Anna Mason of Revolution’s Rise of the Rest Seed Fund joins Nick to discuss Opportunities in Market Downturns, Lessons from Lehman, Inherent Optimism in Venture, and Why Rise of the Rest Isn’t Slowing Its Roll. In this episode we cover:
Advice for Women Entering Wall Street Parallels from Previous Downturns and the Paradigm Shifts They Bring The Symbiosis Between Startups and Local Economies Why Rise of the Rest Continues to Meet Founders Where They Are
The host of The Full Ratchet is Nick Moran, General Partner of New Stack Ventures, a venture capital firm committed to investing in founders outside of the Bay Area. To learn more about New Stack Ventures by visiting our Website and LinkedIn and be sure to follow us on Twitter.
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Transcribed with AI: 0:00 Anna Mason joins us today from Washington D.C. She is Managing Partner of Revolution’s Rise of the Rest fund, a seed stage venture fund within Revolution’s family of funds. Rise of the Rest and Revolution focus on investing in startups that are outside the venture hubs of Silicon Valley, New York City and Boston, and those that are upending traditional industries. Prior to Revolution, Anna co-founded BurnThis, a fitness community startup that was acquired by Beachbody. She also co-led the Vinetta Project D.C., an organization that supports early stage female founders in tech. Anna, welcome to the show. 0:36 Thanks, Nick. It’s great to be here. 0:38 Such a pleasure to have you on and it’s good to reconnect. For the audience, can you walk us through your quick background and path to VC? 0:45 Yeah, it’s uh, I think sometimes it’s helpful to go back to the beginning. I grew up professionally on Wall Street, I was a distressed and high yield bond and bank debt trader and posterior private equity trader. So I often say that venture is the other side of the coin to distressed, big bets, binary outcomes. The only difference and what I love so much about venture is that you’re really living in the light betting on the optimists who are reinventing the future versus betting on bankruptcy and corporate malfeasance and everything else that goes on with the distressed world 1:21 A little more optimistic. 1:23 Yeah, a little more optimistic. So I’ve been I’ve been at Revolution, leading the Rise the Rest effort with Steve Case, my partner, David Hall for a little over six years now. And I ended up in DC for family reasons. My two little girls who I often say are my favorite startups are fifth generation Washingtonians. So the nicer way to think about that is we’re never leaving, and relocated there for family reasons. So I went New York, Wall Street, L.A., startup world. And then when I got pregnant with my first my co founder, and I, my co founder, also was pregnant at the time, we exited our business into one of our large brand partners in the fitness space, a company called Beachbody, and I relocated to DC. So I’ve gotten involved in the female founder support scene there through the Vinetta Project, which he mentioned in the opening. And life has a funny way of coming full circle. So started in finance, came back to finance with a couple of stops along the way in the startup and ecosystem support world. 2:22 So where did you first meet Steve Case? 2:25 I first met Steve, actually, in his office at Revolution at at our headquarters, I got connected to some other folks Revolution, as I was getting to know the startup community myself. And it was actually through the work that I did with the Vinetta Project that I really got to know Revolution. So I had read The Third Wave, which was Steve’s first book, and I’d seen a number of his talks on the Rise of the Rest. And it was just incredibly inspirational and impactful to me. And as a woman who had grown up on a rough and tumble trading floor, I was one of the only female bond traders, I was at Lehman and then went to Barclays in the bankruptcy and, and a private boutique in in the distress world thereafter. The idea and the opportunity to be part, not just of a mission, but ultimately of an investment fund and effort that really focuses on people who are overlooked and underestimated, sometimes just because of who they are, where they’re from, or who they do or don’t know, really resonated with me on a very personal level because of some of my earliest experiences in finance. And so the opportunity to come full circle and a little bit of a different playing field and try to be a part of that effort was incredibly inspirational. And it’s been an honor to work alongside Steve for these last six years. 3:50 So anyone who’s read Liar’s Poker knows how hostile of an environment you know, a trading floor can be. What would you say to young women out there that find themselves in these male dominated and potentially challenging environments for a woman? 