First Funders

Resilience as a thesis: Tahira Dosani on Building for Underserved Markets and AI in Fintech
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welcome to First Funders. Today we have Tahira Dosani, a resilience species based out in DC and I'm so excited to have this conversation because Taha and I know each other from, I don't know, before you were running your own fund, but long, long, long ago through mutual friends.

Um, and my mutual friend adores you so much and couldn't stop talking about you when she moved to DC and I was really glad that we were able to Meet when, uh, her brother was getting married, uh, and follow your journey. Since then, I've been so inspired by you taking international steps to live abroad and do important [00:01:00] work, uh, and really.

Put yourself in places of impact and to see you come back to the US and do the roles you did at the various funds that you were at and then start your own fund has been something that I've been watching from afar. And I'm excited to hear the story, uh, in detail because we mostly get to hang out socially.

Tahira’s path to investing
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So with that, um, I'd love for you to. Introduce yourself, how you would like to share your story with us, because it's a different one than nearly everyone we've had on our podcast in the most exciting and interesting way. And so we'd love to hear the journey of what brought you to this point, and a little bit about like your why, why do you invest?

Yeah. Well, first of all, thank you so much for having me on the podcast. It is so fun to get to, uh, connect in this capacity, right? Like, as you said, we've had social, a little bit of kind of professional encounters along the way, but, um, you know, now we're, we're co-investors and, uh. And, you know, hopefully we'll get to do deals [00:02:00] together.

But, um, that aside, just getting to work in the same space and, getting to do this work that we both love alongside other great people is, is really one of the great rewards of, of being in this world. Um, so in terms of my background. It, as you alluded to, certainly not the most linear or traditional path to venture as is yours and I in a lot of ways.

You know, I. I am really appreciative of that longer journey, and I love getting to work with and alongside folks who also have, um, more meandering trajectories because I think every experience along the way gives you something right, and lets you bring that with you and, um. If, if you have never built, if you have never, um, struggled to build, if you've never failed, I mean, there's, there's so many parts of the founder journey that you just don't understand [00:03:00] and can't relate to.

So, uh, that being said, you mentioned the why and my why started very early in my life. Um, I grew up with, you know, um, I. Some financial instability and uncertainty as, um, as an immigrant to the US We moved from, from Pakistan to, uh, to Atlanta, Georgia in 1989.

And, um, you know, that was, that was a tough move and, and for my family adjusting to a very different cultural context, financial context, et cetera. And then, uh, a few years later, my parents got divorced and that again created. Another element of instability and uncertainty, um, financially for, for our family.

And having experienced that and understanding firsthand, having that lived experience of, you know, what it's like [00:04:00] to, um, to be in a place of uncertainty and, It's not a unique experience, right? 70% of Americans are not financially healthy. Most people in this country, um, are in situations where they are spending more than they're earning.

Where they lack adequate savings and assets. And that can be short term savings, it can be retirement savings, et cetera. And they're not adequately protected against shocks and risks. And those risks, those shocks, those adverse events are inevitable. Um, you know, it's, you don't necessarily know when or what, but you know, things are going to happen.

People get sick. People lose jobs. Cars break down. Floods happen. Roofs leak, right? These things happen inevitably, and if you aren't able to be resilient enough, um. [00:05:00] As a human, but also from a financial perspective to weather those shocks and risks. You get pushed down into poverty, you get pushed back down and all of the working and the saving and the efforts to kind of lift yourself up can, can, can be lost really quickly.

And so, you know, really my why starts from that personal experience, both my own and then seeing. So many others along the way experienced that. And when I graduated college, you know, my, my trajectory was in a lot of ways shaped by that experience, right? It was, I have to go get a job where I'm gonna earn good money and pay down debt and do everything I can to not be in that space.

So I started my career in management consulting. I was at Bain for a few years. Um, and that decision was very much, you know, a reaction to that, that lived experience. And it was a great [00:06:00] experience. I got to build strong strategic and analytic skills. I got to work on a number of different bus business challenges across a broad set of organizations, across the industries and sectors.

Um, and I got to do it with some really smart, really amazing people. Um. And yet after a couple of years, I felt really removed from what was happening. Right? As a consultant, you kind of sit at 30,000 feet and offer strategic recommendations and you deliver a PowerPoint deck and then you go away and you don't know what happens.

You don't get to see the implementation of it. And so I decided I wanted to operate, um, and I wanted to get closer to the action. And so I took a pretty, um, shark turn off the traditional consultant career path, and I moved from Boston to, uh, Kabul, Afghanistan, and where I worked [00:07:00] for, uh, the first telecom operator mm-hmm.

That was building in, in Afghanistan, setting up the first cell phone network in the country. Uh, you know, prior to that company setting up operations during the Taliban time in Afghanistan, there was really no communications infrastructure. It was a country of 32 million people and there were a thousand landlines and no cell phones.

Wow. Um, and so as, as this company started to build that telecommunications infrastructure, it transformed. The way people could communicate. It created the basis for more trade, more commerce, more investment, uh, in the country. It, um, improved, you know, quality of life and social health indicators, right?

