Joel Cahill With Calano VC

Intro: [00:00:04] Welcome back to the start of Showdown podcast where we discuss pitching, funding and scaling startups. Join us as we interview winners, mentors and judges of the monthly $120,000 pitch competition powered by Panoramic Ventures. We also discuss the latest updates in software Web3, Healthcare, Tech, FinTech, and more. Now sit tight as we interview this week’s guest and their journey through entrepreneurship.

Lee Kantor: [00:00:38] Lee Kantor here another episode of Startup Showdown, and this is going to be a good one. But before we get started, it’s important to recognize our sponsor Panoramic Ventures. Without them, we couldn’t be sharing these important stories. Today on Startup Showdown, we have Joel Cahill with Calano Venture Capital. Hey, how’s it going, Joel?

Joel Cahill: [00:01:00] Glad to be here. Going well today. Thank you.

Lee Kantor: [00:01:02] So tell us a little bit about L.A. How are you serving, folks?

Joel Cahill: [00:01:06] Yeah, we are seed stage, primarily fund. It was co-founded by myself and good friend Aaron Solano, and it’s been a great experience. We’ve been at it for close to four years, fully funded, fully invested, out of Fund One and investing at a Fund two right now.

Lee Kantor: [00:01:28] So what’s your backstory? How did you get into this line of work?

Joel Cahill: [00:01:32] Yeah, well, you know, I appreciate stories that are a little bit circuitous sometimes, or at least not the direct path. I spent ten years in New York after school as a currency trader, and that has absolutely nothing to do with tech startups. But in that time, I had a lot of opportunities to make and lose money and trying my hand at some angel investing and found that I just really enjoyed it. I really love the founder journey. I really love the realization of a dream, whether it’s something that I’m putting my hands to and starting, which I’ve had the opportunity to do, or just being able to come alongside founding teams and seeing their vision and helping them to realize it.

Lee Kantor: [00:02:19] Now, did that kind of epiphany happen by you physically experiencing something, or was this something that you were maybe on the sideline and saw somebody else go through and say, Hey, you know what, this sounds fun. I think I’d like to go down that path a little bit.

Joel Cahill: [00:02:36] Gosh, it’s a good question now. I think part of it was just purely from sitting as an investor, being a Wall Street trader, you kind of look at things in a more passive way. But ultimately, what what helped me to kind of like look look at it more strongly was realizing, like, as as an investor, particularly early stage, you can help shape things and not because I think I’ve always got the best ideas, but sometimes it’s just having good questions around the table. And the big difference when I was when I was a trader, which was an awesome job, I really, really enjoyed it. But it was. You’re a passive participant in the markets, whether I’m trading Mexican peso, Brazilian real or the euro. You’re not you’re not changing monetary policy. You’re not changing any kind of fiscal policy. You’re not you’re not able to actually affect cross-border capital flows that would drive those those currencies. But with in the startup scene especially, you get to help shape something. You actually get to be involved in changing what that future of that organization would be. And that’s super exciting. So I really enjoy the the active nature versus passively sitting back and putting money into something and seeing what happens. And that has shaped a lot of the way that casino works. We stay quite active with our with our founding teams. So much of that is based on the relationship that you can build. And if there is good rapport and trust which has to be built and then when we’re able to to be in that position, it’s been very fruitful for us.

Lee Kantor: [00:04:23] And because you like that sense of getting involved, does that mean that the the founders you’re choosing to work with are coachable, that they have to have that quality about themselves, that they want to hear some advice, that they don’t they’re not the ones that know everything and they don’t need help. They just need money.

Joel Cahill: [00:04:44] Yeah, you’re hitting it. One of the key elements, I think in all of the venture space, one of our last questions with every founding team is. What do you need from an investor? And unfortunately, when somebody says cash, it just means that it’s not going to be a fit. If they’re saying it’s just cash, but somebody needs to be coachable, teachable, workable, because we want to invest in teams who who know an industry, know a space way more deeply than we’re ever going to know, but also somebody who is willing to come back to the table and say, hey, I don’t know how to solve this problem. I don’t know how to prioritize these things. I don’t know who I should hire for this role. And again, a lot of what we’re doing is just helping them to create a decision framework. We’re not necessarily giving the decision to them. That’s a rare outcome, a rare occurrence, but more so how do we actually frame this decision so that we can come to what we think is the best outcome in each one of those steps? Because ultimately what those founders are doing is they’ve got tons and tons of decisions to make. And the fact that they can make them and more accurately, they can make them the better, better chance of success.

Lee Kantor: [00:06:00] Now, any advice for those new founders, especially young folks that are out there listening? On one hand, they feel like they have to have all the answers, because why else would you fund me if I don’t have all the answers? But on the other hand, you’re saying, but be coachable and listen and and and systems that are open to help you make better decisions. And, you know, a lot of young people have this fake it until you make it kind of thinking that goes about and it sounds like it’s opposites in some way.

