Capital Series: Christian Hernandez, 2150
This episode is part of our Capital Series hosted by MCJ partner, Jason Jacobs. This series explores a diverse range of capital sources and the individuals who drive them. From family offices and institutional LPs to private equity, government funding, and more, we take a deep dive into the world of capital and its critical role in driving innovation and progress.
Christian Hernandez is a partner and Co-founder at 2150. 2150 is a venture capital firm focused on the built environment. They're building businesses that are changing how our cities are designed, constructed and powered for good. They hunt for “gigacorns,” which they define as the technology champions of the coming decades with the potential to benefit billions of people, create billions in commercial value, and lower gigatons of emissions.
Jason and Christian have a great discussion in this episode about Christian's journey from being a technology operator to a generalist technology VC, and then his awakening about the magnitude of the climate crisis and his path to building 2150, from meeting his co-founders to the initial thesis to their approach to the different twists and turns on the way to getting that first fund raised, and of course where they're heading in the future. Enjoy the show!
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Episode recorded on Sept 26, 2023 (aired on Oct 4, 2023)
In this episode, we cover:
[2:16] An overview of 2150 and Christian's background
[8:51] Early days of starting the firm and its focus on the built environment
[16:22] Christian's views on structure, stage, et.c plus how they evolved at final close
[20:34] His thoughts on portfolio construction generally
[23:39] 2150's reserves and follow on
[26:57] Christian's thoughts on extensions, down rounds, and pay to play
[30:22] How he measures impact and the balance between hardware and software
[33:49] Advantages of being Article 9 Fund
[35:08] Christian's early LP targets and how they played out
[37:47] Risks and what 2150 is comfortable with
[42:22] The firm's impact framework
[44:31] The role of brand building and how Christian thinks about deal flow
[46:26] The launch of Urban Partners
[52:37] An overview of "gigacorns"
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Jason Jacobs (00:00):
Today on the MCJ Capital Series, our guest is Christian Hernandez, partner and co-founder at 2150. 2150 is a venture capital firm focused on the built environment. They're building businesses that are changing how our cities are designed, constructed and powered for good. They hunt for gigacorns, which they define as the technology champions of the coming decades with the potential to benefit billions of people, create billions in commercial value and lower gigatons of emissions. We have a great discussion in this episode about Christian's journey from being a technology operator to a generalist technology VC, and then his awakening about the magnitude of the climate crisis and his path to building 2150, from meeting his co-founders, to the initial thesis, to their approach, to the different twists and turns on the way to getting that first fund raised, and then directionally where they're heading in the future. I really enjoyed this one and I hope you do as well.
Cody Simms (01:04):
I'm Cody Sims.
Yin Lu (01:05):
I'm Yin Lu.
Jason Jacobs (01:06):
And I'm Jason Jacobs. And welcome to My Climate Journey.
Yin Lu (01:13):
This show is a growing body of knowledge focused on climate change and potential solutions.
Cody Simms (01:18):
In this podcast, we traverse disciplines, industries, and opinions to better understand and make sense of the formidable problem of climate change and all the ways people like you and I can help.
Jason Jacobs (01:30):
Okay, Christian Hernandez, welcome to the show.
Christian Hernandez (01:34):
Excited to finally be here.
Jason Jacobs (01:36):
Excited to have you. So I think we first met through, you're a member of the MCJ member community. But it's so interesting what you're doing because, one, from distance you had a similar path to me, starting in traditional tech and migrating your way over to working in climate. It also seems like you're thesis-driven and focused on one aspect of it, which is the built environment. And also you're in Europe. So you put all those together and I think it'll just make for a really interesting discussion and also broaden my knowledge base. So I'm really appreciative for you making the time.
Christian Hernandez (02:12):
Thank you. And thank you for the community. It definitely helped my own voyage.
Jason Jacobs (02:16):
Taking it from the top, Christian, maybe we don't want to go too deep down the path of 2150 yet, but just to frame the discussion, what's the overview of the firm? What do you guys do?
Christian Hernandez (02:25):
We kicked off 2150 back in 2019 as an idea. And the thesis was that we needed to decarbonize fast and we needed to do it in a space I call the vector of attack, where there were solutions that could have been deployed today at scale and have an impact today. Through my own climate journey, I had come to realize that that space was the broad urban environment, not only the buildings, but the infrastructure, the pipes, the grid that supports it. With my partners realized that there wasn't that many people focusing on that space. So, A, there was a big opportunity in terms of impact, but also big opportunities in terms of open space. And so we launched a fund with the vision to scale out technologies and solutions to help to make cities and everything that powers it efficient, resilient, and sustainable. And now with offices in Copenhagen and London, a team of about 22, and deploying from our first fund, which was 270 million euros.
Jason Jacobs (03:21):
Great. And tell me a little bit about your journey, both what you have done historically professionally, but also how you found your way moving in the direction of focus, the clean energy transition.
Christian Hernandez (03:33):
Yeah, I think, similar to you, I come from a traditional tech background. I started geeking out with computers when I was 12 on my dad's Commodore 64. Tried to hide that when I was in college, but I was still coding websites. I think my first website launched in '93 on the Mosaic browser. Luckily, through that path, ended up working in technology companies after college. Big data in the '90s at a company called MicroStrategy. Then early days of smartphones at Microsoft when we launched the first generation Windows Mobile phones, and I got to fly around the world and ship these devices that were great computers but couldn't make phone calls. Then moved back to Europe where I'd grown up and joined Google who was launching their mobile efforts. So early days of Google Maps for Blackberry and Nokia search engine integrations. And then Facebook, helping to launch Facebook in Europe back in '09, I ran what's called a platform team, the team that would've worked with you back in the day trying to integrate the Open Graph and shipping like buttons left and right.
Jason Jacobs (04:31):
We did work with Facebook quite a bit, by the way, when I was the founder and CEO of Runkeeper.
Christian Hernandez (04:36):
You're one of our Open Graph launch partners.
Jason Jacobs (04:39):
Many of the climate people that listen to the show might not know this, but Runkeeper was one of four partners that Zuck called out on stage at one of the early
Christian Hernandez (04:48):
F8s.
Jason Jacobs (04:48):
Yep. One of those F8 events. That was a big deal for our little team.
