better value for their clients. They're going to be able to turn vehicles around more quickly. They're going to be able to diagnose problems more effectively. That just relates to a happier customer. And the more happy customers you can create, more return business you're going to create. So there's certainly a benefit to that technician working in an auto shop in terms of job security and growth. And that's that's got to be part of the value prop as well. Correct, yeah, and they're making more money. Yeah, exactly. And they're making more money. It's exactly the model Raquel, you know, we talk about finding, in this particular case, finding a portfolio company to invest in, through a contact, through your network. What are the other ways that you learn about companies or entrepreneurs that may have a need for venture cap?
Raquel Filmanowicz:Yeah, it number of different ways. We've this last year, has spent a lot of time going out to the Great Lakes cities and doing like. Investors forms and meeting with other VCs to just get our name and profile up, to get those co investment opportunities. Our founders and our portfolio have been doing a very good job of referring deals our way. Founders know founders and so they speak you know nicely about the work that we do and helping them grow and scale. So we were fortunate. There's no shortage of deals coming our way. Are you able
Matt Kirchner:to share, like, how many deals you look at in a week, a month a year? I mean, you don't invest in every single one of
Raquel Filmanowicz:them, right? No. But Jen knows these stats. What are we getting? Like, about five a day. Yeah.
Jennifer Abele:Last year we looked at a 1500 Wow, approximately. And it's a lot to wade through. And you know, 85% of them are an immediate decline because they don't fit the thesis, or maybe we've seen something similar, or already turned something down that's similar, but 15% you know, we'll take a first meeting, and then from there, it's like a funnel. We work through it until, until we find just the right one. And then
Matt Kirchner:we're going to talk in just a minute about what just the right one looks like to our budding entrepreneurs that are maybe doing their first pitch at some point. What is it that experienced venture capital investors like yourselves are looking for before we kind of go in that direction? Though, any other companies we haven't talked about that you want to highlight either one of you? Let's
Jennifer Abele:talk about Rex K 12. Yeah, and I think Rex K 12 is a great example of a company that's headquartered in the Great Lakes region. It's from Wisconsin, a woman founder who worked in computer science at several major corporations, but grew up in a 200 square foot apartment in India and in extreme poverty, and computer science changed her life. So when she came to the United States and put her son into school, she didn't feel that he was having the opportunity to learn about computer science in the way that she felt was going to be necessary for him to be competitive in the workforce. So she started by teaching some coding camps, boot camps, and ended up building out a full turnkey computer science and AI learning platform that she sells to K 12 schools, and she's serving many school districts across the US now. The software has dozens of modules, everything from Python to other types of AI development, machine learning, coding, and it can be supplementary to the classroom, or it can actually fully replace the computer science teacher, because they're in high demand. And we're excited about this company because so it really meets that sort of Education Workforce Connection and teaches those STEM skills that are going to be so important for the US to be competitive in the world economy.
Matt Kirchner:Absolutely, and it's got to feel just great to not only know that you're investing in what you expect to be a successful company, to invest in somebody that has started with a very humble background and is has grown into an entrepreneur, saw this opportunity in the marketplace, and really, like so many opportunities and so many entrepreneurial ideas, came from something she was frustrated with, in this case, maybe her son not getting the experience on the computer science side that she thought was important, and G turned that into positive energy and actually innovated and created a company. Rex K 12, just a great example of how you're changing the world of so many people, in the form of the clients, in the form of the entrepreneur and the employees of the company, advancing technology and so on. Really important work and and certainly master tech AI. And even also great examples in much the same vein of how you're doing really good work, and also keeping a focus on the financial side of what it is that you're doing. And to that point, I've got to believe and you've mentioned a couple of the things already, personality traits that make effective founders and entrepreneurs, but we've got all kinds of young people and their teachers and their mentors that listen to The TechEd Podcast they're listening to you talk about these people that started with an idea, people like you, and said, here's my idea, eventually that evolved into an investment in their company and really creating what could be an incredible future for all three of those, as well as lots and lots of other companies in your portfolio. Let's talk for a moment, and I want to get both you know how you've used this the same. And then if there's things that both of you look for individually, maybe we'll start with Raquel. In this case, if you've got somebody coming to you that's pitching a company, right, you look at 1500 a year, and maybe you're spending time with a small percentage of that over the course of a period of 12 months, somebody gets in front of you. They approached you with some type of a prospectus or a proposal. It was interesting enough to create that first meeting. What is it Raquel that you're looking for? And what tips would you have for our young entrepreneurs in terms of creating that winning pitch?
