Joe: Hello and welcome to On Boards, a deep dive at what drives business success. I’m Joe Ayoub and I’m here with my co-host, Raza Shaikh. Twice a month, On Boards is a place to learn about one of the most critically important aspects of any company or organization; its board of directors or advisors with a focus on the important issues that are facing boards, company leadership, and stakeholders.

Raza: Joe and I speak with a wide range of guests and talk about what makes a board successful or unsuccessful, what it means to be an effective board member, and how to make your board one of the most valuable assets of your organization.

Joe: Before we introduce our guest today, we want to thank the law firm of Nutter McClennen & Fish who again sponsored our On Board Summit last month in their beautiful conference center in the Boston Seaport. [00:01:00] They’ve been incredible partners to us in every way. We appreciate all they’ve done to support this podcast.

Our guest today is Marc Schneider. Marc is an e-commerce and fintech operations executive with a history of driving revenue and profits and for delivering extraordinary results as well as devising effective, viable action plans for complex business issues.

Raza: Marc was the co-founder of Zebit, a mission-driven e-commerce and fintech company where he served as president, CEO, and a board director. He is currently an operating venture partner with Ulu Ventures, the largest Latina-led seed stage venture fund in Silicon Valley, which invests in women, minority and diverse entrepreneurial teams. In that capacity, he has served among other roles as an active board observer for companies in [00:02:00] which Ulu has invested.

Joe: Welcome Marc, and thank you for joining us today on On Boards. It’s great to have you as a guest.

Marc: It’s a pleasure. I appreciate the invitation and I look forward to the conversation.

Joe: Thanks. So, we thought the introduction was pretty good and then I saw something online by one of our favorite podcast guests, Lisa Thompson, who introduced us to you, and I’m going to read it to you to kind of let everyone know just how special you are. Quote, “if you aren’t looking to scale, if you aren’t willing to look in the mirror and make the needed changes to excel, if you’re thinking incremental instead of radical, then you’re not ready for Marc Schneider.”

So, with that very humble intro in mind, can you give us your background that’s led you to have this pretty unusual set of skills?

Marc: That’d be my pleasure. [00:03:00] And yeah, I want to thank Lisa for that kind comment relative to my background. I’ve known her for almost 25 to 30 years now. Time is passing pretty quickly. I’m a 30-year operator with the last 18 years in venture-backed startups and my history actually combines everything from starting as a consultant for the World Bank, Inter-American Development Bank and working abroad to going back and getting my MBA and then going into what I would say is hands-on operational management consulting with a firm that no longer exists, but that was Champion Hammers Reengineering, the organization group at CSE Index.

I went into private equity and worked in Mexico City, so learned a lot about fundraising there, came back, started a business for a former SEC chairman who is in charge of all of the corporate fraud victim trust funds, and then fast forward to 2006, I finally got an opportunity to go into e-commerce and moved out to California with a company called ProFlowers or [00:04:00] Provide-commerce, leading their customer service operations, and eventually being on the M&A integration team with Liberty Media to look at all the-commerce deals.

Spent about four years doing that, and then afterwards, was one of the first 10-plus employees at Zulily Baby, Moms and Kids, fast-growing e-commerce event organization and then moved back to San Diego to be in fintech, where I was managing a company called Gain Credit, managing 350 people in India with the UK customer base and doing lending to subprime consumers. And it was really there that I think I found my passion for what I wanted to do and how I wanted to make change and I started a company called Zebit with a co-founder of mine. We spun it to Gain Credit, which was an e-commerce and fintech company that was focused on changing how 100 million credit-impaired consumers can buy what they need, pay overtime without interest fees or penalties of any kind, a [00:05:00] transformative kind of mission-driven company to change the lives of people that are plagued with a trillion dollars of interest fees and penalties, and they can’t get out of the cycle of debt.

Joe: So, thank you for the background. I’d like to talk about Zebit, a company that you co-founded, ran, served on the board and in which you were very involved for quite some time. It is a mission-driven company, which I think is your passion, and I think it’d be great to talk in a little detail about what it was, what happened, and then we’ll talk about what the governance was like for that kind of late-stage investor-backed company,

Marc: Sure. So, I was with Zabit for seven years. Think of it as pre-seed to seed, to A to B, and then eventually took it IPO on the Australian Exchange. It went through all the different phases of growth and the transformations of inheriting a board as a VC company, which you have little choice in who actually comes on your board, [00:06:00] but you definitely have a choice in terms of how you manage that board, the information you give them and how you make it successful.

