Sunil Rao’s Purpose-Driven VC Approach: Investing in Technologies That Empower Humans

Anthony Codispoti (00:00)
Welcome to another edition of the inspired stories podcast where leaders share their experiences so we can learn from their successes and be inspired by how they’ve overcome adversity. My name is Anthony Codaspodi and today’s guest is Sunil Rao, COO and CFO of Plum Alley Ventures, a venture capital firm investing in founders, creating innovative technologies in medical breakthroughs, vertical AI applications, AI enabled hardware and defense.

The firm supports innovations that positively impact human progress and operates both a membership-based SPV platform and a traditional fund. Plum Alley invests from late seed to series C and is currently raising a $100 million fund focused on technologies that enhance human health, productivity, and safety. At the firm, Sunil leads strategic initiatives, financial operations, and investor relations.

With over two decades of experience at Barclays and Citigroup, he brings deep expertise in corporate finance, client management, and global business leadership. Sunil holds an MBA in finance and a BA in economics.

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One recent client was able to increase net profits by $900 per employee per year. Results vary for each company and some organizations may not be eligible. To find out if your company qualifies, contact us today at adbackbenefits.com. All right, back to our guest today, partner COOCFO of Plum Alley Ventures, Sunil Rao. Thanks for making the time to share your story today.

Sunil Rao (02:05)
No, it’s a pleasure Anthony. Thank you so much for having me.

Anthony Codispoti (02:08)
So I want to go back even before your work experience at ⁓ KPMG, Citigroup, Barclays. What was it like for you growing up? And how was it that you ended up coming to America?

Sunil Rao (02:24)
You know, I love to be able to say it was by design. you know, when I grew up in India and I was like most Indian families, Anthony, there was a lot of focus on hard work, education and success. And I had the privilege of, least, you know, my parents gave me the privilege of being surrounded by people that had achieved. I was in an environment of students and peers that had done bigger and better things that

that I was doing at that point in time. So I’ve grew up very hungry and ambitious and for the right or wrong reasons, you for me, I just wanted to be the youngest and the best at everything that I did, I wanted to do. So my choices were very default and I wish in hindsight I’d done things differently, but it’s held me in good stead. So, you know, when I went to college,

You know, the best company that was there is the one that I went for. Then I went for the, I chose to go to the best, ⁓ in a business school. Then I went to the best company. So I think, you know, it started off like that. ⁓ and I think finance and when, when city happened or you’re in KPMG happen, they were the best recruiters on the campus. But when I came into the organization, what I realized was the power to make a change given a big platform.

was what I was really enthusiastic about. So the power of finance to make a difference was what really kept me going within the field of finance. So while it is ambition and ⁓ blind ambition that got me there, ⁓ it very quickly turned into the ability to be able to make a difference.

Anthony Codispoti (04:02)
Did you do your university studies in India or was that in the States?

Sunil Rao (04:07)
I did. So I my bachelor’s in India. It’s an interesting story, Anthony. So again, I worked hard in school. I got into a good college. And when I went there, I had this big chip on my shoulder. So I’ve done very well in school. And then you suddenly realize that college gets the best students from across the country. That was a very humbling experience. And that taught me that that’s when I learned the difference between a fix and a growth mindset. Because the first three months of college,

And it was very difficult for me because, you know, suddenly gone from being one of the best to not being in the top 10 or top 15. And you went there saying, this is what my capacity is all about. So that’s when I learned what a growth mindset is, where your success is built on how much you learn and how fast you learn. And I think that was both, I think one very impactful for me at the same time as being a sobering experience.

Anthony Codispoti (05:00)
who introduced you to the idea of a growth mindset?

Sunil Rao (05:04)
⁓ You know, I always believe that when you put stuff out there, I’m a learner. keep reading a lot of books. So I read books by Napoleon Hill when I was very, very young. think when I was in my teens, ⁓ I read his book and he speaks about, you know, the philosophy of success. He talks about, you know, the growth mindset and the fixed mindset. And I spoke to a lot of people. They were not able to qualify the term growth mindset, which I now can hindsight.

A lot of people say failure doesn’t define you. It defines the action that you’ve taken. As long as you’re trying, there’s nothing called failure. So there’s a lot of stuff that God built into me, ⁓ by my parents, by my peers, by my mentors at that stage, which I now realize is called the growth mindset.

Anthony Codispoti (05:52)
And I think what you touch on there is really important. I’ve noticed this in myself that it, I probably grew up in more of a fixed mindset. Oh, I’m good at this. I’m smart at this until I wasn’t right. Kind of like you, you know, went to a premier, uh, uh, university and now all of a sudden you’re not in the top 10 or 15 and you’re like, wait a minute, I thought I was smart. Now I’m not. Who am I? Like, where do I fit in? Like this sort of identity crisis. Um,

Sunil Rao (06:00)
Yeah. Yeah.

Yeah.

to that.

Anthony Codispoti (06:18)
And then slowly over time, realized, man, I can get better at things by applying myself, by really practicing. But it wasn’t until probably my thirties that somebody introduced me to that term growth mindset and somehow just having the language around it helped me understand and wrap my head around.

Sunil Rao (06:22)
nature.

And also examples, Anthony, right? So for example, if you look at some of the examples around, and people take these examples of, you know, Mack and Drow, just phenomenal talent, but had a very fixed mindset. And he speaks about it now. So there’s so many examples of people in sports and politics that had the talent, but didn’t have a growth mindset ⁓ that didn’t make it.

