Servant Leadership in Venture Capital: Inside Toph Day’s Vision for Elevate Ventures

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 Cotaspodi and today’s guest is Tof Day. He is the CEO of Elevate Ventures, the number one most active seed and early stage venture capital firm in the Great Lakes region, recognized as being in the top 10 in the U.S. and top 20 in the world.

Elevate Ventures invests in cross-sector innovation companies and strives to foster a thriving startup ecosystem in Indiana. Under Toff’s leadership, the firm has helped businesses secure valuable partnerships and funding, shaping the future of technology and entrepreneurship. Toff himself has been named Indiana’s most influential leader by the IBJ 250.

and was honored as Dynamic Leader of the Year by the Indiana Chamber of Commerce. Beyond that, he’s an accomplished bestselling author, serial entrepreneur, and passionate investor, contributing to sectors like software and healthcare. He also played a key role in demand jump success, earning a number 52 spot in Inc. 5000’s Midwest rankings in 2021. Now, before we get into all that good stuff,

Today’s episode is brought to you by my company, Ad Back Benefits Agency, where we offer very specific and unique employee benefits that are both great for your team and fiscally optimized for your bottom line. Imagine being able to give your employees free access to doctors, therapists, and prescription medications. And here’s the fun part, the program actually puts more money into your employees’ pockets. And the companies too.

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 addbackbenefits.com. All right, back to our guest today, the CEO of Elevate Ventures, Tof Day. I appreciate you making the time to share your story today.

Toph (02:13)
Thank you, Anthony. I’m excited to be here and excited to go deep.

Anthony Codispoti (02:17)
Let’s do it. So you’ve had a lot of waypoints in your career path. What first made you realize that you wanted to get into specifically the venture capital and investing space?

Toph (02:30)
So I never set out to get into venture capital. In fact, growing up, I didn’t even know what venture capital was. I’d never heard of it. We’ll probably get into the growing up part a little bit later. But yeah, I never thought about it. And the way it came about was I got a phone call. Well, actually, we back up even from there. I always say find your friend group, your peer group, where you can talk about anything and everything. Get very vulnerable.

If you ask an entrepreneur at cocktail parties, you how’s it going? They’re, oh my God, it’s going great. I can barely hold on. And that night they’re in the fetal position, not sure they can make payroll that Friday. And so I still meet with the group and for 25, seven years or so. And Elliott Ventures, the previous CEO was retiring and announces retirement. whatever it means, a couple of months later, somebody said, hey, Toph, you’ve talked about a lot of these things for…

that you’ve been wanting to do for Indiana and investing in companies, et cetera. This might be the chance to do it. And at first I’m like, no. And I went home that night and I laid in bed thinking about it. I’m like, you know what? I might want to take a shot at that. So long story short, here I am.

Anthony Codispoti (03:42)
But what was it that actually transpired? Like, why then? Why this approach?

Toph (03:47)
Yep. So if I go back about 15 years ago, one of the companies I founded was, co-founded was called Navidar Group, an investment banking firm, boutique investment banking firm, and buying and selling companies and having been an entrepreneur for, you know, what, basically 30 years, eight companies, seven verticals. When I go to the coast, a lot of the VCs would kind of look down their nose at you, like, where are from, Indianapolis? Like, where is that? They have tech there. And that didn’t sit well with me. And

And so I started to develop this kind of thesis about Indiana called the nation’s nucleus. That’s what I named it. I’m like, we’re actually the nation’s nucleus. And well, if I’m going to make that claim, how can I make that claim? And why I up with seven ingredients of why. That’s infrastructure, talent, mission, critical industry, technology, lifestyle, cost of living, regulatory environment. And when you look at those categories, we have an incredible amount of number one national or global rankings.

or top five, top 10 rankings across all those categories and nobody knows it. Nobody talks about it. ⁓ And I’m like, it’s time to change the landscape. Like we have, this is an incredible place to start your family, to grow your family, to start your business, to expand your business. And we produce some of the world’s greatest talent, but nobody ever talks about it. We just kick ass and that’s it. So I’m like, we need to get this message out there globally and put Indiana in rightful place on the global stage. So.