Christian Hernandez (04:52):
That was you, Spotify and a couple of others, right? All went to be successful companies or successful exits. I stayed at Facebook for four years, grew obviously in terms of users. When I joined, interestingly, MySpace was still bigger in terms of user base. But what I loved about my job was that, effectively, I got to do the VC job, spend time with companies and startups at an early stage and invest in them. But what I was investing was engineering resource and time and attention from Facebook. So naively thought after that that I really liked this early stage portfolio approach and venture capital sounded like the right thing, naively because I figured that I should just go launch my own venture capital fund. Nobody told me how hard that is.
(05:29):
So two years later, or 18 months later, we actually did launch a venture of capital fund called White Star Capital. The thesis was well-developed, but underserved hubs, New York, London, eventually Montreal, Paris, where there was a talent, but maybe less funding. And now over a billion AUM. They're deploying from fund three, some great success stories like Dollar Shave Club and Freshly, so some unicorn minted.
(05:53):
Yeah, so I'm a techie guy that became a VC, as many of my former colleagues have in the past. Something kind of got in the way between that and now, which was an unfortunate or fortunate ability to attend an executive summary program at Princeton that the World Economic Forum had organized at the Andlinger Center for the Environment. I applied, it was free, and I was climate curious. And so I got to go play student on the beautiful Princeton campus for a summer and came away scared and excited. Scared because, as you know, the deeper you go into climate, the more freaked out you are about how immediate it is, but also how complex it is. There's no one thing that solves it. I was a typical guy feeling good about the fact that I drove one of the first Teslas in the UK, and we don't eat a lot of meat and we offset our carbon at home. And I realized that that was not going to make a single dent. So that's the scary part.
(06:42):
And then the excited part was meeting, through this program, a bunch of entrepreneurs working in CleanTech who were super frustrated because they'd raised seed rounds and had scaled out their deep tech ClimateTech solutions, but they had nobody to fund their A rounds. To be fair, this is 2018. There weren't that many, right? One already had Khosla, another one already had Data Collective. The number of names they could go to were very few. And I walked out realizing that, hey, I can do the day job of finding amazing entrepreneurs with amazing pedigrees that want to build these amazing companies. But if I do this rightly, I could also have a greater impact than fashion e-commerce or another game. That kicked off my climate journey, starting just to investigate and understand where we could have the greatest impact.
Jason Jacobs (07:27):
Just one aside, we actually share that in common because in between Runkeeper and what I'm doing now, I started essentially a studio at the intersection of live TV and mobile applications, and got some expertise from building great consumer mobile applications and expertise from live TV under one roof, and was going to experiment and build like a tech enabled content portfolio in this emerging format. And reinventing QVC was like the biggest venture backable kind of opportunity that we had landed on. We had spent a few months in this area, and I just needed more purpose and ended up giving the capital back that the VCs had funded us with potentially to experiment from zero and execute this mission. And that's when I came into climate five years ago. So it sounds like we have had a similar journey.
Christian Hernandez (08:15):
For the podcast, I know you have young kids, this feels meaningful. A, I love the job. The day job's awesome. The intellectual curiosity that you get out of being a venture capitalist, the fact you're never going to be the most informed person on that subject in the room because the entrepreneurs should be. But the fact that if you do it right, I think this is going to be a massive wealth generation opportunity in the decade to come. And, by the way, we hopefully get to nudge the creation of a more positive future for our kids.
Jason Jacobs (08:40):
Okay. So you had this realization. And where did you go from there? What were the initial steps you took? And what were the timelines? And what were some of the big pieces that fell into place?
Christian Hernandez (08:51):
Yeah. Well, the first one was the hardest, which was firing myself from my own fund that I created, which definitely came out of left field for my partners. But the realization that to build what I wanted to build, it had to be a different platform. Climate has a bit of deep tech, it has a bit of hard tech. It's really hard for it to coexist with a generalist fund, just the requirements, the expertise even.
Jason Jacobs (09:10):
I wonder what Albert Wenger would say about that.
Christian Hernandez (09:12):
But Albert had to create a different vehicle. So their climate fund is a different vehicle. It makes sense, and it's fantastic. And I have a lot of admiration for what they've built with USV and a lot of respect for him for launching this as well. It's an amazing testament. I still need to get on the cap table with him though. So it had to be a separate vehicle. Had gone through the voyage of raising my own fund before, so I knew how painful it was going to be. But actually just starting to incubate, finding who to partner with, having a thousand conversations with potential anchors, potential partners.
(09:39):
And out of that, I got a call from a guy I knew who worked for Egon Zehnder, the large recruiting firm. He'd helped us build a team of leadership for Facebook in Europe. And he said, "Hey, I know you're thinking about what to do next. There's this Danish real estate guy that's thinking about starting a fund. You should talk to him." And I literally remember saying, "I didn't just quit my own fund to go launch a PropTech fund." He's like, "No, no, no. It's not a PropTech fund. You really need to go talk to him." This guy was called Mikkel. He's now my partner. And Mikkel, his last startup had been a real estate private equity fund. At that point, 7 billion AUM, most successful real estate fund in Nordics. They had built literally sections of cities in sustainable neighborhoods. And his frustration was that he could build dozens of those neighborhoods and make some pretty good IRR, but that was never going to have the impact of scale that he wanted.
(10:25):
So he had stepped back at the chairmanship of the fund called Nrep. And he's like, "Right, how do I do this at scale? It's not Nrep, it's not even the Nordics. We need technologies that can be scaled worldwide. It's venture. Who do I know that knows how to do venture?" Called this guy at Egon Zehnder, who called me. We met, and his pitch to me was pretty appealing. He is like, "Go build what you want to build on top of the back office infrastructure, LP relations, finance teams of this large private equity fund."
Jason Jacobs (10:51):
I have to ask, do search firms get a fee on that kind of informal introduction?
Christian Hernandez (10:55):
He got no money out of it. But his name is Jens. Jens comes back into the picture later on in the story. All the painful stuff, having to create the infrastructure for a fund would've been taken care of and the liberty to execute on this vision. And actually, I literally wrote a blog post about this the day I met him. Like, "Mikkel, if you only focus on the building, you will fail. The building is the last instantiation of all this stuff, infrastructure, grid, water, that needs to exist for a city to thrive. Think about it more broadly in this notion of the urban stack of the layers, materials, construction, heating, cooling, and transportation that needs to coexist to make cities sustainable and resilient." I'm like, "If we do that, I'm on board."