Raquel Filmanowicz:Yeah, so we like good storytellers, someone that can explain the problem they're trying to fix. Whether they have personal experience with it or they have technical experience with it, we look for, you know, do they understand the market size? Do they understand the revenue model and everything all the way up to, like, what's a potential exit strategy for them? So there's, like, lots of different components, but I'd say like. Some of the better pitches, like touch on all those areas for us, absolutely
Matt Kirchner:no. I really like that. And so much of that points to really having a command and having done their homework, right? So understanding the market, being able to communicate it, communicate it confidently, having an understanding of an exit strategy. So for our listeners, I think they know that lot of times. In fact, almost every time, if it's a PE fund, if it's a venture capital investor, they are not planning necessarily to own that company for decades and decades. Maybe they do, but a lot of times they're looking at, is that company going to go public, or is there an opportunity for a strategic or financial investor to buy it somewhere down the road? What types of things do people say from the standpoint of that exit strategy early on, Raquel, to get your attention
Raquel Filmanowicz:that they've done their homework, like they start to identify what companies could be the potential acquirers. And it's just it's different, you know, scenario based if they get to this revenue or that revenue, they've done their homework. And so that helps us when we're assessing those deals, too. And
Matt Kirchner:I think Jennifer Abel, you probably have a lot of commonality in terms of the things that you look at relative to what Raquel just mentioned, and maybe some things to add, or some some different perspectives. What are you looking for in that initial pitch, and how should our new entrepreneurs, young entrepreneurs, be thinking about that?
Jennifer Abele:Right? So we actually use a scorecard when we review every company, and from the very first meeting, we start to think about where the entrepreneur or that company fits within that scorecard. So the items that Raquel already mentioned are critical, certainly, whether they're a thesis fit for us, whether they're a fit for our team, and whether we think we can add value to the company, because we want to be more than just capital at the table. We want to be able to help that individual succeed. So that's kind of like the first screen. And then from there, you know, we really dig in on the team and the founder strength, as we've already discussed, the market potential. What does the industry landscape look like? Who are the competitors? What's the total market size? Are there adjacent markets that the company can break into? For instance, with Master tech, you know, they're working with auto technicians right now, but eventually they want to go into h back also as like, another vertical for them, and then we look at things like market risk, like, Are there regulatory or legal risks, things that maybe could, you know, tank the company in the long run, is the product differentiated? Have we seen things that look just like this, but just with a different color pitch deck, you know? Are they starting to see some velocity? Are they starting to see customer uptake? Do they have a sales strategy that's realistic, and is that sales strategy, strategy resulting in some momentum in their sales. And then we look at all the financial viability. So I'm pretty obsessed with that. I look at, you know, everything from how the company is capitalized to how much money they have in the bank, what that financial projection looks like, what the use of funds is going to be, how much runway that gives them, and what milestones will they meet with that runway? And then who are the other investors at the table? And are they people that we want to work with? And do they add conviction? And can they also help the company succeed? So I'd say that kind of rounds out everything we look at. It's a lot, but again, you know, we're stewarding other people's money as well as our own, and we want it to be successful, so we take a close look at all of those elements.
Matt Kirchner:Yeah. So other than that list of like 35 things you just mentioned. You're not really looking for anything, right? Not much. So let me ask you this. I mean, is that pitch coming in the form of a formal presentation on the part of the entrepreneur or founder? Is it coming in the form of, you know, your questions and really digging deep and what else is involved?