That’s where it started. I ended up giving that speech. The governor came to sign some legislation in a previous business I had, and I gave that speech. It was like the coming out speech. I’d been sitting on this thought for five years at that time. And now that’s morphed into Innovation Capital World. And if you don’t believe me, just Google it. Innovation Capital World, Elevate Ventures will show up to the top organic rankings in Google. So we are now officially Innovation Capital World. We trademarked it. ⁓

So that’s how it all kind of came about. And this was a platform to help others. I mean, I’ve had so much help in my life and this was a place where could help people at scale, help entrepreneurs and families at scale.

Anthony Codispoti (05:55)
So before we talk about what your investment thesis is, you referenced, you didn’t even know what venture capital was growing up. And maybe we’d get into talking about what it was like growing up. So let’s go ahead and do that. Let’s do a little rewind from there and then we’ll spring back ahead.

Toph (06:11)
Sure, so I grew up on a small farm about an hour north of Indianapolis here in Indiana, a little town called Buck Creek. We had about a hundred acre farm. We farmed it with two, three bottom plows and we were German Baptist. So like I always said, almost people with wheels, but we’d take a horse and buggy church on Sundays and no TV, no radio, all that kind of fun stuff. And I was just always curious, right? What was out there in the world? When I’d go down to the store, we had a place called Meisner Grocery that was

probably about a thousand square feet was our grocery store. had a blacksmith and a grain elevator. And that’s what we did. We farmed and played basketball. And so I didn’t even know what the Dallas Cowboys and the Pittsburgh Steelers were back in the day, but I wanted that color of sock because my friends had it.

Anthony Codispoti (06:57)
So from a guy that took a horse and buggy to church and didn’t have a TV in his house to now investing in some of the leading tech companies in the world, that is quite a journey.

Toph (07:09)
You just gave me chills. I mean, it’s been a fun ride. I’m just a, I’m a curious person. I love people and I wouldn’t be here if it wasn’t for the help of countless other people alone away. Just kind of jumping from lily pad to lily pad.

Anthony Codispoti (07:20)
So how did you,

yeah, what was that sort of first big lily pad jump that you made where maybe you rode in a car or maybe you owned a TV or I don’t know, like what a couple of the big waypoints here.

Toph (07:33)
Yep.

So I think life is funny. It’s a series of you climb the ladder and you fall to the bottom, climb the ladder, fall to the bottom as you take steps up. Right. It’s like elementary school, right. You elementary school, you’re, know, fifth or sixth grade, whatever it is for people nowadays. You’re kind of, you’re the king of the queen, right. You’re at the top of the class and then you go to middle school and you’re back down. You’re a freshman. Right. So

⁓ But the path was basically my first official job was detasseling corn. ⁓ I rose to crew leader very fast the second year. And because I was bound determined that my rose, I was going to pluck every single tassel. I wasn’t going to miss one of them. Became crew leader very fast. And then I got the opportunity to put trash in a dumpster. ⁓ So, you know, the roll was much lower, but the pay was much higher. So I did that.

Guy worked for had a bronco and a bag phone that looked pretty cool So I decided I want to be a commercial general contractor the rest of my life started a painting company had 14 employees I’ve paid my way through college To set out to go be you know to own my own commercial general contracting company I realized later about three years after college that guy was actually a commercial developer. my god. I spent eight years preparing for something I’m not gonna do ⁓ I had no money. No net worth really I had a good salary, but really, you know no net worth

So end up starting a second company, a broadband company with a college friend. We ended up selling it to Comcast. Then we ended up starting three other businesses together.

Anthony Codispoti (08:56)
What what slow down slow down because we

just we just went really fast there you yada yada yada over the best part. You started a broadband company from, you know, corn to ⁓ general contractor to how did you start a broadband company?

Toph (09:03)
Yep. Yep.

So my friends still make fun of me for that today. Amish guy started a broadband company. but being in kind of construction and real estate, ⁓ I knew how to talk to these developers and owners of like multifamily, for example. And ⁓ so I knew I could get the contracts with the real estate folks. And then we went out and hired the engineers from Comcast and Time Warner, et cetera, to build these kind of new age systems. So I…

I knew I’d be able to get to put the business plan together. Our promise was we’re not going to string cables across your sidewalks, and we can turn on and turn off ⁓ cable and internet from a remote location. So if the rent check doesn’t show up, you tell us. We flip a switch, and the rent check shows up. That was our old thesis.

Anthony Codispoti (09:58)
That was your pitch.

And so you’re leasing somebody else’s lines.