When you can call a doctor, it changes things like infant mortality, maternal mortality, et cetera. and, this was a for-profit private sector company. Yet [00:08:00] it was having tremendous impact. Yeah. On the quality of life, on the quality of economic development for the people of Afghanistan. And that really resonated with me, right?

Mm-hmm. And this idea of, you know, you can have the rigor of the private sector, you can have private capital going into businesses like this, um, that are scalable, that are sustainable, that are not dependent on donor funding, et cetera, that are also having significant impact. Yeah. If you can align those incentives, those things can coexist.

Totally. and so that was a model that I got really excited by. And as I was working in Afghanistan and as we built out, um, communications infrastructure and got cell phones in people's hands, we saw another opportunity. At that time, Afghanistan was 97% unbanked. Only 3% of the population had a bank account, but more and more people had cell phones in their hands.

And we saw the opportunity to [00:09:00] build a mobile money solution, a mobile payment solution, where people could use their phone as a mobile wallet and they could use that to pay for goods and services, um, you know, without needing a bank account or a credit card. I mean, for context, this was 2006, 2007, 2008, exactly.

2006 to eight is when I lived in Kabul, early days, and Pesa in Kenya, which was really one of the first mobile payment solutions launched in 2007. Yes. We actually licensed, uh, that platform and launched it in Afghanistan. There you So not only was my time in Kabul, you know. Really transformative in terms of seeing how businesses could generate impact, but it's really what got me into the intersection of technology and financial services.

Yeah. Um, really as a builder and building product that, um, you know, was, was really tough to get off the ground in this market because it was, a population that had low literacy that, you know, [00:10:00] was not used to, um. Digital financial infrastructure or digital infrastructure at all. Mm-hmm. And, um, and, and it took time, but we saw the product grow and scale.

And, for me that was really pivotal in terms of recognizing how powerful that intersection was. Yeah. And historically, right. Financial services have failed to effectively serve segments of the population because it hasn't been profitable to serve them. Right, right. Technology can fundamentally transform the cost curve, making it much cheaper to both acquire and serve those customers.

Mm-hmm. Enabling them to be profitable. Yeah. And that's where the intersection of financial services and technology becomes really powerful. Um. So post by time in Kabul, went to business school and then moved on to the investment side. Coming out of business school, always focused on financial services.

Started in later stage private equity because it was used to these big infrastructure type [00:11:00] investments, you know, from the telecom space. Um, but very quickly. Understood that I liked to be a builder as well as an investor, right? Mm-hmm. And coming in at the early stage at the seed stage really allows me as not just to put capital into something, but to work alongside founders, to, to help them build their businesses, to help them tackle, uh, beyond capital mm-hmm.

The challenges that they face in growing and scaling. Yeah. And that took you to Accion where you spent a good amount of time. Exactly. So I joined, uh, Ion's Venture Lab in, uh, now 12 years ago in 2013. Uh, that's where I met my cog as well. Mm-hmm. We, we co-led Ion's Venture Lab, um, and worked together for, you know, almost a decade before we launched, uh, resilience.

How Accion shaped Tahira’s career
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But at Accion is, was really where I cut my teeth in early stage investing. Uh, did over 50 seed [00:12:00] stage. FinTech deals, all that had a financial inclusion, uh, or impact lens. And, and that fund was global. We invested in the US but also in emerging markets across Latin America, Africa, and Asia. Mm-hmm. Because the, the reality of.

Customer needs is very transferable and translatable across these markets. Mm. Um, and so, you know, the, the products and services and sometimes the underlying infrastructure is a little bit different, but what customers need, I. In terms of being able to make payments, in terms of being able to access credit, in terms of being able to save safely in terms of being able to invest and grow their asset base.

Um, those things are really constant. Mm-hmm. So you, you felt like you were probably in the right place when you started to be at the intersection of early stage being in a lab where you're supporting sort of the zero to one and you're working. Essentially with the customers that you talked about and sort of, yeah.

Would you [00:13:00] call them emerging markets? Is that your term for it? Yeah. Yeah. I mean, it was global. So it was US and, and emerging markets. Us and emerging markets. Right. Um, but then you're like, actually, I just wanna do this myself. So tell me, me, what led you to saying, Hey, I, I've landed where I belong. Like that's my sense of your time at Ion, but that's not enough.

I'm ready to start my own fund. Tell me that story. Yeah, it's a good question. You know, it was a couple of things. I mean, one Accion was an incredible home to allow us to build what we were doing and what we were building and, and deploy capital, uh, you know, generate returns and, meaningful impact. Um, but as, as I thought about how do we scale this.

One limitation is that Accion was a not-for-profit organization. and so that often created the perception of subsidy. Mm. And part of my goal here is certainly to [00:14:00] have direct impact through the portfolio that I'm investing in. And I was certainly able to do that at Accion, but also to be a demonstration model.

To be a proof point to the capital markets writ large that this can happen. That these things are not, um, you know, they're, it's not a trade off necessarily. And not only is it not a trade off that. The returns and the impact can actually be synergistic, right? They can enhance each other. And in order to be that demonstration model, I think, my cog and I had the view that this needed to be an independent platform.

