Tracy Chadwell: 1843 Ventures

Summary

Podcast Summary: The Investor with Joel Palathinkal

Guest: Tracy Chadwell, Founding Partner of 1843 Ventures

Episode Date: August 24, 2025

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Overview

In this episode, Dr. Joel Palathinkal sits down with Tracy Chadwell, the founding partner of 1843 Ventures, to discuss her journey from law to venture capital, the origins of her firm, and her insight into investing in aging and longevity technology ("SilverTech"). Tracy shares her views on cross-border investing, portfolio construction, thematic investing around aging, the challenges and opportunities in raising a first-time fund as a woman, and practical wisdom for emerging managers and founders. The discussion is open, highly practical, and candid, peppered with advice, war stories, and enthusiasm for making a real social and economic impact.

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Key Discussion Points & Insights

Tracy’s Background and the 1843 Ventures Origin Story

Timestamp: 02:13 – 04:33

• Legal & Business Beginnings: Tracy grew up in Rockford, Illinois, encouraged by her lawyer father to enter law. She later wished she’d done a JD/MBA given her affinity for finance.
• Transition to Finance: Started in merchant banking, gravitated toward the business side, took a business course at the University of Chicago, and found her passion for deal-making and modeling.
• Why ‘1843’?
  • The year Ada Lovelace wrote the first computer program; symbolizing a blend of analytical and creative thinking.
  • Practical: "It's impossible to trademark a name. So we really worked hard to find...something that we could trademark...1843 was the year that Ada Lovelace wrote the first computer program." (03:13 – Tracy Chadwell)
  • Numbers also sort high in databases, benefiting deal flow and SEO.

Transition From Law/PE into Venture

Timestamp: 05:00 – 08:25

• Legal Superpowers: Deep understanding of deal terms and documentation provides an edge: "A lot of newer funds don't focus as much on the documents and don't realize until it's too late what they do or don't have..." (06:24 – Tracy Chadwell)
• Dealing with Blessings and Curses: Knowledge can be both empowering and frustrating; sometimes ignorance is bliss when you know you’re missing certain rights but can't negotiate them as a small investor.

Developing Investment Perspective Through Global & Cross-Border Experience

Timestamp: 08:25 – 12:06

• Fund Work: Including cross-border US/China PE and legal work in Japan.
• Cultural Differences:
  • "They think on a hundred year basis." (11:00 – Tracy Chadwell, on Asian portfolio construction)
  • Asian investors tend to be more long-term and risk-averse compared to US investors.
• 1843 primarily focuses on US-based companies due to risk and complexity.

From Angel Investor to Fund Manager

Timestamp: 12:15 – 13:43

• Took a career break to raise children, entered angel investing as a way to stay engaged without sacrificing family time.
• Achieved a unicorn exit as an angel, which built her track record for launching her own fund.

Team Structure and the Venture Partner Model

Timestamp: 13:53 – 14:48

• Started 1843 as a solo GP, then added venture partners for reach and industry knowledge.
• Value of networks and collaboration versus "sharp elbows" in the VC community.

Building a Thematic Edge: Aging & SilverTech

Timestamp: 14:48 – 16:28

• Specializing in aging allowed Tracy’s firm to offer unique value and direct access to founders: "Now that I've actually been able to slide in with a small check ahead of other people, because they want my industry knowledge, which is great." (15:37 – Tracy Chadwell)

Deep Dive: The Aging & Elder Care Ecosystem

Timestamp: 16:28 – 21:38

• Caregiving and Education Gaps: Tracy lays out the intimidating complexity families face with elder care options, insurance, and long-term planning.
• Notable Portfolio Company: Carry Loop – provides care-coaching as an employee benefit, allowing workers to offload the logistical, financial, and emotional burden of caregiving.
  • “There’s 3 million women that just quit jobs because of caregiving responsibilities. I mean, it’s an absolute epidemic out there.” (19:50 – Tracy Chadwell)
• Social Impact + Returns: The sector is full of both impact and financial opportunities.
  • “This is not a sexy space like drones ... there’s a lot of opportunity for me and I’ve been able to take advantage.” (20:18 – Tracy Chadwell)

Opportunities in Mobility

Timestamp: 21:30 – 26:16

• Two Key Investments:
  • HopSkipDrive – Ride-sharing for children and elders, with a driver base that is 90% women. Shifted to an enterprise model, working with schools to transport at-risk and foster children.
  • May Mobility – Autonomous shuttles, including wheelchair-accessible options, with city contracts and real revenue, providing serial, safe, low-speed circuits in city centers.
  • “I hopped on board when they flipped to an enterprise model… customer acquisition costs are crazy…” (24:52 – Tracy Chadwell)

Longevity Finance & Fintech for an Aging Population

Timestamp: 26:17 – 29:07

• FinAI – NLP and voice-based banking for seniors, addressing the fact that those over 50 control 83% of US wealth but are underserved by digital-first banks.
• Challenges: Retirement planning is “spinach”—people know it's good but procrastinate due to friction.
• Loneliness & Monetizing Assets: Example of Silvernest, a roommate-matching platform for seniors (and tie-in with reverse mortgage companies).

Fund Strategy, Exit Planning, and Secondaries

Timestamp: 30:32 – 34:13

• Generalist Fund, Thematic Edge: Remain open to opportunity but led by actionable theses, adjust strategies based on exit market data.
• Stage Focus: Series A/B for lower risk and earlier exits; watch market values and acquirer appetite.
• Secondaries: Gaining traction as both an exit and entry strategy; Tracy is pursuing them proactively.

Building Edge as an Emerging Manager

Timestamp: 34:20 – 36:29

• Differentiation: Emphasizes narrative and relationship-building, especially with under-covered sectors (like aging).
• Practical Networking: Content creation, direct outreach, and simply showing founders you care.

Sourcing, Screening, and Networking Tips

Timestamp: 37:16 – 39:06

• Deep-dive independently into white-space areas, call executives in leading companies, and don’t just “take calls”—proactively seek out opportunities.

Advice for Fundraising—Especially for First-Time and Female Managers

Timestamp: 41:03 – 44:09

• Seed Stage Fundraising is Like Seed Stage Startups: “You’re saying, ‘Trust me.’”
• Start with warm networks: “There’s gold in your LinkedIn account.”
• Understand that fund investors often have non-financial motivations; they want to be involved in innovation, not just maximize returns.

LP Relationship Building

• No Formula, Numbers Game: “You don’t want to offer a steak to a vegan” (45:23 – Joel Palathinkal)
• Many potential LPs simply won’t be a fit for venture, and that’s OK.
• Personal Connections & Mission: “...it’s really about finding the person that is really interested, has an emotional connection to what you’re doing too.” (45:23 – Tracy Chadwell)

Institutional Path and Fund Structure

Timestamp: 51:53 – 52:54

• Closed Fund, Institutional Ready: Annual audits, closed-end structure – necessary for building credibility for future institutional LPs.
• Rolling funds are less common/preferable if aiming for institutional quality.

Angel Groups, Fund Economics, and LP Education

Timestamp: 50:34 – 51:18

• Angel groups are generally less likely to invest in funds—they want the thrill of direct investing. Management fees, carried interest may be a turnoff.