(11:34):
And so that led to another Christian, there's two of us, and Jacob who had been the chief product officer at Rocket Internet and had been incubating this idea to come together and launch 2150. And unbeknownst to us, the institutional world was looking for something like us. An institutional looking platform, because we sat on top of this back office. An experienced team, we had a good track record as individuals, even though we were a first time team, focused on the built environment. By serendipity, we effectively launched a product that capital was looking for.
Jason Jacobs (12:04):
In the earliest days, how did you balance raising the capital, deploying the capital, and understanding what was actually happening in the built environment and where the challenges and opportunities were? And I think what I'm asking maybe in a more succinct way is, how much do you have to do the work versus using the capital to learn?
Christian Hernandez (12:28):
I'll give you the real answer and then the hypothetical answer. The real answer is that you're being asked to raise the money on a hypothetical track record, on a category that at that point didn't exist, literally, ClimateTech was just beginning to get used as a term, and proving there's enough companies out there that you could go back. And so we are instinctively thesis driven. We try to think about the biggest problems, go get really smart about what causes those problems, to then go identify the solutions that we feel can scale to solve the problem. So I think something that happened during the fundraising process that really helped us was, leading up to summer 2020, we'd been doing a deep dive into cement and concrete. I knew it was a problem. Jacob, my partner also knew it was a problem. Why is it a problem? Understanding the chemistry, understanding the heat requirements, understanding just the human addiction that we had to cement and concrete, and then we started looking at solutions out there.
(13:21):
Back then, there were not that many. The poster child was Solidia. But I've been tracking a company in Halifax, Nova Scotia called Carbon Cure. And through a friend of a friend we got in touch with Rob, the CEO, somehow managed to convince him that we knew what we were talking about. And actually, I've seen the notes that he has on this LP tracker and it says, "Well-educated guys. Could help us with Europe. Let's make space for them." And let's make space meant convincing BEV, Microsoft, Amazon and existing investors to do less money so that we could participate. So that was huge for us. It was the sexy deal that summer in a very hard to abate sector, a very high profile round, a fund that didn't even exist yet being allowed to participate in it because the CEO felt we could add value.
(14:05):
Hopefully he'll say nowadays we do or we have. And that, I think, was really a good marketing of a flag waving to say, we are here, we know the space and we can be helpful and we can help you, Canadian company, come into Europe. And that, I think, accelerated the momentum. We continue to do these deep dives and that's very, very core to what we do. We've done steel. Have yet to do an investment in steel. We've done cooling, we've done, one, a company called Blue Frontier. We did Windows. Nobody talks about Windows as a problem set. We did LuxWall in the US and we also share this research pretty openly. We share with other funds, try to educate them on the problems so that we all deploy capital into different solutions that might eventually solve the common problem.
Jason Jacobs (14:46):
Am I hearing right that by focusing on the built environment in a holistic way, that there's different types of technologies, risks, business models, et cetera that maybe don't typically exist in a generalist venture fund?
Christian Hernandez (15:01):
I know there's a big philosophical fight about this on Twitter, but I just don't see how you can make the physical world better without investing in physical assets. And some of these physical assets require CapEx, and need different types of financing than what a typical SaaS software needs. So first of all, you have to accept that and understand how you think about equity financing alongside the credit financing. So actually you've been thinking, how could this get financed by a Generate or HSBC or Barclays? At what point in the trajectory, how much of your equity will they have to burn before they have enough signals for a bank or a financing partner to underwrite?
(15:38):
Two, the complexity of the supply chain in the built environment. Amazon can decide that it wants to use Carbon Cure for its HQ 2 in Virginia. That's great. Amazon has to tell its GC, who then has to tell its supplier, who then has to tell the local concrete manufacturer. All along that chain, everybody's going to be passing the buck. Who's going to take the risk of using that solution for the first time ever in a building that's supposed to host humans? The buck passes from one to the other to the other, and then they turn to the startup and say, "Well, of course, you're going to provide insurance for this, right?" And the startup goes, "Insurance? I hadn't thought about that." So that complexity of the limited acceptance of risk that exists in the built environment is also a hard factor to consider when you're doing these investments.
Jason Jacobs (16:22):
So when you set out to raise this fund, how did you think about structure? How did you think about duration? How did you think about portfolio construction? How did you think about stage? And also, how much of that was still how you thought about it when you got to final close?
Christian Hernandez (16:40):
Was it fund size in terms of your fund strategy? So we knew we wanted to be a sizable fund. And by sizable, I mean north of 200 million. We would've been one of the few in Europe at that scale at that point. Ended up being oversubscribed, 270. And we knew that to get to that scale, you need institutional capital. It's really hard to get there with 1 million to 2 million checks. So it was finding the initial set of anchors that could get you to a meaningful first close, those were Nordic. The Augustinus Foundation, which is a large charity in Denmark. There was Novo Holdings, the parent company of Novozymes, that is a pretty active VC investor. There was the Danish sovereign wealth fund that had just created a green 2 billion euro vehicle.
(17:24):
And they were all fairly material checks, which helped us, A, do the first close but also prove that we could convince institutional checks. Sorin at Novo is an LP in some very, very high profile London and Valley funds. The fact that we met his bar was a validator for other institutional investors as well. So that was on the fundraising, get to a big enough close with big enough checks. Two, we made the decision to unveil after first close, A, because we want to tell the world we existed. But also, we wanted that to be for deal flow. What we didn't realize is that was going to open up a lot of inbound from people that were looking for something like us that we would not have had access to. And it was a conscious choice to unveil, but it was not necessarily for fundraising. It was for deal flow. Ended up accelerating our fundraising efforts.
(18:11):
And then the promise to the LPs was, we are not the right guys to go back two guys and a PowerPoint, where there's high, high technical risk. We are the right ones to go back a company that's either already in market or soon to go to market because we will generate demand. To generate that demand, we have a group of players in the built environment ecosystem, largest construction company in Finland, largest real estate owner in Norway, people who can actually validate the problem and then drive demand for the products and we call them our strategic LP base. These industry partners are the offer that we make to entrepreneurs to go test and deploy their solutions. So not large in terms of percentage of the fund, but large in terms of importance to the strategy.
(18:54):
And then finally, the focus area was, let's call it stages hardened climate, because some of them have been science projects for so long. But 3 to 15 million euro initial check size for double-digit ownership, and median has been 6 million. That changed from what we had modeled. We, looking at historical data, modeled 4.5 million initial check for double-digit ownership. What happened was the bubble overall in tech, this is 2020, 2021, 2022, and then ClimateTech becoming a thing and a hundred other funds coming out. So naturally, the amount deployed for that first initial check went up by a couple of million. That has a knock on effect on how many companies you can do and the reserve ratio you can keep. So instead of doing 23, 24, we're going to do 19, 20.