Raquel Filmanowicz:We try and steer any potential start or founder through our intake form, which is just a short questionnaire that goes straight into our CRM. And then they can upload their pitch deck. And then Jennifer and I, a couple times a week, will sit down for a few hours and kind of go through what's come in for us. And then that's where we just start taking the next steps, whether it's a straight decline or do we take that first meeting, and it's usually a virtual meeting, and we have them kind of walk through their pitch and, you know, sharing it in their own words. And that's our first screen, yeah,
Matt Kirchner:and that initial few hours, Raquel, is that like your favorite part of your week, or is that kind of like the grind, where you just, you know, you have to get through that phase to get on to the next one? It's our
Raquel Filmanowicz:favorite. Yeah. It's really
Jennifer Abele:inspiring, actually, because, you know, all entrepreneurs are optimist, maybe sometimes too optimistic, but it's fun to look through them and just see the exciting ideas that people have after we have that first meeting, and really hear why they're building the company and sort of what their vision for it is. If we decide to take another step, we'll do a product demo. Is typically our second step, and where we really look at the technology and understand the user experience and ask more technical questions. And then after that, we'll start to do market research on our independent market research of what the founder tells us, because we want to understand, you know, is there invalidate what the competition looks like and whether the market size is valid. And if we get through that, and we still find it to be really compelling and differentiated. Then from there, we'll move into, like, really more detailed legal and financial diligence. So
Matt Kirchner:here's a question for both of you, and when we think about what makes a successful entrepreneur, I know a lot of people have the question of is that just, are those just personality traits that are innate, that you know? Maybe we learn really early in life, or we're born with, are those things that we, you know, we learn over the course of our education pathway, or maybe, you know, we're running and being in business, and I'm sure it's a combination of both, but when you think about it, is it like 5050 nature versus education, or is it more like 90% is just kind of how you're wired, and 10% is what you learn. How would you break that down? Yeah,
Raquel Filmanowicz:I mean, I think it's, it could be 5050, some of our founders are quiet but very strong leaders, so they're not kind of very robust in their personality. But then others are, and, you know, they're both like, doing the right thing and growing their companies and doing everything they can, but they just have just a different approach, right? Some we have to reach out, like, Hey, how's it going, and others are like, you know, texting us and calling us. So, you know, we just try and help wherever we can. But I think for some people too, it's just learned, like, maybe they grew up being more quiet and timid, but then they've kind of grown to acquire some of those leadership skills. So,
Matt Kirchner:Jennifer, you feel the same way. Is that a little bit you're born with it? Is it things you learn can be a combination or all over the map, it's
Jennifer Abele:a little bit of both. The fact of the matter is that some people are just not meant to be a CEO, and we do see those, and sometimes we have some kind of awkward meeting. You know, the pitch deck might look great, product might look great, but it becomes very clear in the first meeting that this person just can't run a company. And one of the things that we look for is, you know, do they recognize that maybe they might be good now, but they might not be good three years down the road? Sure. Are they adaptive enough to know that maybe they should be the CTO of the company, not the CEO. And so I think, you know, there is probably something innate for most people that enables them to grow and scale and lead a large company. But I think there's also something innate and some other people that they have the idea, they think they can get it through these first steps, and then they know they might need to turn it over. We actually are really interested in looking at, you know, maybe some personality assessments in the long run as we continue to build out our firm, and whether there are some characteristics that we can suss out early on, will help us determine whether somebody will be a good leader. You
Matt Kirchner:know, early I mentioned the private equity back business that I ran for a number of years, and one of the very first things I did, believe it or not, was I went to our board of directors and had every single member of the board do a personality profile, as an example of, okay, here's what we want to do in the rest of the business in which we ended up doing that. So we ended up our entire leadership team did a personality profile. And my whole philosophy is that they're not good bad, right or wrong, but certain personalities are going to match certain roles really, really well, and so understanding that and also understanding how people are wired, both in terms of whether we're a leader, understanding our team, or we're a team member, understanding our teammates, really, really important. But the beauty of that is I actually had the personality profiles of my entire board of directors as well. So imagine going into a board meeting and knowing exactly how those folks are wired, and there was a wide, wide variety of different individuals. But that can be really, really valuable. It'll be interesting to maybe that's another podcast episode to explore. We did that when we started the company. Awesome. So you guys have each other's personality profiles. We do
Raquel Filmanowicz:have them somewhere, filed away, but we realize we have very complimentary skill sets are personality traits.
Matt Kirchner:No question about that. I'm tempted to ask a bunch of really probing questions about both of your personalities. Here we
Unknown:go. You know us
Jennifer Abele:a little bit, so you might be able to guess some of them. So
Matt Kirchner:on that point and in as much as working together and having this partnership is so important, Jennifer, what's a personality trait that Raquel has that you would point to that makes her really effective in the work she's doing.
Jennifer Abele:I would say collaborator. She has a really special knack for making people feel included and part of something, and bringing people to the table and keeping them there. And I think it's, it's something really special and unique about her business sense that draws people to the table.
Matt Kirchner:Yep, no question. I can attest to that from experience and Raquel, same question about Jennifer, yeah,
Raquel Filmanowicz:I'd say, I mean, I've always said this in other calls, that I think she's one of the smartest women I know, and so I know that she has my back no matter what, and we just work so great together. And I just never feel like I'm at a loss or I'm doing something on my own, like she's right there locks up with me absolutely.