Community Q&A Highlights

• On SilverTech: Tracy coined the term to underline vitality and opportunity, preferring it over “Agetech” or “ElderTech.” (53:49 – 54:18)
• Fundraising Advice for Women: Perseverance, focus on personal relationships, and play the long game with LPs—sometimes they come in after saying no initially.

Advice & Memorable Quotes

• Timeless Quote:
  “Winston Churchill always said, ‘When you’re going through hell, keep going.’ That, honestly, has gotten me through so much, both personally and professionally.” (55:15 – 55:42, Tracy Chadwell)
• Practical Wisdom for Fund Managers:
  “Anybody can make an investment—that’s pretty darn easy...But it’s really getting out. Getting out is true art.” (31:10 – Tracy Chadwell)
• On Building Edge:
  “I chose the aging space because there weren’t a lot of people and I could have a voice in this space.” (34:53 – Tracy Chadwell)
• On Networking:
  “There’s gold in your LinkedIn account.” (42:28 – Tracy Chadwell)

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Noteworthy Moments & Timestamps

• Why the Name ‘1843’ Matters: 03:13–03:40
• Legal Superpower in VC: 06:24
• Cultural Insights on Asian Investing: 11:00–11:32
• Impact of Women Leaving Workforce for Caregiving: 19:50
• HopSkipDrive’s Pivot to Enterprise Model: 24:52
• LP Sourcing via LinkedIn: 42:28
• Signature Advice – Churchill’s Quote: 55:15

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Tone & Style

• Warm, Open, Candid, and Supportive: Tracy balances practical advice with levity and empathy, particularly as a woman in venture and as a champion for “unsexy” but critical sectors.
• Encouraging to Emerging Managers: Both Joel and Tracy maintain a collaborative, non-gatekeeping tone, offering concrete advice for listeners aspiring to enter or scale in the VC space.

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Summary for New Listeners

This episode offers an insider’s roadmap to building a venture career with both heart and rigor. Tracy Chadwell demystifies everything from legal fine print to aging tech opportunities, LP fundraising, and cultivating an edge as an emerging manager. The conversation showcases her deep experience, creative brand-building, and her commitment to sectors that blend financial returns with real social value. If you’re a fund manager, an aspiring VC, or anyone interested in SilverTech/aging investing, you’ll find both tactical and inspirational takeaways here.

Transcript

[Tracy Chadwell]

So that right now it's just running on circuits.

[Joel Palathinkel]

Okay.

[Tracy Chadwell]

Low speed, which is one of the reasons that they're able to be out there functioning safely. And they, they have a certain loop that they do. And it's like kind of like a bus. You can check.

[Joel Palathinkel]

Yeah. Kind of like a trolley kind of goes around and then it has stops that they can stop on. Welcome to the Investor, a podcast where I, Joel Palathinkel, your host, dives deep into the minds of the world's most influential and institutional investors. In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights.

[Tracy Chadwell]

That's, that's a. Actually a great thing for me to ask is who the audience is so I can make sure I say things that are interesting to them. Right?

[Joel Palathinkel]

Yeah, I think.

[Tracy Chadwell]

Just interesting to me.

[Joel Palathinkel]

Yeah, absolutely. Yeah. Well, you know, I'll. I'll try to keep this interactive so people can just chime in. The people that I see here are people who are aspiring VCs, you know, so I think that's definitely a hot topic. And then some of the people actually that I see here have also shown an interest in starting their own fund. So I think some things that we can maybe tee up is, you know, how did you transition into vc? I think you had a legal background first, right?

[Tracy Chadwell]

Very first. Yeah.

[Joel Palathinkel]

Yeah. So that was your first background. So maybe that's something that we can tee up. But let me formally introduce you. You know, we got tr. See Chadwell here with 1843 ventures. Right?

[Tracy Chadwell]

Yes, exactly.

[Joel Palathinkel]

I was afraid for one second because I was afraid that I messed up the number. Oh, I know. So I had to like flip back. And I actually did that the other day. I met. I introduced somebody and it was like, it was like the opposite, like sequence of words, but, you know, that's a good tee up, you know. So. Tracy Chadwell, 1843 Capital. Maybe we can start with just a brief synopsis of yourself, but Also, what does 1843 stand for? How did you guys come up with that branding and just kind of the inception of the fund.

[Tracy Chadwell]

Yep. And absolutely. And you know, it's such a blessing and a curse, this name, 1843. One of the reasons we chose it is it's impossible to trademark a name. And you really need to trademark, not so much that just so you can go after other people, but so that someone doesn't come after you and give you a cease and desist that you have to Fight after you've invested a lot, you know, in branding the name. So we really worked hard to find out something that we could trademark and every. Anything capital is already taken. We said, you know, I think we have to find a really meaningful number here. And 1840 and also too numbers get you to the top of the list. So that's.

[Joel Palathinkel]

Oh, interesting. You mean for SEO.

[Tracy Chadwell]

So. So if, you know, for deal flow, if you're at the list of all the woman funds or all the VC funds or anything, it is 1843 is going to be, if not the top, at the near, you know, near the top.

[Joel Palathinkel]

So I did not know that. So with fund databases, sometimes the numbers just show up first.

[Tracy Chadwell]

Yes, that's great. Exactly. So. So that's been really helpful and really side benefit of it. But you're right that the numbers do get scrambled and people will sometimes say, oh, Tracy, she's with 1828 Capital. That's fine, we'll figure it out. But 1843 was the year that Ada Lovelace wrote the first computer program. And AD is really interesting. Besides being a woman in the 19th century that was interested in computing, she was also Lord Byron's only legitimate daughter. So she had this sensibility of the beauty of poetry, of numbers and then also the analytical side. And I don't know, maybe some people on the call are familiar with Charles Babbage, who started the Analytical Engine, which is credited to being the forerunner to the computer. And she programmed that with punch cards that she had seen Charles Jacquard use punch cards, program looms to make his tapestries. And she said, you know, I think we can transfer this to the analytical kind of exciting.

[Joel Palathinkel]

So at least to me, yeah, no, it's really interesting. Yeah. I also appreciate, you know, ENIAC Ventures. Right. Because they're named after the ENIAC computer. So any. I'm a little bit of a nerd. So whenever anybody's kind of named after like a mathematical algorithm or anything that's tied to computing, hey, you know, you have me at. You have me at that word. So.

[Tracy Chadwell]

Exactly. But I think it kind of suits how we look at companies too, because we love the analytical side, but we also love the story. So it's a nice combination.

[Joel Palathinkel]

And that's really what venture is. Right. It's storytelling. I mean, the way that you get into great deal flow, the way that vc, I mean, the way that startups kind of captivate you is really the story. And then even as an emerging manager, as you're trying to help LPs get to know who you are. It's really the story. Right?

[Tracy Chadwell]

Absolutely true.

[Joel Palathinkel]

Well, let's start from the beginning. You know, maybe let's talk about your career. Very, very early. You were in the legal industry. And I've seen, I've interviewed so many VCs, so I've seen so many of them start from a legal background. And, you know, I can already see some of the superpowers that kind of feed into your current role as a venture fund. But maybe talk about where you grew up, where you went to school, and then, you know, just your legal career and how you pivoted into VC and why you even pivoted.