Jason Jacobs (19:48):
Is it a standard fund structure in terms of duration and extensions, et cetera?
Christian Hernandez (19:55):
Yeah, I think there's only so many things you can change in an LP's playbook. We were already doing transatlantic, we were already a first time team. We were already raising a fairly large fund for a first time team. So we kept the traditional stuff, fees and carry standard, 2 and 20. And we kept it to a 10 plus one plus one lifetime. I'm comfortable with that because we don't take super early science risk, like sometimes our friends at Breakthrough do. You need the 20 years to actually make that stuff come out of the lab and get deployed? But I do also understand the logic for some climate funds that you probably are going to need longer to maximize the enterprise value by the time of exit.
Jason Jacobs (20:34):
And how do you think about portfolio construction generally? And similarly, because for whatever reason I ask my questions in twos, within the portfolio, how prescriptive are you at saying, "Is there a bingo card that says we want this many hardware, this many software, this many X, this many Y?" Or is it really just the best opportunities that you find across all of these areas?
Christian Hernandez (20:58):
It's not written legally anywhere, but it's just our mantra. We'd like, let's call it 60%, 65% of the portfolio to have come out of these deep dives that we do. And so far I think we're on that mark. And we've proven, it was a thesis, and now I think I'm comfortable saying that we've proven it. Doing the deep dives, getting intelligent about the problem, showing up educated to the entrepreneur to the first meeting has helped us win deals. Because Daniel Betts at Blue Frontier didn't have to spend 30 minutes explaining to me why cooling was going to become a very big problem in the future. I'd literally written the blog post about why we wanted to find solutions for cooling. And so that helps win trust with the founder, helps accelerate the DD process, and it's become a pretty important part of our strategy on how we find the right companies. So on the portfolio construction side, that's one.
(21:44):
Two, though we do need keep an eye on how much is hardware, plus how much CapEx will that hardware require? I mean, we do hardware, but I do get a bit scared when the business plan requires 60 million in equity to go build that first industrial plant before the funding partner kicks in to do plant number two and number three because I'm probably not going to be able to defend my ownership for that 60 million plus round, or beyond that 60 million plus round. So CapEx smart is what we like to focus on. We have a blend now of hardware and software solutions. Geographically, we're pretty well mixed, half North America, half US, we actually have one in Australia and one in Hong Kong. We do also want to feel that there's a value add, like why should we get chosen as the investor of choice for a company in Australia? Well, it's because Europe is one of the most important markets and they wanted us to help facilitate market entry. The why us angle was kind of important, especially when there was a plethora of cash in the last couple of years.
Jason Jacobs (22:41):
Any preference in terms of leading versus not leading?
Christian Hernandez (22:44):
We've led a co-led. Most of the investments that we've made in fund one, we have syndicated in every single one of them as well, where we've issued a term sheet and then helped the founder go find the right next partner. There had been in a company here in the UK where a well-known climate fund had already said no, and we went back to them and said, "Can we come in and tell you why we're saying yes?" And helped convince them and their IC that that was the right bet for them to make. And they co-invested with us. Actually, there was a specific deal in the US where I had the lead, we'd signed a term sheet, and I reopened the round to let another well-known climate fund come in. Because I knew that, given that it was a US company, that fund in the US was likely to be more additive. So I actually gave away 2.5% ownership of the company for that other fund to be able to get to their ownership target. But I think for the long term, for that company, it was the right choice.
Jason Jacobs (23:39):
And then how do you think about reserves and follow on?
Christian Hernandez (23:40):
So a lot of the stuff that we're backing, it's going to take a while in terms of ramping up. So we start with a fairly healthy reserve. We're over 50% reserves for follow-ons. Important to note, 50% reserves, assuming no recycling, because recycling is hypothetical. You never know when it's going to happen. So we don't model recycling into the portfolio construction. We hope that it happens because that'll mean more reserves going to the companies. We mentally allocate the reserves that we will need, but we don't hard code them to the individual companies.
(24:10):
The reserve pool is fluid. We would do another DD process and a full memo for every investment round to make sure that that dollar going to that company has the potential to be a venture type multiple return, not taking into account what we already plowed in. That is the hard part. Making the initial bets, I would argue, it's about picking and access, figuring out, because it's so early in their voyage, where to put that follow on dollar allocation to make sure that you hopefully betting on the right one that's going to be the outlier. That's the hard part. Some just take a long time to mature and then they become your heroes late in the fund lifetime. At that point you have no reserves to defend your ownership.
Yin Lu (24:50):
Hey everyone, I'm Yin, a partner at MCJ Collective, here to take a quick minute to tell you about our MCJ membership community, which is born out of a collective thirst for peer-to-peer learning and doing that goes beyond just listening to the podcast. We started in 2019 and have grown to thousands of members globally. Each week, we're inspired by people who join with different backgrounds and points of view. What we all share is a deep curiosity to learn and a bias to action around ways to accelerate solutions to climate change.
(25:16):
Some awesome initiatives have come out of the community. A number of founding teams have met, several nonprofits have been established and a bunch of hiring has been done. Many early stage investments have been made, as well as ongoing events and programming like monthly Women in Climate meetups, idea jam sessions for early stage founders, climate book club, art workshops and more. Whether you've been in the climate space for a while or just embarking on your journey, having a community to support you is important. If you want to learn more, head over to MCJcollective.com and click on the members tab at the top. Thanks. And enjoy the rest of the show.
Jason Jacobs (25:50):
And is defending the ownership in the companies that you continue to have conviction about the goal? Or are there ever scenarios where you're looking to increase ownership over time?
Christian Hernandez (25:59):
I started investing as a VC in 2013. That thesis of, I'll buy more ownership later has never worked for the good ones even super pro-rata, if you managed to negotiate that into your agreement. Honestly, if, pick a name, Andreessen shows up and wants to take the next round and that's the right thing for the company, you'll simply not take your super pro-rata. So the best way to maximize the outcome is pick well and maximize ownership in that initial round. If you have conviction, maximize the ownership that you can get. In our case, getting with syndicate, we also want to maximize ownership while letting others have the right piece. And then be rigorous in how you're allocating your reserves to the right companies. This current time is a hard one for that because so many of the companies are not ready for the next round. The markets have clearly slowed down, and so you're being asked to do extension rounds on a lot of different companies at the same time. So how do you actually decide which ones you do and which ones you don't?