Joel Cahill: [00:06:36] Absolutely. I think we all live with some form of sort of an imposter syndrome. But the last thing that I want is to be found funding a team who is trying to act like they they’ve really got everything together and not being willing to look at where their their gaps might be. I have yet to found to find anybody who has has no gaps. I don’t think that God has created any humans just like that so far. But and if they did, I mean, I’m sure they’re going to be a pre money pre-revenue billion dollar company at that point already which which we wouldn’t touch. But ultimately, we like to invest in people who are real, who actually can face flaws, who can recognize the places where they excel, but also the places where they’ve got those gaps. And to kind of get a little bit further that question is to find teams who have a great vision for what they want and a path that they can to get there. And along that path, acknowledging, hey, we don’t know how we’re going to get the engineering team that we need in order to solve this problem. We don’t know how this product needs to look. We don’t know all of the various different steps to get there. But but having a vision and something that is very clear on how they want to get there, because at the end of the day, we might that that all of those steps will be different from what we actually plan. But we need to have some kind of plan in place that is clear, well articulated and digestible.

Lee Kantor: [00:08:16] It sounds like it’s a combination of confidence, competence and a layer of humbleness.

Joel Cahill: [00:08:25] Yeah. It is a confident humility, I think, which from my trading days was something that I learned is having confidence in the steps that you’re making as a trader, the trades that you’re making, but also the humility to know that you’re going to be wrong a lot. And and that’s okay. When I was a trader, I was only right, probably one out of every three trades. But the two that didn’t work didn’t kill us. And it’s the same thing with the decisions that every founder is going to make. They cannot make 100% of good decisions. But if they make a handful of really great decisions and and their bad decisions really aren’t that hurtful, you’ve got a really powerful potential there.

Lee Kantor: [00:09:06] So now when you’re looking at a team, what are some of those kind of let’s let’s put aside the red flags for now, but just kind of the the signals for for moving forward, what are some of the qualities they have that you’re like, okay, that’s good. Like these are the kind of the must-haves that I got to see in the founding team.

Joel Cahill: [00:09:27] A lot of it at this early stage where we’re involved is being able to clearly articulate the problem and the solution. And I think that in itself oversimplifies the challenge there. And to go a little bit deeper, that means seeing where revenue identifying where your revenue is coming from, identifying typically we’re investing with somebody who’s already got product market fit and so that there is some revenue, but identifying exactly how and why that’s coming to them, you know, it’s really remarkable the number of times that somebody is like, great, we’re doing 100 K, 280, 300 K of revenue and let’s just go go hit the gas on all of our marketing and you guys have to stop them and say, hang on, do you really do you know who you’re communicating to? Who is that customer that that you need to be communicating to? Are you building for a single customer or are you building for your broader base? And very early on, that can be some of the hardest decisions because some of the early customers sometimes are not the ones that are going to take you all the way through those early customers sometimes can take you down rabbit rabbit holes, which can be really a problem. So being able to clearly articulate your vision and clearly know your what your your go to market, what is working in your go to market and which customers you’re trying to communicate to that that at this seed stage, lots and lots of things will change in time. But you’ve got to have a you’ve got to be able to deliver a product that has a broad enough potential, a broad enough audience that’s also that’s not going to crush your team and trying to serve them.

Lee Kantor: [00:11:18] Now, is there a niche that you specialize in or you’re pretty industry agnostic?

Joel Cahill: [00:11:27] I wouldn’t say totally industry agnostic that we are brought in, but some of our focus areas have been in esports and gaming. We’ve crossed over into some of the web3 and crypto spaces and we’ve done a decent amount in influencer and marketing technology and then just in broader B2B SAS. We look at lots in that space.

Lee Kantor: [00:11:53] Is there a story you could share about working with a founder or a team that you helped get their business to a new level that maybe even surpassed your kind of expectations?

Joel Cahill: [00:12:04] You know, the first story that comes to mind is one of our more recent investments. It was a 2021 investment out of fun. One, just an absolute awesome founder. So appreciate him and his excitement for the business. But it was an odd problem. He could generate lots of sales, lots of interests, had great connections within the industry and a great product, but really struggled to optimize revenue. So we were able to he was bringing on customers but not actually generating the revenue that we needed to out of them, which was a lot of it was just communicating the broader value that hadn’t been communicated beforehand. And we’ve seen month over month revenue increases of five and ten X since then, and customers are way happier. And so oftentimes a lot of it is just helping somebody to see that there’s way more value than they actually think. And we’ve got to sell to value and not sell to cost.

Lee Kantor: [00:13:12] And it’s one of those things that once you kind of see something, you can’t unsee it. It becomes obvious to you probably a lot faster than it was to the the team.

Joel Cahill: [00:13:23] I think in this case, it certainly was. I tried to not to not assume that I’m always right in this case. Fortunately, Aaron, my partner, and I were both. Both saw this early and saw it as a really exciting opportunity. And in reality, other other investors have passed because I just don’t think they saw it the same way. Fortunately, it appears that we were correct on this. It doesn’t always happen that way. And so we’re really excited to get to be alongside this this team to build.

Lee Kantor: [00:13:50] Now, you recently were a judge in on a startup showdown event. Can you talk about how you found out about that event and why it’s important to get involved in those kind of events?