Toph (10:04)
So, note well, we originally started building a head end on every single property, but then we figured out how to tariff dark fiber with Ameritech. And as we understand it, we were one of the first companies in the country to do that. So we would take RF signal, turn it into light, you know, down fiber, and then just daisy chain. So we first built this system in Ann Arbor, Michigan. And it’s actually the reason we got bought by Comcast. ⁓ But we figured out how to…

basically build one head end, not have to pay the right of way fees and all the licensing stuff that master system operators have to do. And we just daisy chained our signal around in Arbor to all the apartments. And Comcast had come in and bought the MSO there, but didn’t realize it kind of didn’t own the market because we had it tied up under contracts. We just hadn’t turned our signal on yet. So that was our claim to fame.

Anthony Codispoti (10:56)
Okay, all right, let’s fast forward now, because I want to hear more about what’s going on present day. How would you describe your investment thesis at Elevate Ventures?

Toph (11:05)
Yep, so our investment thesis is cross-sector. So anything that’s innovation-driven. There’s a tale of two entrepreneurs by Kauffman Foundation. And so if you’re an innovation-driven company, cross-sector, pre-seed seed series A, $500 million TAM, and headquartered in Indiana, then we want to talk to you.

Anthony Codispoti (11:30)
has to be headquartered in Indiana.

Toph (11:32)
Yeah, it used to be a significant presence as well would qualify, but with the new administration change, we have to have a headquarters in Indiana.

Anthony Codispoti (11:41)
⁓ And how does the administration change effect? Because some of the funding is coming from the state.

Toph (11:46)
Yep.

Yeah. So we are a venture development organization, which means we do both venture development and venture capital. So a typical venture capital firm will invest in one out of 100 companies. We invest in about 10 out of 100 that come pitch us. So kind of taking 10x the risk. And then the venture development component is we try to do ecosystem building at the same time. So the beauty of it is it returns is not the number one North Star.

It is ecosystem building, catalyzing an ecosystem across the entire state, startup community, entrepreneurial community, innovation community, and doing that cross-sector. And then everything from pre-rev to entry point, companies are doing probably 5 million. And some of our companies grow to be, you $100 million plus companies, right? ⁓ But that’s our thesis.

Anthony Codispoti (12:39)
So help me understand again the connection to the government. Are some of the funds coming from the government? All of the funds? I’m assuming there are traditional investors as well though?

Toph (12:48)
Yep, so we do manage another smaller fund for a corporation, but the vast majority of the funds come through our, think of the Indian Economic Development Corporation as like our partner, our LP, right? And those dollars come from both state and federal sources is how we invest.

Anthony Codispoti (13:04)
Got it. Okay. ⁓ And is this model common in other states, other municipalities maybe?

Toph (13:11)
Yep, I would say probably, I don’t know exactly how many states have venture development organizations. We are, in our situation, we are a private entity, right? So we’re not a quasi-state agency, et cetera. We are a private, think of us just like a normal fund, right? A private entity. And that has a professional services agreement for how we execute all of this work, all the investing functions and ecosystem building.

Probably, my guess is half of the states have some kind of a version. Probably the states that are most similar to us are like Ohio with Jumpstart and some of the things that they have are similar to us. Pennsylvania. A lot of states, instead of consolidating the capital, which is how you get the flywheel spinning and really make a big impact in your state, they will splinter up the dollars into really small buckets.

and send it around to a bunch of different cities and towns. It’s hard to get traction that way. So that’s one thing that Indiana did that was really special 15 years ago when Elevate Ventures was launched ⁓ is density of capital.

Anthony Codispoti (14:22)
What metrics can you share with us to show that this approach is working?

Toph (14:27)
Yep. So I’d look at it from two different ways, from an economic development standpoint and then from a venture capital standpoint. So if we start off with the economic development components, we’ve created almost 9,000 jobs at 2X the state wage. ⁓ We’ve run a run rate, if you think of a fund life cycle of 10 years, we’re on a run rate of a $6.5 billion impact to the state of Indiana. So that comes from those direct jobs, nearly 9,000 of them. ⁓

50,000 indirect jobs. So all those have multipliers of teachers and, and, you know, car salesmen and all those other ancillary jobs, restaurants, right? The restaurant workers, service teams, cetera. our annual payroll is about $325 million. We’ve invested about $194 million in the market, $2.4 billion of co-investments. And then about $20 million a year in sales tax, in income tax revenue.