Um, and you know, when you look at the data, um. Of the 80 some trillion dollars of investible assets in this country, 98.6% are controlled by white men, only 1.4% by all women and all people of color. Right. And so there was also something [00:15:00] about being able to demonstrate that we can generate impact and returns hand in hand.

Mm-hmm. Um, and being able to demonstrate that who we were, um, you know. Was not a barrier to that, and in fact could enhance that for sure. and you know, finally I'll just sayI didn't come into this saying I have to have my own fund. Mm-hmm. It was, I want to do this work a certain way and.

I didn't see others doing it the way I thought it needed to be done. Yeah. Which then led us to say, okay, we have to build it. That's how this goes. Right? It's it and that. It's that clarity of vision and that clarity of conviction that really, I think shows the entrepreneurial side of you. That seems to have been a thread throughout, because by the way, leaving consulting, like one of the top firms to go to a developing country in.

In stable conditions is a very entrepreneurial move and a like a [00:16:00] bold belief in yourself. And then to continue on in this journey that the way that you have just shows, like people don't realize how entrepreneurial it is to start a fund. I, I think it's o overlooked. It's just people think that you have a lot of money to deploy and that's, that's it.

Yeah. But the path to get there. Is one, you're right. I mean, I think the, the emerging manager journey is a startup journey for sure. Right. And we, and, and, and in some ways I think that's really important because it reminds us what the founders that we invest in are going through. Yes. For sure. Right. we know what it's like to be on the other side of that fundraise conversation for sure.

Um, it builds that empathy and it connects us back to that experience. You know, you, early on in your intro referenced uncertainty a lot, and I think uncertainty is the hallmark of both the immigrant experience on the entrepreneurial. Experience and now very clearly the emerging manager experience.

And I think your, fund is aptly named [00:17:00] resilience for so many reasons. One, it represents I think your journey to this point and then your journey going forward with this fund, but also the founders, your backing, I think, you know, to be resilient through uncertainty. It. It has to come from life experience.

And I appreciate you sharing those, those life experiences because for people to see the human behind the check is what really matters. And thank you for being open with it. And I think when we can be human centric, that trickles down to the way we think about the founders and then the way they think about their customers.

What makes a resilient founder?
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Yeah. Because ultimately we want to build resilience for the end user, right? Yeah. That's what matters. Yeah. Let, let's talk about that. Like when you think of your founders, what makes a founder fit for your investment strategy? Like what makes a resilience founder? Yeah. Um, so, you know. Our thesis is [00:18:00] around investing in early stage FinTech that builds financial resilience for the end user.

And when we think about financial resilience, we're really talking about models that help build net income. So that can be higher inflows or earnings or reduced expenses. That can be models that help build assets and that can look like, um, savings investments. It can also look like things that help people on a path to home ownership, for example.

And then we're looking at models that help, um, mitigate risk or help people recover from shock and risk. And so one is that it's a founder who's building in that space, right? Who's building for financial resilience for consumers or small businesses in this country. Um, and, and that's around their business model, but beyond the business model, um, you know, when we think about a founder, that's going to be a good fit for us as an investor.

And that [00:19:00] is such an important dynamic and relationship, right? The average VC founder relationship. Last longer than the average marriage in this country. Um, that says probably more about the state of marriage in this country than it does about venture investing, but it's really important, right? It it, it's a long term relationship and it's one that has to navigate ups and downs, uh, navigate different macro environments, different competitive environments, different um, stages in a company's lifecycle and in a fund's lifecycle.

And so finding that investor founder alignment is really critical. Um, and your strategy as an investor, I think very much shapes what you're looking for. Mm-hmm. Right? We are an investor that's very hands-on. We work closely with founders. Once we invest, we take board seats, et cetera. Mm-hmm. And so. For me, a founder who just wants capital and [00:20:00] wants to not be told what to do for years is not gonna be the right fit.

Mm-hmm. Um, so one thing I often test for early in that relationship is how does a founder respond to feedback? Because over the course of this relationship. I'm going to give feedback. I want to know that they have a growth mindset that they can take that feedback. Um, well, that they can internalize it, they can reflect on it, and when appropriate action on it.

Uh, I don't want defensiveness. I also don't want a yes. Right. And someone who's just paying me lip service and saying, that's a great idea. That's a great idea. You, you know, they, they have to have conviction, but be able to take things in effectively. Mm-hmm. We know the founder journey is a tough one. Um, you talked about, you know, that threat of uncertainty and it really is right, because founders are, have visibility into.

Few months, maybe a year or two at a time. Yeah. Uh, or [00:21:00] going kinda from funding round to funding round, or, and, and especially right now, we're in a particularly uncertain macro environment. Yeah. Right. Where so much is changing on the policy side, on the regulatory side. On macro side with things like tariffs, et cetera, where, you know, these things have huge implications on certain businesses and business models, and you have to be able to be resilient through that uncertainty, through those changes, through the failures and, and, um, challenges that we know are going to arise.

Yeah. Uh, and so you're coming in at the seed and you're writing what size checks and how many checks per year? Yeah. So, uh, just on that seed piece I want, because these terms get used really broadly, so I'll just define what seed means to us. Um, and, and really when we talk about seed, we are talking about, uh, a product that's live in market that [00:22:00] has some early customer revenue traction.