Joe: What was the value proposition of Zebit? What was it that drove you to work for seven years to make this company successful?

Marc: Yeah, so I grew up in an impoverished kind of background. I supported my disabled mother since I was 15 years old. I went through financial crisis, everything from homelessness to eating government cheese, food stamps at University of Pennsylvania, et cetera. And I always thought there was a higher calling in my life that I wanted to fundamentally change the lives of other people, maybe to substantiate that we’re not all captive by our histories.

Joe: Hmm. That’s fantastic. So, what was the proposition with Zebit that would allow people to kind of emerge from the kind of situation you experienced?

Marc: Yeah, so what my co-founder and I saw that was happening in the United States, 100, 000, 000 people trapped by a cycle of debt [00:07:00] because they had bad credit. Now, a lot of them had bad credit because they made poor decisions, but a lot of them had bad credit because maybe they made a poor decision and because of the financial instruments they were able to get a hold of, the interest fees and penalties continue to add up, so they never get out of it.

So, we wanted to basically give subprime consumers the ability to buy what they need, think about it as Amazon for the underserved and pay back over six months without interest fees or penalties or paying four times the value of a product in order to get afloat.

Raza: That’s pretty challenging thing to do in terms of the business model. How was that business model built for making that successful for your customer?

Marc: Yeah. So, we had a very strong set of investors that had a lot of conviction in this business model. So, the first thing is if you can’t charge interest fees or penalties, or you can’t charge 400% APR, and you can only make your money through the product margin, you [00:08:00] have to make the operation extremely automated, efficient, and not tie up your working capital.

So, on the e-commerce side, we had an operating model that was a 100% dropship. So, think 120 suppliers, 25 product verticals, no inventory, no warehouses, no cash going into tying stuff up that you would sell like on sale, et cetera. Fundamentally on the fintech side, we focused on how do we build a big dataset to model the propensity to pay for a customer that we already know is a 550 or below FICO score. We know they’re bad credit, but how do we build data within our site to be able to predict whether they’ll pay us back on that first order or not?

Joe: So, one of the things you told us is that FICO doesn’t tell us why someone has bad credit and why they didn’t pay back. How did you figure out who those people were that might be worth taking a risk on?

Marc: Well, FICO, if you get a report, it’ll tell you where all [00:09:00] the defaults happened, but it won’t necessarily tell you how to fundamentally separate the goods from the bads within the defaulted people. And so we figured what we had to do was if I present a fair deal, if I give a consumer something that they can never get, let’s say a 0% credit facility in the form of store credit to buy the things they need to support their family at fair prices where they can structure their payments over six months that correlate to when they get paid and how they get paid, maybe they would raise us in the payment hierarchy and think about, “I’m going to have a store credit line that grows with me and all I have to do is shop responsibly, pay this company back over time, and then I get access, just like everybody else, to fair products and float, or credit, I’ll put my share of wallet all my transactions in with them.” it was a hypothesis, Joe, that we had to prove that could work. That was the bet.

Joe: Right. So, how do you go about proving it?

Marc: Yeah. So, what we did [00:10:00] was we built a closed marketplace. So. We would underwrite you, so it’s our customer, we’re the-commerce merchant, we acquire customers either through B2B relationships, B2B to C, or direct to consumer marketing, bring them on our site. We have two bites to the apple. We bring people in, we validate their income, their identity, et cetera. We bring them into our marketplace, and then we tracked all of the consumer behavior happening in the marketplace.

So, if you didn’t have a username and password, you couldn’t get in, and we modeled that behavior for a first-time customer, repeat customer and a customer that was on the platform for a longer period of time of the propensity to repay back, and so this is everything of what they’re looking at, how fast they go through, are they loading their carts up, are they trying to overextend their line, even though they have a store credit line, and we’re watching that first payment, which is also balanced by what we call a down payment at checkout. So, we’re making them put a little bit of skin in the game, structuring their payments, and then over time, the model is [00:11:00] building what is the right consumer behavior that leads to a lower bad debt on the first order.