So that’s about a $200 million run rate. So if you had all those numbers up, that’s how you get to $6.5 billion. And then ⁓ if you look at the venture capital side, ⁓ so by taking all that risk, a thing called power law comes into effect. So if you place enough bets, and I’m going to come back this in a minute with angel investors if they’re listening, this is a really critical concept. But the whole key is the ability to follow on with your investments with the winners of the winners.

And so by doing that, we’re sitting in the top 50 percentile of all venture capital firms. If you look at the ⁓ data that CARTA puts out, ⁓ we’re sitting in the top 50 percentile of, if you just look at a peer-play venture capital model, we’re in that top 50 percentile. So it’s like economic development that pays for itself. If you’re from a legislative standpoint, like if I give you a dollar, does it equal more than a dollar coming back? Yes. And then there’s all the other ancillary benefits. ⁓

From a pure play venture capital standpoint, so our multiple invested capital is about 1.25. So every time we get a dollar, we turn it into $1.25. From a pure play venture capital standpoint, you’d want that to be 2 or 3X. The upper, upper echelon of performers is 3X, ⁓ which we could do that too, but then you wouldn’t have all the ecosystem building, right? The way you build an ecosystem is you’re betting on lots of jockeys. There’s a lot of failure rates, but those jockeys go on to start another business.

And then that one’s successful, and they start two more businesses. And so we’re now really seeing the compounding effects ⁓ of the success of the launch of Bell Adventures Now.

Anthony Codispoti (17:02)
And what is it that you wanted to say to angel investors?

Toph (17:05)
Angel investors, I see a lot of angel investors that have $100,000 and they were going to get into the angel game and they either put that $100,000 into one company or they put it into two companies at one slug. They’ve pretty much just guaranteed they’re going to lose their money. You have to put your money into at least 20 bets and you have to have the ability to follow on with those bets that win two or three times.

And we just see lots, and this is not just in Indiana, this is all over the country, all over the world for that matter. But the people that get into the game directly and don’t have enough capital to make enough bets and then follow on with the winners of the winners in those bets, ⁓ their odds of success are very, very low. It’s out of the game. They’re in and out of the game in a matter of 24 months. And so we encourage angel investors, if you want to get into the game, get into a fund.

So or get into an angel group where you’re allocating creating, you know SPVs special purpose vehicles and putting your money into those so that you can distribute your your dollars however much you have if you’ve got a hundred thousand or a million dollars Make sure you can get into 20 or 30 deals and have the enough dry powder to follow on with some of those winners of the winners That is that it’s mathematically. That’s the only way to get a return

Anthony Codispoti (18:29)
you have other states coming to you asking for help in structuring a similar program in their area?

Toph (18:38)
We haven’t had one yet flat out ask for us to set one up for them, ⁓ but we do get a lot of calls. There was a study done in 2019, I think it was, ⁓ that were the most efficient venture development organization in the country. And so we do get a lot of phone calls for best practices and those types of things. What we’ve been focused on since I came in three years ago is basically building a Sequoia-esque, right? Platinum tier one level. ⁓

your platform, venture capital platform based right here in Indiana. And by that, mean all the other wraparound things that entrepreneurs expect. So anybody can write a check. That’s just a small percentage. That’s 10 % of what needs to be done. But there’s how do you bring the right butts in the right seats, the right talent, right? It’s talent and capital. And I would say talent is more important than the capital. So the right people at the right time in that business, toolkits, help them get discount rates.

⁓ with various vendors for all the things they’re going to Workshops, so financial hygiene, data hygiene, now jumping into AI and modern technology hygiene. Like all of these things really going deep and helping the entrepreneur get the right resources at the right time that they need to make the best decisions. ⁓ We’ve done a massive push over the last two, three years to build a best in class platform for the entrepreneurs.

Anthony Codispoti (20:04)
So I want to hear more about this efficiency because as we mentioned in the intro, Elevate Ventures is recognized as the most active seed and early stage venture firm in the Great Lakes region. So what’s different about your approach that allows you to participate in so many deals and why people are calling you the most efficient one out?