[Tracy Chadwell]

Right. I grew up in a small town in Illinois called Rockford, Illinois, and my dad was an Estates and Trust lawyer. And he used to always say, tracy, the only sure things in life are death and taxes. And so he really encouraged me from a young age to go to law school. And I really did enjoy it. But I always say if I have had any regrets in life, it would have been that instead of doing just a jd, I would have done a JD mba, which only would have taken another year.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

And would have been just a terrific background because I really have always gravitated to the finance side of things from my very first job, which I started out working at a merchant banking firm. And literally from day one, I said to them, this is great. I'm happy to work on all the documents for you, for all the deals, but what I really enjoy is the business side and can I learn financial modeling. And so they sent me to the University of Chicago for a short course business course on finance. And I really, really got excited by that side and never looked back. I really, I appreciate the education on the legal side and it really helps for me, reading documents. And I think that a lot of especially newer funds don't focus as much on the documents and don't realize until it's too late what they do or don't have in their documents. So, I mean, we look at everything holistically, right? Is it a great market opportunity? Is this a great team? Is this right timing for this? But then also too, how's the deal? Right? Is it. Is the valuation crazy? But then also to do we get preferences? Are we getting locked out of the preferences so that you don't realize at the end of the day can make the difference between just getting your money back or getting a multiple on your capital?

[Joel Palathinkel]

And I think that's a superpower that you would have that I think others may not have just Kind of having a little bit of that legal background, right. I mean, you can kind of really read through the lines and maybe understand that terminology where somebody else will probably have to hire a lawyer and, and you know, get some extra expertise. So.

[Tracy Chadwell]

Well, we, we do also have outside counsel because as good as I am, I know that all the time. And I love to know what current terms are. So it's nice to have that viewpoint of someone who sees it all, all day long. And I highly recommend that you hire outside counsel to review your documents, even if you're not the lead. The other thing is too is that even it's, it is a superpower, but it's not because sometimes it's also a blessing and a curse because maybe ignorance is bliss, some of this stuff, right? Yeah, a lot of times sometimes I'll know going into a deal, I'll go, okay, I know we're doing this and I know that we don't have provider rights, you know, and that is because we're small. I get really frustrated knowing that I don't have them and it has come back to bite us. So.

[Joel Palathinkel]

Sure, no, it's a good point. And so let's keep going. So, you know, you, you kind of studied these business classes, started kind of building more of that, you know, skill set, understanding finance and did some financial modeling. And then, and then what happened after that?

[Tracy Chadwell]

Well, when I was working for this merchant banking firm in Chicago, one of the things that they did do is that they raised a fund to do cross border work between the United States and China. So this was a private equity fund. I had worked in Japan, I'd worked for a law firm in Tokyo, so I spoke Japanese, so that's why I was hired in the firm in the first place. And that was my first introduction to the fund structure. And then when I worked at Robertson Stevens, I had a really nice introduction to both venture capital and to technology. Then I became a partner of a billion dollar telecom fund called Baker Capital. That was capital. So I've seen this.

[Joel Palathinkel]

Yeah, that's great experience. And what were some of the initial things that you've observed as far as just the dynamics with China, Japan versus Us as far as how business is done, how funds are ran and how have you seen that evolve over the last few years as far as just cross border transactions and how handled things are handled?

[Tracy Chadwell]

You know, this has been a 30 year perspective for me, which is nothing in terms of Asian history. You know, that's just a flip. And, but in that short time I have seen Some sort of love hate, Love hate. And it's a very hot and cold relationship that can kind of turn on a dime. So, you know, look, we have some great companies that are doing some really great things in Japan right now. And it's exciting, but we as a fund to date have only invested in companies that are based in the United States.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

And then want to take a lot of that extra risk. Right. It's hard enough to build.

[Joel Palathinkel]

Absolutely. Yeah. We co invest with a couple funds in Japan and also in Far East Asia, China, Mainland China and Hong Kong. And there's been a big initiative for Impact and Deep Tech. That's kind of what I've been seeing with just specifically the ones that we co invest with. There's also a pretty big hotel fintech ecosystem, especially like in Singapore and Hong Kong and then they got some of those big accelerators as well back then. On the private equity side, how do they like to think about portfolio construction? Do they think about real estate or are they also thinking about public markets bonds? Or is it mainly just straight up PE deals where they're trying to take up 80% of the company with debt?

[Unidentified Participant 2]

Right.

[Tracy Chadwell]

I think it's everything. Just like we do our portfolio construction as balanced as possible. The only thing that I have seen in the there's two things, the different mindset is that it's not short term thinking. We think on a quarterly basis. Right. You know, where's the quarterly reporting? How are we doing? They think on a hundred year basis. So when they're building positions in something, it's not with short term thinking. So that's number one. And then number two is there's, there is a certain amount of being risk averse so that you see them coming in sometimes a little too late on things like in Japan that people were coming investing in real estate in the United States when it was too late.

[Unidentified Participant 1]

Right, sure.

[Tracy Chadwell]

To a lot of trouble in their economy that still persists today.

[Joel Palathinkel]

Yeah. No, that makes sense. Yeah. Because it's an interesting portfolio construction. Right. Because as a VC you're thinking about how many deals you're going to be investing in every year for seven to 10 years. And then here you go, you got like a Japanese portfolio that's long term thinking. It's like how do you break that out into 30 years? Right. What's the IRR that you're expecting in 30 years? So that could probably be kind of tricky and kind of a unique culture that you got to integrate yourself with. Right.

[Tracy Chadwell]

It's a very long game of chess yeah, yeah, exactly.

[Joel Palathinkel]

So did the private equity game for some time, you know, worked at some massive funds and then is that kind of when you stepped into venture?

[Tracy Chadwell]

So I took some time off. I had two sons and I decided that I wanted to raise them and did everything that you should try to do as a mom. Work at the school, do fundraisers. I raised money for an art museum that we had in town and played a little bit of tennis, but really lost my mind. And so the way that I got back into work again without having to sacrifice time with my family was through doing angel investing. And at the time I was frustrated by that name because I thought, I'm a real investor, I'm not just someone dabbling here. But that created a portfolio and I was lucky enough. Actually, just this week it was announced that one of my portfolio companies that I invested in personally had a billion dollar exit. That's beautiful.

[Joel Palathinkel]

Congratulations.

[Tracy Chadwell]

Thank you. It's nice to be in the unicorn club finally. I've had a lot of successes, but this is, this is the first one, you know, I've had companies that have exited with a greater multiples, but this is the one that, you know, gets all the attention as a, as a unicorn. So it's great. And then on the back of that portfolio that I put together, I went and raised my own fund. It was really great timing. Women were getting more attention and for the first time we actually could raise money. So it was really exciting and I decided to throw my hat in the ring and it was successful. So.

[Joel Palathinkel]

Yeah. And you also, you also selected a co founder as well. Right. Didn't you have a, like a partner that you, that you collaborated with or were you, were you a solo GP in the beginning?

[Tracy Chadwell]

So I started the fund by myself. We have, I have venture partners and I have someone who was a partner who's no longer with the firm.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

Yeah. That's an interesting model too because I think, you know, you, the whole venture partner model, that helps you take the, you know, it helps you just scale completely globally. Right. If you, if you don't have the reach of East Asia or Europe, you know, being in New York or being in Montana, having people support you as a community base vc, I think is really helpful. And I think you've been, you know, really successful in building that. And, and then the community also would just deal, flow sharing. Right. Kind of having more of a collaborative approach versus the, the sharp elbow approach. I mean, people have told me in New York there's sharp elbows, but overall I haven't had Too many issues. So I don't know what you feel about the west coast versus New York or just, you know, in Canada or internationally as far as just kind of collab on deal flow.

