Podcast Summary: The Investor With Joel Palathinkal Episode: Mark Phillips: 11 Tribes
Release Date: July 30, 2025

Introduction

In this insightful episode of The Investor With Joel Palathinkal, host Dr. Joel Palathinkal engages in a profound conversation with Mark Phillips from Eleven Tribes Capital. The discussion delves into Mark's entrepreneurial journey, the inception and philosophy behind Eleven Tribes Capital, and valuable advice for aspiring venture capitalists.

Mark Phillips' Background and Early Career

Mark Phillips shares his journey from his upbringing in Chicago to his initial career steps.
“Chicago born and raised. When the Cubs won the World Series, that was a very emotional day in the Phillips household.” [00:43]

He began his professional life as a mathematics major, eventually transitioning into consulting with Accenture Strategy. His focus was on mergers and acquisitions within the technology sector, providing him with early exposure to how large corporations approach innovation and technological acquisitions.
“I ended up working with Accenture Strategy for about five years...help large corporations that were interested in acquiring innovative technologies.” [03:00]

Entrepreneurial Journey and Lessons Learned

Mark recounts his transition from consulting to pursuing an MBA at the University of Chicago’s Booth School of Business, where his entrepreneurial spirit was ignited.
“In my first year at Booth, I launched my own startup...an IoT hardware device for type 1 diabetics.” [05:00]

Despite nearing manufacturing, his startup was outpaced by a large health tech company that launched a similar product, leading to the crumbling of his venture within 36 hours. This experience was a pivotal moment, teaching him the fragility of tying personal identity to business performance.
“It really hurt. It stung really deeply...I've had very easily tied my identity and my value as a person and as an entrepreneur into the performance of that company.” [04:24]

Through counseling and mentorship, Mark overcame this setback, inspiring him to support other entrepreneurs facing similar challenges.
“I couldn't want to see another entrepreneur go through that same experience...that's when the idea of 11 Tribes was nascent and started to percolate.” [07:12]

Inception and Philosophy of Eleven Tribes Capital

Eleven Tribes Capital was founded with a mission to support entrepreneurs not just financially but also personally. Mark emphasizes the high failure rates of startups, attributing a significant portion to personal struggles of founders rather than just product or market issues.
“On average, precedent seed stage startup will fail 80 to 85% of the time...about 65% of the time that failure was completely related and attributable to people.” [08:14]

To address this, Eleven Tribes introduced a unique approach—allocating an additional 2% of their investment directly to founders for their mental and physical well-being.
“When we allocate $250,000, we take 2% on top of that. So in that situation, it's $5K and we give it directly to the founder for them to put towards their own mental and physical wellbeing.” [12:15]

Support for Founders: The 2% Commitment

Mark elaborates on the practical implementation of the 2% commitment, ensuring that the additional funds are used transparently by requiring receipts for expenditures related to well-being.
“We created an expense account within the fund...send me the receipt, show me the bill from your coach, show me the bill from your sleep specialist, and we will pay up to $5,000.” [14:56]

This initiative not only aids founders in managing personal challenges but also strengthens their commitment and resilience in building their startups.

Building and Raising Eleven Tribes Capital

Mark discusses the early stages of raising the fund, highlighting the challenges and strategies involved in sourcing capital without relying on public fundraising mechanisms like 506C regulations.
“What I did was I started syndicating deals for a little mini angel network that I had started to build in Chicagoland...” [27:58]

Through persistent efforts and building a track record with small investments, he was able to secure committed capital from high-net-worth individuals.
“We're sitting at nine and a half million dollars of committed capital from 73 investors...majority of our investors are what I would describe as high net worth individuals.” [27:58]

Venture Partner Program and Diverse Portfolio

To enhance deal flow and ensure a diverse investment portfolio, Eleven Tribes established a Venture Partner Program. This program leverages experienced ex-founders to source deals and provide industry-specific insights.
“These are ex-founders...they've got to be convinced about investing into the person and bringing an ecosystem of support around our entrepreneurs.” [46:22]

Mark explains that their portfolio diversity is maintained by intentional investment stages and geographic targeting, moving away from Silicon Valley to capitalize on decentralized opportunities.
“We're really intentional about the stage. We're very intentional about the geography...the number I saw was five years ago, Silicon Valley represented north of 80% of capital deployed. That number is down below 35% today.” [49:24]

Advice for Aspiring Venture Capitalists

Mark provides actionable insights for newcomers to the venture capital space:

1. Build Relationships:
   “Deal flow is about relationships. It absolutely is about relationships.” [45:16]

2. Demonstrate Value Before Hiring:
   “What they saw me doing was I was doing the job before I had the job.” [39:35]

3. Excel in Relevant Skills:
   Proficiency in Excel and financial modeling is crucial. Mark emphasizes the importance of understanding financial statements and valuation models.
   “Excel will never be a skill that goes out of style.” [41:24]

4. Leverage Existing Networks Creatively:
   Engaging with accelerators and establishing partnerships can provide proprietary access to promising startups.
   “We have a partnership with an accelerator...Ocean Accelerator...gives us really great deal flow that's truly proprietary.” [46:22]

5. Be Generous and Build Goodwill:
   “Use them broadly and generously. And what I think you'll start to see is those networks, those introductions to bigger firms that you want to get a hold of, those will start coming back to you many times over.” [52:05]

Audience Q&A Highlights

The episode concludes with a dynamic Q&A session where Mark addresses various listener questions:

• Sourcing and Screening Deals:
  Mark underscores the significance of having a robust network and being strategic about the stages and geographies of investments.
  “Be creative with it...venture partner deal flow source for us has been through the roof.” [47:12]

• Valuation and Financial Models:
  Addressing the need for rigorous financial assessment, Mark shares his approach using a probability-adjusted present value calculation.
  “We do our own assessment of every company we invest into...probability adjusted present value calculation.” [63:06]

• Reaching Out to Large Funds like Andreessen Horowitz:
  Mark advises focusing on building relationships and demonstrating value consistently rather than seeking immediate connections with large funds.
  “Keep taking those steps forward...there's no silver bullet here.” [56:33]

Conclusion

Mark Phillips' discussion offers a refreshing perspective on venture capital, emphasizing the importance of supporting the personal well-being of founders alongside financial investment. His strategies in building Eleven Tribes Capital through intentional relationships, diverse portfolio management, and innovative support mechanisms provide a valuable blueprint for both established and aspiring venture capitalists. The episode underscores that success in VC is deeply rooted in relationship-building, continuous learning, and a genuine commitment to empowering entrepreneurs beyond mere capital allocation.

Notable Quotes:

• Mark Phillips [00:00]: “It requires that motivation and it requires that sustainability. But if you're with a messy situation at home...business isn't going to make it.”

• Mark Phillips [08:14]: “On average, precedent seed stage startup will fail 80 to 85% of the time...about 65% of the time that failure was completely related and attributable to people.”

• Mark Phillips [12:15]: “When we allocate $250,000, we take 2% on top of that... give it directly to the founder for them to put towards their own mental and physical wellbeing.”

• Mark Phillips [46:22]: “These are ex-founders...they've got to be convinced about investing into the person and bringing an ecosystem of support around our entrepreneurs.”

• Mark Phillips [63:06]: “We use a probability adjusted present value calculation...each of those cash flows are worth something today.”

This comprehensive summary encapsulates the essence of Mark Phillips' conversation on The Investor With Joel Palathinkal, offering listeners both inspiration and practical strategies for navigating the venture capital landscape.