024 Ashwin Pushpala on building/exiting a company before becoming a VC at Eclipse

Speaker A: And I think some of us, like myself included. Right. I've found that being a part of the beginning of people's journeys has been, like, a lot of fun for me as an investor in a way that I didn't fully imagine I'd love. Right. I was always in the driver's seat in my, uh, startup, but now I get to be in the passenger seat, which is really fun.

Speaker B: M welcome to Money Moves, the show about raising money, making great investments, and building venture scale businesses. I'm Neal Divani, your host and the founder of Necessary Ventures, a firm investing in what the world needs. Each week, we'll talk to folks who have raised anywhere from $10 million up to billions of dollars. We'll learn how they return multiples of 10x to 100x or more to their investors. We dive into their stories, uncovering what worked and what didn't, learning from real experiences to understand the journeys of raising capital and rapidly scaling a business. Money Moves isn't just for those already in the game. It's also for anyone interested in the mechanics of startups and venture capital. Whether you want to raise money, make better investments, or just understand how it all works, Money Moves gives you the insights and advice you need to succeed. So join us each week and hear from those who've been through it all and learn from their journeys. Usman, thanks for joining for an episode of Money Moves.

Speaker A: Absolutely. Thanks for having me.

Speaker B: Yeah. So I want to talk about Eclipse, talk about investing. We're excited to be invested with you guys in companies like Wave and Ark. But before we get into all of the VC talk, I want to go back to the beginning and just talk about Ashwin, the founder, and learn a little bit more about your journey and how you got to today.

Speaker A: Sweet. That sounds good.

Speaker B: So when did you know that you wanted to start a company?

Speaker A: Oh, man. Probably would go back to, to my middle school and high school days when I try to find a way to make. Make lemonade out of lemons and build. Build small businesses from scratch. I think one of the first things that I ever did was, you know, when I. When I heard from my parents that I wasn't going to get that PlayStation, I had to figure out how to make the money to buy the PlayStation. Right? And so I said, I know how to play tennis. I know how to string rackets. I'm gonna go figure out how to, like, get all my teammates on the tennis team to pay me to do the thing that they would have paid someone else to do and do it faster. Do it better do it cheaper and make money that way. And so that's how I was able to get the money to buy some PlayStation games. And I think the joy of serving other people, being able to do something on my own, having that autonomy was really, really fun. And so that was probably the first thing that made me want to start something on my own. I didn't really have any real talents back then, but slowly figured out that I could and turn that into a career path. But, but that was probably the dentist

Speaker B: bracket is, is skilled labor for anyone who's tried it or done it before.

Speaker A: That is, right. It's, it's very challenging. And I had one of those, those stringers that didn't use computers to, to create the tension. It was a balance, right. So you'd uh, you'd balance it on one side and, and make sure that it was taught before you tied it off. So this was true manual labor.

Speaker B: And how did that translate into what you wanted to study, what you wanted to pursue professionally?

Speaker A: Yeah, I mean I was always interested in stuff technically and so I was always a math and science nerd in high school and that translated to college. But I was fascinated by the human body. I thought I was going to be a doctor like many Brown people think uh, when they're moving from high school to college. So I studied biomedical engineering. It was good combination of being fascinated by the human body and being fascinated with fixing things and building things. And I, I remember my, I think it was my junior year at uh Penn where I took a class where the whole point was go shadow a doctor, be around this person for six, eight weeks, understand what they do on a day to day basis, try to find out what the problems are that they try to solve and, and design a solution, whether that solution is a method, whether that solution is a device, whether that solution is just uh, uh, a checklist. Right. To make sure that they don't make the mistakes that they were making before and then present that as you know, a part of your, your thesis for the end of the class. And one thing that I noticed is that I was more fascinated by the tools that the, that the physician was using than I was by the work uh, that he was doing. I said wow, he uses this like pretty simple scalpel to do a lot of things. He uses this set of protective equipment in like, like ah, in the same way every single time. But there's a lot of manual labor associated with putting it on and taking it off every time. And so I said wow, the, the devices in the, in the hands of this expert. Right. Are pretty crude and, and that's kind of how I got really, really interested in medical devices. Like these are people that are saving lives, but they're doing it with pretty, pretty, pretty crude instruments at times.

Speaker B: Yeah, yeah. A lot of my friends who've done bme, I always will joke like I feel like you're just too smart for medical school. Like pre med was too easy. You need to add in some engineering.

Speaker A: The grades would not indicate that I was too smart for medical school. But you know,

Speaker B: so, so you develop an interest in, in medical devices. You came out of college and, and I think you joined Sinuses Corp, Is that right?