I genuinely believe some of the choices that I’ve made are because I learned about the growth mindset early on. What I, I’m at the fundamental opinion that you can’t be boxed and what you’ve done in the past doesn’t define what you can do well and what you can do in the future. That’s how I’ve built my career. I’ve always done stuff I’ve not done before. That’s how I’ve hired people. As long as I find somebody that’s willing to go at a problem.

what they’ve done before has less impact on my hiring selection. it’s really played into so much of the way that I make decisions, the choices that I’ve made personally and professionally.

Anthony Codispoti (07:35)
Let’s skip ahead then for a minute here. Talking about how you assess people in terms of hiring, how do you assess people in terms of what you’re looking for in a founder?

Sunil Rao (07:48)
I thought that’s a great question, right? And I wish there was one answer for it. I think one is, you know, we found most founders, ⁓ they have a audacious purpose, right? They’ve got, they think in terms of decades.

But the best founders we’ve seen, Anthony, they execute scientifically. So which means they execute on 90 day milestones. And that’s very difficult to play. We’re thinking in terms of dreaming, in terms of decades, but you have the ability to execute in terms of 90 day milestone. That is one is very important. I think the second is, you know, a very short learning loop.

I’ve seen how they iterate the process and I’ve seen how they’re able to go from experiment to feedback. And again, I don’t see ego in feedback. So that’s been very important. Emotional resilience, they’re very sympathetic to stakeholder expectations. And then their talent magnets, some of the best founders I’ve seen are able to attract phenomenal talent along with them. And that happens when…

your purpose in the why is very, very strong. So I’ve seen those as pretty similar characters around some of the successful founders.

Anthony Codispoti (09:01)
When you see people who are a talent magnet, are they typically ⁓ very outgoing people, like big personalities that people are naturally drawn to? do you see introverts have this capability as well, just because, like you said, the idea, sort of the why behind their project is so compelling to people that even if the founder doesn’t have sort of this big…

magnetic personality in a natural way, they still draw people to them.

Sunil Rao (09:33)
And I’ve seen both. ⁓ And again, it goes back to the mindset, Anthony. Sometimes a lot of the extroverted people get lost in ⁓ the validation that they get from people around them.

I’ve seen a lot of extroverted people when they don’t get positive feedback, you know, they go back into their shell and they’re not able to engage. Well, on the other hand, the introverted people, ⁓ they don’t lean so much in validation, which means they’re able to deal with stresses, failures, a lot better than what extroverted people are.

Again, it’s not so much of an extrovert introvert, but I think it’s where you thrive. If you thrive in, you know, in thinking and sitting and working on product, and that’s what you should be doing, but then you should have somebody else on the team. Maybe on the sales side that’s out there speaking to clients, that’s out there raising money with you. I don’t think a founder has everything, but it’s why this being a talent magnet, understanding who you are, what your shortcomings and strengths are, and then trying to compliment or supplement that.

with other people I think is extremely important. That’s something that we do. We work with the founders very closely. And we make sure they’ve got the right talent at different inflection points. ⁓ The other place where you spend a lot of time with founders is on…

Yeah, you know, psychological strength, you know, because it’s going to be an up and down journey. We want to be there to make sure that they’ve got the flexibility and the muscle memory to be able to push through it. But yeah, we’ve seen a range of personalities.

Anthony Codispoti (11:05)
Okay, let’s back up a little bit. Before we get into how the idea to start Plum Alley Kim about, I want to hear just a little bit about some of your background because you worked for some of the most prestigious companies out there. We briefly mentioned KPMG. There was a four-year stop at Citigroup, then Barclays. If you had to pick from one of these stops, which one of them was the most formidable for you and why?

Sunil Rao (11:32)
And I’ve thought about that. It’s about, you know, what’s the best part that I enjoyed about my career. I, the choices I’ve made, and Anthony again, you I, when it comes to people, when it comes to profession, I think I try and, I believe I take the best parts of what I’ve learned. It’s a learning journey. So I’ll give an example. Siri, when I joined them, had a phenomenal culture.

They’re the ones that taught me that if you’re good at something, you have the capability to be good at something else or everything else.

They put you in charge and give you a responsibility very early on. And it’s with them that I started the journey of being an internal founder. So across my banking career, I’ve built businesses. I’ve built four businesses across different countries. It’s been phenomenal. And it started because the culture at Citi taught me that if you’re good at something, you generally can be good at everything. So I take that from Citi. think that was extremely important for me. The other one is when I joined Barclays.

I think I was 27 or 28. And then my then boss and supervisor said, know, Sunil, go ahead and build a business. And this is a bank that’s 300 years old, right? To give a 20 year old, and then the keys, you know, the kingdom and say, go build a business across 10 countries. And I trust you to do that. Was a phenomenal opportunity for me and learning experience. So what I learned from that is good people.

⁓ and then over a period of time, know, there were times in my career, like everybody else has, you don’t enjoy what you’re doing. Right. And then came the third aspect of my career choice, which is good work. So from city, I learned in a good culture, ⁓ from Barclays, learned good people. And then I also, when I was on enjoy myself, I learned about good work. So these three aspects of the one that define what I want to do now going forward.

Anthony Codispoti (13:27)
And sorry, was Barclays who said, go start a company.

Sunil Rao (13:32)
It was my boss in Barclays. They wanted to build a business called the Fig Business, financial institutions group. So I was based in the Middle East and across, they said, we want to build this business across 10 different countries in Middle East and North Africa. Build it from scratch.

Right. And I spent quite a bit of time doing that. You know, we grew the business to be one of the largest, what we call sterling clearer. So, I mean, I built it down, you know, quite substantially to be half, you know, the value of the corporate banking business for Barclays in the Middle East. And I think I could do that because I had, you know, a boss and a team that had the faith in my being able to do it. So the idea of working with good people is something that I picked up from those first five or six years in Barclays.