What we found was, once somebody passed or has paid off their first order, their bad debt goes down by like 50%. So, let’s say 20% of the people default after six months, that bad debt on their second, their bad debt as a cohort goes down to like 10%, they’re on our platform for three or four years, they actually look like the three of us super prime customers who don’t default on their debt, but really their underlying credit score isn’t changing, their behavior with the company is

Raza: So, this is the reverse of the debt cycle that people face. It’s a virtuous cycle that they get into.

Marc: That’s correct, and it’s a very, very difficult cycle to get out of. And so how did we prove it? But we never pulled FICO, but we can do what’s called a retro append. So, we took our customers after seven years, the ones that have survived and continue to buy with us and consolidate their purchases and we pulled their credit file, and we wanted to [00:12:00] see at our time-based analysis when they came in and seven years down the road, has their underlying credit profile changed? By and large, it didn’t. They were 550 FICO scores, even though we didn’t use it, but we could pull it, on a anonymous basis, and seven years later, they were still at 550. But to us, they look like 850 FICO scores.

So, what did that say? They valued the product. They saw a fair deal. They saw that they were working in unison with a mission-driven company that was actually trying to change their lives, whether it was a birthday, emergency purchases, Christmas holiday, et cetera, who else, or where else would you be able to get a 0% credit facility that grows with you and all you have to do is not abuse it.

Joe: So, essentially you gather data that really supported the initial proposition based on what you have observed from their behavior.

Marc: Yes, the data came over time of building where you have millions of customers coming in, millions of applications, millions of orders, [00:13:00] millions and millions of order attempts, and then seeing the repayment curves and then using real machine learning models that are actually trained to understand what we call an efficient frontier.

So, what is the trade off between what you put down the risk of that order and the willingness of the organization to accept a certain level of bad debt? You obviously can’t get rid of bad debt, but you won’t approve anybody, you won’t take any orders, so there’s always that trade off of where the business is and how the algorithms are working to get to the financial goals.

Joe: So, one of the things you said you did, which is probably not typical for most of the people that are listening to On Boards, is list your company on the Australian market. I assume that was to generate capital. Why Australia?

Marc: I would probably say it was a survival move. So, new business models that are not well understood by venture capital tend to have a harder time raising capital over time. When you have a company that is a [00:14:00] complex business model that intersects between e-commerce and fintech, the number of investors that understand that actually gets smaller and smaller in the funnel.

Joe: I bet.

Marc: And so, looking at Australia, we were looking at potentially selling the company, trying to raise private capital in a Series D or going public, and there was a wave, buy now pay later, even though we weren’t buy now pay later, a four-payment model, was going overseas. The Australian Exchange was like the NASDAQ of the 1990s. You could be a hundred million dollar revenue company and raise money and have liquidity.

That was always a challenge for us. I mean, our investors stood behind us, put money into the company, but we needed to get access to more liquidity so we didn’t have to keep constraining the growth of the company every time I had to go out and raise capital, which would take longer and longer to do.

The other thing is subprime consumers, unfortunately, aren’t that popular unless you’re charging them interest fees and penalties, and if you look at what’s going on, a lot of those [00:15:00] companies, their valuations are pretty depressed. So, I went to Australia to find liquidity.

Raza: Marc, you went through the journey from seed to Series A all the way to that IPO. Talk a little bit about the board and the evolution of that board through that journey.

Marc: So, when I started Zebit. I wasn’t the CEO. I was actually the chief operating officer. And after about a year, there was a change and I was made the CEO. So, typically when a VC firm is founded, pre-seed doesn’t really have a board. You might have a board advisory, maybe an observer, but no real board. When you get to seed, you may or may not have a board as well. Really depends on what your investors want to do. When you get to an A, you have a board, and the board is typically composed of your main investors. You don’t have a choice who’s put there. You don’t really have a choice of whether you get along with them from a chemistry perspective, whether you have the same expectations of how you want to run the board, the governance, et cetera.

So, for first-time founders, it’s very difficult to understand what am I supposed to do and how am I supposed to not [00:16:00] anger my investors that are on the board while I’m trying to be the CEO. So, it’s a big learning journey that I’m also, by the way, trying to pass on to our new CEOs in Ulu’s portfolio.