4:08 I’ll say that, I love that question. I hate that question. I, I think in now, my late 30s, and a mother of two little girls, I find myself thinking about these types of questions a lot more and a lot differently than I think I did in my early 20s. When I was in my early 20s. And growing up on Wall Street, I very much so took the, you know, there’s no crying in baseball attitude and approach. I chose to be there. I chose to be in the lion’s den so to speak, and so it was a little bit of a put up or shut up kind of environment. And what I actually loved about Wall Street and one of the reasons why I went there in the first place was my sense that your worth and your value was actually a little bit more clear cut than maybe it was in some other industries. I ironically started government in college and thought that I would end up on Wall Street. And after one summer interning on the hill, I went running straight into the cold, dark arms of Wall Street, because I felt like at least there, they called it like they saw it. And if I worked hard and delivered value, then I would be recognized for that and could see my career grow accordingly. And it did. I think the flip side and the downside to your point on Liar’s Poker, and my earlier comments about venture being the other side of the coin, and maybe the bright side of the coin to distressed and Wall Street is that as a woman on Wall Street, I definitely felt as though I had to develop a bit of a persona and almost have this, like stage veneer, where nothing could ever get to me. I was, you know, hard as a rock. And after a number of years on on the street, you almost start to think, oh, this persona maybe is me. And that was actually one of the one of the biggest reasons why I transitioned from Wall Street into the startup world, where I think entrepreneurship is very much so about trying to bend the arc of a particular industry or opportunity. And people who go into that tend to really just be inspired by creating something that’s bigger than themselves. So to come full circle, I think my advice to any woman interested in spending some time on Wall Street, it can be an incredible education, but take it for the street education that it is. Look for mentors, I was really, really fortunate to have some tremendous people who had longtime careers on Wall Street really mentor me, but know if and when it’s time to go and time to take your street education and run and pursue something that you’re really passionate about. 6:44 That’s good advice. You know, while we’re talking Wall Street, you were at Lehman, during the 2008 financial crisis. Do you see any parallels, you know, with the current environment and what we went through them? 6:58 I think the the core parallel is the market being in complete disarray, and paper value evaporating in a lot of different places overnight. I was incredibly young when I was at Lehman, it was my first job straight out of school. And it was really a tremendous learning experience. I’ll tell you that I’m incredibly grateful and thrilled and happy to be on the venture side of the corner right now in this type of economic downturn, potentially even a recession. I think back to that time in 2008, 2009, when I was on Wall Street, a lot of friends from college who actually went instead straight into the venture and into the startup space. And that’s just when some tremendous, really paradigm shifting startups were created. So I think these types of downturns, whether or not you draw parallels or see core differences in them are an incredible time to be building startups and investing in startups. I do think one of the core differences if this inflationary pressure really continues, is that the margin compression, rather, excuse me, the multiple compression that I think we’re seeing in the public markets that’s bleeding over into the private markets is something that could have a more persistent impact on valuations, because you’re seeing investors less willing to pay forward for more years of growth, which is oftentimes where you see those really large multiples come into play in the venture space. So it’ll be interesting. For me, one of the things I’m watching is the battle, I think, in the debate between growth at all costs and more sustainable businesses, more cashflow businesses, which oftentimes are sort of the darling of the private equity space, not necessarily the venture space. What’s happening in the market right now. If it persists for a number of years, will we see that shake up the way venture actually thinks about how businesses grow and scale? That’s really, really interesting to me, because I do get the sense that there’s a little bit of hypocrisy in the venture system right now, in terms of the way all of us investors are pushing and pulling founders in different directions. 9:09 Yeah, sometimes I feel like folks on Twitter will hide behind this narrative of profitability. And really, they’re just, they’re trying to rewire some young founders that probably haven’t seen this type of environment and just say, you know, stop hemorrhaging your cash, be a little tighter and a little smarter with a creative initiatives, and not just wild experiments that cost a lot of money. But 9:34 Yeah, yeah. You know, for example, one of the business models that we really like a lot and invest in quite a bit in Rise of the Rest are marketplace businesses, is when you have a business that grows through market based expansion. And we have a sense that we’re American’s venture capital fund, we’re the city’s based fund. We know a lot of people in a lot of different cities. And so as we think about where and how we can be helpful post investment And oftentimes b2b businesses that grow through market base expansion are really, really intriguing to us. And as I reflect on that cohort of the portfolio, one of the aspects of those businesses I’ve been thinking a lot about is the tension between sort of blanketed surface area expansion. How many cities can you be in? How quickly do you get there, from a competitive landscape standpoint, you want to get there have first mover advantage in some of these