Anthony Codispoti (14:16)
And tell us a little bit about what this new business line was doing.

Sunil Rao (14:20)
So it’s called the financial institutions group and where most of the clients are the banks or the non-bank financial institutions and you give them ⁓ transaction backing products. You do cash payments, you do trade to make sure that they have the ability to offer their customers the ability to be able to send payments in different currencies. You manage their ⁓ cash ⁓ in places like the UK, in Europe.

At that time we didn’t have the US. And the other one is trade finance. The ability to be able to vouch for your clients and then work the supply chain to make sure that ⁓ the buyers and the sellers are connected to the entire trade process.

Anthony Codispoti (15:03)
Fascinating. Okay, so how did the opportunity to ⁓ start Plum Alley come about? Where was the idea from?

Sunil Rao (15:11)
So I joined Plamally, the two managing partners, ⁓ Deborah Jackson and Avantika. started this in 2017. And it’s a very purpose-driven organization, Anthony, right? So when Deborah started Plamally, ⁓ she wanted to make sure that there was capital available to female founders. Because at that point in time, nobody was talking about getting…

money across to female founders. And what she also wanted to do is get more people into the venture capital ecosystem so that the benefit of an upside could be, you know, to people who are not institutionalized and et cetera. So we, it is always a purpose of an organization and also feeds in from her background. Right? So she, ⁓ you know, 30 years in walls, she’s a legend on Wall Street at 30 years. She’s with Goldman Sachs, healthcare. she’s.

she’s done it the hard way, right? And she’s seen how difficult it is for a woman to walk up there. And that’s where Plum Alley came from, right? So it’s a play on word in Wall Street. So it’s about giving women the opportunity to be able to have Plum seats, or Plum Alley. not as, and it’s a Wall Street, it’s Plum Alley. But so we always started as a purpose-driven organization. And in 2023,

And I’ve been investing in startups for about seven years. So I was always drawn towards the idea of helping founders and taking my skills and experience and helping founders grow from zero to one, one to a hundred, because I knew that’s what my skill set like. So in 2023, I started my own consulting firm because I wanted to be an operating partner for this. as fate or luck would have it, I came across the other managing partner at an event and we were

advising the same company. And as we got talking, they spoke about what their vision for the organization is. They wanted to build a fund that was able to help about 400 founders. So they wanted to go from incremental to exponential, which also meant building an organization or building an institution that could manage about a billion, billion and half in capital commitments and deploy. And that’s what we’re towards.

Over the last, you one I’ve been working on building AI enabled tech stack, which I hope will be a differentiator for us in the industry and the way we source, the way we manage the portfolio. it’s, I think it is a meeting of minds. And again, I think Plamali ticked all three boxes. Great work, great culture, and I have the opportunity to work with some phenomenal individuals.

Anthony Codispoti (17:50)
And so what kinds of companies do you look to invest in? What’s your criteria?

Sunil Rao (17:54)
Because we’ve always been purpose-driven, Anthony, we’ve always said that we want to invest in technology that empowers, protects, and extends human capability. That’s always been the case. And we always invest in the latest technology. So we’ve invested in machine learning and data science way before it became stuff that came on the front page of Bloomberg. And now the latest technology is AI. And when you talk about…

you know, human capability, healthcare or medical breakthrough is a large part of it. So what we invest in is ⁓ quite a lot of medical breakthrough companies, one that are coming out with, you know, unique ways to be able to get new medicine, existing medicine, cheaper and faster to the audience, new drug discovery.

We also have, you know, frontier technology, like we invest in a company called Diligent Robotics that makes robotics available in hospitals to be able to help the nurses. We’ve invested in companies, you know, that look at water quality and air quality. We will invest in cybersecurity because for us, protecting, you know, the human capability involves protecting data, defects, et cetera. it’s education. You we want to make sure that we’ve got

EI enabled hardware that makes work, the work environment, the physical work environment lot safer. How do we make sure that we increase the human capacity for thought, for learning, ⁓ for action in the industries? Anything that extends human capability. And I’d like to believe the way we differentiate ourselves, Anthony, is the first question we ask is to the founder, is how are you going to impact

billion lives positively. So the rest of the industry says, listen, how are you going to make a billion dollars? Now we flip that question. It is important for us. So for example, we say, if you’re able to answer the question, how are you able to positively impact a billion lives? To be able to do that, you need to grow. You need to be profitable. And you need to be in a market that has got a sizable tap. So that becomes a second priority. It becomes a need.

rather than driving force behind the investment. So we have flipped the script. They were saying you need to be purpose driven, but you need to grow fast enough and be big enough so that you can impact a billion lives.

Anthony Codispoti (20:20)
I mean, that’s a tall yardstick, a billion lives. May it reach for the stars, right? So you mentioned a few projects there that I’d like to hear just a little bit more about. Robotics to help nurses, what is that?

Sunil Rao (20:22)
Yeah.

So, I mean, you’ve got, and there a companies that we’re very proud of in terms of investing, and there’s another one that I’d to bring to the table. But Digit Robotics has, mean, their technology can be used in different use cases, but the one they’ve gone for is hospitals, where they’ve been able to build a robot that can autonomously go from the patient.

a patient site helping nurses, you know, get the equipment that they need at that point in time. It can go across hallways. It can go up, you know, to the break room to be able to get the equipment across. It’s very autonomous as long as it’s pre-programmed in terms of what it can get. So what we try and do is reduce the workload on the nurses and also, yeah, just absolutely.

Anthony Codispoti (21:18)
So it goes and fetches things, like we need a

blanket or a medication or a syringe and it goes and gets it.

Sunil Rao (21:23)
Yeah. Yeah.