Essentially what I want is I'm, I'm not gonna invest pre-product or pre-revenue. Mm-hmm. That's awesome. I also don't, yeah. I also don't need, you know, hundreds of thousands or millions of dollars of revenue. But what I want to see is that customers are willing and able to pay for the product. Sure. And I want to see some early traction.

In the channels that we think are going to drive scale for the business. Yeah. So that, that's really what I'm looking for. The stage and your check sizes. Yeah. So we're writing million dollar checks at the seed stage. Amazing. Uh, we can lead rounds, we can follow if a strong leads already in place, so flexible and agnostic there.

And how many checks are you writing a year? Typically, uh, a, you know, between five and 10. Mm-hmm. Roughly targeting about eight or so mm-hmm. In a year. Mm-hmm. Mm-hmm. Yeah, that makes sense. So it feels like somewhat [00:23:00] concentrated, not entirely concentrated portfolio. Yeah. We'll do about 25 deals out of the fund.

I mean, we are sector specialists. Yeah. In FinTech for financial resilience. And so, uh, you know, our approach to portfolio construction is probably a little more high concentration. High conviction. Yeah. Than, uh, than say a generalist investor might be. Totally makes sense. What's coming up for me is that you bring a lot of understanding of this emerging customer, emerging markets customer, which of course exists in the US as well, but it sounds like you're investing primarily in the us.

ResilienceVC in the U.S. and beyond
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Is there This fund is all us. Is there plans to invest internationally in future funds? Is this, is this something you believe in? Yeah. Like what's your take on writing checks into companies that are built outside the US? I mean, you know, I've spent most of my investing, career investing, um, in and beyond the us.

Mm-hmm. And with this fund as [00:24:00] a fund one. Um, given that my cog and I are both based here and given the massive market opportunity in this space in the US, it made sense to focus and start here. But the goal with resilience is not just one fund, right. It's, it's a platform. And so, you know, over time, certainly would be excited to, um, have either global vehicles or other regional vehicles that we, uh, launch on the platform.

Do you think that the venture mindset and the behavior of getting to venture scale can be found since you've done so much of this investing, um, internationally? Like do you see it, is it different? Does it show up differently? Are you okay with that? You know? Yeah. Look, I mean, there are certain things that.

Certain, I would say market prerequisites that you need to be able to invest in venture, right? [00:25:00] And, um, it, it certainly has to be a market where, um, where you can have entrepreneurship, right? So, uh, a socialist economy might not be as open. And may not create enough opportunity for entrepreneurship and ownership because in the VC world, we rely on ownership as a, an incentive for,entrepreneurs.

Um, so, you know, certain kind of. Market level economic characteristics are important. We also need to see the capital markets built to a certain extent. Yeah. Because we need capital sources beyond our own. Mm-hmm. Right. We need angel and pre-seed investors to get companies to the the stage, and then we need later stage investors to be able to take companies through the growth stages after we invest as well.

Yeah. And we need. Um, mechanisms for exit liquidity, right? So we need, whether that's an [00:26:00] IPO environment, an m and a environment, secondaries environment, uh, and then you have to be able to repatriate capital out of those, those countries. So, you know, certain markets and economies are certainly more ripe for venture investment than others.

But broadly, when you think about success and venture. You're looking for opportunities that serve large addressable markets and um, and that are able to do so disruptively. Mm-hmm. Mm-hmm. and so emerging markets are, um, in some ways ideal for that. You have large populations in so many markets that are not well-served.

Um, you know, where. There has been investment in those markets. It tends to be on products that are focused in the very top end of the market. Mm-hmm. But when the vast majority of that market is lower income and is underserved, there's real opportunity to build there. So you're talking [00:27:00] about huge addressable markets for sure.

And you're talking about necessarily needing disruption to effectively reach these markets. Yeah. And venture is made for that is ideal for that in so many ways. So certainly, you know, I think that the global opportunity in many ways, to me is so similar to the low and moderate income opportunity in the us.

Um, I'm so curious because I, I agree with you on the, um, the customer opportunity for sure. These customers are underserved, which countries are. In your top three that have the right market conditions that you spoke of, because it feels like there would be few, uh, on that list. But you know, I'm probably wrong.

So I'd love to hear from you. I mean, I think there's, there's many. And when we were at Accion, I mean we were investing, you know, in Latin America, we had investments in [00:28:00] Mexico, in Brazil, in Chile, in Colombia, in Peru, um, in Africa. We were invested in Sub-Saharan Africa, in Kenya, in Tanzania, um, in. Uh, South Africa and Nigeria, and then in North Africa and Egypt, um, and then in Asia, in India and Pakistan and Indonesia and the Philippines.

How Tahira qualifies opportunity markets
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So, you know, these are all huge markets, massive opportunities. And you feel like the follow on capital, the sort of environment for building a business, the potential for exit. There Or is it different? Is it a, a different path? It's not uniform in each of those places. Yeah. Right. Certain, some of those elements are going to be stronger in some markets and weaker in others.

Um, but I think there's, there's enough. To be able to, to deploy and, and you know, it's, [00:29:00] it's a little chicken in the egg, right? Because you can't wait for it all to get built up. You have to be part of that building. Yeah. and so, you know, seeing more international investors come in then brings more local money in it brings other international money in.