cities, versus actual real deep market penetration? And really validating that you can acquire a decent percentage of your target customer in those core markets? is pretty interesting to me. Because ultimately, I think the greater success you have that more hyperlocal market penetration, actually, the better your unit economics are going to be. Yes. So that, to me is a really interesting example from a business model standpoint, that’s very close to a lot of the work we do at Rise of the Resr is I think about this tension that didn’t just explode overnight. I think it’s been simmering for a little while. And I think the conversation more broadly, around cash flowing businesses, and sustainable unit economics has actually been upon us in some shape or form for the better part of 18 to 24 months. I actually think it started when the initial WeWork IPO was originally shelved. And there was just a tremendous amount that came out about the sustainability of that business. You went from that into the early months of COVID, where you had a lot of our funds, you know, everyone across the market reshoring their portfolios, trying to figure out what balance sheets and what burden what cash management really look like for businesses. And so this isn’t the first time we’re having this conversation. I think as an industry or with our portfolio companies. I certainly think the tone and the tenor is that now it might be different. And this goes back to your point just around what’s the difference between now and and 2008? I think this actually does have a lot to do with the inflationary pressures that we’re seeing how the Fed does or doesn’t react, what it means for rates and where investors across asset classes ultimately are really willing to make bets. 12:10 How does the value compression, you know, that’s happening in public markets and trickling back into the privates and the inflationary pressures and everything that’s going on, how does that impact either your deployment strategy as a firm and or the way that you’re managing the portfolio? 12:26 Sure, let me tell you a little bit about Rise of the Rest the fund. So we are currently investing out of our second 100 $50 million fund. They’re all called seed funds, we do early stage, what we call catalytic co investment. So what that means in practice and Rise of the Rest the fund was very much so built out of an extension of what had previously been Steve Case’s sort of personal seed stage investing philosophy, which is that the startup communities all across the country outside of California, New York and Massachusetts, where three quarters of all venture investment capital gets deployed every year, you just have a tremendous number of very credible, very qualified entrepreneurs and startups, who are woefully undercapitalized. And by extension, we think not to underestimate it but also undervalued from, from an investment thesis standpoint. So we are higher volume, early stage co investors, each of our portfolios is constructed to have between 100 and 125 companies. And we take a land and expand approach to investing. So a little bit different than what you might typically see with investors who are venture investors who are trying to amass as much ownership as quickly as possible and with their first check. So we’ll typically invest about a half a million dollars with our first check. And then we’ll look to follow on with a multimillion dollar follow on investment through the A or B round. So for us right now, you know, on any given year, we’re investing between, I would say 30 and 50 companies per year. So slowing our pace is a little bit different than how many other venture investors might think about slowing some of their pacing. So by and large, we continue to be very active investors in this environment. We continue to see a lot of strong term sheets and compelling syndicates come together for early stage founders all across the country. And while we do invest in some secondary markets, that many folks in the venture space who like what’s the first city you think of when you’re not thinking of Silicon Valley in New York or Boston, you know, a Chicago and Austin increasingly in Miami, we’re investing in all those places, but we’re also investing in places like Tampa, northwest Arkansas, Tulsa, Kansas City, Bozeman, Minneapolis, Indianapolis, Salt Lake City, you name it, we’re invested in three quarters of the states all across the country. And so I share that detail as part of this conversation because in a lot of these markets, I think you haven’t necessarily, you didn’t necessarily see that wild spike in valuation or deal size at the seed stage. As we would probably all acknowledge, we did see over the last couple of years in the valley, you don’t necessarily see a lot of $15, $20, $30 million seed rounds, $50 to $100 million series A rounds, you still see incredibly compelling opportunities, you absolutely see, you know, venture scale opportunities, we’ve got seven unicorns in our portfolio. And we looked at some data earlier that showed the rise in high growth, venture backed bull opportunities all across rise the rest regions more broadly. So long story not that short, we continue to be active investors in this market, we really like our approach, which we think is a balance, kind of de risked approach of writing a smaller check, and then being quick to expand in follow on. And we think valuations and syndicates, by and large, in regional markets will continue to follow the path that they followed for the last, you know, 5 to 10 years, which is that things don’t necessarily get too out of whack in either direction, because you still have a lot of these entrepreneurs who are working hard to put credible rounds together. 