Toph (20:24)
Yep. So that goes back into the venture development ecosystem building mandate that we have, along with investing. So because we’re not measured by returns only, right, in our function, because we’re a venture development organization that does both venture development and venture capital, so think about that as ecosystem building, so innovation ecosystem, entrepreneurship ecosystem building, and then investing. Because we have that one-two punch,

focus, that’s what makes us the most active investor in the Great Lakes region and one of the top in the country and the world. We have two terabytes of deal data. So we’ve co-invested with almost 3,000 other co-investors from across the globe. ⁓ We’ve made, I think we’re at roughly 1,300 transactions with all of those different co-investors. You think about the sheer complexity of all that deal making from safe to notes to priced rounds to down rounds and bridge rounds.

⁓ It gets very, very complex, very fast. ⁓ How we initiate those investments. Sometimes we’ve invested in over the years fund to funds and sometimes it’s direct investing. Sometimes it’s investing in someone else’s fund. It’s all over the board the way those have been designed. ⁓ But through all those activities, it’s what’s made us the most active. And that’s per pitch book. It’s not our data. It’s pitch book’s data.

Anthony Codispoti (21:47)
Why have you chosen the particular industries that you do? Life science, hard tech, product, software?

Toph (21:56)
So basically anything that innovation touches, right? So sometimes it’s easier to say the reverse, what we don’t invest in. So our mandate, we don’t invest or can’t invest in, you know, bricks and mortar ⁓ or oil or gas or insurance, ⁓ other, ⁓ I’d say those are some like big, brushstrokes of what we don’t invest in. But it’s basically anything that innovation touches, right? And so if you think about some of those from a big,

broad brushstroke standpoint, know, software, hard tech, life science, know, ag and food, sports tech, etc. ⁓ Those are some of the major industries that innovation touches. And these are all places where Indiana, for example, we have the number one valued pharma company in the world, is right down the road from here, a half a mile, Lilly. We have the number one pure play ⁓ ag company, the number two animal health company, the number one health care

systems or number one, advanced manufacturing jobs. ⁓ I mean, the list goes on. Salesforce, our second largest physical presence in the world is right behind me, right on the circle of Indianapolis. And so we have some major players, major national and global players ⁓ that exist here in Indiana. And so it’s a natural fit. If you think about ecosystems off of all these types of companies, it’s a natural fit that we help support all of those.

Anthony Codispoti (23:24)
So now I’m going to ask you to choose from among your children. Can you pick one or two of your investments that you’re particularly proud of and

Toph (23:33)
So I love them all. ⁓ But since you asked, I will share a few. ⁓ So Adranos is one of our investments and it was solid rocket ⁓ fuel and motors and they sold to Anderl, which is one of the sexiest defense tech companies out there today, right? With Palmer Lucky at the helm. ⁓ So we were an investor in Adranos and they sold to Anderl and so by default, we have some equity in Anderl. ⁓

Adipo Therapeutics. So we’ve heard a lot about GLP-1s. But Karen Worcester is the CEO of Adipo, and they’re getting, they’re still somewhat early in their journey, but things look very promising. But they’re basically supporting healthy weight loss by increasing ⁓ your energy expenditure, like through the unique benefits of brown fat. And I find this compelling because it’s orthogonal to traditional GLP-1s, which suppresses your calorie intake.

Right. So I’m really excited. think that’s a real game changer. Phil, you know, I’m, I’m really fired up. I’m really excited about her company and she’s been at it for four or five years or so. ⁓ yeah, several years, probably still several years away, but it’s looking very promising. She came from Lily, right? Lily, the talent that they have there. It’s just insane. ⁓ and then.

Anthony Codispoti (24:36)
This is going to be like a pill or an injection or a patch. Okay.

still some years away. That one sounds pretty interesting. Okay, go ahead.

Toph (25:01)
a company called Frozen Garden, and this is one that’s near and to my heart because I’ve always wanted to drink smoothies, but I’m too lazy to make them consistently, I guess. ⁓ I’ve tried to buy all the stuff, the kale and the whatnot, and then it goes brown in the fridge and gets nasty. But it took her a number of years to perfect ⁓ harvesting fresh vegetables and fruits at the point of harvesting and freezing those, but then making the recipes in a pouch.

And so literally take the pouch, you throw it into a blender, you can stick water, almond milk, whatever you want up to the fill line. And you can make a smoothie inside of 60 seconds. It’s legit. There’s no added sugars. It is it’s the closest thing I have found from straight out of the field.

Anthony Codispoti (25:47)
So basically she’s taken the freshly grown produce, frozen it right away, and then mixed it all together with the kale and the berries and whatever else so that you’re getting your nutrition and it tastes good but without the added sugar.