So the, these things, you know, kind of grow to in tandem. Totally. And, uh, and, and, but you know, over the last many years, we've certainly seen. Uh, a lot more local funds grow. and, you know, success stories are really important in these markets because when you have the success story, one, it attracts more people, more capital into this space.

Yeah. But then, and, and people have the model of what, you know, what it can look like. But then those successful founders. Feed more capital back into this space, we get to see all of that snowball. I love it. Um, I'd love to hear about an example of a startup that you are, an investment that you're particularly proud of, hopefully because there's some outcome you can speak [00:30:00] to, but I also know that that's not always the case so early in the journey, um, or maybe because of what it's building.

OS Benefits: Solving the under-insurance crisis
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Like what is one that speak stands out to you that you'd love to share? Yeah, so our resilience portfolio is, you know, is, is is very young. Um, we just started investing out of this fund in the last couple of years. And, uh, and we haven't, you know, these companies are seed stage companies. None of them have really gone back to market for an A yet.

They're just starting that. So, uh, I'm gonna speak less about performance and really more about, uh, the models and, and you know, where, where we see. Um, serial opportunity, and I'll actually point to, uh, one of the more recent investments we made out of the fund, which is a company called OS Benefits, um, based out of New Orleans.

And, it's a company that focuses on providing health insurance to hospitality workers, to restaurant workers primarily, and, hospitality [00:31:00] workers are. One of the largest segments of employed adults in this country who are un or underinsured for sure. Employers are mandated to offer health insurance once they go above 50 full-time employees.

90% of the million restaurants in this country are below 50 FTE. Yeah. So employers are not mandated to provide it. We no longer have an individual mandate in this country, so consumers are not required to go get their own health insurance. Mm-hmm. And, um. And so many of them don't have it. Um, and you know, people tend to be a little younger, a little more active in this space.

And so, um, they're often looking at options where the plans that are affordable for them are high deductible plans. Yeah. And so they're going through a calculus of, well, I'd be paying this monthly premium and I would have to pay thousands of [00:32:00] dollars. Out of pocket before the insurance kicks in to cover me.

This doesn't really make sense, right? But then it can put them at real risk if there is a significant health issue. And so, uh, Elizabeth Tilton, the founder of OS Benefits, came up in the restaurant industry. Um, you know, started as a line cook, moved into restaurant management, and then ultimately advisory to restaurants.

But lived and experienced this challenge. And, um, you know, we talked earlier about how my lived experience shaped my journey, and, and I think that founders who have lived experience. Lived experiences of the problems that they are trying to tackle Yeah. Are so, um, connected to those issues and tend to be really resilient, really convicted because there is such a personal connection to what they're working on.

I love it. Um, so she saw the challenges firsthand, both from the perspective [00:33:00] of. Restaurant workers and restaurant managers and owners, um, and, and recognize that, you know, this is an industry where turnover is high, where, uh, you know, owners are facing. Slim margins and, you know, increased challenges, especially now with tariffs, with, uh, you know, all of those, those things that are coming into effect.

And, um, and yet they want to be able to offer benefits to their employees. It's costly for them when employees get sick and don't have mm-hmm. Coverage. Um, you know, that, that creates challenges as well. But it's been really hard for employers. To offer it, um, because it's prohibitively expensive and even where they're mandated to and, uh, to offer health insurance, they have trouble finding good group health plans, right?

Because traditional group health plans require, uh, they have minimum [00:34:00] enrollment rates that are required so that they don't, um, face adverse risk selection, where only people who are sick. Take on the insurance. Right? Totally. So they wanna see 60, 70% plus of the employee base take up the, insurance.

And that's not gonna happen unless the employer can pay almost all of that premium, which in many cases they just can't afford to. Yeah. And so. That drives premiums up even higher, creating even more challenges. Mm-hmm. And so Elizabeth really set out to build, uh, an insurance product and distribute an insurance product specifically within this space.

Amazing. And, and you know what? We talked about the challenge of what she's solving, the fact that she knows this space deeply. Um, but you know, folks who are targeting niche segment or sector specific opportunities, uh, especially when they have a deep understanding of that customer. I think those opportunities [00:35:00] are really exciting.

Yeah. When you're taking a space that, you know, you're not just another product jumping in the mix mm-hmm. But you really are. Solving a true pain point with something that just hasn't existed in that space. It's really powerful. As you see this new wave of companies coming with AI arriving as well, what are some areas you're excited about within FinTech?

The fintech and AI crossroads
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Like. Like diving into the industry, right. you're an expert in, in FinTech, uh, and this very specific part of it too with AI now here. What is your view on areas that weren't previously accessible that you're hoping to see, um, solutions to? Yeah. I mean, first and foremost, ai. Beyond the product side of it is transforming the way startups grow and operate, right?

Yeah. Um, there's no company we look at that isn't using it in some way. Um, many of them can on the backend for, [00:36:00] uh, writing marketing copy, for coding for customer support, right? We're seeing, uh, AI integrated into operations and companies that are integrating it or natively building with it are able to.