And they extended the capacity, right? So for the time being, is about, you know, automated movement across. And we love automation, right? So if I can, there’s another one that, company, very proud of, it’s called Iron Drag.

And what it does is it has autonomous electrical logistics, trucks for logistics. And we know there’s going to be a shortage of truck drivers. We know for a fact that a lot of the pollution of the road is because of long distance vehicles running on diesel, et cetera. So it, I mean, that company, one, from a supply chain perspective, it is phenomenal. It cuts down time. You’re using, you know,

electricity to be able to charge running on batteries, so significant reduction in pollution. So it just hits so many of the propositive and thesis that we have and touch what they’re doing well. They’ve got a great set of leadership team.

Anthony Codispoti (22:21)
What about the one that you mentioned working on air and water quality? What does that do?

Sunil Rao (22:26)
So we’ve got a company called KETOS, and they help ⁓ both from an industrial perspective and agricultural perspective, ⁓ measure what the various components of water are. And that can be used by the government, that can be used by the industry, by the municipalities, and that happens in a real time basis. In fact, the founder of the company is a lady called Meena Sankran. ⁓

She’s so inspiring. mean, um, she’s seen ups and downs and she just, she, I mean, she embodies everything that a founder should be. Right. There’s passion. There is the capacity to be able to be emotionally resilient, to take the good with the bad. And she really is, you know, what, what I call a role model for, and if she had a lot more time, I’d have asked her to an advisor and a mentor to a lot of the other founders, but

She embodies what a good founder would be like. The other company is called Aclima, which does what Keto does for water, is what they do for air. They work very closely with the government. They’ve got a contract with the government of California. So again, it goes back into how do you extend in a human capacity. So it’s about physical and it’s also about the environment that we as human beings operate in.

Anthony Codispoti (23:45)
How about the last one I’ll ask you about the AI enabled hardware that makes the workplace safer. just talking about like more robotics. So it’s picking up heavy things or is this something else?

Sunil Rao (23:55)
Yeah.

And that’s what we’re looking at now. So, you know, one of the thesis we have is, you know, earlier the software Anthony was built for, built for the existing hardware, right? And there was severe limitations in terms of what the hardware can do. But now with AI, the ability of software to be able to direct hardware to do different stuff has increased many fold, but the hardware hasn’t kept up. So what we’d like are those companies that are building hardware.

to suit and to be able to leverage on the phenomenal AI software that they have. So we call it, and it’s a term used by the industry as well, either software for hardware, hardware for software. So those are the companies we’re looking at now, because I believe the ability to be able to build hardware to that software is very recent. I would say it’s about the last 9 to 12 months. So it’s something we’re looking at right now. But let’s take companies like Aptronics or Agility.

You know, that are making difficult work in ⁓ the logistic centers done by robots rather than the people, right? mean, lifting heavy boxes, so on and so forth. There are companies that are looking at, I’ll give an example. When ships come in into the port, you till date you had a lot of people that used to, you know, wear the gear, they used to go submerged just to clean the bottom of the hull.

because they have so much of, you know, guck on it. It keeps it low, it takes a lot of fuel, but you have people doing that and it is dangerous because they would be there for a lot ⁓ longer periods of time. Now you have people building submersibles that do the same job. Right? So you could think about window cleaning and skyscraper. I mean, those are dangerous jobs. If you can have, you know, tools or robots that can…

take off the difficult and I would say dangerous work, then we’d like to look at that.

Anthony Codispoti (25:54)
And so when we’re talking about robotics, a lot of these sound like they’re probably not in a humanoid form. It’s more, I don’t know, like in some cases, it’s like an arm that picks up something heavy or maybe like a couple of arms or plier looking things. Is that right?

Sunil Rao (26:08)
Yeah. Yeah.

So I think humanoids is the most logical evolution. And you’ve got some phenomenal companies that are doing some amazing stuff out there. We recently saw a company that is building tactile feeling. So for example, you’ve got arms, but it doesn’t feel pressure, it doesn’t feel objects. And it can see.

And they’re building that they can attach to robotic arms. So can feel the pressure, be it in, know, so for example, if you are in grocery stores and you’re picking from the warehouse into retail stores, just to be able to feel the pressure of how hard they should catch a tomato versus a pineapple. And so, and, or maybe even for home care, a robotic hand with tactile feel can know how much pressure to put on patients or for the age.

So it’s getting there, you know, the current form of humanoid robots are still slow. Right. If you see some of the videos, it’s getting there. think the hardware is there a lot faster than where the multimodal software has come. It’s an evolution. So we will get there. Now, whether it’ll be in every home, we don’t know it’ll get there. But yes, till such time, I believe it will be individual pieces of the human anatomy that will find the use case. You know, like

prosthetics, I think will be something that we’ll see very, very quickly that runs on AI and tactile, know, again, evolution through humanoids.

Anthony Codispoti (27:37)
So doing what you do Sunil, you get to have a view into just all kinds of cool things that are happening, all kinds of amazing innovations. As you think about all that, whether it’s in your portfolio currently, something you’re looking at, or et cetera, what’s the most mind blowing thing that’s within, call it a year or two of being available that would be fun to talk

Sunil Rao (28:04)
I mean, and there’s so many, right? Every time you meet a founder, know, do something and say something that they’re building that just completely blows your mind. know, we are a diligent single company that ⁓ can predict cancer five years before it does. Right? And, you know, I think all of us have somebody in our family that’s like an uncle that, know, unfortunately,

know, losses life to cancer. Most of us know somebody that lost life to cancer and you know, it’s, it just seems that we’re not moving fast enough to be able to get there. So the fact that they can do that and they have, ⁓ they’ve proved it across in a 250 case case study. it’s, it is, it is very, very real. So the impact that can have even from a cost perspective is massive, right? So that really, really excited about that. Then there’s, you know, there’s one entrepreneur that we had spoken to. ⁓

that has created this AI avatar that you can get on your phone because you know, lonely as when you grow older is a real thing, at a depression, at least a shorter lifespan. And because that avatar has the ability to be able to see, speak, store data, it is somebody you can speak to and it responds in real time based on what it’s seeing and hearing. Are you feeling okay? Would you like to go out? Can I book something for you? Right, so that has a real impact.