[Tracy Chadwell]

Listen, we are in a highly competitive business and there are a lot of dollars at stake. And when you're in a situation like that, yeah, sure, of course you're going to see some sharp elbows. You know, whether you're getting cut out of follow on funding and a deal or, or you know, other things, it happens and you have eyes open. Again. One of the good reasons it's good to pay attention to the documents. Right? Because everything will always come back to the documents. And I've had situations where I've raised my hand to participate in deals and been cut out and it's, it's really frustrating. But it's one of the reasons that we decided to have a thesis around aging as well. Because then when you develop an expertise and you develop a real network in a space and you're seeing everything, you become much more value add to companies. And now that I've actually been able to slide in with a small check ahead of other people because they want my industry knowledge, which is great.

[Joel Palathinkel]

Yeah, I think that's a great, you know, and what you're referring to is getting access directly with the founder due to your relationship and then kind of your strategic credibility versus kind of the other VCs that might just be able to write a bigger check, but they just aren't connected in the, in the industry like you are. Especially with like aging tech.

[Tracy Chadwell]

Right, true. Yeah, absolutely. And it's luckily for me this space has just evolved recently. You know, we, we just recently started seeing companies that weren't just all phone based, you know, or gadget based. So with the advent of technology into this space, I've been able to get to know most of the players and participate and develop some nice relationships.

[Joel Palathinkel]

So let's unpack aging tech for a second because there's mobility, there's longevity, there's elderly care. And look, I mean, I'll be honest, I didn't fortunately have to deal with that yet, but I have family members that it's just really, really difficult on everybody. Not even just a person that has to deal with aging care, but how can that innovated on, I mean again, going back to the terms, who knows like what coverage they have. You know, you look at your insurance plan, like do you really know, you know, when you get older, like what treatment you're going to get? I think you have a good idea. And I think you're more worried about it as you get closer to that age. But I'll be honest, I don't really know, you know, what my parents, you know, what the options are. Right now I have to start thinking about a much more, more carefully. But, you know, do you feel that there's innovation as far as just kind of better knowledge on, you know, what your plan is like when you get older and how do you take care of your parents? And is that kind of a subset of something you're looking at as well? I guess just kind of elderly care and, and making sure that there's the right, you know, treatment and, and just long term care for those people as well. There's, there's, there's big insurance companies that are getting innovated by fintechs, but I don't know if that really covers everything. Right. I think there's some better billing, you know, platforms, there's millennials that can buy life insurance through an app. But again, you know, if you're, if your aunt or your parents are starting to get sick, it's like, how do you get the right education as far as like, what the best treatment should be? And I feel like for me, it's still kind of scary.

[Tracy Chadwell]

Yeah, no, absolutely. And I think what you're talking about there, we talked about three different things, which is caregiving, innovative insurance products for when you do need care, and also retirement planning and saving.

[Joel Palathinkel]

Yeah.

[Tracy Chadwell]

And all of that stuff is really intimidating. You're absolutely right. But it's all incredibly necessary. I feel like you just teed me up because we invested in probably the greatest, not probably, definitely the greatest company in the space. And it's called Carry Loop. It's a company out of Dallas and they are doing a fantastic job providing for employers the ability to, for their employees to offload all these responsibilities.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

So if you are, for an example, Proctor and Gamble is one of their clients. If you work for Proctor and Gamble, you are able to access Carrie Loop and use their care coaches to basically do everything for you. If you have somebody that needs some extraordinary care, whether it's a child that you had that was recently diagnosed with a disability, or whether it's your mom that has Alzheimer's and all of a sudden you're confronted with this and you're trying to get your head around getting your work done and you've got a lot of distractions otherwise, and suddenly you have to decide, does mom, can mom still live at home? If she does, are there sensors that we can put in. If she doesn't, should we move her to memory care? And how expensive is that? And how do we navigate Medicare and Medicaid? And how do we get her transportation to and from the doctor? And this is care coaches map out and help with everything. So it really keeps people productive at their job, which from a business standpoint, when we were analyzing the investment possibility, we looked at, there's such clear ROI here.

[Joel Palathinkel]

I mean, there's some people that have quit their job to do this. I mean, they've had to make this.

[Tracy Chadwell]

Joel, it's. There's 3 million women that just quit jobs because of caregiving responsibilities. I mean, it's an absolute epidemic out there. And the more that we can help people all around, the better. I think is.

[Joel Palathinkel]

Do you think also it's because people just. It's a sensitive topic to even talk about or even face. Right. I mean, I think part of it is a logistical part, but it's just nobody wants to talk about elderly care and how to take care of their parents and then even just their finances. Right. So I think that's kind of a very.

[Tracy Chadwell]

This is, this is not a sexy space like drones. So that's, I guess the good news and bad news. Right. Is that there's a lot of opportunity for me and I've been able to take advantage of that because there aren't big, huge funds saying this is the space we're going to be in.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

And it's also great when it's a win win. Right. If you can invest in companies that can help the world and also provide social impact. Because normally when you, you know, you and I have talked about this, right. When you think about impact investing, that's really hot in the private equ. But those deals don't really make any money. You know, I mean, you get, you get a great ESG score, but you're not getting the venture type of returns. So we can do both like you're doing, you know, with some of these deals.

[Tracy Chadwell]

Beauty Counter was both great for the world because it was toxic products.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

But you're right, a lot of these, and I'm confronted very often too with a lot of things that, okay, this, this particular company combats loneliness for the aging, which is fabulous and something that really needs to happen. And, and ironically, actually there is a code now in ins for loneliness. They have, the insurance companies have quantified it.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

But. But a lot of times you're right that there are better economic opportunities other than solving for that problem.

[Joel Palathinkel]

Yeah. And then I think another topic and theme and thesis that you guys focus on also, and I think you guys made some investments in this is the mobility space.

[Tracy Chadwell]

Oh, yes.

[Joel Palathinkel]

So the, so maybe you can unpack the opportunities with mobility beyond just picking your parents out up, right? Where, where is the, where's the bigger future? Is it autonomous? You know, driving that automatically picks them up? I mean, where, where, how deep and far can we go? Maybe in the next decade for mobility for aging tech?

[Tracy Chadwell]

Yeah, absolutely. When we looked at what the biggest problems were, and we spent a lot of time talking to people who run senior living facilities and the like and analyzing the market before we even made any investments in the space, the large markets are mobility caregiving, fall detection. These spaces are huge. And when you look at that, then coupled with what Joe Coughlin's doing at the MIT Age Lab, he went right in and tried to tackle mobility first too, because it's the largest and most compelling problem. We took two investments in the space. One which is in a ride sharing company called Hop Skip Drive that's located in Los Angeles. They drive both for children and for the elderly. And something that's interesting is that 90% of the drivers are women. Now this is great from both the perspective of the. Maybe the person might feel a little more secure having a woman driver, but then later down the road when we're talking about an exit. One of the difficulties that Uber and Lyft have had is acquiring women drivers. Less than 20% of their drivers are women. And so it would be nice for them to be able to acquire all these female drivers because it's 50% of the population that they've missing, which is, which is terrific. So then the other one is a company called May Mobility, which is incredibly exciting. And this is one of the ones that actually just just launched in Hiroshima, Japan.