16:22 So a couple key distinctions from maybe most of the folks that are on the show, right? You guys are doing much higher volume investing than most folks, especially on the coasts, you’re also not investing in the Bay Area, in New York City, or Boston. What do you think, is different about maybe your diligence process, the way you evaluate opportunities that enables you guys to succeed with this high volume strategy that may be different from your counterparts, you know, in these tech hubs? 16:54 Sure, I think first and foremost, what’s really core to our strategy, we think about it as one of our core values is that we meet people where they are. And what I often say is that we mean that not just figuratively, but also quite literally. Rise of the Rest is a platform, a brand, and a fund that’s been built on the premise that it’s critically important to show up in person and to go experience innovation economies, and entrepreneurial communities and ecosystems and cities all across the country. We’ve done this through a branded bus tour, road trip effort that dates back to 2014, it actually predates the launch of our two funds. And through that process, and now through each of the work that the dozen members on our team do on a regular basis, big red bus or not, we actually do it, you know, quite quite aggressively on a regular basis is to travel to these different communities. I’ve personally been to nearly 50 cities in the six years since I’ve been at Revolution. And I know I can say pretty much the same for the different members on our team. So first and foremost, we show up. And I think why that’s critically important to a strategy like this, where we do take a broad, and we think diversified approach, not just from a geography standpoint, but also from an industry standpoint, is that we get I think very fortunately 360 access and context to the communities, where are these entrepreneurs are building their businesses. And I think that level of connectivity really enables us to connect a lot of dots, not just with our sourcing process, which is multifaceted. But also with our diligence process. I’m incredibly proud of the very rigorous process that I think our team runs when it comes to diligence. And we have the opportunity to team up with lead funds, who are you know, who are coming into the deals and explore diligence with them, as well as working with industry experts and folks on the ground. So I think for us, it really does often start on who we know where we’ve been and what we find that we have access to. And then by extension, the leverage network approach that we take also has really paid dividends in terms of access that we have to industry experts, domain experts, and the like in terms of running that process. 19:12 It’s funny in Midwest circles this bus tour that went all around the heartland, it’s almost become like folklore at this point, but are there insights that you think you and your team get from being on the ground and in person with these folks that others that invest in the region, but maybe do everything just you know, over Zoom calls and don’t physically show up that maybe they don’t get? 19:36 Yeah, and you are right to point to the Zoom factor, because I think one of the aspects of the opportunity to invest in ROTR and Rise the Rest regions that we’ve seen really actually explode at the early stage over the last two and a half years is the notable increase in other investment into rising cities. We actually rise there as partnered with PitchBook, late 2021 to publish a report actually called Beyond Silicon Valley that details the both percentage and dollar change in investment in early stage venture investments. So seed series A Series B that was going to startups based in the Bay Area, to startups all across the country. And actually, for the first time, in about 15 years, the percentage of investment going to Bay Area startups fell below 30%. So we definitely are seeing a lot more investment. And I think what’s also really interesting and we map a lot of this internally at our end, and our fun relationship management strategy is that we see a lot of investors also increasingly investing outside of their own states, their own regions. So you have an investor in LA investing in Nebraska, you have an investor in Tampa, investing in Columbus. So I think this increased activity and mobility that you see sort of across the melting pot, the venture investment melting pot is incredibly compelling. What I think we’ve long been the beneficiaries of by spending time on the ground in these different cities, is really the broader context within which a lot of these startups are building, like any organization, large or small, is ultimately the sum of its people. And you get a tremendous amount of context for what someone is building based on the way in which they’re also building in their communities. And we all don’t necessarily get that from these little Zoom boxes that we exist in. So I should say, we are very comfortable investing over Zoom. But that comfort comes from the years that we’ve spent and the infrastructure that we’ve built the relationships that we’ve built into all of these different communities. So we generally feel like all sorts of diligence checks are typically one maybe two calls away. 22:03 It’s kind of funny for me, you know, when we visit a startup that’s in a smaller place, and you don’t get a true sense for their impact in a region, and then you show up and they’re like, a startup celebrity in their town or a small city. And it’s it’s pretty cool to see the impact they’re having on others and how inspirational they are as a leader in their community. 