And the other field of AI that we’re really looking at is something called causal AI, which has the ability to be able to take in huge loads of data, synthesize it, and predict what will happen and help you make those decisions. So we are now at a stage where AI agents can help you do the work. But we’re getting to a stage where you can have AI agents that tell you what you should be doing. And if you don’t do this, what the impact is.

And that will refine itself, but the ability to be able to make good decisions or aid the human endeavor to be able to make more effective decisions is phenomenal. I mean, it can have such a significant change if you apply in the field of architecture, the way we build buildings, the field of medicine, out there in the field for it. mean, the applications for decision-based AI is massive.

Anthony Codispoti (30:28)
Decision-based AI what when are we going to see that?

Sunil Rao (30:32)
I ⁓ think the biggest problem we have right now, Anthony, is we’ve got so much of data, but it’s not necessarily structured for AI to accurately read and learn on, right? So there’s a massive investment that each one of us needs to make as an organization, you know, as people to be able to clean up the data and structure the data.

So that when you run AI on it or any technology, has the ability to synthesize the data in the right way. There’s a garbage in garbage out. One of the issues with AI right now is the fact that if there are any biases in the data, it assumes that biases to be fact-based reality and that that’s what you want. And so we need to try and make sure that when we define cleanup,

It’s not only about putting data in the right columns, making sure there are no empty columns, but the fact that their data reflects who you are and what you want as an organization. And then you let AI on it. So I think that’s the biggest challenge we face. The technology is there. It’s all about inferences, A to B, B to C. It’s about the data.

Anthony Codispoti (31:39)
So want to hear more about the cancer detection. Is this specific types of cancer that it works on? Is it across a broad range? And when will that tech actually be available for doctors to use?

Sunil Rao (31:53)
And so right now they’re focusing on breast and lung cancer. But it really depends upon how well you train your model. So you literally need to put in significant amount of work to see what scans said earlier in existing patients and why they were not diagnosed till date. And so you have to see that over a five year period. So think a significant amount of work goes in terms of extending that use case because what they’re essentially doing.

is then taking a list of patients that have been afflicted with that specific type of cancer, going back through the entire medical history and saying, so why was it not picked up five years back? What do the scans look like? Let’s go through the scans. And then you teach your AI saying this is how it was missed. And then you need to start doing it across gender, race, ethnicity, age. Actually, if you want this to be a tool that doctors can rely on.

You need to be able to get the entire source. And again, we know that health data is very difficult to get through, right? is, you’ve got a few players that have the data, people don’t save the data from, you their own health data for the previous five years. So again, it comes back to data. The technology to learn and implement is available.

Anthony Codispoti (33:08)
And so the way that it would ultimately work is by being able to identify signs of cancer earlier in some sort of scan, an MRI, for example.

Sunil Rao (33:18)
Correct. So, for example, if we see a lump that might be missed or maybe there’s a deviation, a deformation somewhere that might not be picked up or might be ignored as just something as a part of it. And the other one, Anthony, is because we are very litigious societies, a lot of us, doctors prefer to send a lot of people for a scan even when they don’t need it. And going through a CT scan has an impact on the body.

So one of the other use cases is the people who don’t need it should not be going through a CT scan, right? Or should not be going through that process, invasive or otherwise. So then you also, one is detect early, but also make sure you’re not sending the wrong people. So it reduces the pressure on insurance, it reduces the pressure on our medical establishment because there’s just so many people through the pipeline. So just got several use cases.

Anthony Codispoti (34:14)
So let’s shift gears a little bit and I wanna talk about the membership model that you have at Plum Alley. Tell me how that works.

Sunil Rao (34:22)
So we’ve got about more than 200 members and these are paying members. Again, the payment is not as much for the, not for the opportunity, but as a show of commitment. Otherwise, we do a lot for our members. So we’ve got about 200 plus paying members and what we show them is about eight to 12 investments per year. And then they can choose to invest or not to invest in those specific opportunities.

But one of reasons we do membership, it started with us wanting to get people into the venture capital ecosystem. So a large part of the focus is on thought leadership and in terms of sharing knowledge. So even when we show a company.

What we do is we get the founder and call, talk about the market, talk about the technology. ⁓ we get experts for, you know, thought leadership sessions and knowledge transfer. It started off as getting people interested in venture and making sure that they have the access to the latest technological development. know, and this is the beauty of, of karma, right? You do, you do right things, right? Things happen by you. What’s that? What that’s evolved into Anthony is a set of people that.

believe in the journey that we’re on and that want to support the journey. So now, you know, they’ve invested in our traditional funds. They, some of the best companies that we’ve got have come as, as referrals from my existing members. And because all these members have been successful entrepreneurs or very senior individuals in very large organizations, they become a ready pool of advisors for our founders and for us when we’re diligencing companies. So it’s, it’s morphed.

into this family that’s always there for each other, but we’ve not lost our purpose. The idea is to share as much information as possible, make sure that they’ve got access to the latest information on technology in terms of recent events, what the risks are, what the upside are. So that’s what the model looks like right now.

Anthony Codispoti (36:20)
So your members, they’re paying some sort of a monthly or annual fee to have access to the network and the information that you’re sharing. And then they make their own individual decisions about which companies that they want to invest in. And if I understand correctly, at the same time, you have your own fund that you’ve raised. And Plum Alley is making their own decisions as well on how to deploy that capital.