Jason Jacobs (26:57):
I was going to ask you that, so I'm glad you brought it up. How do you think about extensions? How do you think about down rounds? How do you think about pay to play?
Christian Hernandez (27:05):
Tricky, right? Because you have all these different dynamics at play, not only you and your LPs, which should be the core priority, but also the co-investor and also previous investors. And previous investors might not have any more money left, so there's a reputational component that comes into play as well where, yes, taking the risk to put in more money to give the company another year to hit certain metrics might be the right thing, but how do you compensate for that risk? By protecting for the downside. And we're seeing it now with down rounds or actually a lot of, as a banker put it, extend and pretend. Doing notes instead of price rounds so you don't have to market. And some of those have come out with pay-to-play provisions, which might actually negatively impact the guys that invested six years ago because they have no follow-on round. And so at the end of the day, each individual case has to be evaluated on the risk profile, what the right thing is for you as a fund and the right thing for the company and the founders.
(27:57):
The other thing you don't want to do is completely dilute down the founders so that you're asking them to continue on a six-year risky voyage, but he now has 3% ownership. How do you keep them incentivized? How do you keep them focusing on the upside while giving them the leeway they need to execute on it? And each individual case has a different reason as to why you might need to do an extension. But most important part for us, and that has been agreeing with the other board members, investors, of what we will do jointly. If you brought in a syndication partner into a round, there's a reason why you brought them in, how do you align with them? And by the way, that just becomes a multivariate negotiation because then you're negotiating with them, who's negotiating with their partners and their IC. So a lot of human emotions that come into play as well.
Jason Jacobs (28:42):
Do you typically have board seats or do you insist on them?
Christian Hernandez (28:45):
We have board or observer seats on all of our companies. In some cases, Carbon Cure is a great example, I didn't expect to be offered an observer seat. That was a small ticket next to Amazon and Microsoft and Breakthrough, but Rob felt that we could be valuable at the board, and so he offered one to us, which we took. Some LPs really like you to have board seats because it gives them comfort of governance. The reality is, as a minority investor, you have one hard stick, which is getting rid of a founder, which is a really, really hard stick, and just a bunch of carrots, incentives, trust that you build with a founder to hopefully lead them in the right direction. That hard stick probably comes with a board seat and also the signal to the next round investors that you've done the work to get that board professionalized, governance professionalized and you're ready to pass it on to them as they come in for the next round.
(29:37):
In the past, what I've done is I stay on for definitely the next round and maybe one more round and then step back. The voyage is done for you, right? You did your part in getting them there. I also don't believe in 12 person boards. They're just massively dysfunctional. And that includes observers, right? If you have five board members plus five observers, everybody's going to want to have a voice. Those are going to be very long, very messy board meetings.
Jason Jacobs (29:59):
You talked about how when you think about portfolio construction, you want 65% of the companies to come from thesis first versus opportunistic. Is that the only way that you cut it, or are you looking at other things like for example, percentage that are software versus hard tech or percentage that are consumer versus B2B, or any other lenses that you kind of sought?
Christian Hernandez (30:22):
So we don't have a hard metric like some other funds on the potential impact because it's so hard to calculate. But we do need to get comfortable. And Peter, head of sustainability, will be pretty thorough on doing his own math alongside the financial math to get us comfortable that this can probably have a carbon impact at the megaton level in the life of the fund. Not 2050, but in the near future. And so that's probably biased us away from consumer. To get to any level of megaton scale where, let's say, an electric scooter or electric bike, you need a lot of bikes. You need a lot of bikes and you need to get comfortable that bike trip did not replace that individual taking a public transportation trip. So he'll do some magical analysis on the LCA and on the impact and give us comfort that that company could have at least a significant level of impact if they achieve their financial projections. And then obviously we discount those. So that's definitely a filter that we apply.
(31:19):
We don't have a hard number, but we do keep an eye on how much is software, how much is hardware. On the hardware ones, we need to get comfortable on margin increases. Many of these hardware companies are going to sell on an EBITDA multiple, not a revenue multiple. And so how do you get comfortable that as they scale from making 1, 2, 3 of these by hand to having a factory, that COGS can significantly decrease and therefore margin can increase. The hard one in general in climate is finding public market comps to figure out what the right enterprise value ratio should be. So we spend a lot of time debating that at the IC.
Jason Jacobs (31:57):
How do you think about returns relative to generalist funds? And how do you think about impact relative to other types of impact capital?
Christian Hernandez (32:08):
So we're first and foremost a venture capital fund. So we need to, by fund three, have competing or compelling enough returns similar to a software only fund. I'm convinced, and I'm biased, at the end of the day I'm a pure capitalist, that in the life of fund one, so 2021 first close, 10 years, 12 years after that, companies that mitigate significant amounts of CO2 in the hardest to abate sectors, cement, steel, buildings will have a greater enterprise value and therefore will command a premium, which therefore will generate greater returns. That's my thesis. I need to prove it out, but I feel pretty comfortable that's the direction of travel on a global basis.
(32:48):
We are what's called an Article 9 fund, it's a European Union Fund selection. So you have different types of fund types. You can be an Article 8, which is kind of mild green. Most of the stuff that you do is going to be impact positive, but not all of it. Article 9 is hard green. You have to be able to report and prove that every investment that you made has an impact potential, and report it, and have it publicly stated. So we made that choice before we even had our first close. It was part of our ethos. It was a pretty easy choice to make. It's really hard to start as a non Article 9 fund and then try to move into Article 9 because you'll have a legacy portfolio that might not fit.
(33:28):
Because we did it before we had a portfolio, it also sets the bar of what we can look at and how we need to publicly be able to stand and say, "Yes, this investment can have a significant level of impact and here's why." And by the way, we report annually on our portfolio level impact across a number of different metrics, not only because it matters to us, but actually by legal obligation based on the type of fund that we are.
Jason Jacobs (33:49):
What is the advantage of being Article 9? If anything, it sounds like it makes it more rigid to hold to. And I get that it proves that you're serious. Is there any strategic advantage or is it just signing up for additional scrutiny?