Matt Kirchner:And if anybody wants to take a look at Jennifer avelles LinkedIn profile, you can tell right away that this is somebody who's brilliant because of just all the incredibly diverse different types of roles that she's had over the course of her career. And Raquel, I could say the same thing about you. Some of that was nurture, some of that was learning in your educational experiences. Let's dive into that a little bit. If I'm a teacher, and we have a lot of teachers, STEM teachers, TechEd teachers that listen to this podcast, and I am trying to foster the kinds of skills, abilities and traits in my students that will be important when they get to the world of entrepreneurship. For those students. Said, have a knack for leadership, a knack for creativity and being entrepreneurs. What recommendations would you have in terms of how we generate that next generation of entrepreneurs? Jennifer, as we think about future students and your future entrepreneurs and founders,
Jennifer Abele:I guess I'll start by saying that I do not subscribe to the notion that higher education is unimportant. I think higher education is really critical. And I just really think that to be a successful entrepreneur, to the extent possible, most people are going to need to go to business school or engineering school or something like that. So let me just start with that. You know, after that, I think building confidence is really important, because entrepreneurship can feel really scary and risky. Leaving a job that you know you might have the golden handcuffs, or, you know, you may be well compensated, frankly, like Raquel and I were before we left to do this, it can be nerve wracking. So I think building that confidence in yourself and knowing that you have sort of, at least the infrastructure to support you be supported, to build a company, is really important. I don't think it's really necessarily, like intelligence specific. I think it's just, you know, having the fortitude and the grit and the scrappiness and frankly, the courage to do it, but it's hard. I mean, I'm not gonna lie, it's really hard, absolutely. And you know, there are good days and there are bad days, but I will tell you, it is very rewarding when things start to stick and start to work,
Matt Kirchner:absolutely. And I having been in entrepreneurial world and in leading companies now for boy, I don't even know how long, over 30 years, it seems like I think that's right. It is right that it is amazing how you can have a bad day followed by a good day, but over time, you have more and more good ones and fewer and fewer bad ones. And the more established to get, the more experience to get, the more times you've kind of seen this before and relying on that background. But you're right. It's not always. In fact, it's often not the most brilliant, highest IQ person who ends up being the greatest entrepreneur, the greatest leader. It's really just that person that was willing to stay at it. I like the adage of standing up one more time than you fall down, because you fall down a lot and running businesses, but you just got to get up and dust yourself off and get back in the game. And over time, it gets better, and that's what creates success. And it sounds like a lot of that is similar to your experience in terms of working with entrepreneurs. Raquel, same question to you, if I'm a teacher and I've got a classroom full of students, what do I need to instill in those students that make them potential future great founders and entrepreneurs?
Raquel Filmanowicz:Yeah, my brain tends to go more towards, like the mentorship and creating role models for students to look up to. I think that's was a key challenge for me growing up coming from the inner city of Chicago, where I didn't have like this network of business people, and, you know, people that went downtown for work. And so even in starting venture capital, I think representation matters, so making sure that they can see the people that they're trying to aspire to, sure
Matt Kirchner:absolutely well, and that background has to be incredibly valuable to your founders as well, and relatable and inspiring too, right? I mean, do you get that kind of feedback from the folks you're working with?
Raquel Filmanowicz:Yeah, we do. We get. Our favorite line is, you guys are so nice and helpful because they've had such bad experiences pitching to VCs and, you know, not getting the time of day, or being very short Curt, or, like, just getting ghosted. You know that sure that we make sure we don't do, yeah,
Matt Kirchner:one, what a testament to the work that you're doing in a competitive advantage, right? Because if you're like that, and you're taking an honest interest in these individuals, you're going to see deals that maybe other people aren't taking the time to look at and and that really, in a lot of ways, this is part of the secret sauce of what makes VC 414, so successful. And while we're so excited to watch what happens here into the future, before we dive into the future, and we've spent a lot of time into the future, I guess I want to spend a little time looking backwards. We all have our own educational pathway that we've been on our own educational journey. I have mine. You have yours. As you think about that, I've got so many ideas that I'm like man, having gone through the education path, spending time in education, here's what I would do different. I'm hoping that the two of you have those as well. Let's start Jennifer with you and ask you this question, what is something that you believe about education? And you've actually worked in higher education, I should measure mention that. What is something that you believe about education that would surprise other people?