Sunil Rao (36:25)
Great.

So in the membership model, we diligence the opportunity, right? So they, and we invest in those. So we never show something that we’ve not got conviction in. So we do the investment memo, we diligence it and we offer it. We do about, it was about eight to 12 every year. And then we show to all our members and they have the option then of investing those companies should they choose or there’s no obligation to invest, but in a sizable portion.

of the individual investor. And also, we’ve also lowered the check size so that those opportunities are available for a broader set of people and everything grows by word of mouth. So we don’t really pitch membership. It’s one member speaking to somebody else, their friends, and then they want to sign up. So we’ve seen a significant growth in membership. We continue to new signups. And as in when we show a company that our members lie.

On each call that we have, we get 10 new members joining us as well. it’s seen how it’s pretty steep growth.

Anthony Codispoti (37:42)
Can we talk about numbers at all in terms of like, what’s the membership fee or what’s the minimum check size?

Sunil Rao (37:46)
Sure,

the membership fee is only about 2,500 per year for what we call the base membership. And that really goes for everybody because it has a cap of $100,000 in terms of total investment. Your minimum check size can be $20,000 and up, it’s per company. The next membership level is in a 5,000 where, again, it allows two people to come together.

or individually you can invest up to a quarter of a million dollars. And the third is what we call entity level membership, where you can invest up to a million in each check size and you can be a family office that invests in it. So we’ve got quite a few people that have entity level memberships, where these are family offices, or very high end individuals that invest over a period of a year, pretty much close to a million or more than a million.

or of course, we’ve got three membership levels. The access that they have to thought leadership is exactly the same. It’s only the kind of, you know, the entity that they come from and the amount that they want to invest per year that changes, that’s it.

Anthony Codispoti (38:54)
Now you’ve been investing yourself for eight years or so now. How has your investment strategy or thesis evolved over the years?

Sunil Rao (38:58)
Yeah.

So I learned by the school of hard knocks, Anthony, right? So I got quite a few wrong where, you know, I think I started with, I’d like to believe I’m a good judge of character. And I started being enthralled by the stories that the founders said. And the irony is I come from a very fundamental investment background, right? That’s what my career has been about. You see the fundamentals, you see the financials, you talk about, damn.

And I think some of my earlier investments, I just want to go out there and I wanted to help that founder because I was just so sold into his dream ⁓ that nothing else mattered. I think personally, you know, the, the, there’s been a certain level of maturity in terms of what, you know, I personally look at. right now,

And I look at my diligence sheet and I think it’s a lot of the stuff I try and think through internally, but I’ve got about 137 questions that I ask myself internally. Have you checked this? Do they have a co-founder agreement? ⁓ know, what does, if it looks at target market, what does the persona look like? Is ARR really ARR? the same person come and pay next year as well? What size is the contract? So I think I’ve become, we’ve become a lot more mature in terms of, you know, what

We want to check the founders will remains the base. The purpose is still important, but ⁓ the firm as such has made about 70 investments, including follow on and about 30 at companies. So you, learn some stuff through that, you know, ⁓ and I get to lean on, you know, the, the other two partners we’ve got a phenomenal people in the investment company. So it, I think it takes a village to make a good decision. And I think they’ve got a village around us. So it’s been.

Anthony Codispoti (40:51)
Tell us about the

village. Who are the folks that you work with?

Sunil Rao (40:54)
So we’ve got two managing partners, Deborah and Avantika, again, they come with ⁓ very long experience. I Avantika has built businesses, a few companies up to IPO. She’s an entrepreneur by heart, both are Forbes, 50 or 50. ⁓ Then we’ve got a young gentleman who’s in the investment company but has been working in the venture capital space. We have a lot of advisors, both technical advisors.

that are able to diligence the technology and the code to check whether it does what it does. And then we’ve also got people in the industry that can assess, like we do stuff in cyber security. So we’ve got people in the industry that can assess whether there’s an actual market for it, who the key decision makers are. And then I come from an operational and financial diligence perspective, and I say, does…

Does this organization have the bones, the structure to be able to be an organization that can sustain over period of time? Are they asking themselves the right question? What is the makeup of the founding team, the leadership team? Do they have the right people for this point in time? So I come into the diligence process to make sure that the investing in a company that is building something that will endure.

Anthony Codispoti (42:10)
Let’s shift gears again here, Sunil, because we’ve a lot about, know, certainly you’ve mentioned ups and downs and some struggles, but mostly the picture that I get is a lot of up and to the right for Sunil Rao. I’d like to hear about one of the harder times, a big challenge that you’ve had to overcome in your life and how you got through that and what you learned going through the process.

Sunil Rao (42:36)
I’m not sure if if I block it out or whether, you know, but I think, I think the, so my dad was a bureaucrat, but you know, as, part of his role, job was to move every three years or three to five years. you know, India is a, is a massive country. And the minute you move states, it’s different people, different languages, different food, different school. So for me, the entire journey was, ⁓ so I didn’t feel like I had roots. and I think what I had.

The way that I think you cope as a young kid is either you Become a new person, you know, wherever you go. You have a new identity Just to be able to cope with you know, the surroundings environment and to be able to make new friends I think the upside is I know how to make friends easily. I can get into a room work the room. It’s helped me But I didn’t the later on in the life what I had to ask myself is who am I really?

Anthony Codispoti (43:34)
Yeah.