Christian Hernandez (34:03):
So the reason it exists is to try to get rid of some of the greenwashing and to at least create some clear rules as to what that impact fund would look like. I have seen some other funds that become B Corp funds or put the word sustainability in the front cover of their deck. But for us it was an easy choice because it was the intention when we created 2150, but it just allowed us to actually publicly state that we were Article 9. In some LP's cases, that was a strong validation. It's something they were looking for. They actually want Article 9 funds.
Jason Jacobs (34:34):
Does the other way happen too, where some LPs that are strictly returns focused look and say, "Oh, it's Article 9, so the returns must be concessionary"?
Christian Hernandez (34:42):
No, Article 9 does not necessarily link it to carry. And by the way, unlike others, some other funds link impact to carry. We do not. We think that both can coexist. And we are, at the end of the day, optimizing for returns to LPs, which will mean carry to us as a pure VC fund, in parallel to that, optimizing for impact at scale, which we report in a different way. But most of our LPs, I would argue, invested in us because of that as well.
Jason Jacobs (35:08):
Now, when you set out to raise the fund, you talked about how it would help you to get the bigger checks and it would help your credibility to get the more well-known types of institutional LPs for the credibility. When you thought about where your value prop would resonate the most, what type of LP were you targeting? And then how did that play out by the time you got to final close in terms of what type of LP was the sweet spot for fund one, if there was such a thing?
Christian Hernandez (35:33):
I don't think we had a prototypical expectation. I mean, we have two Nordic sovereign funds, the Danish Growth Fund that I mentioned before, who had created this sustainability pocket. That was clear, my partners are Danish. That was a clear port of call. And then the Norwegian government mega fund had created a spinout called Nysnø, which is a dedicated climate fund of fund and direct investor. Part of the team being Nordic, and them being focused on climate, that naturally made sense. An example that I would not have put in my short list was Goldman Sachs. Goldman has an impact driven platform called Imprint. It's a team they bought out in California. Imprint is a pretty active investor in climate solutions, mostly private equity and later stage on behalf of other people's money. I didn't even know Imprint existed, to be honest, when I got started. And they ended up being my biggest LP at final close.
(36:24):
Then, it's interesting, we never made it to the US. The idea was to do a strong first close with the European partners and then start having conversations in the US. But then we were pretty much close to oversubscribed before we even got there. I think for longevity, you probably want to start having some endowments in the LP base. So we've just been nurturing those conversations since the first fund. When we first started talking to some endowments in the US, some were just burnt out from CleanTech 1.0. Others were kind of curious in this new, evolving thing called climate, "But where do I put this? Is this kind of like infra-ish? Is this really venture? Is this part of my philanthropic budget?" Some of them have actually gotten quite educated and become quite active in climate as a category within their private equity and venture capital allocation, and then trying to educate other peers. And then others are still in mapping mode.
(37:13):
Yep. I accept, as a category, whatever, 25 cents on the dollar of every venture capital dollar invested into this thing climate. But I could argue climate's quite broad. Probably I should pay attention to this. I'm just in mapping mode, talking to as many of you as possible, trying to understand where you guys all fit in.
Jason Jacobs (37:28):
Just more of a logistics question. But when you were doing some of the initial deals before you had the fund, like Carbon Cure, what were the mechanics of that? So was it just funded out of partner personal capital and then warehoused in?
Christian Hernandez (37:40):
It was from one LP and it was warehoused.
Jason Jacobs (37:43):
So it was an SPV with one LP?
Christian Hernandez (37:44):
Yeah. And then brought in at cost into the fund.
Jason Jacobs (37:47):
Got it. And how do you think about risk and what types of risk you're okay with and not okay with?
Christian Hernandez (37:53):
Super early technical risk, probably not for us. To be fair, the breadth of climate, you have so many different types of solutions and technologies that we also need to rely on a spectrum of technical advisors that we can go to. The history with Princeton continues, we're still an affiliate of the Andlinger Center. And through that, we get access to Princeton PhDs who can help us at least ask the right questions. We've relied on the UC Davis Center for Cooling for due diligence on a couple of different companies. So trying to find the right pockets of wisdom around the world without getting biased. Because a bunch of them, you'll mention membranes to somebody and they'll be like, "Ah, membranes, they don't work, don't do that." Well, that's because you looked at membranes five years ago. Maybe something's changed. How do you keep yourself nimble enough to understand why that wasn't possible back then, but why it could be possible today? Trying to figure out how to mitigate that technical risk.
(38:48):
And then we've done all sorts. We did a bootstrap company that had been profitable for the last 10 years and have never raised funding, and ended up being part of round to actually capitalize it, make it unprofitable to make it grow faster and help it scale. And that was not a company that was necessarily looking for funding. We've done a company that was in the lab. The product existed in the lab but had never been deployed in real life. So that was probably on the earlier stage of the technical risk. And then we've done companies that were in the tens of millions of revenue already and, well, in traditional tech would be a B round to scale up. So not sure we necessarily bucket just we will only do this. We try to keep flexibility across the portfolio as long as we feel that, A, we're the right partner. B, that's the right solution that we want to help solve that problem with.
Jason Jacobs (39:37):
When you think about the initial thesis to start the firm and that drives at least 65% on paper of your investments, what is the process of pulling together that thesis? And how much of it is internal versus external, as an example? And also, how often do you refresh it, if at all?
Christian Hernandez (39:56):
So we have this fantastic lady in the team called Nicole. She was trained as an equity research analyst in Morgan Stanley, then got climate curious, went to get a master's in that. And she's great. She applies this very methodical framework to the problem sets. So we agree on a pipeline of problem sets, and she has this beautiful little calendar of when she's going to go do the various ones, and pulls in different team members who might be interested. So for example, cooling, I joked that I'm the token Latin American partner with a bunch of white Danes. I cared about cooling. And so we started investigating and learning.
(40:27):
And cooling, the more you dig into it, the more you freak out. The summer proved that we're going to rely on air conditioning to stay alive, not only to stay comfortable. But if we deploy cooling at scale, the grid just can't support it. So you have a problem that when it pulls from the grid, it's probably the dirtiest part of the day. And B, the grid just can't support the current architecture. So we'd understood the problem, and it really freaked us out. So kind of the first part laid out the problem. Then we started mapping out solutions that could solve it. And then that's where we started talking to other people.