22:24 We actually have a name for that, we call it our tentpole thesis. And this is something that we worked really hard to put pen to paper on over the last nine months or so. And it was actually the feature thesis of the most recent annual report that we published on the Rise the Rest fund, it came out earlier this year. And the the core of the temple thesis is this idea that when you are a successful scaling, scaled startup, in a rising market, it’s not just about valuation, acceleration at all costs, or without anything else taken into consideration. And this idea that you can build a very valuable company, but also be a core valued anchor tenant of your community, ie a tentpole company, where it’s not just about the value you create, because certainly, if you’re creating value for your company, one of the metrics that we actually look at is is there broader wealth creation, that gets established in that community butto your point about the sort of startup celebrity is interesting, because you also, you de risk the future opportunity for entrepreneurship in your community by showing what’s possible. You validate your city, you kind of literally and figuratively put them on the map. When you show what’s possible there. One of my favorite examples actually comes from one of our tours way back in the day, I think it was 2016. And we visited Omaha and Lincoln, Nebraska. And one of the places that we visited was Huddle. They had had sort of reached startup acclaim, I would say not just in the heartland, but also across the country for raising. It goes a little bit contrary to what I was saying earlier, but they raised a $70 million series A from Excel. And one of the most impactful I think aspects about what that business was doing wasn’t just the hundreds of people that they now employed in downtown Lincoln, but they had gotten so big and they’d outgrown their space, they actually built their own building. And this is also something when you see a five or six storey building, which by the way, in downtown Lincoln is kind of a tall building. What’s really impactful to a lot of local folks in that community who perhaps built their wealth built their businesses in more traditional industries, like real estate, like other you know, sort of hard asset businesses where you know what your downside protection is, you can actually look at something and say that is how this business is collateralized. That’s really not how startups as we all know, like that’s not how startups work. That’s really not how venture works, then that’s why you’ve, I think for a very long time, have had a lot of local and regional skeptics. And so a lot of the work that we focused on at Rise of the Rest in the early years, and I think persists to this day wasn’t just about encouraging our peer venture investors to look in unexpected places. But it was also really to encourage the local community and the regional community and leadership to not be so skeptical. You know, I sometimes say that, you know, familiarity can breed skepticism in the startup community, and continuing to see more local folks focus on the opportunity that entrepreneurship affords, is really powerful. And that’s something else that you see when you’re local, because when it does, we’re to your earlier point, the access that an early stage startup can get or a young founder can get in a regional community all across the country is pretty extraordinary, especially relative to what might be possible in a major metro like San Francisco or New York, and having those connections can really help to accelerate the trajectory and the arc of that startup. And that’s oftentimes what makes the difference. And why sometimes you might see an increased measure of capital efficiency in a regional startup that you might not necessarily see on the coast. 26:24 Yep, a funny discovery for us was, you know, I heard this narrative for years and years that talent is the major issue outside of the hubs. And as we looked at some data, and anecdotally observed what was happening with our startups based in second or third tier markets, talent wasn’t an issue at all, I’ve talked to my founders and asked, you know, how are you going to be able to hire these devs, and in these leadership, folks, and, you know, she would say, oh, talent’s, not an issue, I actually have my choice of kind of the top devs in the area and the top marketing people in the area. And I think, you know, once a startup gets to Series B, maybe you’re missing the experience component, and there can be some help on the coasts, you know, people that have kind of seen the scale portion of a startup, but at least in the early stages, we have not seen talent ever be a barrier. And in fact, it’s usually much more affordable. 