Speaker A: Yeah, that was actually something I did during school. It was an internship to begin with. It's actually one of those stories where this is the, the CEO is a multi time founder and entrepreneur to a couple companies public, but one of those companies that he, he built my, my mom worked for. And so it was like classic getting an internship in, in high school and college because you got a connection, you got lucky that you were able to. You make the connection through family and, and the founder, his name's Tom and he's become a mentor of mine since then. He took a, a, uh, liking to me and said hey, when I start my new company, I'd love you to be involved in whatever way possible. And for me it was doing everything that he couldn't do. It was. People call this role probably like a chief of staff or whatever you want to call it, special projects person. But I was just the college uh, kid with a lot of energy who knew how to make slide decks and could do some simple calculations on the computer. And every time he needed something I did it for him. And so that was the end of undergrad, early grad school. I was kind of his right hand person in building this company. And I don't know if you, the product was really, really clever actually and it was a fun thing to develop. It was, do you know anyone that has any sort of chronic sinus condition like a deviated septum, um, and things like that. They have trouble breathing and have to usually have some sort of surgical procedure to open up the sinus cavity. But usually it's done using some sort of balloon. Right. You put a stent in there, you pump up the balloon and it opens up the cavity. This was super clever in that that's a pretty tough physical task to do on the body. Like, you know, it usually causes some pain and people have to be under anesthesia during A procedure like this, this balloon is stented in the exact same way with a balloon, but filled with a bunch of salt so that the mucus in your nose would expand the balloon by osmosis. And so it expanded slower, gentler, and it was better for the patient. It could be done in the office as opposed to in a surgical setting. And so that was super clever. And it was one of the moments where I realized that, uh, not all technology solutions have to be super complicated. They just have to solve the problem in the simplest way possible with the simplest technique to make it super manufacturable, super easy, super simple to make, and ultimately super inexpensive for the use case. So that was a really awesome learning experience to be along for the ride for that one.

Speaker B: Yeah. Did, and that, did it motivate you then to start your own company?

Speaker A: Yeah, honestly it was, uh, I, I realized that I was doing a lot of the things that, that an early stage company needs and switching roles all the time. And I, and I said, you know, what if, if I can do this as the right hand person for someone when I'm, you know, this young and this inexperienced, how it's probably not that big of a leap to say I could do it myself as a founder. So that was always in the back of my head. And even after I took, took my first job, you know, out of school, this was, this was, was happening at the, the dinner table or at uh, beers after work. Right. What are the things that, that me and my friends were going to build together one day and that ultimately did turn into to what, the company we started.

Speaker B: Yeah. And, and did you have the idea first? Did you meet your team first, your co founders? What was the initial step in actually getting things moving?

Speaker A: Yeah, definitely met the co founder first. Didn't know he was going to be my co founder. He was actually, uh, good friend of mine from, from school who was my roommate when I was living in Boston. And it was, it was really about the both of us have a really good chemistry together. He had strengths that I did not have. I had strengths that he did not have. I was pretty decent engineer and pretty good jack of all trades on the technical side. He was an incredible storyteller and a really good recruiter. And, and so we had these, the, the two kind of like lanes that we could swim in to start to start a business. And I learned a ton from him, um, along the way. But honestly, the idea didn't really exist until after. Right. Uh, we knew we were going to work together on something and we Threw ideas at the wall for probably four or five months before landing on this one. But realizing that the market opportunity in healthcare and preventative medicine and ultimately fixing some of the things that are structurally, along with structurally wrong with doing chronic disease management was a problem that was big enough to solve and one that I was purpose built to be the, the, the technical co founder for. And so a lot of it was like trying to find the right fit. Right. For the business that, that, that I could help start and, and he could be a really, really good partner in. And, and this happened to be the one that we chose.

Speaker B: Yeah. And, and for the folks who don't know, uh, the application you went after was a transdermal glucose monitor, which there, there are devices now that are getting close to it. It's not, we're not really at the, the holy grail yet, I would say. But what did you see at the time? I guess at the time there was probably CGMs and they were like wearable, they were painful. Not, not easy to use.

Speaker A: Yeah, the, the, the products that were out there were the kind of first generations of continuous glucose monitors. So not nearly as sleek and easy to use as the Dexcom G7 that's out there today or the Abbott Libre 2 that's out there today. This is kind of the first generations of these, of these products that were coming out or had just been released at the time, they were only used by type 1 diabetics. They were pretty painful to inject into the body and actually weren't all that accurate. And so, uh, totally different generation than what we have now. But the thing that I saw in the moment was, look, these continuous glucose monitors at that time would cost a patient out of pocket north of 6,000, $7,000 per year. They had to be used in conjunction with pricking your finger. They weren't used as a replacement tool. And so really that only made financial sense to someone who actually was taking medication all day, every day. People who are using an insulin pump or using insulin pens quite regularly. But the vast majority of diabetics are not those people. The vast majority of diabetics are managing their conditions with exercise, with diet, and potentially with an oral medication. And so 90% of the population is doing it that way. And they don't have a tool that's easy to use enough, doesn't require an invasive injection, and doesn't require to use multiple devices to actually manage your condition. It had to be easier to use.

Speaker B: Right.

Speaker A: Uh, it had to be much, much simpler to put on and take off and understand how to operate the device. And then obviously you had to be less expensive and that was the motivation for starting the company. And, and then the other side of it was hey, if we can do this for, for diabetics, eventually a lot of these other conditions that are comorbidities with diabetes could be, could be helped right as well with, with an improvement in diet, nutrition, fitness and a, a companion tool that, that, that helps people manage those conditions more effectively.

Speaker B: Yeah, yeah, that, that, that vision I think is, is very clear. So, so when did you guys first raise capital from happening first

Speaker A: I think it was late 2012, early 2013 was our seed round and that was an entire journey because we had never raised capital before and we had no idea what we were doing. We had gone through the, at the time Rock Health, which is now a seed fund, was, had its accelerator program similar to obviously Y Combinator and many others where there was a class and a cohort of 10 or 12 companies and still close friends with a lot of those folks who are in the trenches with us to this day, which is pretty awesome. We were part of that program and learned how to tell a story and build a pitch and then went out and talked to I think it was 75 or 80 investors and I think N minus one of those said no. Uh, and the one of them that gave us the shot, gave us the ability to go on this journey.

Speaker B: What do you think got that one over the line?