(40:58):
So for example, in the case of cooling, we talked to, there's a guy at Third Derivative, which is part of RMI, who had actually led the cooling prize, which was effectively the XPRIZE for cooling on behalf of the government of India. So he knew the whole landscape around cooling and pointed us to a couple different solutions and companies working on it. And so we reached out, we started learning about different solution sets. From that, developed a thesis. The thesis was that cooling would probably get solved in commercial buildings before residential buildings. A commercial building owner can compute the value of 90% more energy efficient HVACs. For you as a homeowner, putting a heat pump, high upfront cost. Yes, I get it's going to save me money over time, but I'm going to go with the cheap version.
(41:43):
And that led us to Blue Frontier in Florida, which we ended up co-leading the round with Breakthrough and VoLo Earth. That had gone through a six-month process. That thesis gets revisited every so often. As we find new companies, we had to add them to a tracker. So in our CRM system, you should see a big spike for the cooling because we put all the companies that we saw and then new ones being added over time as new innovations come into play. So it's on us to also keep on top of the problem set. There's some deep dives that we have yet to do something on. So Steel, there's the one I mentioned, we have yet to find the right steel bet that we want to make, but it's a huge problem. It's 78% of CO2 emission.
Jason Jacobs (42:22):
Similar question, but around impact, how do you think about impact and what the right metrics are? And does that vary across companies, or do you have standard metrics that you report on across the entire portfolio?
Christian Hernandez (42:33):
So no, it varies company by company. We have an impact framework that we've put on the website, so it's fairly public. And it's not only CO2, it's human health, so air pollution, it's biodiversity. We've done one investment in biodiversity, a company called NatureMetrics. So we have these different buckets that we track on and we report against all of them on an annual basis. What we've done is we actually invested in a carbon accounting company, as you do, called Normative. We've actually given Normative to our portfolio companies, and then we give them a fair amount of consulting to get them ramped up on how to track and report. But because they're using Normative, we get one dashboard across the portfolio, which is quite helpful. And they don't have to use Normative going forward, but it's just a good way for us to onboard them.
(43:16):
So Peter and his team spend a fair amount of time with the companies agreeing on what the impact framework looks like. And there is actually a bit of back and forth on this, where Peter will talk about additionality, software for solar panel deployments. You didn't really deploy that solar panel yourself, you just helped make it happen. So do you get the full credit? Do you get part of the credit? It's interesting, right? The climate math is not perfect. But actually, at least having a framework on how you're going to account for the impact of that specific company over time, and then also forward forecasting what it might look like. And so that then gets turned into an annual report.
(43:49):
So in the last report we published, which would've been 12 companies in 2022, the climate math says that those companies mitigated half a megaton of CO2. I asked Peter, I'm like, "That sounds low, is that good?" He's like, "No, it's really good. This is half a megaton that I feel very comfortable going in front of any EU commissioner and stating this is legit, this is a real number." Forward forecasting those companies, if they hit their inflection points on the financial model, he's modeled that they get to 39 megatons by 2030. 39 megatons is quite a bit, that's effectively the emissions of a country the size of Denmark. Being realistic in what we're reporting now, but also being hopeful and aspirational in what the impact could be later.
Jason Jacobs (44:31):
This is more of a, I guess, venture firm building 101 type of question. But as you've set out to build your firm as a newish team in what, it sounds like, was a new category for many in the partnership, how have you thought about brand building? How have you thought about deal flow? And how much of it is outbound versus inbound?
Christian Hernandez (44:56):
The vast majority of the top of funnel is inbound. But then we also get some stuff that, if you read our website, you should never be sending to us. It just makes no sense. It's completely out of scope. I think genetically modified CO2 sucking algae is super interesting. I just don't see how that fits into the urban narrative. The actual investments are inverse, where the majority of the actual portfolio is outbound. In terms of brand building, I think we got lucky that we unveiled or came out at the beginning of this ClimateTech VC wave, especially in Europe. So we got some good visibility before, and it now it feels like there's a new climate fund every month or every week.
(45:36):
I think we need a lot more types of capital, a lot more strategies around it, a lot of different types of minds around it. So I'm all for it. We just benefit from being out early. It had transitioned from CleanTech to ClimateTech. We used a number, which back then wasn't that common. Now it seems like everybody's using numbers. Interesting hack with a number, and if you're sorted alphabetically on some of these VC listings, you come up first, side hack that I hadn't really planned for. And we were aspirational in our, if you go to our website, we have a manifesto, but it really was our desire to tell the world why we felt we needed to exist, which we've actually, since launch, doubled down on. I want to make sure we talk about that as well of how we're still 2150, the venture capital fund, but we've effectively done a merger to go create something much bigger, focused on the same problem set.
Jason Jacobs (46:24):
Well, can you talk about that so we don't forget?
Christian Hernandez (46:26):
Remember, when we got started, Mikkel, my partner, had created Nrep, the real estate fund, doing beautiful sustainable neighborhoods in the Nordics. We were off doing VC early stage tech solutions. We start talking about the need for, it's called the urban capital stack. I'm never going to solve the problem. I'm going to fund some solutions, but you need a lot of demand drivers. Nrep is one demand driver. There's also a bunch of solutions that I look at, base installation company, chugging along, profitable, great solution, not venture backable, needs different types of capital. There's asset financing, project financing, private debt that needs to coexist to scale some of these solutions out. But all these exist in kind of silos.
(47:07):
So last year at Climate week we had the dinner where we agreed to do this. We started incubating this idea of creating a multi-strategy investment platform all focused on the same mission, making cities efficient, resilient, sustainable, but doing it across the capital stack. And so we launched, it's called Urban Partners, it's 20 billion AUM. It includes Nrep on the real estate side, so the deployment phase. It includes 2150 on the innovation phase. And in the middle we've announced Luma, which is going to be a private equity platform doing these roll-ups of these solutions and services. We have a private credit vehicle that currently does brown to green retrofits. So teaching others in the real estate value chain how to deploy solutions. And it does everything from backing scientists working in amazing science that can decarbonize the built environment, all the way to actually literally building the building and the financing in between.
(47:57):
And there was a conscious move to be able to share knowledge across the platform, but also give us access to forums where we can never be. So Urban Partners has a partnership with C40, that's the Club of Mayors from around the world. We are the first real estate built environment partner with C40, and we're doing a number of initiatives in 22 cities around the world to help them define and build green sustainable neighborhoods. As 2150, I never would've had a seat at the table for that conversation. As Urban Partners, we have enough weight and influence that we merit that seat at the table. And so the strategies are all still independent. I never sit on the IC of the real estate side. They don't sit on my IC. It's just very different products, but we're aligned and coordinated on these big problems that we want to go solve. So that was an evolution of 2150 as the VC standalone to becoming part of this mission aligned family.