But the board started with basically investors, and then the investors typically will add an independent or so that are related to that investor. So, what you have is a board composition that is pretty much investor focused, that’s supposed to wear the dual hat. When I’m in the board meeting, I’m a board member, I’m supposed to take off my investor hat. And then when I leave the room, I’m an investor, and it’s a careful and delicate balance for a CEO or even a management team to understand how to navigate that and how to understand the line of demarcation between is the board managing me or is the board managing the company or am I managing the company, am I managing the board?

As you get to different series, new board members are typically added, and then when you get to a public board, obviously, especially in Australia, we had to add, to our benefit, independents that were [00:17:00] representative of the Australian market and Australian stakeholders.

Raza: Marc, a few important points that you highlighted. So, as you mentioned, when you take investor money, you may not have the choice of who comes on as the board member or members. So, I think for founders, it really is, think about the choice of which investor you’re taking, because that will result in the board, if you do have a choice.

I think the second thing you highlighted is that even though investors are trying to compose a well-composed board with some management representation, let’s say, two board members and two investor board members and maybe additional observers and one independent, are they truly an independent? Think founders are also advised to have a say on it. At least, that it should be a mutually-agreed board member, even if it’s an independent.

How then did your late stage [00:18:00] board work in all these important decisions, and maybe talk a little bit about your experience and support. I think you highlighted earlier that it’s also the founder’s job to make the best out of their board. So, maybe talk a little bit about that aspect of your later stage boards.

Marc: Well, I think that, depending if you’re a first-time founder or a serial founder, you get to wear the battle scars and understand what you did wrong in interacting with your board over time. And so, for me, I took a very active management approach. I wasn’t the chairman of my board, but I ran the board meetings and I facilitated our chairman’s agenda, prepared the content, the decision making, the frameworks, and then really deferred it to him to run the meeting, but I was basically providing the information needed, the decision we were trying to do, coordination with outside counsel, and then the board meeting would discuss the matters at hand and vote.

I think there’s two things we should separate here. Venture firms where the founders actually [00:19:00]have control over the organization in terms of voting. So, founders that are lucky enough to continue to maintain 51% have a different point of view versus founders that get diluted over time and the board wants the entrepreneur to be incented, but the entrepreneur is also replaceable over time the larger the company comes, and the entrepreneur has less of an effect in voting because they don’t really have that capital stake anymore, and so that’s part of it.

So. I think a lot of entrepreneurs don’t know what they don’t know until they actually go through it. I found that in leading up to the IPO and thinking about the board differently, what I found was we found very capable Australian people. We went through an interview process to make sure the person not only understood board governance, et cetera, but interacted well with the current board.

And part of that is a pro and a con because a board where everybody thinks the same way doesn’t necessarily bring in disconfirming evidence into how decisions should be [00:20:00] made. And then you could potentially, I’m not saying this happened necessarily, but then you have board enclaves that actually pool to toward one another and make it even more difficult for the CEO to figure out how to get decisions that are done.

Joe: That is a great observation about board composition. We always talk about the importance of diversity of perspective. On the other hand, there has to be a fit and finding kind of balancing what a fit means, but still having enough diversity of perspective to make the board as powerful as it can be.

That is not easy. In any event, at some point, you essentially were forced to sell the company. What happened to make that necessary?

Marc: Yeah. So, it took me two years and during COVID, missed an IPO window and there’s two windows that happened in Australia, but finally got the IPO to occur and I tried to learn from all the other entrepreneurs, the people at Credible, [00:21:00] Zazzle and Rivasem and other individuals, Life360, that went down to Australia.

Australians are very concerned that American companies are coming in, running and dumping. You come, you raise money, you sell, and then the shareholders are taken advantage of. And so we really escrowed all of our individuals in order to not allow them to sell for 18 to 24 months to give stockholders on the other side of the world confidence that we’re here for the long term.

But the day we actually launched, one of our holders who wasn’t escrowed who sold his fund, triggered an event that happened to every other company, which I tried to avoid, which was he sold. We went from a $200 million valuation, cut by half within the first hour. Pretty heartbreaking.

We had a 70% to a 100% year-over-year forecast delivered against that forecast, but the market never really recovered in terms of raising the valuation relative to our growth and expectations. I think it [00:22:00] was also a fact that a subprime consumer doesn’t necessarily exist at all in Australia, and it’s hard for the market to understand the dynamics of that. There’s actually a bad stereotype around subprime consumers we’re trying to dispel, but it’s hard to educate a market from 13, 000 miles away.