[Joel Palathinkel]

Oh, wow.

[Tracy Chadwell]

Being here in the United States, in Indianapolis and Providence and Ann Arbor, Michigan, actually started by Ed Olson, who was a professor at the University of Michigan. So it's really exciting to be in Ann Arbor too. But this company is an autonomous shuttle that also has wheelchair accessibility, which was really important to me when we were analyzing the deal. But also too, it's one of the only autonomous driving companies that actually has revenue. They have paying clients in these cities. And the Hop Skip Drive offers you the opportunity to go point to point in a more expensive manner with a private driver. But the autonomous shuttles allow people to have mobility within city centers when they can't or maybe shouldn't be driving anymore.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

And they're probably generating revenue. I think the opportunity is more of an enterprise play, I'm assuming. Right. If they, they could probably provide transportation for a whole community of. Of elderly people to kind of get them from one place to another, take them to the mall or something like that. Right. Is that kind of the.

[Tracy Chadwell]

Right. You mean the main mobility of the Hop Skip Drive? Because right now main mobility is just so that right now it's just running on circuits.

[Joel Palathinkel]

Okay.

[Tracy Chadwell]

Low speed, which is one of the reasons that they're able to be out there functioning safely. And they, they have a certain loop that they do. And it's like kind of like a bus.

[Joel Palathinkel]

You can just kind of like a trolley kind of goes around and then it has stops that they can stop on. Right. Yeah, that's great. And then hop skip drive, it's more of a. Is it kind of an. Is it kind of like a consumer marketplace as well, or do they also do like enterprise stuff for schools as well?

[Tracy Chadwell]

So they, they do it's. And actually I hopped on board when they flipped to an enterprise model. Because the direct consumer, you know, I mean, I think that everybody today listening knows that the direct to consumer customer acquisition costs are crazy.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

It doesn't matter what you're selling. If you're trying to buy, like the game of, you know, dollar shave club, just buying all these Facebook ads and becoming successful is over. So you really have to be creative and innovative about how you acquire customers. And so hop skip drive had trouble initially. They had traction, but it was very, very expensive to acquire these. These clients individually. So they went headfirst into an enterprise game with schools. So they are driving at risk kids and foster children back and forth to school. And they have these. That sort of baseline now for the company where they have a great re and then guarantees for their drivers so the drivers know that they're going to be working. And so this is how they've been able to scale and have higher margins.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

Yeah. And it's repeatable too, if they can prove that they're repeatably just solving the problem that the schools normally have to deal with. I mean, they essentially are replacing the school bus, I guess. Right.

[Tracy Chadwell]

Yep. And Covid obviously was tough for the company, but have absolutely recovered. And more 100% of their clients have renewed. Renewed, which is great. And a large, large number of them have renewed at a higher value, which is.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

What's your thesis? So that's interesting. So that was really helpful with mobility. What's your thesis on people just living longer and their bank Accounts lasting longer. Right. So some people have called that longevity finance. Right. You're not gone at the age of 85 anymore. People have like another 15 years to accumulate wealth. Right. So have you guys looked at the fintech space when it comes to longevity? And what do you see that's innovative on that side and where is that heading?

[Tracy Chadwell]

And that's one of the reasons we made the investment in FinAI, which is a natural language processing company focusing on chatbot technology. But it's also the underlying, all the underlying analytics for using voice. Because I think eventually we're going to be. Demographic is aging. We're going to need to be doing our banking by voice. And this is one of the few companies that, which is really great. And fintech is definitely an area that we are very interested in and we have some investments in, in terms of retirement planning. You know, I think in terms of just investing the thing. Well, and I think, I don't know if everybody knows here, but people over 50 control 83% of the wealth in the country. So it's a ridiculous amount. It's almost all of it that is still in the hands of sort of either wealth managers or places like Schwab, which I'm a big fan of, but, but they're not in the betterments and they're not in a lot of some of these other digital banks. So it's been a conundrum and it's something that we are, we are spending a lot of time on and trying to figure out maybe on the retirement planning, although we have seen that it's been really difficult to get traction and people spent a ton of money trying to solve this.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

And I call it spinach. It's something that it's absolutely necessary for you. You really need it. You know, you need it, but you're absolutely, completely unwilling to upload all of your documents. Yeah, it's just not a high enough priority for people right now.

[Joel Palathinkel]

So another huge thing is decumulation. Right. So as you're getting older, you want to try to take money out. Right. Because you may not be earning. So if you, if you take the wrong amount of money, you just get penalized on the tax strategy. So I haven't seen too many companies really tackle decumulation. How do you pull out your money the most tax efficiently, how do you donate to charities, you know, kind of all that stuff. So I wonder if you've seen anything on that front because that also kind of is the same.

[Tracy Chadwell]

Nothing compelling. Yeah, not yet. But I think that we're definitely moving towards that space. You know, I had a personal investment in a company called Silvernest. And this was kind of interesting because it gave people the ability to have a roommate. So they have their largest asset right as their house. And this gives them a way to monetize it when they no longer had income. And it was really interesting because the large investor who eventually became an acquirer was a reverse mortgage company.

[Joel Palathinkel]

Interesting.

[Tracy Chadwell]

So, you know, people weren't, maybe they were defaulting on the reverse mortgage because they had taken money out and they said, okay, you've done this. Guess what? We have a good way for you to make some money is to pay us. Here, take a roommate. That's, that's a great way to solve loneliness too. So it was a good company all around.

[Joel Palathinkel]

And then the, the population for this is people that are, may have lost their, their partner. I guess they're later in their age and they're kind of living on their own.

[Tracy Chadwell]

Absolutely.

[Joel Palathinkel]

They want a companion. Yeah. I remember my wife and I, we would, we would actually go to like an Airbnb and we would be at these, we would pick a house that had some empty nesters and it felt like we were visiting our parents. They would get so excited when we wake up. So I feel like having some type of sense of purpose, having, you know, the ability to host guests or even just have a roommate, I think could really, you know, boost the morale for, for the people that are going, you know, that are kind of dealing with loneliness at that age. Yeah. And, you know, that's great. So you guys are on, you guys, we were discussing this earlier too. So you're thinking about fun too and kind of on the, on the road, kind of, you know, working on that. Has your, has your thesis evolved from the current thesis? Have you expanded it or are you really staying laser focused on the same focus of silver? So it's silver tech and then any other themes that you guys are really excited about as well?

[Tracy Chadwell]

So we, we are a generalist fund. I don't believe in strategy taxes, but I do believe in investment thesis. And those can change. Yeah, those change based on where the investment appetite is. Because also too, like I always say, anybody can make an investment that's pretty darn easy. Although it's hard to get into the good ones. But it's really getting out. Right. Getting out is true art. And so we keep tabs. We talk to a lot of bankers, a lot of strategic acquirers to keep tabs on their appetite and who's buying what, where at what value?

[Unidentified Participant 2]

Right.