Speaker A: I think it's a lot of what I've taken into the role that I'm in now, which was on the investing side is ultimately it's you can invest in companies that are obvious, right? Where the founder is super proven, the market is gigantic and, and that'll those will be the easy ones to say yes to. The, the hard ones to say yes to. But perhaps the ones that are maybe you'll be rewarded. The boast for is taking a chance on someone that, that has promise and a high slope and an industry that also has a high slope. And if you get both of those things right, then um, then you've nailed it. Right. And so for, for the folks at True Ventures who were the ones that gave us our, our start, they, they said that about us, right? Is that like you two are kids? Obviously right? At the time we were 23 and ah, pretty wide eyed and optimistic about the world. But we were able to go from knowing very little about an industry to knowing a lot about it in four or five months to getting a number of really, really talented and Experienced folks to come and work for us before we had any money to pay them. And that was their way of describing trajectory. Right on our ability to be founders and leaders of a company. And then we were at the beginning of this kind of continuous monitoring and self monitoring trend that now seems obvious in retrospect. People are wearing aura rigs and Apple watches and things like that left and right. I mean this was not the case at that time. And so both of those things happened to be right at the beginning. And you, if you make a bet on, on the right team to do that, then shot. Right. And, and that was, that was something that I, I frankly look for a lot.

Speaker B: How did you find them? How did, how did they find you? I mean not just true, but the uh, 70 plus investors you mentioned.

Speaker A: Yeah, all of any. Anywhere and everywhere at that, at that time there was the best way, right. To getting to folks that I thought at the time was to, to talk to founders that I respected and talk to their investors.

Speaker B: Right.

Speaker A: If I can get the warning. Sure. Right. But in this case this was, I think I spoke at a conference and one of the investors at TRU came and found us afterwards. And then that turned into a coffee meeting which then turned into uh, us meeting some of the rest of the partnership and then us getting a term sheet probably a week or two later. Little did they know that we didn't have any money left and probably wouldn't have survived if they didn't, if they didn't come and find us at that time. But, but you know, timing is everything in luck. Luck is a big part of it too. But yeah, it was random. But in terms of the other investors, we did anything and everything we could to get to folks. It was starting with founders that we knew and getting every interest provide us. It was going to coffee shops that we know investors frequented and trying to bump into them. It was cold emailing and cold LinkedIn messaging which frankly worked better than we thought it would. And uh, uh, yeah, any, any and all. And so you know, the desperation calls for desperate measures when you, you don't have any cash and you need it.

Speaker B: Yeah, yeah. You take all the shots you can. What, what did you find in the subsequent rounds? Did it get easier over time now that you had a, uh, basic goal that you knew you had raised some money? Or was it always kind of a challenge because med devite, even something like what you're working on is not an easy category by any means.

Speaker A: Totally. I, I thought my, I think my initial reaction to that question is that it was harder, but I do think there, we got enough. We got a lot more top of funnel, right. As the time went on, right. There was some PR about us. People knew who we were. They were able to hear about us before taking the meeting. And luckily, right, we're in one of the few medical device categories where you can actually see the product and use it. Right. It's easy to demo something even if you're not diabetic, you could still use this product. And so that is what allowed us to, I think, attract a, uh, wide range of investors throughout our, our time. But it was still hard. I mean, yeah, I think at the end of the day, medical devices are products that, you know, require a bunch of regulatory work before you can actually sell your first one. And it's a bunch of technical milestones that need to be translated into proving to investors that the value of your company has increased since the last financing. And that was really, that was really tough to do, especially for someone that doesn't have a track record at the time of building anything. So I think that was, that was tough. And we had to be creative, right? Uh, we, we raised some money from great seed investors who were pure financial investors. We took money from strategics throughout the time we took. We convinced a corporate who didn't have a venture fund to invest in us towards the later stages of our fundraising journey. So we, we took money from wherever we could get it and convinced people to, to join along for the ride. But it took some creativity, for sure.

Speaker B: How much did you guys end up raising?

Speaker A: In total, it was close to 40 million.

Speaker B: And what was the, uh, if you can recall, like, what was the best pitch you ever had, the one that you just absolutely nailed?

Speaker A: Oh, there was one pitch. I won't say who it was with, but it, but the, the demo was perfect. It was like, beginning of the meeting, I, I was wearing one of our patches that was, that was monitoring her blood sugar. I put one on. The investor was sitting across the table from me. And then I had some candy and some Coke in the. Coca Cola in the middle of the table, and we both had some. And we started the pitch and I was talking through it, talking about the market opportunity, talking about the, the, the need for more passive monitoring of patients and, and how this could, could drastically change behavior. And, and then I told them, hey, like, just, just take a look at your phone and then let's see where your, where your blood sugar is at. And it had gone up way higher than he expected. He's like, I don't believe this at all. And I was like, all right, we'll take the, take the finger prick test and like just prick yourself and just see if it uh, see if it matches, right? That's the gold standard. And it matched within like two points or something like that. And, and it was, it was, you know, I couldn't have drawn up the better, the better pitch. But you know, a lot of it is, it is showmanship, right. In certain regards. And it was the best show I could have put on in that moment which I think ultimately resulted in, in that, that investor coming in on our next round, which was, which was awesome. But it was, it was this, this like magic moment, right? Like a lot of, a lot of consumer products which, even though this is a medical device, it is a consumer product. Diabetics choose what devices they, they, they want to use. And now a bunch of other people who are not diabetics choose to use CGFs too. So this magic moment where something they, they felt right, feeling a little hyper. Seeing that in the sugar reading, looking at it in another device and having it confirm the reading was like pretty magic.