Develop faster, get products to market faster, test things faster. Mm-hmm. And that changes their ability to be capital efficient. Totally. It changes, uh, you know, the trajectories that they're on. So, for our, our industry, for all of venture, I think we're gonna see some patterns shift and emerge.

Right. The levels of pre-seed capital that someone might need to get a product to market may change the way people think about that. C to a journey will likely change. Right. So I think we're in the early days of that still. Um, but I, I'm really excited to see how it more broadly transforms the way companies need to be capitalized.

Yeah. And then from a product perspective, you know, ai, we're [00:37:00] seeing really exciting product. Um. Uh, use cases. Um, we are, um, we're seeing a lot in terms of the use of AI for personal financial management and money management more broadly. Right. And the reality is we've seen personal financial management solutions for years in the market.

The holy grail of PFM has been behavior change, right? It's, they, you could be told, yes, pay down this debt line first. Yes, put this much into savings each month. But, um, you know, the, the challenge was, well, how do you get someone to actually do it? And we gamified and we incentivized, and we nudged and we rewarded and we did all of these behavioral things to try and get people to actually.

Take those actions. Um, but in an AI agent world, you don't have to count on the user [00:38:00] to take the actions. They can be taken for them. And so that opens up some really exciting opportunities. Mm-hmm. Um, and so, we've seen autonomous vehicles and self-driving cars, and I think we're now going to see the era of self-driving money.

Mm-hmm. This money movement in a way that's best for the user. Right. When you're thinking about in the mass market consumer in the us, they are trying to optimize between checking and savings. They are trying to ensure that they are earning as much yield as they can on money that they're saving, while never being at risk of overdrafting a checking account.

They need to, um, manage and pay down debt over time. Most people in this country are, are in debt. Um, and that can be automated and it can be done for us better than most of us can do it ourselves. Right. So I can relate. Yeah. Like I think back [00:39:00] to when I first moved here, I was on a line of credit and you know, I was getting paid at a certain pace.

I. And I had to pay rent at a certain pace. Yeah. And there were plenty of overdraft moments simply because of user error. Right. Uh, and I had to call friends to like spot me for the next month. I mean, a was a slightly shameful, but, and you know, just shows that I was living hand to mouth for a long time, but.

You know, it was a little automated. 60% of Americans live paycheck to paycheck for sure. And I, that was, it's not a unique, it is not a unique experience. It is the majority of people in this country, and it's so, and you know, you, you mentioned shame and that's a, that's a huge reality is that. People feel so much shame around their financial lives.

Yeah. Right. Um, I read a study that like men would rather talk about erectile dysfunction than like, not have, not being financially stable. Wow. Um, so you, you know, there's real shame there when you know, [00:40:00] and, and, and that shame creates suboptimal behavior. Right. Yeah. I open up my bank account and there's like only 70 bucks in it and it's stressing me out, so I just close it.

Yeah. And then I don't do the things that I need to do. Yeah. Um, and so, you know, technology can solve for that. Yeah. For sure, for sure, for sure. Yeah. And, and other use cases as well. I was talking, uh, to a company this morning that, in the insurance space, right, right now, um, my, my old, the old place I lived in a few years ago, I.

Got flooded. Mm-hmm. Um, and uh, and you know, I had to wait, uh, over a week for, uh, an insurance adjuster to come out to calculate the damage that took weeks. It was a couple of months from the incident before my insurance company was able to cut me a check. And until, for most people, until they get that check, they can't start paying for the repairs.

Yeah. Right. Which means that people are [00:41:00] dislocated, people are living in unsafe conditions. Um, tho that's a reality. And you know, we have, um, I. AI is can now be powerful enough where you don't need to send an adjuster on site. Mm. You can have an app that someone installs on their phone and they take video of their property and the damage and AI can automatically calculate, you know, we know this furniture, we can do image recognition.

It's from this store, it, this is the value. These are your floors, these are the material. This is what a replacement will cost. This is the level of damage. And that can be done instantly, real time. Um, and so AI and a model like that one significantly reduces cost for an insurer. And hopefully some of that cost reduction gets, uh, gets passed down to the end user.

But more importantly, for the end user, it accelerates the claims process for sure, and it means that they get paid out much [00:42:00] faster, which is really critical in a, in a situation to your point of like. Intense stress and uncertainty again. Yeah. In a time where you need the service to move fast and you need the cash or you need the fix that, we just went through a situation here as well, and the slowness in this industry is painful when you're just trying to get repairs done so that you can make your space livable again.

Um, and like 90% of insurance payments are still done via paper checks in the mail. You know, there's so many opportunities to optimize, right. Even beyond ai. Yeah. Um, but, but AI can be a huge driver in optimizing, in cutting costs, in reducing time, uh, and inefficiencies in these processes and improving accuracy.

Because that's the other piece is like fraud. I mean, AI is gonna generate fraud, but is also gonna be very critical in fraud detection and [00:43:00] management in this space. Sure. Yeah. We had, um, my friend Shield from Better Tomorrow Ventures on, mm-hmm. A while ago, and he. I'd asked him this question that I'm gonna ask you.