Joel Cahill: [00:14:01] Yeah, absolutely. I found out about it at Venture Atlanta. I was talking with Faraj, one of the on the team over at Panoramic. Great guy. Really, we were connecting over a lot of things in the web3 and crypto space and gaming and he’s very accomplished in that space. And he invited me to be on there on the Startup Showdown, and I really enjoyed it. It was I’ve done several of these, but it was it was a high quality group and a fun panel to be on. And so we we got to see some, some great founders with with very cool visions for where they were headed. It actually was a little bit of a challenging decision for us. For me, it was ultimately for for the winner.

Lee Kantor: [00:14:56] Now. Any advice for those startup founders that are going through an event like that? What’s what would you say are kind of the do’s and don’ts?

Joel Cahill: [00:15:05] Sure. Clarity. Clarity, above all, is the best thing. And identify one revenue stream, identify one client. At first, you can acknowledge that there will be plenty down the road. But do not try to boil the ocean. Do not try to create ten, 12 different revenue streams right away. We’re going to make money from X, Y and Z. Suddenly we’re going to have $50 million in revenue. It’s okay to start more slowly, especially in the market, the market environment that’s changing now where there’s an emphasis more on getting to cash flow over just rapid growth and burning through cash. And so I think just absolute clarity. I want to see somebody has clarity on what they what they want to do, where they’re going to go. And again, like we’re saying it, that can all be the wrong direction. It’s a matter of starting in a direction with where you can then gather the information necessary to determine which course corrections are necessary.

Lee Kantor: [00:16:12] Right. Take action, go boldly forward and then adjust.

Joel Cahill: [00:16:16] Absolutely.

Lee Kantor: [00:16:19] So now how how do your relationships evolve? You know, once you start with somebody, you get them going. How does it go beyond that first initial investment?

Joel Cahill: [00:16:32] Sure. Yeah. So it all depends on that, that founder and the team and how they want to how they want to communicate. We’re not trying to add more, more work to their plate, but we we do a lot of ad hoc catch ups. We something that we do value is rather than everything just being purely scheduled sometimes actually just getting on the call. And there are times where there’s just personal stuff that we, we kind of chat through once we’ve built some rapport. And it’s important because our personal lives are are important. They shape the things that we do, the way that we feel, the decisions we make and all of that. So there’s a combination of of digging hard into the monthly metrics, but also just make sure that getting to know each other, helping to just further shape, better shape everybody’s sort of emotional fortitude as we go through the challenges and rational decision making. So to answer your question, it differs from every every company. But we do we make ourselves available and schedule, schedule calls and even just just a quick text. Hey, you got a few minutes to chat and sometimes just just just just to check in. Not like, hey, how was revenue last week? Did we did we hit our targets? But how are you doing? Those those I think are actually very important. The soft things. We’ve been very keen to do that all along.

Lee Kantor: [00:18:01] Yeah. It’s funny how when you look at it as a human to human relationship, you tend to get better outcomes.

Joel Cahill: [00:18:10] Yeah, I like that. I’m going to steal that one. That’s a better way to look at.

Lee Kantor: [00:18:14] Well, what do you need more of? How can we help?

Joel Cahill: [00:18:20] You know, the thing that we I think need the most of is, especially in this environment now with with lots of offers getting rescinded and people large layoffs at some of the later stage. The biggest thing to us is, is being able to communicate on talent whereabouts. We’ve got a lot of portfolio companies who are growing. And, you know, the unfortunate reality is that the talent pool, that the market for talent is loosening, which is which is really great for companies who are hiring. It’s painful for those who are experiencing it. And so the faster that we can make those matches, the better everybody benefits. And that’s what we’ve been pushing more towards, is being able to better place talent that is being who is leaving, being let go, who’s losing offers. And, you know, one of our portfolio companies just picked up four people right away in that kind of scenario. So that’s that’s a big focus for us right now.

Lee Kantor: [00:19:23] So if somebody wants to learn more, have a more substantive conversation with you or somebody on the team, what’s the website?

Joel Cahill: [00:19:31] We are. I think it’s fun. I don’t go over there very much so.

Lee Kantor: [00:19:36] And it is that Zalando funds few and Chess.com Joel Cahill, if they want to connect with you on LinkedIn, is another good place to go.

Joel Cahill: [00:19:48] Yeah, LinkedIn is best. I don’t I’m not as active on Twitter and so I know that that doesn’t fit for the tech personality, but it’s just where I’ve landed.

Lee Kantor: [00:20:00] Time is, you know, you got to kind of focus in on what where you’re going to be and what’s important to you. And I think LinkedIn and doing the work you’re doing, it’s important. So we appreciate that.

Joel Cahill: [00:20:15] So like.

Lee Kantor: [00:20:17] Well, Joel, thank you again for sharing your story. Like I said, you’re doing important work and we appreciate you. The website again is Carlino funds. Carlino funds. And you can connect with Joel and on LinkedIn under Joel Cahill. This is Lee Kantor. We will see you all next time on Startup Showdown.

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