Speaker B: That's, that's uh, ballsy. I feel like a lot of people don't ever do a live demo. Like, what's the one time things are going to go wrong? You had the opposite experience.

Speaker A: Totally. I mean it went wrong other times, right?

Speaker B: But I was going to say yeah, I had to ask like what was the worst pitch and, and did it involve a demo?

Speaker A: The worst pitch. The worst pitch was probably one of my first ones when like I,

Speaker B: I'm

Speaker A: sure this is not uncommon with, with uh, a number of folks who are first time founders, but I got pretty starstruck the first few times that I, that I pitched with investors that I are tier one investors, names that all of us recognize walk in the room and like a couple of times I, I froze, right. Get up at a partner meeting, there's 20 people around you, three of them are really famous and simple questions that it would have been really, really easy for me to answer in a room one on one couldn't deliver with confidence. And I think especially at uh, a partner pitch when my mind, I assumed that was the final step before this amazing tier one investor is going to invest in my, in my startup at crash and burden, right? So it was, it was devastating, right? It's like you ask a question, someone that like you've been waiting months to meet, right? And then, and then you screw it up. That was probably the worst. But I, I think I learned over time to. One of my investors said this, this really well, it was a really good lesson is that being starstruck doesn't, obviously doesn't help you at all, but, but the reality is those people need you more than you need them. Right? Uh, like you are, you are the asset that will get them the returns. If you win, they win and you win even more frankly than they do. And so they need you way more than, than, than you do. It doesn't seem like that, right, because they got the money and you don't. But, but you have, you have the, the technology right, and you have the business and you have the ability to make them the returns that they need to make. And so keep that in mind, right, that like they may come in with a lot of power in the room seemingly and um, it might be a pressure filled situation, but they are lucky to have the opportunity to potentially invest in you. And that was like a really good lesson to learn. And I think I took a lot of those meetings less seriously after that, which allowed me to be more relax and deliver.

Speaker B: It's, it's really easy I think for investors, uh, and for founders to lose sight of that, right? Like who's actually driving value, who's actually building, creating things that matter and who's just along for the ride. But if it doesn't, if it doesn't help to keep that in mind, you could always just imagine them in their underwear. I feel like that's, that's right.

Speaker A: I, I, I tried that the first few times because people, people said that that was the thing to do. It, it did not help at all.

Speaker B: Just a bunch of middle aged men sitting around the table in their underwear is probably not a good fit.

Speaker A: That's right.

Speaker B: When you talk to founders today, are there things that you advise about how to pitch? Well beyond some of the stuff we've covered?

Speaker A: Yeah, I think especially in our industries and at Eclipse, we invest in the physical world. It's like a lot of challenging technical problems that can be really complex to communicate in a first meeting especially I advise to folks that I'm talking to and even in, we do a bunch of incubation work as well. So when we're starting companies from scratch or building the pitch alongside an entrepreneur, one of the things that we try to focus on is that the, the big picture around the economic value of the problem you're solving is the reason someone will invest in the company. It's not just the technology. Technology is what allows you to do something unique that, that many other people may not be able to do the business problem. Right. And the, the economic impact of you solving that problem needs to be front and center. Otherwise you run the risk of losing. Right. The audience a bit. And the dumbing it down and talking to someone like they're reading the material and reading the subject matter for the first time as opposed to assuming that they're somewhat of an expert is super important. And then the other thing, which is like super tactical, but, uh, I found it really, really helpful when a founder who is probably a generation before me would always advise me that like when you're going through a pitch deck and then designing it, there should be, if it's 15 slides, your presentation should be able to be set in 15 sentences, one sentence per slide. There should be one sentence takeaway. Even if you have a bunch of complex data, um, and images on this thing, there should be one takeaway. And make sure that your talk track has that too.

Speaker B: Yeah, yeah, I think that's great advice. I say that all the time. That's why it's great advice, because I say it. No, I think it's, I think it's, it's very easy to get lost in the details and figuring out the layer of abstraction that makes sense for every investor is difficult. But it's better for an investor to pull you deeper than for you to have to get pulled back. Usually they're lost by that point. So, uh, I want to move on to talking about investing and Eclipse, but let's talk about, uh, you know, wrapping up the company, the exit and everything like that. What was the rest of the journey like?