[Tracy Chadwell]

Because that also can dictate to us where we can invest in a company. What's the right pricing? Because where are we going to exit? And I remember when we started the company, the median exit price for venture backed deals was $56 million. And so, okay, you're seeing all these deals done at 80 million or 100 million valuation, you better be darn sure that company's going to exit for over 2 billion because otherwise you're going to be able to get a great return for your investors. And so that was the strategy behind Series A, Series B also too, because 90% of seed stage deals fail. So even though we are, are small and are not the lead on stage deals, what we're trying to achieve is the best above market returns we can. And so we have that in series A and Series B because it still allows you an early exit to do well, but it also gives you the Runway but the lower risk profile.

[Joel Palathinkel]

Yeah. Have you guys seen any, have you guys entertained, you know, any of the secondary opportunities? And you know, do you, do you see some of the, you know, emerging funds kind of get out quicker with the secondaries? Because some of these founders, they want to buy a house, you know, some of the funds that are, that were in earlier, they want to cash out and provide liquidity. So there are some secondary opportunities. So are you seeing some funds get out quicker, you know, leveraging that mechanism? And then also do you see that as an entry point as well, using secondaries to get into some really hot deals? And look, I've personally gone and gotten into a couple secondaries that I've been excited about. But you know, we'd love to hear your thoughts on exit and entry with secondaries.

[Tracy Chadwell]

No, absolutely. I think it is a great way to exit and we haven't had that happen in our portfolio yet, but it very well could in terms of as an entry point. Actually, it's ironic that you bring this up because I'm looking at two right now that we're not. So my philosophy is it's not the calls you take, it's the calls you make. So these are not opportunities that were brought to us, but these were companies that I really, really like and have said to them, look, we'd be willing to do a secondary in your. Because we want to, we want to have a placeholder here.

[Joel Palathinkel]

So I totally agree. That's the best feeling for me, to be honest, Tracy. So when I feel lucky that I was able to even get into the deal, like for me, that feels magical. Because I'm like, wow, you know, this is a really, really oversubscribed deal. But if you feel that you're able to kind of build that relationship and that trust with the founder and add value in some way, and then you're in. You're like, wow, you know, like. And that exactly kind of relates to the quote that you mentioned earlier. It's like you took that deal, you know, you tried to try to get access and you try to build. Because a lot of times, right, it's the founder trying to get you in. And even if you're an emerging manager, a lot of times your check is the smallest on the cap table, you know, so from an optics, from an optics standpoint, it always doesn't look the greatest, right, if you got the smallest check. But if you're able to build that relationship and build trust and they bring you in, it's like, wow, that's. That's amazing that they let us in.

[Tracy Chadwell]

I know, but I think it's so competitive now. We have so many new started. I think you really have to build a reputation for yourself.

[Joel Palathinkel]

I agree. You and I talked about Twitter, vc. Let's talk about Edge. What do you think can help? Because these days, just being fintech, I mean, you and I are both generalist funds, right? But the emerging manager program that I have, I have, like, you know, people were joking with me because I got like five fintech emerging managers, right? So just being fintech isn't enough. So what is it? What. What can you do to differentiate yourself? And what are some of the things that you've learned to. To do and which, which things don't matter, right?

[Tracy Chadwell]

Well, that's like, we're interested in fintech, but I'm always more interested if it has an aging angle, right? And I chose the aging space because there weren't a lot of people and I could, I could have a voice in this space. And I think that you can differentiate yourself by being on Twitter, by creating content, by creating things that are valuable. And like doing podcasts, I think is a great way to differentiate yourself and to have access to people. But then also, too, it's just. You just can sometimes just ask, too. You can just bring them up on either LinkedIn or try to get their email address and say, look, I've noticed something, something very important about what you're doing or about your background. This is why I'm interested. And I think, I think that first and foremost, founders want to know that you care, right? Understand their business and that you care and that's a good way to differentiate yourself because a lot of people don't take that extra step.

[Unidentified Participant 1]

Sure.

[Joel Palathinkel]

Yeah. And I think it's on both sides. I think it's with LPs and with founders. They just, they just like working with people that they like working with. Right. So they, if they, if they just like you and, and they want to, to join the journey, take that journey with you, then I think that's much more than posting on Twitter regularly two to three times a day. So I think it's just sometimes there's those intangibles that you really can't explain. Right. It's just kind of, hey, they really love your mission and your journey and they're going to take a bet on you or they're going to take your money. Right.

[Tracy Chadwell]

And building relationships is really important. And that can be done at a cocktail party or it can be done over zoom. So as much as you want to build your external profile, I think what we're talking about is it's not necessarily just about. You make it about them.

[Unidentified Participant 2]

Right.

[Tracy Chadwell]

I remember Bill Clinton said, the second you forget that it's about them and you've lost the election. And I was just really, really lucky to be able to invest in. The founders of Teladoc have started a new company that's Teladoc 2.0, called Recurrence Health. And this would never be a company that I would think that I would have access to, but I did because I'd gotten to know the founder, Michael Gorton, because he was on the board of another company I was invested in and I developed a relationship with him and we're super excited to be a part of it now.

[Joel Palathinkel]

No, that's great. And maybe you can tell us a little bit about your sourcing and screening best practices and any recommendations because we do have some aspiring and emerging managers, Managers in here. So, you know what, what are some ways that, that have helped you in terms of just finding great deals? You know, I think we talked about relationships and collaboration. Any, any tools beyond Crunchbase and Pitchbook and any other frameworks that have helped you find great founders?

[Tracy Chadwell]

Oh, absolutely. Well, I think first of all, it's, it's a great idea to develop the thesis yourself. So figuring out, out where we're in fintech, you think the real opportunities are left if fintech is something, you know, we're in healthcare, we're in retail, where, where, where's the white space? So I think you need to, instead of, you know, we're also flattered when so many people want to talk to us and, and share their ideas and we get very excited about what we hear. But if you haven't canvassed the environment yourself for that space, and that's one of the reasons we became much more thesis driven, is because if you don't know what's happening in the space, you don't know whether it's really truly a good idea or not. I would encourage everyone to step back and even take two or three months and sit down and really figure out where the white spaces are that they want to attack and then go after the companies in that space and start even sometimes with the hottest company in the space and call up the CEO and say do you have 10 minutes? I'm really looking for. I'm sure you get a lot of people pinging you because they do. The famous CEOs will get a lot of new founders coming to them, asking them to introduce them to their VCs or other people that they know. So those people are going to be a great source of deal flow for you. So that's that it. Like I said before, it's the calls you make, not the calls you take. Right?

[Joel Palathinkel]

Yeah, no, really good advice, really helpful too. I'll open it up for questions, see if anybody wants to rattle off any questions. If not, I'll still, you know, try to, to bring up some helpful questions to tee up the discussion. But I guess anybody in the audience have any questions about, you know, Tracy and her background and just breaking into vc.

[Tracy Chadwell]

Hi.

[Joel Palathinkel]

Hey Anu.

[Tracy Chadwell]

Hi Anu.