Um, he had shared some insights on like the complexity of building in FinTech, I would love to ask you the same question, which is like, what do founders get wrong about building in FinTech today? Like, what is necessary to be successful as a FinTech founder and like, where do you see the common mistakes when someone starts a company in this space?

Common mistakes from fintech founders
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I mean, you know, speaking of ai, one challenge that I often see is that, um, people get really excited about a new technology and then build a solution and then go looking for the problem they're trying to solve. Right. And we're seeing it with a, with uh, ai, we saw it with crypto and blockchain as well. Um, where it was like, oh, well yeah, we're, we have this blockchain enabled this, or we're using crypto payments.

I'm like, but [00:44:00] what's the, the value proposition of doing that? Is it actually more efficient? Is it enabling something that wouldn't have been enabled otherwise? Um. And, the answer is often no. And so I, I really, encourage founders. To start with a problem that they're trying to solve versus a technology or an idea around a solution.

But if you are oriented around a customer and a customer's needs, if you're able to remain customer centric, then I think you avoid that. Because then you're, you come with a deep understanding of that customer and an understanding of their pain points, and then you're building solutions to solve for their pain points.

And when you're solving someone's pain point, their willingness to pay is so much higher, right? Because you are actually creating immediate, direct quantifiable value for [00:45:00] that.

Um, and do you think in the space of FinTech in particular, that the founders are more likely to succeed if they have prior experience in this space and prior networks? 'cause my understanding was essentially that I. Unlike other spaces, you know, it's a very closed, uh, network in terms of trying to build partnerships or getting into the pipes or building with the financial institutions, you know?

Do you see that true or do you see that actually different for the type of work that you're funding? I. I think there's a bit of both, right? I think there's advantages to being an insider to having networks and relationships. I mean, B2B sales to banks are hard in the best of times and with the best of connections.

That's right. Because these are not fast moving organizations typically, and they're highly regulated. So there's a lot of, a lot that they have to go through in any procurement process. Hmm. [00:46:00] Um. we've seen really successful fintechs built by outsiders mm-hmm. Who come in with a different view and are not limited by the way.

Things have always been done. Uh, and we see strong success stories from people who've been deep in this space for many, many years. Yeah. Um, and so, you know, if there was an algorithm to like who the ideal founder was, then we would be putting that into ai and I would be out of a job. Totally. Totally. And that's coming.

But anyway, it probably won't be right. Um, I feel you. I feel you. Is there's just, you know. We talk about product market fit, we also talk about founder market fit and it, and that can take a lot of forms. Yeah. So for, for some products and for some founders, it's, you know, I've been in this space, I have these relationships.

I can sell that better and faster than others. Uh, or I have deep experience in [00:47:00] this product, which is really complex. And so my experience is incredibly valuable. Mm-hmm. And for others, it's. I understand this customer segment deeply and that's why I'm a fit for it, even though I've never worked in financial services before as, as in the example of OS benefits that I was sharing with you.

Yeah. Right. Totally. And, and so any of those can be a formula for success. Um, but you do need something that connects the founder. To the problem they're working on, whether it's industry experience, customer knowledge, market knowledge, whatever. It's, that makes sense. Yeah. Um, is there something that you believe about either the venture space or FinTech that you think is like contrarian or maybe just misunderstood and it shapes how you approach your work and like other people would hear it and go, me, I don't agree.

Yeah, I mean, in some ways I wanna kinda come back to where we started, which is that [00:48:00] you can generate top tier venture returns and have meaningful, scalable, sustainable impact. Yeah. And a lot of people see those as trade-offs or counter to one another. Totally. Um, and I'm not gonna say that that's true in every space or sector.

Yeah. But. In FinTech, I believe it is. Yeah. And um, you know, there's, there's so many people who are still of the mindset of like, I make my money here and I do my philanthropy here. Right, right. Totally. And those things have to remain separate. Um, but I believe, and this, and this firm was founded on the belief that building financial resilience is a returns multiplier.

Right That, um, that customers who are more financially stable and resilient. Are going to be better users. Mm-hmm. They're going to use products more. They're going to, uh, grow their [00:49:00] balances and their transaction sizes over time, they're going to be more loyal users to the companies that help them get there.

Yeah. And so solving that, um, does create value inherently for business. Yep. I agree. I mean, the word value is key. I always feel like if you're building, if you, if you have the mindset of value creation, you know that that's sort of synonymous with impact, right? True value. Sure. Yeah. So, um, is there a piece of advice that you've been given along the way that you turn to, that you'd like to share with us that keeps you grounded in this bumpy ride as an investor and fund manager?

Curiosity as the anchor
---

Um. That's a good one. Uh, there's a few things, but, um, I think, so for me, so much of what keeps me really grounded in the work and, um, and engaged in this is. [00:50:00] A sense of curiosity. Yeah. Right. Um, and wanting to know and learn and that, that when I approach things with curiosity, inherent in that curiosity is a recognition that I don't have all the answers.

Yeah. That there's still opportunity for me to learn. And that I think is so important for investors because the minute we start thinking we know better, I like, I will, I can't presume to believe that I know better than a founder who's been working on a specific challenge for years. Totally right. I can have some views on, on what they're doing and.