Speaker A: Yeah, I mean it was, it was a, a long development journey. Right. If you were to ask us at the outset did we think it was going to take eight years to develop the technology from scratch and you know, come out of the lab, I think we would have said it would have taken half that time. And so there were some pretty big technical challenges with making a microneedle electrode on silicon, applying biomaterials to it in, uh, a manufacturable environment, making that happen consistently for a team of folks that at, uh, the outset didn't have any experience doing this. Right. Other than some of the work I did at grad school. So it was a long technical journey. So that was from founding in 2012 to ultimately exiting in early 2020. It was like a eight year journey, most of which was us in the lab and in a manufacturing facility. Right. We, we, we uh, we didn't actually sell any commercial product Right before we got, we got, we got acquired. So I think one of the things that was challenging about the, the interim, which I think I referenced earlier, is raising capital when you don't actually have like really, really easily measurable milestones. And so we had to find people along the journey who were intrigued by the proof points that we had. And they, not all of them were financial investors. And this is true even at the end of the story too, right where we had a product that worked technically, we had a very, very small production line that could produce a small volume of products. Not enough for us to do our final pivotal study for the FDA to get cleared by as a, as a medical device and ultimately go, go commercialize. But we had this kind of small effort and we said okay, who, who would care the most about, about what we've developed? Uh, who utilizes these types of technologies today and who has like the greatest incentive structure to want to partner with us and perhaps fund this next round? We started talking to a number of folks who we knew were buying continuous glucose monitors for their business. These are folks who were doing diabetes management programs or diabetes prevention programs that, that were selling into self insured employers and, and health plans to help manage the employee base or the patient population that had diabetes and lower the cost. And they were buying fingerprint tests, they were buying devices, they were buying weigh scales to ensure that patients were complying and actually losing weight with the program. And we said those are the people that buy this stuff today, right? If we can provide them a better solution that uh, will increase compliance for their patients, or a better solution that was less expensive than what they currently did, or both, then those are the people that like have the most to gain, right, from, from, from partnering with us or, or either investing in us and seeing us exist, or, or maybe even buying the product itself as a, as a uh, as a partner. So we went and we talked to all of them. Some of them said hey, we're purely software and services companies. Not for us. Others said hey, we're developing our own. Not for us, right? Or hey, we've already partnered with the other big continuous glucose monitoring companies. Not for us. But we, you know, we went through and we, and we found one and one dropped that that said hey look, we, we'd love to vertically integrate because that's our differentiator. That's how we show that we can provide a better end to end service. It's all under one roof. It's one product experience. You get the hardware, you get the software, you get the Services all under one roof. And, um, we can do it for less if we did it together. So I met Jeff and it turned from a, hey, should we invest? Should we partner? To, hey, why don't we just combine forces and know you guys will get the cash that you otherwise would have had to raise externally? Because we just raised a big round of funding. Uh, we'll get the technology differentiation that we don't yet have on. On this future product, and then we can continue operating the way we have. But we can just, you know, both provide the strengths that we have at the time that we can. And so that was, that was how it. It went down. And frankly, it was. It was good timing for us because we had those discussions right before COVID hit, and it would have been a real rough go at it to, uh, try and raise money when no one knew what to do right in early 2020. And so we, you know, transaction ended up closing officially in March, I think early March of 2020. So basically right in time for there to obviously be a pretty big desire to do remote care and build, uh, a product that you could have a kind of digital diabetes clinic in the clinic cloud. And so that was what we set out to do together, you know, when we. When we joined forces with One drop.

Speaker B: Yeah. And did that end up working out well, because you were at onedrop for a little while, I think after.

Speaker A: Right. I was there for a couple years. Story's still being told, I think so. I mean, you know, OneDrop still. Still building out that, uh, that, uh, technology and. And frankly, it was. It was awesome to get to see the commercial side of the business too. I learned a ton from it. You know, they. They were already servicing customers with their previous generation of the product. And so we learned a lot from that, those interactions and ultimately changing some of the designs of our product to meet the needs of the customers. We never would have had that opportunity on our own. And so there was a little bit of rejiggering of the product, and now it's in the midst of getting validated. So I think we're. The journey's still. Still happening, and the story still remains to be told. But, like, I'm hopeful we'll end up having that, uh, great impact.

Speaker B: What do you think about the technologies that are out there to the extent you can talk about it now in the CGM space in terms of, like, what do you see as the future technologies versus what we have today?

Speaker A: Yeah, I think a lot of the goal for the last 20 years of this industry Existing was to make a product that was less invasive but more accurate and then ultimately less expensive and uh, more manageable for a patient to be able to afford. One of the ways that they were doing it, right, because they had a pretty invasive product, was to make the injection of a wire underneath the skin less painful and easier for someone to do at home and then make that last a really, really long time. The first continuous glucose monitors were used for less than a week and now they are 14 day products. And there's a roadmap to being much longer than that. And so I think uh, there's probably a limit, right, to, to how long a product can be worn on the skin. I mean our, our skin regenerates every, you know, seven to 10 days. Right. It's why when you put a band aid on, it falls off after a certain time. That's why when you have a wound, it, it closes up. Right? And, and so you're, you're no longer having access to the, to the fluid underneath the skin. And so I, my guess is that, you know, the, the end state is not something that's worn on the outside of the body, right? It's, it's something that is implanted, injected, ingested, right? And, and is always there, right. In the body. Every cgm, including ours, was not actually measuring the blood, right. It was measuring something called the interstitial fluid, which is kind of that extracellular layer that, that is in epidermis in the skin or in the dermis in the skin, um, before you actually get to the blood. And that's a proxy for what's happening in the blood, right? So if you can do it with a device that's actually measuring the direction measurement of glucose or any other molecule in the bloodstream, that's, that's the holy grail, actually more than, than just something that's not invasive. So if you could ingest a pill and it did all those things, that's better, right, than wearing a patch on your, on your arm that's even more invisible. So my guess is that the, there will be some technology leap one day where a patient doesn't have to wear something on their body, on the external part of their body to get this information. And that's, that's gonna one make the uh, device hopefully more accurate because you're actually measuring the true source of the data, which is the bloodstream, and then, and then also enables it to be completely painless, right. To use.

Speaker B: Yeah, yeah, it seems very possible. It seems the companies that have tried it so far run into all sorts of challenges. Obviously this is not easy stuff to do, but it does seem like that's the path. I think this is a good transition into talking about Eclipse, where you're working a lot on incubations and an idea that I think you and I have talked about a little bit before. Something that I've been really interested in is this idea of like personalized automated dosing. And it's, it's the, the precedent example of having a uh, CGM with an insulin pump for a type 1 diabetic that are synced and the insulin's titrated against the CGM readings. Seems applicable for a lot of other drugs if you have the ability to tightly monitor the drug itself or metabolites in the bloodstream or in some other, some other vector. Have you seen folks working on that? Is that something that you're interested in?