[Unidentified Participant 2]

How are you doing? Tracy, that it was so wonderful to hear, you know, a woman in VC and your, your journey really resonated with me because a similar journey so I began in tech company. We did a overseas stint so you know, kind of spent some time there, ran my company but you know, kind of my kids took front seat and then came back, started doing angel investing and now you know, I really want to get more into putting VC at the forefront. Right. We see. I've always been interested in startups so I'm in Houston, Texas so I look at a lot of energy companies and that's you know, an interesting space. But I'm a generalist. Right. So I kind of look at companies in the digital and SaaS space and I was curious, you know, you talked about, you know, Joel asked about the two companies. I was very interested. I looked at May Mobility, a very interesting play. Definitely, you know, going into the self driving and supporting the older set of as well as I think with working Individuals, it's great to have that support. So I'm kind of curious. You don't have a very tight thesis, which is great, I think, as an investor, because then you can kind of find where the opportunities are. But when raising your first fund, how did you go about and how did you convince your LPs and what were some of the challenges? What are some tips that you have in terms of raising your first fund and then follow on?

[Tracy Chadwell]

What matters?

[Unidentified Participant 2]

Is it how you did in that first fund? But it's a really short time because we see journey, you know, seven, eight years or what matters. Yeah, right. So when you're fundraising and how did you go about finding people to bring into your team? So, you know, I'd love to Hear your. With 1837.

[Tracy Chadwell]

Sure. And it's 1843. I know. You're close enough though. So anyway, those are all really, really great questions. And I think that some of the things that we don't think about when we're starting funds is that you're sort of the same stage as a seed stage company. And sometimes I would, you know, I get turned down by an institution. I'd say, well, I agree, I wouldn't take a chance on me either at this point because it's so early, you know, but at the seed stage company stage, this is what I tell the founders. And at the first time fund stage, it is almost impossible to get institutional capital. And so there are now seed stage investors for VCs for the founders, but there's no real seed stage fund investors, which actually there's probably a market opportunity for that.

[Joel Palathinkel]

You can't pull a dropdown in Pitchbook and look up micro lp. It's just not one of the drop downs.

[Tracy Chadwell]

No, exactly right. So just like a seed stage company, I would, I always tell the founders, you need to go after the person that is really trusting you and that knows you well, because those are the people that at this point you're still saying, trust me, whether it's a company or a VC fund, you're saying, these are the things I'm going to do and you, you should just trust me. And I think when you get to now for Fund 2 and then for fund free for me, I've done it, I can say, look what I did versus this is what I'm going to do. So I really would start with, I always tell both founders and new managers, there's gold in your v in your LinkedIn account. So what you need to do is go through your LinkedIn account and maybe they're not the investor, but someone they know might be the investor and say, these, these are the things. This is the opportunity I'm going after, and here's why. I'm the best person to do it. And if you know someone in your network, I would love to talk to you, talk to them, or even for somebody to give me advice. So that is, you'll be so surprised because there'll be people that you would think, oh, this person does a lot of investing, so they're, they're probably a sure bet. Or, oh, this is another one. This person has so much money, why wouldn't they invest with me? Well, guess what? That person might just really be comfortable in fixed income and cash. And you can't blame them. That's their own personal choice. It doesn't matter if they have $10 billion. So there's going to be people, too, that you, that you sort of just meet, but it's going to be through someone who knows you because you have to have that trust factor that you're going to be surprised, will just write you a check right away. People that would do it over the phone. And it always dumbfounded me, but those are some of my greatest investors that I'm closest to now.

[Unidentified Participant 2]

Awesome.

[Tracy Chadwell]

Awesome.

[Unidentified Participant 2]

Thank you so much for sharing.

[Joel Palathinkel]

Oh, yeah, and I think we talked about this too. I mean, it's, there's no real formula or correlation. I, you know, I think we referenced on one of our discussions, Tracy Elizabeth Yin's blog. You know, I think she Talked to like 800 LPs, and some of them invested and some of them didn't. And she could not find some pattern to derive from that. She's just like, look, there's no correlation. So it is very much, you know, a numbers game. It's a sales strategy. You got a pipeline and, you know, you don't want to, you know, the quote I've heard in the past is you don't want to feed a, you know, you, you don't want to offer a steak to a vegan, right? If they focus, if a real estate family, they're not going to care about Venture because they just don't get it. And I've actually done a couple syndicate deals and I've talked to a couple LPs, and they're like, joel, I just don't get Venture. It doesn't make sense. Like, I can't sell my shares. I can't, like, just go on the app and, you know, just cash out. I'm like, no, it's, it's so, so there's a, there's an education behind it too. And I think there's just some people that just don't have an interest in it and it just isn't aligned with the strategy. So it's like, it's very tough to try to feed it to them and continue stuffing it down their pipeline if they don't care about it. And it's not.

[Tracy Chadwell]

You are absolutely right. So it has to, I always say too, look, if someone really wants an above market return, they should have invested in Apple last year because, you know, it's a great company, great balance sheet. You get 80, 80% return on your money and your liquid. Right. So, so this is an above market return, but there also has to be a secondary reason for the person to invest. Like you said, said the person who, who has real estate or I had a friend who I still love and talk to a lot who had sold a lot of Taco Bells and I kept trying to get him to invest in the fund. He's like, Tracy, I just don't understand venture. And so it's, it's really about finding the person that is really interested, has an emotional connection to what you're doing too. And that could be just wanting to be involved in interesting, exciting new technology companies because that's very appealing for a lot of people. And I think especially now, and this is the golden age of venture because people are seeing tons of exits, there's still a lot of cash on the sidelines. And I don't know if you guys saw, but in 2008 there were a thousand family offices and now there's 8,000.

[Joel Palathinkel]

Wow.

[Unidentified Participant 2]

Wow.

[Tracy Chadwell]

Yep. So there is tremendous amount of interest in getting into this game. You just have to find the pipeline of people that have the ability and the interest in investing in you. And that could take 300, 400 phone calls or meetings or.

[Joel Palathinkel]

And you know, part of that increase of families is the next gens. Right? So we actually had a NextGen family come in last night to our Emerging Manager program and he was like, look, you gotta, you're gonna have to slide into these DMs. You know, you can't tap that database that every single fund manager has that they bought from, you know, familyoffices.com. no, just no, no disrespect to, you know, familyoffice.com or any of these databases because everybody's hitting, everybody's pounding some those same databases. So it might be innovative to kind of comment on, you know, you know, a single family office is the next gen, they have an interest in sailing. Right. And maybe you comment on something that you resonate with too. You don't want to be fake about it, but, but slide in, slide into their DMs, right. Message, message them and kind of take that conversation offline from Instagram, from, from all these other digital channels. So I think you have to kind of think a little bit out of the box.

[Tracy Chadwell]

And also too, there will be people that say yes upfront that will not end up investing. And that's incredibly disappointing. But then there are also two. I always say don't discount someone who told you no because if you continue to prove yourself and do what you say you've done, even though they said no originally, you might actually be successful with them after you've had a few more successes under your belt.

[Unidentified Participant 1]

Sure, yeah.

[Joel Palathinkel]

The average is 19 months. So that translates to at least a couple years of relationship building. And you know, I mean, the institutions you probably already know, you know, probably went through this, Tracy, but they want to see a full, fun life cycle as well. So they want to see the whole progression of the, of the life cycle and then, and then, hey, let's talk in fun too. So I think it's also important. Would you agree to meet those institutions now because it takes a whole decade for them to even observe what you did.