27:20 So I think this is a fascinating and wildly timely aspect of startup growth and scale potential and regional economies. Because of what we’ve seen happen with COVID. And the remote work phenomenon. There’s obviously been a tremendous amount written on it. There are a lot of organizations and publications that have access to a lot of different types of data that are tracking this. And so I would, I would offer up a couple of thoughts on this front. One is that I think there was a lot of focus on where folks were moving industry wide. But I think there’s a subset within tech that’s really compelling, and will really prove to have the nerve to the benefit of these regional startup communities over the long term. And that’s that you had a lot of senior, not necessarily C suite execs, but you had a lot of like VPS SVPs, Director of XYZ, at some major, really well funded, Silicon Valley based startups move just because they could and those policies changed. And so now you have happening, and this is where now what you have happening is you have this talent that to your point might not have necessarily existed on the ground in that HQ city, in a region in the Midwest or the Pacific Northwest or southeast, wherever it is. Now that talent exists. The question is, can the startup community and perhaps local government or economic development really link arms and identify those people and embrace them. And as this cultural phenomenon of remote work persists in a lot of different pockets and corners of tech? Can they say, Hey, you might work remotely for this multibillion dollar tech company in the valley, but we’ll be your water cooler, here in Birmingham, Bozeman, Chattanooga, you know, you pick your place. And that’s where it really is incumbent on these communities to rewrite economic development playbooks, which really often focused on the relocation or the second headquarters of an organization of a corporation. They didn’t it was more b2b, if you think about it than necessarily like a direct to consumer approach. And I think now in this moment that we’re in with so much talent having shifted to different places in the tech community, they can’t be invisible to the local startups. It’s really important that they get adopted into these communities in ways where they’re really able to build roots. You never know a couple years out a lot of those folks who do have that talent. Maybe they’ll become advisors to startups in that community, maybe they’ll leave and go join those certain now Series B startups, maybe they’ll quit and start their own companies with that expertise that they have. So I do think, from our own portfolio, which nears 200 companies now, I’ve certainly heard a tale of two sides. On the one hand, the dynamics of the last two years have made hiring easier than it’s ever been before. On the other hand, some startups feel as though it’s become more competitive, because now they are competing with a lot of different organizations who will keep things remote. And I think the final point and the tension that certainly incredibly interesting to us, and to me, because of our place based strategy is whether or not these emerging startups actually have a headquarters and really embrace what it means to build locally or build regionally or if they take a remote first or remote only approach themselves. And we certainly have a number of companies in the portfolio, who are growing very quickly, who have embraced really having a headquarters, one of our companies in Fayetteville, Arkansas approaching 100 employees just closed a series B, and a B one top off, and they are all in on we are in in person, HQ centric, northwest Arkansas based company. And I think it’s really interesting, it’s perhaps contrarian in certain aspects, but they really see the value of that. So that’s something we’re tracking a lot inside of our own portfolio as well. 31:31 As you think about the sourcing exercise, and kind of a breakdown of where you source your deals. You know, how do you guys track that? And can you give us kind of high level, you know, where are the majority of deals coming from for this high volume investment approach? 31:48 Sure. So well, from a literal tracking standpoint, this will be my shameless plug for Affinity. We’ve used a lot of different platforms over the years. And we’re pretty obsessed with the capabilities of that platform, once you really figure out how to get in there and use it. So shameless plug for that crew, we have a network of over 1000 investors that we’ve built relationships with, and it cuts up and of course, from that 1000, it then you know, subdivides, in different pockets. And it’s not necessarily like we’re, you know, talking to 1000 every day. And we’re really grateful for a really healthy list of co investors and fellow early stage venture investors that I think cuts across a couple different subsets or cohorts within the venture investing space. So increasingly, we’ve certainly seen coastal investors from both the Valley and New York, increasingly come into the market. And we work very closely with a great subset of those big brand name firms, who oftentimes will also come to us to validate or reference check a region or a city that has started that a startup and a founder is building in, there’s a phenomenal cohort of regional micro funds that are maybe $20 to $70 million, $20 to $50 million in fund size, that have really emerged over the last seven to 10 years, as you know, and are now not just building on fund one, but it really proved it out. I have seen some tremendous startups that they were some of the first money and local money to back in their communities to now see a great subset of these funds that are on second or third funds themselves. Yes, really strong communities there. And