There may be some elements of their strategy that, where I can provide some value and insight, but I'm not gonna know their business better than they're Totally. And so, you know, both in terms of helping shape and define my role as an investor and, uh, how I engage with founders, really this, [00:51:00] this idea of like, let me approach this from a desire to learn mm-hmm.

Uh, has, has always served me really well. Yeah. I, I think that's so important. Um. I think that especially, uh, people who've been in the game a long time can forget that and, and think that they know when the times are different. The founder's different, the market is different, the customer is different.

Everything is different in this moment in time when you're making an investment. Um, and there's, it's always day zero. I totally agree with that.

Um, thank you for all of these wonderful reflections and stories, and it's so beautiful to have the full version of you here and, and for you to really give us a 10 a sense of what it's like to. Collaborate and work with you. Um, my speed round questions are the following, and we just, one word is fast, whatever comes to mind.

Speed round
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Um, who is another first funder that you admire? Oh, um, so many, but I'm going to, uh, call out. [00:52:00] the team at JFF Ventures, uh, just, I had breakfast with them. They were in the DC area this morning, but Yigal and Chari, there are, uh, they focus on investments in the workforce space, uh, the future of work and.

They're a really thoughtful team, uh, and have deep expertise in that world and, and are really able to provide so much support to the founders they invest in. Mm, love it. What is a book or a piece of media that has had a major impact on how you invest? I've had some really fun answers to this one in the past and how I invest.

I mean, I'm a big reader and I love to read, but I read fiction. Almost exclusively. I love it. And so, um, you know, I think. And actually maybe this, this will kind of come back to, um, the, the curiosity point. Mm-hmm. But I think for me, reading and consuming media generally is about seeing new worlds. [00:53:00] Yeah. And seeing new ideas and um, understanding different aspects of people.

Right. Seeing these characters grow and develop over time. And, and that keeps me wanting to learn, to explore, uh, to see different opportunities, different. Challenges, different solutions that, um, set up the way we think about investing. So I don't know that there's one, one book or one, uh, you know, kind of source of media.

It's really being able to consume and see so much, um, continues to make me excited. Is there a book you'd recommend that I pick up? Oh, um, what do you like to read? I mean, I don't read fiction, so this will be fun. Just your favorite book. Well, I'll recommend one just given our shared immigrant experience.

And, uh, and it's a, it's a Pakistani author named Camilla Shazi, and she writes Often stories of women and women [00:54:00] that are kind of navigating the two worlds that they come from and that they live in. Yes. and so, um, there's a couple that I really love of hers, but one is called Cartography.

It's spelled with a K's in Karachi and, and in the us And then the other one is called Best of Friends, uh, also set between Pakistan and the uk. Wow. Um, but I think you, you might enjoy those. I love that. Thank you. Um, zoom phone or in person meetings? In person? Mm-hmm. Social media platform of choice. Oh. Uh.

Professionally, LinkedIn personally. Instagram. Okay. Uh, the surprising number, and I think those distinctions are important because for sure we're seeing so much like personal bleeding into the LinkedIn world Yeah. And vice versa. And I, I personally like to keep them separate. By the way, I completely admire all of your Instagram photos from your travels.

That's, that [00:55:00] was, that was a fun way to know through throughout the years where you've been been and the beauty you've seen across the world. Um, I am so happy to have had you on the show. Thank you for taking the time to share your story. Um, I really hope we get to do some deals together. Likewise. Thank you so much.

You're welcome. All right. Welcome back. That was another great episode. Hope you enjoyed it as much as I did. So typically, I listen to the episode soon as we record it. Take some time to reflect, do some thinking, do some writing, and share back my takeaways. Many of you have said how much you enjoy the takeaways, which I appreciate because this is why I'm doing this.

I'm doing this too. Take the time to think and reflect and have my own thoughts about what other people are saying. So it's, it's, the real reason for doing all this is to have some takeaways. However, I'm gonna change the format of how I share my takeaways, [00:56:00] and there's two reasons for that. One is. I wanna hear from you.

Uh, I love recording my thoughts, but it's also great to hear what you all think the listeners. So whether you're an angel investor, a venture capitalist, or a founder, I wanna hear your thoughts too. If you agree or disagree or have new thoughts or have questions, I'd love to hear what those questions might be.

Um, so that's one reason is I want to be in conversation. I want to be in community with all of you listeners. The second reason is things are changing. In a good way for me, which is gonna make it harder for me to take the time out to come back on to record. It's gonna be much easier for me to spend time writing and thinking and putting that out via our newsletter.

And I'll share more about why things are gonna get busy in the next week or two. But it's all good stuff and I'm super excited to let you all know. So with that, if you have not joined the newsletter, and I know some of you already have, thank you [00:57:00] for that. Please join. And once you do join, you'll only get messages after every episode.

Nothing else. But I invite you to share your thoughts with me or reflections or even just like, let me know if that was a good or a bad episode. I just wanna hear from you all. I want to be in better connection with my community. So with that. Go to first funders spot.com and drop your name in the newsletter.

I might have to manually add you 'cause I know some of you listeners out there already. but please, do that and um, we'd love to hear what you think. Thank you again. Thank you for listening. Thank you for being a part of this community and we'll see ya next time. Ciao.