[Tracy Chadwell]

Yeah, I think so. I think. But I would be selective about it too because you can waste a ton of time with, with institutions and they want all these specific reports and they want things printed out a certain way.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

And I think that the, you know, for the, if a fund is under $100 million, look, there are people that go out and raise $100 million first time funds, but they're generally a team that comes out of Sequoia or, you know, another front gate or something, you know, really well known fund that they've known already because they, they've been an LP in that well known fund. But if you're just starting out, I think institutional capital is almost a unicorn. It's just. So we have one institutional investor in our first fund. I had expected them to be the first one in because they're strategic. They were from the state where I was based and they ended up being the last investor and we had to, we had to reopen the fund to like an inch. Sure. So, so I would just, I think you're better off if you're raising a first fund or even a second to talk to people who are just a little more aggressive, which is an individual or and you know, and there's a lot of people out there that have had liquidity events with startups or are working for large technology companies that are making a lot of current income. And that's another thing too for the, if you're, if you're welcoming smaller checks into your fund, say the smallest check size in ours was 100. I would say to people, don't think of it as 100,000, remember, because a lot of people have not been in a VC fund before.

[Joel Palathinkel]

Yeah.

[Tracy Chadwell]

You know, you don't, you're, you're not giving me the hundred thousand right off the bat. Some people choose to do that. I don't, I do the capital calls and the irr and I, so I said to them, if you're committing 100,000, think of it as approximately 20,000 per year for five years. And people that, they're like, oh, I can do that.

[Joel Palathinkel]

Yeah, it's like one angel investment. Pretty much.

[Tracy Chadwell]

Yep. Yeah, exactly.

[Joel Palathinkel]

What do you think of angel groups? Do you think they, they are a good community to build LP relations with or do you think they're trying to just get into the deal or have you seen that be a good community?

[Tracy Chadwell]

I think it's tough because people are in angel groups for the passion of being involved with the startups and the excitement of it. So if you ask them to be in a fund, you're taking away the. What's the best part?

[Joel Palathinkel]

Well, I feel like they may also kind of get irritated with the, you know, the management fee and carry. They're like, why do I need to pay Carrie? If I can just go direct.

[Tracy Chadwell]

Yep. Although we're European waterfall structure, so I would always remind our limited partners that they are getting back all of their dollars plus their fees.

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

See any carry split.

[Joel Palathinkel]

Yeah. And that goes back to the terms. Right. Understanding the terms and the devil is in the details. So yeah, this is really helpful. So anybody else have any, any questions for Tracy?

[Unidentified Participant 2]

One follow up. So, you know, you give very nice details about the first fund have raised. Are there any tips about should it be an open fund rolling? Because you said, you know, with your largest institution you had to reopen the fund. So what's the advantage or not of having sort of an open rolling fund or a close, you know, what, what would you.

[Tracy Chadwell]

I, I am hopefully on a path to building an institutional quality product and they're most comfortable with the closed end funds. So that's why I did. Even though I'm small, I have done everything by the book and we even have annual audit that I pay for every year because we want to be institutional quality as we move along.

[Joel Palathinkel]

Okay, that's a good, That's a good piece of feedback and a good mindset to have too, because I think when you get to that institutional path, you know, you want to have that roadmap. Right. So I think some of the institutions, even if you're talking to them now, they're not going to invest. They kind of want to know what your framework is for, like Fund 2, Fund 4 and beyond. So I think already doing the audits, even though it costs money and already kind of having that structure in place, I think is really a good best practice to have instead of kind of saying, hey, we're going to be angels first and do syndicates and, and, and then go institutional at some point. So I think, I think you hit it right on the head as far as just kind of the roadmap and, you know, having all the infrastructure in place. So.

[Tracy Chadwell]

Yeah.

[Joel Palathinkel]

Yeah, that's great.

[Unidentified Participant 3]

I have a quick question. Yeah, and I'll make it. I might get quick because I actually have to draw in four minutes, but. Tracy.

[Tracy Chadwell]

Yeah.

[Unidentified Participant 3]

Again, great to see another woman vc. I've spent a lot of years, excuse me, in management consulting, but I want to be able to make this transition as well. Ben Angel's class for about a month or two. I love the term SilverTech. That's the first time I've heard it, but I'm posted in the chat. I dealt with the unenviable and emotionally and mentally taxing feat of trying to get my mom into assisted living last fall. So everything you talked about, I can absolutely see. Say there's a market for that. There's a market for having a service, for what I went through, to have me not go through something like that. And then I got really excited. So I'm curious about this term silver tech. Did that exist before you? Did you coin that? Did you. Getting people excited about it, like, tell me more about SilverTech.

[Tracy Chadwell]

I coined it and it's sort of starting to stick. Although I would say people are more familiar with age to tech or elder tech, which. Or senior tech, they're all interchangeable. But I really like silvertech because I feel like it reflects the vitality and the opportunity in this space. You know, it's not just all about things for, you know, skilled nursing facilities. We're talking a lot of really exciting longevity opportunities as well.

[Unidentified Participant 3]

Yeah, I totally agree. And even assist living or wherever it's. But it's like, which one do you choose? Why what are the criteria? And then now I'm even dealing with. Now she's there, there. But how do I know that they're doing what they say they were going to do? And occasionally we'll have somebody else go in there. So I'm already thinking about, like, other opportunities for you. So.

[Tracy Chadwell]

Hear you.

[Unidentified Participant 3]

Yeah, that was. That was.

[Tracy Chadwell]

So.

[Unidentified Participant 3]

It's. It's just really good to hear your story. And unfortunately, I know we don't have much more time and I have to drop to ask more questions, but it's just great to hear your experiences. So thank you for sharing with us today.

[Tracy Chadwell]

Happy to do it. Yeah. Thank you.

[Joel Palathinkel]

Yeah. Tracy, thanks a lot for coming. It was really great, you know, learning from you and all the storytelling. I always ask one final question at the end. Any nugget of advice that you got from a mentor or family member that you want to share with us?

[Tracy Chadwell]

Well, I always say that my best mentor is Winston Churchill. And, you know, when people say that they don't have access to a mentor, I say, do you? You have access to a library?

[Unidentified Participant 1]

Sure.

[Tracy Chadwell]

Because there's so many great biographies of people that have done their, you know, done that and been there before you. And Winston Churchill always said, when you're going to. Through hell, keep going. And that. That, honestly, has gotten me through so much, both personally and professionally. You know, we're all going to have highs and lows, and when you're in those lows, if you just put one foot in front of the other and keep going, you know, some good stuff is around the other side.

[Joel Palathinkel]

I love that quote. Yeah. I think it's. That's just our whole ecosystem. Right. I mean, dealing with founders, being an emerging manager, we're essentially founders, too. Right, so.

[Tracy Chadwell]

Exactly.

[Joel Palathinkel]

So I think that's. That's very encouraging. And it helps you just light that fire again if you don't have it and you need somebody to light it for you. So. Yeah, thanks for. Thanks for doing that for us. And I hope you make it back to New York soon. So catch up. You're still in beautiful Montana, right?

[Tracy Chadwell]

Yes. Which is great.

[Joel Palathinkel]

So cool. Hope we get to do a coffee when you come out here, and I don't know, maybe I'll be in Montana sometime.

[Tracy Chadwell]

Sometime sounds great, Sam.