I think as those fund family start to mature, and you see more vehicles come into those firms, you also see that each of those funds start to expand a little bit in terms of their geographic approach. So what may be started as a state specific effort is now regionally specific effort is now Midwest effort is now a sounds a little bit like Rise of the Rest, like everything about the Valley, New York and Boston effort. And so it’s great to see this cross pollination, I think of investing effort and intent. And so I think, you know, those two cohorts coupled with funds that focus on industry specializations are verticalization. And this is another I think, really strong aspect of the Rise of the Resrt thesis is, you know, when we talk about this place-based investing, almost a sort of view from 10 or 20,000. So you start to get down into the weeds a little bit more, you see that in a lot of pockets in the country. There’s strong intersectionality between place or specific geography and industry. Chattanooga is always a favorite example of mine in Tennessee more broadly, where you have this region in the country that’s like quite literally called freight alley. And because a lot of the success in the 1.0 2.0 genres of company that you saw emerge in the supply chain and logistics space in that area. You now have operators who have turned into investors who are focused very specifically on that industry, and you see pockets of that in different places all across the country. And that’s another great cohort of investor that we love to work with. So, you know, for us that rise the rest, we take a mixed approach between sort of the classic outbound, you know, sort of New Deal hunting, that you know that I’ve never been done just getting to know founders directly. And we’ve seen some tremendous investments come from that. But then we also take very seriously the opportunity to work closely with a broad cross section of funds, and continuously spend time with them building relationships. 35:36 Yeah, it’s pretty amazing how things have evolved, both on the startup side and the venture side. I know when I started investing myself in 2013, I recall going to angel group meetings in Chicago, and folks weren’t even familiar with what a cap was on a convertible note. And then, you know, a couple years later, I think, 2016, 2015 timeframe, I started a breakfast group for VC fund managers that were managing less than $100 million. And there were five of us. And I was like, wow, you know, there are actually five of us trying to do this. And now that group is 35, you know, 35 different firms in Chicago, $100 million and less. So it’s kind of astonishing to see the way that, you know, this cottage industry has kind of exploded in the past decade. 36:23 And Nick, you know, that’s also it’s a real testament to your leadership in the Chicago land area and the Midwest more broadly, because you need that connection and that convening, because at the end of the day, even though, you know, every once in a while elbows get thrown and competing term sheets kept put out. At the end of the day, I do I do find the industry to be very collaborative, and, you know, club, is there going to be the wrong word, right? Because we don’t want it necessarily to be clubby. But this idea that we all get together, we share deal flow, we learn from each other, we exchange ideas, I mean, what, what a special industry to have the privilege to work and where we’re all just endlessly curious. And we get to back these brilliant people who are actually out on the frontlines doing the hard work. But this idea that we can grow both individually and as an industry when we come together, and we convene in large ways or small, is so powerful, and so desperately needed in so many pockets of the country. So certainly a great testament to everything you’ve done on that front. 37:26 Well, you’re too kind, you’re too kind. I recall Anna, the first time we sent a term sheet to a founder, and a another local partner of ours that we’re friends with submitted a competing term sheet. And there was room for both of us, but they wanted to lead and, you know, I was on tilt, I was like, What is this all about? And then, you know, a few years later, it’s like, we’ve been in a number of those situations. And it’s, you know, it’s part of the business. And if you’re doing a great job building relationships and building a brand as a firm, then you should put yourself in a position to win, you know, most of those. And if you’re not winning them, you got to kind of look in the mirror. So, you know, I think it’s all good, the competition is good. You know, one firm not controlling an entire region, I think is a good thing. There’s certainly enough tech and startups to go around that we all can do well, if we have a thesis and follow it. 38:24 Agreed. Amen to that. 38:26 You know, Anna, you had mentioned before marketplace startups, and I’m kind of fascinated with some of the geo expansion based marketplace startups, especially in the middle of the country, we have a few in the portfolio. Are there any hallmarks that you look for in these startups? Or is there a way that you think about gaining liquidity in one geo before, you know, expanding that to many others, because I find there’s always this tug and pull between, you know, when have we proven out sufficiently that it’s working in a region and begin expanding this effort elsewhere? 