Jennifer Abele:One of the things that's really beautiful about higher education in particular is being in a cohort of individuals who are learning about the same thing. So you're not just learning from your instructor, you're learning from other people who share a common interest. And that, I think, really helped advance intellectual curiosity in a way that you really can't learn on your own.
Matt Kirchner:So advancing that intellectual curiosity through that higher ed experience, and it was your How long were you? University of Wisconsin, Milwaukee, I know it was period of time, correct? I was there for four years, yeah. So seeing higher education from the inside out, incredibly valuable experience. Raquel, anything that you would point to in the world of education that would surprise people, that that's kind of how you feel, or that's how you think about education.
Raquel Filmanowicz:I mean, for me, the biggest kind of aha moment was being around diverse students. You know, I came from 90% Latino schools, from K to 12, and I went to college and Carroll College in Waukesha, Wisconsin, awesome, where I was, like, probably one of five Latinos in the whole school. Wow. So it exposed me kind of to, you know, black people, white people. I didn't really, you know, understand customs and culture of them. So for me, it was very rich learning experience. I
Matt Kirchner:mean, that's absolutely perfect. And this, this whole idea of growing up in a school and education system where just about everybody you know looked like you came from similar background. I can certainly say that it was, you know, certainly different than the background that you came from. But everybody in my school, or at least most of them, kind of looked like me. And fortunately, I had experiences growing up. I mentioned them earlier in the podcast, where I was exposed to all kinds of different cultures, all kinds of different people and and recognize what you know, how beautiful it is to be around people that aren't necessarily of exactly the same background. And in a lot of cases, that's what creates a strong entrepreneurial mindset and a strong company is, is having a lot of different individuals and ways of life represented. So really, really cool observation there. We're gonna go back in time for both of you and Raquel. We'll start with you, and let's talk about so you're this 15 year old girl. You're growing up in Chicago. You've got your whole life ahead of you. Maybe back at that time, you knew that it was in your absolutely in your blood to be a, you know, to be a VC, leader and an entrepreneur yourself. Maybe not, but if you could go back and tell that 15 year old girl one thing, what would that one thing be?
Raquel Filmanowicz:Yeah, I lack confidence, so I, for me, it was just to trust myself more and don't be afraid to speak up. That was, like, probably the biggest thing, because I never asked questions or anything. And so now I look back and I just think, like, those experiences were just part of my growth process.
Matt Kirchner:And I can point to, you know, points in my life where, like, that confidence light just went on. Do you have one in yours where it's just like, you know, oh my goodness, this filled me with confidence. Or I found a different way of looking at the world that kind of kind of changed that paradigm a little bit. Yeah,
Raquel Filmanowicz:I think it's probably like the last decade of my career, having worked in in a few different roles, and then launching this firm. Like, just gotta be confident. Jennifer,
Matt Kirchner:same question to you, if you could go back to that 15 year old Jennifer and give her one piece of advice, what would you tell
Jennifer Abele:her? The advice I would give myself is start a business someday, even if it fails, even if you don't feel confident, you can do it on your own. Do it with a great partner that you trust. Take that leap of faith on yourself, because if it does work, it feels really good.
Matt Kirchner:As it turns out, that advice that you had given your 15 year old self is exactly the way things are turning out. Somebody with a great business partner doing really, really important things, going into an organization like VC 414, not knowing how it's going to end, but having the confidence in yourself that you're going to figure out a way to make it end really, really well. You are both well on your way. Can't thank you enough for joining us here on The TechEd Podcast. Jennifer Abe Lee, Raquel, Phil manowitz, thank you so much for spending
Jennifer Abele:some time with us here. Thanks. Man Thanks, Matt. It was great to be with you today, and it was great
Matt Kirchner:to be with both of you. It's great to have our audience along with us as well. Learn so much about venture capital, about what venture capitalists looks for in entrepreneurs, about what the future of venture capital looks like, about these great opportunities to pitch your company, your idea, to people who are well versed in the world of business that can help you along the way, figure out how to be that successful entrepreneur that Jennifer mentioned in that closing discussion. So thanks so much to Raquel and Jennifer to our audience. You will find information on this episode of The TechEd Podcast in our show notes, those will be at TechEd podcast.com/vc 414, that's TechEd podcast.com/vc and then the numbers 414, after that. Check us out on social media. We are all over LinkedIn, Instagram, Facebook, Tiktok. Wherever you go for social media, you will find The TechEd Podcast, and until next week, I am Matt Kirkner, your host. Thanks for joining us. You.