Speaker A: Yeah, I mean there's a number of folks working on that for glucose and for diabetes in particular for sure. There's also folks working on that for many medications that are meant to be titrated continuously or, and some of those biomarkers can be chemical like, like uh, glucose and some of them can be more digital. Right. Like we have a company in our portfolio, Runelabs, that, that does measurement of motion disorder for Parkinson's patients. And so that could be a really, really interesting companion tool for, for folks that are taking medications that, that are supposed to counteract those symptoms. Right. And so I think that's a, uh, that's. It's happening all across the board, particularly for, for uh, medications that need to be taken regularly and for measurements that can be changed quite frequently throughout the day in a person's body. That's not always the case for every disease state. Right. Some, some measurements don't actually move as quickly as glucose or potassium or sodium or calcium, things like that. But in those cases where it is truly valuable to measure continuously, I think you'll see, you'll see a bunch of other folks do that. But I do think that the measurement of a variety of metrics in the body even semi regularly is taking shape. Now you've seen a number of companies that are enabling kind of personalized treatment plans using a bunch of more in depth blood work. Right. A number of those companies come out and done that both for consumers and then as kind of a concierge service. And this enables folks to do things like take supplements and other medications preventative way that they normally would have not been able to because they don't have that depth of data and that frequency of data in their normal healthcare practice. So I think that's, that's one version of the story that is turning out to be true and, and quite, quite a bit more popular now than it was 10 years ago and a lot more affordable today because you can utilize telehealth instead of in person visits. You can do a bunch of analytics on the data and ah, provide a range that is healthy for a patient of a particular age, gender, background, et cetera, that you wouldn't have been able to do if you didn't have to analyze these Larsens.

Speaker B: Yeah, yeah, yeah, yeah. It's a, it's an interesting moment, right. The consumerization that's happened and seems to be continuing to happen alongside the development of a better understanding of human uh, biology, pathophysiology, all of these things kind of happening at the same time. That's pretty exciting to see. Let's talk about Eclipse. Let's talk about your work there. I'd be very surprised if anyone listening doesn't know Eclipse, but can you give a little bit of a primer about the firm and then what you're focusing on?

Speaker A: Sure, yeah. So Eclipse has been around. We're in our 10th year now, which I guess is still young for a venture firm. But the thesis of the firm since day one has always been investing physical industries. So and the way that we make and deliver things to. One of the stats that we like to cite is that uh, more than 85% of global GDP is in the physical industry is not in pure it. And uh, there's a lot of those industries that haven't yet had a meaningful disruption with technology. And we want to be the investor in those types of companies that change the way that those businesses operate. So that can be things like manufacturing, supply chain, transportation, energy, healthcare, infrastructure, et cetera. So any, any place that we're making or moving something or delivering a service to, to someone that allows the world to go around, that's kind of the, the business we want to be in. Like I said, we're, we're in our 10th year now. We've got about 5 billion a1. Um, today there's 10 of us on the investment team and all of us are former operators like myself. We've either started companies like me or we've scaled them as executive team members of companies that have gone public. And so that's the, that's the perspective that we bring to the equation. All of us are first time investors. This is I think pretty much everyone, yeah, everyone at the firm is as their first job in venture, even though we've had lengthy careers doing other things before that. And so hopefully we have a bit more of a, you know, empathy for the other side of the, the zoom screen or the table when we're, we're talking to entrepreneurs and some battle scars from the, from the building of businesses ourselves that can be helpful along the way.

Speaker B: Yeah, yeah, I think that's very true. From what I've heard from founders you guys work with and everyone seems to be very, very happy and to really value. I think the insights that you guys bring from having built companies, having run companies, especially in the, in the physical world, which is so different from what it looked like in just a pure software setting. We've talked a little bit about stuff you're thinking about from the incubation side versus investing. Can you talk a bit more about that to kind of expand on what the difference is, what that looks like?

Speaker A: Yeah, I mean, you know, we, we approach every category of investment kind of the same perspective. It's, you know, we are super thesis driven. We do a bunch of uh, research upfront before we make decisions to invest in any company. We tried to just develop a perspective on why an industry needs to change, why technology is the right way to change that industry and where the hole is in that industry. So a lot of what we do is try to develop relationships and connections with the people that will be customers of any particular product that we would hope to invest in or build from the ground up, understand their, their problems. A lot of the customer discovery work that any founder would do, uh, at the beginning of the journey and frankly I should have done probably more than one before I started the company. But you live and you learn. But the, we try to do a lot of that upfront and come up with a thesis for how the world needs to be different, then go in, scour the landscape to find which companies are doing. In some instances we'll find an amazing seed company and we'll, we'll run that down and try to try to back that. In some cases it'll be a series B or a series C company and we'll do the same. But in some cases we'll say, hey look, we, we don't believe that there's anyone that's doing this the way that we, we believe would change the industry in the way that we envision it. And so let's see if we can build a team from the ground up in a bespoke way. Right. This is not a accelerator this is not an incubator, this is not, there's no cohorts to this. Right. It's a one to one, uh, opportunity. When we see that there's a gap and we don't find the company that we want to there and then we'll build it from scratch. And that's partnering with uh, an entrepreneur from, from the ground up on day one and kind of acting as a surrogate co founder. Right. Until they've built out that team. So that's probably 15, 20% of our portfolio comes from deals that we structure that way.