Bottom line is after 14, 15 months and the opportunity to continue to raise capital in the Australian market but at depressed prices, the board or at least part of the board advocated to delist the company, which was a very difficult decision to make because it took forever to get into a liquid market. And when you look at hindsight, it’s always interesting when you look back. We were just six months ahead of everybody’s valuations getting crushed, not only in Australia, but in the US.

But we delisted because we’re not getting new valuation, you’re producing all of this growth over profit, you have $3 million of costs to maintain a public company. The board’s rationale was it’s more effective to be a [00:23:00] private company at that time. And that whole process to delist the company, take care of shareholders, go back to a private market that you already left and now you’re stuck with a late stage stranded company that’s not profitable yet because we focused on growth, and how to raise the last bit of capital in order to get it to profitability.

The minute we delisted it, I think it kind of put the nail in the coffin of a phenomenal company with phenomenal employees that our customers are raving about, and I think really helped their financial lives that doesn’t really exist anymore today.

Raza: It also goes to show that that’s what risk taking is, and that’s what a startup business is. You are starting with something that has not been proven yet. You do help people and you change a bunch of people’s situations. But in the end, it may or may not work out exactly how everybody expected.

Marc: Yeah, there’s a positive to this. One of our board members, who I actually work for today, who’s an [00:24:00] extraordinary leader and builder of Ulu Ventures. She’s been on my public board. I asked her to come on, Miriam Rivera, and they had so much conviction in the business. I’ve never seen this before. And they actually bought on market after we went public. So, they bought another couple million dollars to prop up the market as well as to demonstrate the continued support for the business.

I could never thank her enough for doing that, regardless of whether I wanted to continue to guide her not to do that and take additional risk in a late stage company when she’s an early stage investor. But sometimes, board members surprise you in how much they really believe that you’re going to make an impact on the end consumers, and she is a woman who has built a firm that is solely focused on women, minority entrepreneurs, and diverse teams who don’t get a lot of capital, like 1.5% of the total capital allocation of venture, and that led me to really see something from a board member that I’ve never seen before and really embracing the mission, [00:25:00] especially in a new market and trying to convince other investors through her own actions.

Raza: Marc, you’re talking about Ulu Ventures. It’s a perfect segue. Introduce us to Ulu Ventures and what it is about and what it invests in.

Joe: And how do they identify companies that fit its mission?

Marc: Yeah. So, Ventures takes a very different approach to venture capital. Miriam Rivera and Clint Korver, who are a married couple, which is very non-traditional in venture and a mixed married couple, are on fund for. They raised over $450 million-plus of capital, and their focus was, we believe that diverse entrepreneurs can build great businesses, and there’s enough bias in venture that does pattern matching. So, you look like me, therefore I want to invest in you, that, isolate and alienate women and people of color

So, they started this well before impact investing ever happened, but they using a decision analytics framework [00:26:00] out of Stanford. Clint is a PhD from Stanford. He was taught under the late Ron Howard who just passed a couple of weeks ago, which was his mentor, and he’s bringing a probabilistic analysis to looking at companies in terms of what they’re, for us, a 10X probability weighted multiple, and he goes through a number of different analyses to know whether pencils that are out or not.

He’s been using and refining this framework with the investment team, and they’ve had success. They’ve had two to three handfuls of unicorns in their funds, and they have large portfolio construction, so each of their funds could take 70 to 80 different investments, but really they were trying to change the landscape of how capital was allocated to people with diverse backgrounds, believing they bring something to the table. Just like you guys believe, which I believe too, diverse boards add value to an organization as a diverse people base inside, so do diverse entrepreneurs who lead those companies.

Raza: And I think specifically for diverse entrepreneurs, we in venture also believe that [00:27:00] the problem solving ability and the decision making leads to superior outcomes is another reason. I mean, for boards, it’s decision making, but for startup founders, it is about execution and solving through problems.

Marc, another thing that we learned with Ulu Venture, has board observers, including yourself, that go into the boardroom and teach entrepreneurs and help entrepreneurs early stages on what it is about boards. Talk a little bit about that and how that you believe improves the value and output for Ulu Ventures.