38:57 I don’t know that there’s one specific hallmark. But a place where we’ve certainly found some great success across industry is when you have the CEO or one of the founders was born out of the industry that they’re tackling. And we see this a lot. I think in the Rise of the Rest portfolio and the market in general. But I find it to be particularly true in in a b2b marketplace, where you really understand what makes it depending on the nature of the market, either the supply or the demand side tick in a way that’s often very analog. You can’t necessarily automate it until you understand the industry behavior and the human behavior that you might ultimately be trying to automate. And so it’s just this idea that, I think where I’ve seen it be most successful in the portfolio. You have a founder who’s born out of the industry, they have oftentimes built the tech for their own company. And then when their competitors start coming to them say, Hey, can we you know, can we get this routing software or booking platform, that’s when they really realize they’re onto something and they spin out to then go build it and scale it. And then what happens is they really know how to talk to that industry in a way where you can’t just wave, like, bro-y tech like magic wand, and get them to conform to the software. And I think that’s also because we have just a final point on this. Some of the places where we find these marketplace opportunities to be so interesting is where technology adoption has historically been slower. And I think oftentimes, it is because of this dynamic where, you know, I think I made the comment earlier in our discussion, like every organization is the sum of its people. And it really doesn’t matter if it’s a five person startup, or a 5000, person investment firm or a $50,000, international, you know, Fortune 500. So really understanding that human component in a really analog way, and then figuring out how to very capital efficiently onboard that customer. That’s where I think we’ve really seen some magic happen. And then the question of, when do you scale, and I think how quickly you scale. That’s actually where I think it’s critically important that you do have the process automation built in, and you do have a lot of the technology and the product roadmap really locked, because otherwise, that’s where then where the capital efficiency falls off. If you have too many humans in the loop, doing too much of the work in too many markets, I think it becomes really unwieldy hard to control. And ultimately, you know, the proof is going to be in a margin compression game. And, um, you don’t necessarily see market by market unit economics standing up correctly. 41:45 Anna is there a book or an article that you would recommend to the audience that you found valuable? 41:51 Oh, yes. Well, my first one that I would give you is actually about process management, not necessarily learning about the space. But it’s this great book called Make Time. And don’t 100% quote me on this, but I’m pretty sure it’s by the guys who built Gmail inside of Google. And the general thesis for the book is “we completely ruined your life and all of your efficiency, because you’re just going down your email, rabbit hole all day, every day. So let us try to help you reclaim your time with these like 137 great strategies for time management”. But you know, sort of cheekiness aside, I think so much of what we are charged with doing in the space is dependent on how we manage our time. And when you’re super curious, and you love connecting with people and just love learning new things. Sometimes that time management can be a little bit tricky. So I absolutely love that book, Make Time. And another I’ll give you from like slightly out of left field is The Hidden Life of Trees. I spend a lot more time in the country. I’m very grateful for that during COVID. And I sounds really weird, but I’m around a lot of trees now. And the reason why I actually think it’s fascinating and applicable, not just from a human interest standpoint, but also from a venture investment and industry exploration standpoint, I think probably comes back to another core value of Rise of the Rest’s, and also of mine personally, which is to not judge books by covers. And we see that through so much of the work that we do. And this book explains and explores how trees communicate, how they age, how they grow, just things you might never have otherwise thought about. You can’t necessarily unsee or unthink right now, and I love books like that, that just really are thought provoking in the way that they can create a little bit of a paradigm shift. And that’s oftentimes the the approach and what I’m looking for when I’m on the hunt for incredible new founders to back. 43:54 Love it. And then finally here, Anna, what’s the best way for listeners to connect with you and follow along with fund? 44:00 Oh, amazing. Well, revolution.com is our parent company’s website, we somehow scored and got that one all those years ago. And so you can find everything on the Rise of the Rest fund under that. And I’m on Twitter and DMs are open, it’s AnnaMasonDC, and Rise of the Rest is RiseofRest. So we’re doing a lot of cool things and love promoting all the incredible work of our portfolio. So those are the best places to find us. 44:26 Perfect. Will she is Anna Mason. She’s Managing Partner of Revolution’s Rise of the Rest fund. Anna, thanks so much for the time today. Really enjoyed it. 44:33 Thanks, Nick. This was fun. Thank you. Transcribed by https://otter.ai