Jason Jacobs (48:46):
Now, are these informal ties across, given that the strategies are separate and distinct, or is it actually a legal structure that they all sit underneath?
Christian Hernandez (48:54):
I am now an equity partner of Urban Partners. So we created one top co that houses the independent strategies.
Jason Jacobs (49:01):
Was there a precedent for this or other companies or firms that have tried similar? And any success stories? Or the equivalent of when you ask a startup, "Are there any comps to justify your valuation in the next round?" Were there any comps in terms of the type of firm that you're building?
Christian Hernandez (49:17):
Not focused on this problem set? So there's many multi-strategy asset managers. So a Blackstone or BlackRock has the infra, the real estate. They all have sustainability teams now. KKR that came from private equity and has now launched a bunch of different things. In the urban environment, there's infra funds and there's real estate private equity funds. There's other VCs playing in that space but not aligned in one. There are some funds, so EIP for example, has the super early stage fund, their core fund, their European fund, and they have a credit fund. So you do have, if you will, multiple strategies inside the same platform, but not on a broader set across different categories.
(49:57):
And so what you want to become, the measure of success, I joke about it but I think it's a true analogy, we want to be the bath phone that the mayor picks up when they have a sustainability challenge. We want to be seen as that trusted partner for cities to help tackle their biggest challenges by giving them solutions that I might've backed, by giving them capital to go build these things, and by making their neighborhoods and their citizens better in one phone call. So the one phone call comes to Urban Partners and then we can deploy capital across all these different strategies. That does not exist.
Jason Jacobs (50:28):
So if you were a betting man, and I want to be cautious not to ask anything that might lead to forward-looking statements or anything like that. But if you look across the next, let's say, several funds, do you anticipate that that fund size and strategy would remain pretty consistent or would it evolve over time? And if you had to bet, in what ways would it evolve? What does expansion look like? And I'm talking about for the 2150 bucket, not for the overall?
Christian Hernandez (50:50):
2150 side. Something that has changed since we got started. So the easiest way to think about it is, we wanted to make everything inside the city walls efficient, resilient, sustainable. People are healthier, materials are better. But what we realized is that to make things inside the city wall resilient and sustainable, you need to think about all the inputs and outputs in the city. The water that flows in and out, the grid that got generated and then lost 30% by the time it came into the city, the proteins that are going to feed the humans, the waste that gets generated. So we've expanded tools to think about problem sets on the periphery of the city wall, but without which the city can't thrive. So that's one.
(51:28):
Two, we started thinking a lot about adaptation. We're all rosy eyed, thinking that we can solve this through mitigation. This summer was a great proof that bad stuff starts happening if we don't. What will need to get deployed at scale for adaptation? Sobering fact, if we hit 1.5 degrees, hypothetical, even at 1.5 degrees, global sea level rise will go up by 0.4 meters. So even if the best possible outcome that we're all striving for happens, we still have to think about a bunch of adaptation measures. So we're spending a lot of time thinking about what areas are we going to try and tackle in adaptation. Some of it's more infra, so it's not for us. But what types of solutions need to exist?
(52:08):
And then on fund size, similar. We just probably like to have a broader portfolio. But yeah, sweet spot is still going to be 6 million to 7 million initial check. So series A or B, if you want to give it a letter, still want to do double-digit ownership, still lead and co-lead. So being able to have the capacity to manage the fund one portfolio plus also scale up to fund two portfolio in the future.
Jason Jacobs (52:30):
Great. Last two questions. Just one, what didn't I ask that I should have, if anything? And two, who do you want to hear from, if anyone?
Christian Hernandez (52:37):
You didn't ask about gigacorns. So I made up this cheeky term, like June '21, about what we were hunting for. And I actually did a tweet about it. I said, "No, we need to create a new term. Everybody's hunting for unicorns. We need to go hunt for gigacorns." And my partner was like, "What's a gigacorn?" So on the fly, I made it up and I said, "A gigacorn is a company that has the potential to mitigate a gigaton of CO2 and be commercially viable." And so literally there's now panels at events titled Hunting for Gigacorns. It's taken a life of its own. A cheeky tweet has become something that we've embraced. Whatever you want to call it, we need to hunt for those mythical creatures. And as you know, a gigaton is very, very mythical. So that's question one.
(53:15):
And question two. Daniel Betts from Blue Frontier, Mr. Cooling. He was literally all over the media this summer because everybody started realizing that you needed air conditioning. MIT Tech Review, MSNBC, Wall Street Journal, New York Times, I joke that cooling has gotten hot. And he is an amazing, thoughtful ClimateTech founder thinking about solutions for this problem set that when you got started, not a lot of people are talking about.
Jason Jacobs (53:39):
What about you personally or as a firm, anyone that you want to hear from in terms of listeners?
Christian Hernandez (53:44):
Oh, sorry. I was thinking about the show.
Jason Jacobs (53:47):
That answer was interesting too. It was also relevant and interesting.
Christian Hernandez (53:51):
The lifeblood for a venture capital fund is two things, right? Capital and deal flow. Interested parties that want to help join the mission of actually helping to make cities sustainable, resilient, and efficient through 2150 or our sister funds and Urban Partners, please reach out. And then deal flow. If you're scaling out a solution that can help tackle some of these hard to tackle problems that I mentioned before. We've done two investments in the concrete space, we probably will make more. We've done one investment in cooling, we probably will make more. So just because we've made one bet. Don't assume that that's the only bet we'll make.
Jason Jacobs (54:21):
Awesome. Christian, this has been a great discussion. I enjoyed it. And it's awesome learning more about 2150. Wish you every success and hoping to find more ways to collaborate as well.
Christian Hernandez (54:31):
Thank you, sir.
Jason Jacobs (54:32):
Thanks again for joining us on My Climate Journey Podcast.
Cody Simms (54:36):
At MCJ Collective, we're all about powering collective innovation for climate solutions by breaking down silos and unleashing problem solving capacity.
Jason Jacobs (54:45):
If you'd like to learn more about MCJ Collective, visit us at MCJcollective.com. And if you have a guest suggestion, let us know that via Twitter at MCJ pod.
Yin Lu (54:58):
For weekly climate op-eds, jobs, community events, and investment announcements from our MCJ venture funds, be sure to subscribe to our newsletter on our website.
Cody Simms (55:08):
Thanks. And see you next episode.