Marc: Let me say that Ulu Ventures is all about testing. It wants its companies to test and iterate and scale and get their proof points. Ulu Ventures is also testing on a new way to do founder approach or founder support that almost mimics a little bit of private equity in terms of hiring somebody like me to run the founder support program, which is inclusive of, [00:28:00] let’s say, low cost, high usage platform elements, discounts to marketplaces, jobs, et cetera. But also aligning my expertise with a founder need, whether it’s strategic, operational, cash flow management or capital raise, how do we move the needle, raise the probability of success that they can raise a Series A. Most of our companies are seed stage.

One of the opportunities that I’ve had, which I’m very thankful for, is the opportunity to join as a board observer. Now, I’m more invited than placed. Ulu doesn’t place me at a company. I have to be invited or introduced. It’s like the vampire entering the house, so the investment partner that sits on the board. The investment partner sits on the board, sees a strategic need to add my capability set, introduces me to the entrepreneur, I have a conversation with the entrepreneur and what’s happened is the entrepreneur has actually invited me to be a board observer.

So, this has happened multiple times for like four companies now in a very short period. I think my relationship with [00:29:00] them, the value add I can bring to them based on the challenge, and then they want to be able to hear a different perspective. And my role is always in combination so far with an investment partner, and as the investment partner who sits on the board, he has to play the traditional board role. I do not. I’m supposed to observe. I tend to observe and I listen, but I also have the ability to chime in, in a respectful way, that brings an operational or strategic perspective that maybe the board member wants to say, but it crosses that line of being a board member versus being part of management. But so far, it’s worked out well.

Joe: So, the fact that the CEO has invited you basically enables you to act differently than board members and basically act differently than most board observers because I’m calling it active board observer. That’s what gives you the okay to do it.

Marc: I think so. I think it’s a bridge. One. It gives me a mentorship opportunity to [00:30:00] helping a first-time founder understand how to manage the conversation with the board, the agenda, the decisions, the things you’re asking the board permission for where you don’t have to ask them permission, the information you’re giving to them without actually derisking that.

Board members want an efficient understanding of what’s going on in the business; what are the risks, what are the mitigations, what do you want from me, what are we deciding, how do we move forward? A lot of CEOs don’t know how to structure that conversation. So, it gives me an opportunity to mentor them outside of the board meeting through the projects that I’m working with them on as well as bridging some of the questions and perspectives that are typically more delicately handled or aren’t necessarily surfaced in a board meeting that should be asked at that point in time, because otherwise it wastes a lot of cycles.

You can go from board meeting to board meeting to board meeting and still not get the answer to the question because nobody’s willing to kind of say, “Why are we doing it this way?” And so, yes, it empowers me a little in a professional and respectful way to be able to bring to the forefront to try to [00:31:00] accelerate a lot of this stuff for our founders, because there’s two things that are the enemies of our company, time and cash, and so from an operations perspective, if I see a clear line of path, I’m not surprising anybody. I think I could help facilitate that. Like I said, so far, I think it’s worked out well because I know what my place is, but I know what’s value added and I know what’s just distracting.

Raza: One very important distinction is that startup founders often have advisors or advisory boards or informal mentors, but a key difference here is that in this type of a role, you are inside the boardroom as well, where an advisor that’s offline or a separate meeting would have to get that secondhand or something, and you are also more of a board coach as well and teaching the founders how to make a best off their board.

Joe: I think you’ve well defined an active observer. It is really a different role.[00:32:00]

Marc: It is. And I think it’s grounded in a couple of things. One, the CEO and the rest of the board have to trust that I’m coming from a good place, that I’m authentic. I’m transparent, and I don’t opine on things that I have no clue what’s going on. It’s not about me talking in a board meeting. It’s about me adding value where strategically I think it would be helpful for the company stakeholders and of course, the CEO.

But I think coming from that place and building that trust, which from my management consulting days, within 15 minutes of walking in a new client, you have to establish who you are, why you’re there, how are you going to add value, build some sort of culture and trust with the team and then prove it through your actions.

So, I tried to do that by having sessions before any kind of board observer meeting that I’m invited to in the initial time, understand their business in detail; the operating drivers, their forecast, what their objectives are, what they’re struggling with, the profile of the board members who are on there. So, I try to come in with a comprehensive plan about where I can slot value in to help that CEO and help [00:33:00] that board get to the outcome, which is for us pretty simple, get to the next capital raise. Because if you get to the next capital raise, you’ve raised the odds of success overall for an exit.