Speaker B: Yeah, and I know the answer to some degree because we've talked about this before, but the obvious question I think every investor or founder is going to have is for, for a founder, why would they do this versus go raise a traditional round? What is the incentive uh, for them? And how do you describe that?

Speaker A: Yeah, I think there's, there's two reasons why, and there are many reasons why you wouldn't. Right. It's got to be the right fit. Right. But the reasons why to do it are if the entrepreneur wants to build in the industries or we have a really good network and can help them pressure test the idea way easier than they would have to do it on their own or can help them recruit the type of talent that they wouldn't have been able to do it on their, on their own. And that usually comes from maybe an entrepreneur that's coming from outside of the world of building in the physical and industrial space and coming into it and saying hey look, I have a really, really great idea or a set of ideas that I want to pressure test but I just, I don't have the network to uh, do it in this space but I have success in other industries that I want to bring to this one. So that's one way. Or, or it's someone uh, that hasn't yet been able to build the conviction around three or four different ideas and just wants a sounding board from someone who's built a business from the ground up in those spaces before. And luckily for us, in addition to me you've got folks that are super early at Tesla, uh, and Rivian and Samsara. And these people are all just sitting around in the same room as I am. And uh, and you get, kind of get the whole team right when you're, when you're working with Eclipse. So I think those are probably two reasons. It's like, hey look, I don't, I don't have the ability to pressure test this idea to the degree I need to with my own network. I mean Eclipse has, has a, an extensive network in those spaces that help me do that and I want help building out that team and Eclipse Network can help do that as well. And, and one of the things that we like to do during that process is if we can, most of the time we can right before we've even launched and funded the company, we've pressure tested the idea enough, identified a design partner or two or three and inked some of that right before the entrepreneur has gone on their journey to go and build. So it's less of a question of what's going to happen if they build it like the customer will buy it. Right. Because they've actually said that they would. And so that's what we try to do during that process is give the entrepreneur and us right some certainty that the thing that we've ideated on has, has legs and usually we're, that's resulting in success and faster progress on an idea of what comes through this. And, and the results kind of speak something for themselves so far, right. Our, our companies that have gone through this company formation process with Eclipse raise at a faster rate for their next round, which obviously we know is not a, the only thing that matters, but it is, it is a proof point they're able to recruit super high quality talent that uh, you know, seed companies normally wouldn't get access to because they pressure tested the idea and they're hitting the ground running and they move from idea to commercial traction way faster than the folks that aren't going through a process like this. But I think you have to, if you have those gaps, right. Or the ability for Eclipse to help accelerate some of those parts of the like commercial and the recruiting side of things. That's the reason they do it.

Speaker B: Yeah. Yeah. Well, I'm sold. If I'm starting a company, uh, we got two sections left here. We're going to do what's become my favorite, which is this is not financial advice. And that's the disclaimer. None of this is financial, legal or tax advice for anyone listening. But what would your advice be to a founder who's had an exit or an investor they're sitting on call anywhere from a couple million but less than 10, trying to figure out what to do with it as they explore the next thing. They're not ready to retire, but they want to make some good investments.

Speaker A: It's a good question. I think. I, I'll tell, I'll tell you the advice that actually, that I've actually used with my parents because they're, you know, towards the end of their, um, their careers and trying to figure out what to do. Right. You know, can, can we retire? Can we do some other more creative things with our money? And, and I think one of the things that I, that really, really helped in that discussion was imagine that future where you're like 75 years old and like, what are you doing at that time? What does your morning look like? What does that, what does your afternoon look like? What does your evening look like? What are the activities that you're doing throughout the day that are going to make you happy at that point? And let's figure out what, figure out what that, what you need to do to get to that and then start, and start bidding, picking the tasks and picking the, the activities and picking the investments. Right? That, that, that allow that reality to be true. Right? In a retirement scenario, it's like, all right, well, if I want to do these things, it's going to cost me about $5,000 a month to do those things. And you can backtrack and create like, the investment vehicles that allow you to have that money one day. But, but I think the same goes for, for an entrepreneur. Like, if you're, you have your first exit and want to figure out, like, what would make you happy right back, you know, in the, in the far future, design the future and then, and then wind the clock back and figure out what things you need to do to get there. And, and I think some of us, like myself included, right, I've, I've found that being a part of the beginning of people's journeys has been like, a lot of fun for me as an investor in, in a way that I didn't fully imagine I'd, I'd love, right? I, I, I was always in the driver's seat in my, in my startup. Uh, but now I get to be in the passenger seat, which is really fun. And I want to do that for things beyond just tech. And so I think finding opportunities for me to be a part of creating concepts and ideas and being a part of other people's, like, journeys that are not just technology is something that I want to do. So I want to allocate some of my time, energy, capital in the future to do some of those things too.

Speaker B: Yeah, yeah, I think that was a good answer. But yeah, I mean, you know, I always just put people to like, their personal finance subreddit, and then they always come back to me and they're like, that's not useful. What should I do. And I'm like.

Speaker A: I don't.

Speaker B: I'm a venture investor. I'm not a financial planner. But I think it's a great. It's a great to think about it, reverse engineer what you want your future to look like, and then also think about your interests and allocate accordingly. Cool. Last section here of our. Of our show. This is going to be lightning round. First question's easy. The rest of the question is a little harder. First question for you. What food would you eat if you could only eat one food for the rest of your life?