Sunil Rao (43:35)
Because

with every move you’re trying to fit in, you’re trying to pretend and then you build this persona that you have. So for me, I think some of the formative years had significant upside, but stuff that I had to correct for later on in my life is to get a good foundation of who am I? What do I like? And that came on pretty late in life. would say that that did not hit me until the time I was in my early thirties. But I mean, that I would say is…

And because it sits so deep subconsciously, I think it has taken a lot of work to be able to build what I call authenticity. And everything, I’d like to believe everything I do right now comes from a place of authenticity because I know who I am, what I want, what I like. But I think that journey has taken a very, very long time. know, again, I was very close to my uncle who passed from, you know, from cancer. So I’m dealing with, you know, personal losses of people that are very close to.

Anthony Codispoti (44:12)
Yeah.

Sunil Rao (44:34)
I think it takes some time to get over. And I think professionally, I think one of the hardest things was… ⁓

I think very early on, I had the option to be able to be a trader on the FX desk. ⁓ And I applied for it. I think I was the last three and everything and I didn’t get it. And I was, again, because you know, this fixed mindset, my God, I’m really not good. I’m not talented. I can never make it in banking and stuff. ⁓ And in hindsight, it was a good thing, but it took me a very long time. I thought that was a massive failure on my part.

And not getting that role because I thought it was perfect for me. There’s obviously a massive monetary upside to that. Um, but in hindsight, you I, realize, it comes back to authenticity. I’m not the kind of person that wants to sit behind a computer and not engage with clients, with people. And, uh, I would have been very unhappy if I’d taken that role. So I’m glad I did not. But again, you know, I mean, hindsight is 20 and 20, but I have no regrets for everything that’s happened or the decision that I’ve taken.

Anthony Codispoti (45:38)
Okay.

So what do you think happened in your early 30s to know that triggered that kind of existential questioning that you were just talking about?

Sunil Rao (45:54)
Yeah.

I don’t think there was one specific trigger, Anthony, but I realized that, you know, ⁓ for a very long time, was getting… I’m ⁓ a very calm person by nature, but I could see myself ⁓ having road rage. I could see myself biting, I mean, going at people, being aggressive.

I could see myself being very harsh on people that were close to me that are trying to support me. So I knew something was wrong. I woke up angry and I slept angry. know what I And then by, and so things were not working. And you know, was, I think there were a few decisions that I made personally that came from a place of need rather than want. So I made some wrong decisions personally in life as well. So I think all of that, but I think the switch came is when I read this book called

The Power of Now by Cartole. It talks about the ego. talks about mindfulness. That’s, didn’t call it mindfulness then, but it is, it is mindfulness. think that book is, I remember reading that book. was, my God, what, 2010? 11, something like that. I think that was a switch. I said, this is not right. Something is not working.

And I think that after that, that I started thinking about meditation, et cetera. But I would say that the book that I read was the one that helped me think that something needs to change.

Anthony Codispoti (47:30)
So you were asking yourself the question, who am I, a lot at that time? How would you answer that question now? Who are you, Sunil Rao?

Sunil Rao (47:41)
So, yeah, I’m a person that believes that each one is on a personal journey. And my personal journey is to try and find out ⁓ everything that I’m capable of doing and all the gifts that I’ve been given. But my journey, it is not validated by what people say, it’s not benchmarked against what people do. And as I go on that journey, I want to be able to make sure that

you know, I spread love, I’m able to give back and I’m able to care of the people that, ⁓ that have always been there for me. So it’s a very personal journey. And that’s who I am. And I think on a daily basis, I ask myself the same every question, right? You know, I take the subway every morning. ⁓ love people watching, but you always have incidents of where maybe somebody’s ruled, maybe said somebody said something and you look back and say, you know,

Does it define me? Is it me as a person? So I think I’m a person that’s on a journey of self-discovery and always will be, that values good people. That values, really values good people. Because I think it’s very difficult to be a good person in this day and age. That values good people and wants to contribute back to everything that I’ve gained. So I feel very privileged and I want to find a way to be able to give back.

Anthony Codispoti (49:02)
What’s your superpower, Sunil?

Sunil Rao (49:04)
Um, Emotion resilience. You can throw anything at me. I’ll keep coming back. You know, I think that’s one and I, uh, self growth, uh, I’m reading all the time. Uh, you know, and, uh, think humility, you know, have a firm belief that almost everybody that I come across has something that they can teach me. Um, then I always try and carry.

myself with grace and I always treat people with respect but I think humility and this keenness to learn I think would be my superpower.

Anthony Codispoti (49:42)
say more about that keenness to learn that self growth aspect. How do you approach that on a daily basis?

Sunil Rao (49:48)
So, you I meditate. I’m a huge believer in the fact that, ⁓ you know, the rituals that you have really define, you know, your journey and your path. who you’re going to be in 10 years time will be defined by the rituals you have today, right? What do you do on a daily basis? What are your habits? ⁓ So I meditate every day. So that really helps me center myself. And that’s a very important part of, you know, my journey.

⁓ I do some form of exercise every day. I’ve just picked up cycling. I enjoyed that for 15 years. did martial arts, enjoyed that. Too old for that now, but I still go to the gym. So, taking care of my health is very important. Surrounding myself with people that I care about is an important part of my journey and I’m learning all the time. So if I’m looking for challenges, difficult challenges to solve.

Because when I do that, I believe who you are really comes out. It’s not when you do something easy or something that you’re good at, that you realize who you are or what you’re capable of. My daily goal is to find something that I find challenging to, irrespective. There’s no, let’s example when I left banking for this. You had an executive assistant, you had somebody doing this, and now I’m picking up.

the paper and it’s crazy. It’s stuff that I used to do in my early teens. My first three years of banking is what I’m doing now. And that’s okay, you know, because it gives me the opportunity to do stuff that pushes me towards my skill limit. So I take an opportunity every day to learn from people and from stuff that I’m allowed to do.