Joe: You learn to live for another day. So, you’re part of an experiment to see if this role works in the way that they hope it will work. How’s it going so far?

Marc: I think it’s very hard to prove tangible results. How’s it going so far? I fully enjoy working with these entrepreneurs. I feel like I’m a call center where people are calling me at Saturday, Sunday night, Sunday morning, my term sheets in, I’m running out of cash. I need help with this forecast, but I think that one of the things that brings me pleasure is I never had that as an entrepreneur and as one that’s been in multiple startup companies, so it’s a way for me to give back and feel like I’m personally adding value.

Now, the value to Ulu will be, the companies that I get to participate in, because I can’t force myself in, they get to that next capital raise, [00:34:00] and so if I had to answer you today, there’s one company that I’ve been working with and coaching the entrepreneur for the last year, got to know the founding team, it’s a medical device company. Well, they got a lead term sheet. So. If I asked the entrepreneur, did I help you do that, I just got off the phone with him and talking to him about it, he would say, “I probably couldn’t have gotten there without your guidance.” Especially navigating; well, what does this mean, how do I go to investors, how do I negotiate this, how do I get another one. So, there’s a lot of steps that build there.

But I think so far it’s working and I applaud Ulu’s ability to put funds to help founders in a very different and distinct way. We’ll see. I think we need probably another year or so to see whether we want to continue to invest in this way, but I think the long answer is, I think it’s working.

Joe: I think it’s a brilliant experiment. I did notice that on their website, they refer to you as the champion of persistence. And I have to say, I [00:35:00] can’t think of a characteristic that would be more important in what you’re doing than just persistence, because it’s a long road, which must have so many moments where you just don’t know if it’s going to work.

Marc: Yeah, it’s a marathon, startups are a marathon when you’re the CEO and you have everybody’s payroll on your back. You have to do sprints, but you have to take the long game, and look, I know I don’t know everything, but I’ve been through a lot of the different passages and caverns and bridges and dark places and feelings that a lot of our entrepreneurs are going through, and I’m not a therapist. Pretty much, this is kind of a point of view and you have to make the decisions in order to get there, but it’s a phenomenal journey to be a founder and go through this and whether you succeed or fail, you’re learning something and hopefully you’re learning something about the people you’re employing, the customers you’re serving, the boards you’re interacting with, and the people you trust to be your thought partners along your way.

Joe: How do you think you have made a [00:36:00] difference for the young entrepreneurs with whom you’ve worked?

Marc: That’s a really interesting question. Look, I’m a humble, humble person, but I derive all my energy from the people I work with. I think I’m making a difference because they keep calling me and emailing me for the next step and the next stage. Look, this, originally, I came over to Ulu to be an EIR, an entrepreneur in residence, to start a new company. I never expected to be in the role I’m in, and I’m very grateful for it. I think that entrepreneurs, I think some, if they get to an x-ray would like to see me inside of their company, but I think I’m delivering a lot of value to a lot of different people.

I just hope that through that, when they become successful, or even if they’re not successful, when they get to my age at 55, and a lot of these people are at 28, 30 years old, they will think about how to give back to the entrepreneurs below them in terms of what they learned, and so I’m extending myself. I’m extending my mind, my time, my [00:37:00] authenticity, and also my emotional support to these entrepreneurs because they deserve to have somebody help them along the way.

Raza: Well said Marc. And I think the ultimate thing is that money is fungible in venture, being able to help and support the company is the only real thing that distinguishes one investor from the other, and I think it’s a tremendous privilege for folks like us to be able to do that.

Joe: Amen. Marc, it’s been great speaking with you today. Thank you so much for joining us on On Boards.

Marc: It’s been a pleasure. Thanks, gentlemen. I appreciate it.

Joe: And thank you all for listening to On Boards with our guest, Marc Schneider.

Raza: Please visit our website at OnBoardsPodcast.com. That’s OnBoardsPodcast.com. We’d love to hear your comments, suggestions, and feedback. And if you’re not already a subscriber, please be sure to subscribe at Apple Podcasts, Spotify, or wherever you get [00:38:00] your podcasts. And remember to leave us a five-star review.

Joe: Please stay safe and take care of yourselves, your families, and your communities as best you can. We hope you’ll tune in for the next episode of On Boards. Thanks.