Speaker A: Oh, All right. I have, like a. I have a basic answer, and then I have a. I'm gonna have an answer twice. So I'm a huge. I love pizza. It's like living in New York is. Is a, uh. I'm in the best place in the world to. To have every different version of it. So that's cheating answer because I could have so many different varieties of pizza. So that would be the. That's the easy one. But I think the one that's. That, uh, immediately came to mind was there's this dish that my. My grandma makes, this, like, shrimp curry dish, which I absolutely love. I have close to been able to replicate it on my own now. And it's like ginger garlic, chili shrimp, and it's a curry. And then I eat that with, like, rice. It's, like, amazing. I can eat them every day. And I. My. My rendition of it is like 85% as good as hers, and I still love it, so it's great.

Speaker B: I gotta. I gotta try yours and grandma's. That sounds incredible.

Speaker A: Welcome anytime.

Speaker B: All right, so we're gonna go some harder questions here. What is the hardest lesson you've had to learn in your career?

Speaker A: Hardest lesson. I think the hardest lesson that I've had to learn is that, uh, like, that I have that learning to trust myself and trust. Trust that, like, my instincts and my choices are actually ones, even if the external result doesn't always show that it was a positive outcome. Right. I think there are many reasons why businesses succeed or fail, and usually it's not all about the quality of the decision. Right. It's about resilience and reactivity and the ability to creatively navigate challenging situations and the quality of the decision. But the quality of the decision and the quality of the. The outcome aren't always correlated. And, uh, I took a lot of the negative outcomes early on in my career, personally looked inwards, which I think is appropriate at times, but it can be a bad Spiral if you do it for too long and take too much stock in every negative outcome. So I think that's probably the thing that took me a long time to get right, but life becomes a lot easier, uh, when, you know, especially when I've learned that like, luck is a pretty big part of it and like, as long as you do do all the right things in the right way, it's okay if things don't go out exactly as you thought they would.

Speaker B: Yeah. Yeah. Annie Duke calls this resulting. I don't know if she's still popular in the D.C. world. There was time right where that book came out, but I believe there's a lot of resulting in startups in VC as opposed to thinking about, you know,

Speaker A: and we do it all the time too. Right. It's like, hey, look, so and so was, uh, on this team at this company at this time, and so they must be great, right? And, and so of course we should back them right. When that's, that's, uh, that's not always the case. Right.

Speaker B: Yeah. 100. Okay, next question. What's been the best moment of your career?

Speaker A: I, I think, I think, uh, this is, this is a really, this is a really like, weird answer, I guess. But like, one of the things that made me most proud of myself and my career is there's. We ran my company for eight years as a independent, uh, company and then a couple years uh, at one drop. And you know, one of the things that I, I didn't fully appreciate while I was doing it was that we, we had created a really awesome group of people that, that work together, a community and, and like a pretty unique culture at the company. I'm like, oh, it never became like a, you know, thousand person company in a, a huge public success in any meaningful way. That way the crew of people kind of stuck together. Right. For a while after we finished, there was a Slack channel for alumni of the team. And now I've seen that like a couple of folks that work for me now work for companies in our portfolio. A lot of them are still friends. They hang out separately like eight years later, nine years later, and are really close. And I think it's because they, they won respect the other people and were super. They learned a lot from, from being around them a lot. But. But they also became really, really close personal friends too. So I think the, it's an extended moment. But, but seeing that every once in a while I went to one of our portfolio companies for a board meeting and one of my old employees was There. And it was. It was really awesome to see that. That, like, that community is still really strong and has continued to, uh, stick ten years later.

Speaker B: Yeah. Yeah. That's probably one of the most beautiful answers anyone's given to that question before. That's great. The. The. The relationships, you know, that we build, I think are more important than anything else, and it's. It is cool to see how they. How they evolve over time. Okay, last question for you. Who's helped you the most in your career?

Speaker A: A lot of people helped me a lot, but I'd have to say. I have to say my dad has probably helped me the most in my career. He's, uh. Uh, it's pretty funny that, you know, he's someone I always looked up to, but if you ask anyone, you know, that. That hears me, uh, on the phone with him now, they don't even know I'm talking to, like, my dad.

Speaker B: They.

Speaker A: It sounds like I'm talking to a buddy. Like, I was on the phone with him a few. Few days ago, and I hung up, and my girlfriend was like, oh, who was that? I was like, oh, it's my dad talking to him like, he's your best friend. I was like, he kind of is, you know, and one thing that he always taught me was to. To focus on the things you can control, right? Be calm when it is chaotic around you. Right? Have, um, the patience to. To realize that, you know, if you do all the right things and surround yourself with the right people, the best outcome that is possible will happen for you. And in the toughest moments, it was, like, really, really good to. To. To hear that. And. And in the. The best moments, he's, like, there to celebrate it when it goes really well. So he's been. He's been awesome. And what's. What's really cool is that when I was CEO for the first time, he was actually getting his first CEO gig around the same time, too. And so we were in the same place at the same time, though his business little bigger than mine. But it was. It was really cool to just, like, have a sparring partner and someone we could just, like, say, hey, look, this is happening with my management team. I'm, like, learning this about these characters, and it's like, oh, like, I just experienced this, like, three weeks ago. Let me tell you about what I did in that situation. And it was back and forth. So I think I learned a lot from him, and I hope he says that, uh, he's learned a lot from me too.

Speaker B: Yeah. Awesome. Well, another great answer from you and kudos to your dad. And thank you for joining and sharing so openly with us. Absolutely.

Speaker A: It was great.

Speaker B: Thanks again for tuning in to this episode of Money Moves. If you learned something new or just loved this episode, click below to subscribe. See you next week.