Anthony Codispoti (51:28)
What is the future of Plum Alley look like? What’s coming around the corner that you’re really excited about?

Sunil Rao (51:34)
So I generally believe, I think that AI is a transformative technology, but AI is a tool. ⁓ And if again, if you’ve not read this and your listeners haven’t, there is this video cast and podcast by a gentleman called Mo Gowdad. He was a chief business officer for Google. This video cast is, it’s called Diary of a CEO. And he talks about how AI can be

can lead to a utopian society or a dystopian society. And it’s like with any tool, but AI is such a powerful tool, it just becomes that much more real. So our purpose of investing in technologies that support the human endeavor, I think is very, important. And I think we need more people, more venture capitalists, more allocators that invest in technology with purpose. ⁓

What’s coming up is we need to raise a hundred million. So we have the capacity to be able to invest in founders and solutions that are human centric. I think it’s very important. think everybody that’s raising for a purpose driven, ⁓ know, technology hopefully gets funded very quickly. want to find phenomenal founders. You know, we want to find a phenomenal technology and us being able to do that. I think would see success for us. And I’m sure all of us have grown in that process. Right. So for me.

success of Plum Alley Ventures would be both a professional success and a personal success because I know I’ll grow through it. So we’ll now be meeting with a different set of investors and capital allocators and the ability to be able to share the conviction that we have, maybe we’ll need me to change or I’ll need a different skill set. So I know I’ll grow through the process. So if we can succeed ⁓ professionally, then I know that I’ve grown personally as well.

Anthony Codispoti (53:28)
Who do you most admire, Sunil?

Sunil Rao (53:31)
Apart from family, ⁓ family, the wife and you know, ⁓ I admire traits in people. I’ll give you for example. For example, you know, when you look at sports, I admire Djokovic. I don’t think he’s got as much talent as all the other number ones have had, but his mental fortitude and his love for the game, in my view, is unparalleled.

And I take that from that. Then when you look at the Obamas, the grace with which they carry themselves, there’s nothing to do politics, but just the grace that they carry themselves is something that I’d like to imbibe. And what I really admire is people who push themselves beyond what they think the capacity is. Every time I go to the gym or when I see athletes, they’re running to the last, ⁓ when you have the New York Marathon.

You know, the last few miles that they’re running, they’re pushing themselves. I admire that. I admire people who are trying to do good because I know how difficult it is. One, to be a good person and one to believe that you can be successful being a good person. if I had, let’s say tomorrow I hit the jackpot. What I’d really want to do is build an ecosystem around good people and make them believe that, listen, you can be successful being a good person because I believe that’s possible. So I admire people.

that push their own personal boundaries, emotion, physical, and admire people who are value-based and who want to do good and be good. think I admire those people.

Anthony Codispoti (55:09)
How much of who you are today, Sunil, do you think is a result of your upbringing by your parents versus who you’ve become sort of since you left the nest?

Sunil Rao (55:24)
⁓

I think all of us, ⁓ so I credit a lot to my upbringing, but I’m also fighting a lot of my upbringing. You know what I mean? Like, I think all of us do that, right? There’s a lot of, I think, stuff that we need to work through. There’s all the stuff that’s helped us grow. What I’ve learned is I was, you know, I was brought up by a lot of love. So, you know, I’ve learned to love people quite easily. So that’s, that’s good thing because when you love people, I’ve learned that from upbringing.

I’ve also learned the value of hard work and being organized. ⁓ So I would say I was at 50 % of who I am is credit to my upbringing. And the other 50 % is just blood, and tears and self work.

Anthony Codispoti (56:14)
Dr.

Just got one more question for you today, Sunil. But before I ask it, I wanna do just a couple of things. First of all, Sunil’s given us permission to give out his personal email address if you wanna reach out. First of all, their website is Plum Alley and that’s A-L-L-E-Y, so PlumAlley.co. And then you can reach out to Sunil directly at S-U-N-I-L, that’s spelling of his first name, Sunil at PlumAlley.co. And we’ll have that.

for you folks in the show notes. Also as a reminder, if you want to get more employees access to benefits that won’t hurt them financially and carries a financial upside for your company, reach out to addbackbenefits.com. And finally, if you’ll take just a moment to leave us a comment or review on your favorite podcast app, we will be forever grateful to you. So last question for you, Sunil. A year from now, you and I reconnect and you’re celebrating something big. What’s that big thing you hope to be celebrating?

one year from today.

Sunil Rao (57:15)
the 100 million raise for the new fund and me having learned Spanish, which I’ve been at for quite some time now. So I regret, when I was in the Middle East, I regret not learning Arabic. And I’ve realized if you want, you know, I like connecting with people. And if you connect with people in their own language, then you get a lot more out of them, right? So for example, you get to them at a deeper level.

Anthony Codispoti (57:24)
Why Spanish in particular?

Sunil Rao (57:42)
And given the fact that, ⁓ think Spanish is as widely spoken language as English in this country. I, want to be able to connect with people that have Spanish as a first language. Right. So I made the mistake. wish I’d learned Arabic. if I was in China, I would have made an effort to learn, ⁓ you know, Mandarin, if I was somewhere else. So I want to connect. Learning the language in which people think I think is the best way to connect with them.

Anthony Codispoti (58:07)
Hmm, so Neil Rao from Plum Alley Ventures. I want to be the first to thank you for sharing both your time and your story with us today. I really appreciate it.

Sunil Rao (58:16)
It’s been a pleasure, Hannah. Thank you so much for having me.

Anthony Codispoti (58:18)
Folks, that’s a wrap on another episode of the Inspired Stories podcast. Thanks for learning with us today.