Toph (26:02)
100%. And like, I tried messing with this for 10 years. And when she came in and pitched, I’m like, if diligence checks out, right, we’re in. And it’s awesome. It’s amazing.

Anthony Codispoti (26:03)
That’s fun.

Yeah.

Talk to me about servant leadership. What does this mean to you? Why is it important?

Toph (26:20)
You’re my customer. ⁓ So I think that everybody is everybody’s customer. And it doesn’t matter if, you know, it’s the valet, you know, parking at the office building or a restaurant or the janitor or the CEO of the largest company in the world. Everybody is everybody’s customer. That’s what I believe. ⁓ And we should always be looking to serve each other.

That could be something as simple as a smile, or it could be if you’re preparing a bunch of papers for a meeting and you need multiple copies of that and people are using three-ring binders, you three-hole punch them in advance so people can easily stick them into their binders. ⁓ Just anticipating the needs of others and trying to deliver value. That’s what I think that means.

Anthony Codispoti (27:11)
How does that show up in interacting with your portfolio companies and their employees?

Toph (27:17)
So ⁓ I think it’s a lot of things that we’ve built on this platform that I mentioned a little bit ago. But what are all the other ancillary things that entrepreneurs need? It’s so hard starting a company, right? And building a company. ⁓ You’ve got to be, you know, maybe slightly bipolar, manic, ADD, ADHD, whatever all the words are, all the phrases, all the acronyms. But it’s just so hard. And so what can we do?

without them even asking for it. But what can we do, what can we build to provide them ⁓ that helps make that next decision a little more clear, right? So that’s how I think it manifests itself. And that’s why we went to build that vesting class platform of all those other ancillary services to support them.

Anthony Codispoti (28:09)
Tell us about Rally, largest cross sector innovation conference. You’re the, what is it? The chief, what’s your role there?

Toph (28:20)
Well, it’s another thing I laid in bed at night thinking about for a long time in the context of like, you know, Indiana and technology innovation. So I don’t, I don’t really believe in sectors anymore. Honestly, I don’t, we, we still will classify things as life science or sports tech or whatever. But if I’m starting a company, ⁓ I, somebody may put me in a box, right. In a sector, but for that widget, that product, even if it’s software, if it’s hard tech, it often involves three or four or five sectors in one.

launch in one company. If I’m building something on my wrist, is it sports tech or is it healthcare? Is it software? Is it hard tech? It’s all that stuff. And so I have learned, so I’ve had eight businesses and seven verticals. I will learn more from talking to you than to people who sit next to me because you don’t do what I do. And you’re going have a different viewpoint on whatever it might be. Right.

how to manage people or how to get customers or how to do marketing or you’re doing certain things in your world that are not exactly the same as mine. And those things might be better than mine because you’re thinking about something differently. And so the short story with Rally is cross sector disparate stakeholders in one place at one time sectors silos, those lines are melting. And if we don’t get out of our boxes, if we don’t get out of our own way,

we will never achieve the greatness that we’re destined for. And so, and this can be personal or business. And so that’s the idea for Rally, a big melting pot of innovation, cross sector and disparate stakeholders. I always like to say it’s not just the investors and the entrepreneurs ⁓ that make innovation happen. It’s our policymakers. It’s our educators. It’s our economic development leaders. It’s our philanthropists. All these people have an innovation, a finger in the innovation pie.

And so what would happen if you get them all in the same room at the same time? And that’s why we started rally.

Anthony Codispoti (30:20)
And so somebody who’s attending, what does this look and feel like? What are they getting from?

Toph (30:25)
Yep. So ⁓ if they’re looking for, ⁓ if you’re a company, if you’re a startup, you’re a founder or a scale up, if you’re looking for investors, for customers, for partners, perfect place to go. If you’re looking for ideas on how to grow your business, perfect place to go. If you’re a policymaker, perfect place to go to find people who can educate you on policy you’re thinking about crafting and passing. ⁓ If you’re ⁓ in wealth management,

great place to go for customers. If you’re an investor, it’s a very economical way for you to go see and have 100 one-on-one meetings in 48 hours. So it’s something for everybody. Even for personal, I had a lady run up to me in year one, oh my gosh, this is the best conference I’ve ever been to. Like, what happened? And she said, I just met such and such, who’s apparently some world expert on cold plunges. I don’t know. But she wanted to get into that. That was really important to her. And she met some

I don’t even know who it was, whoever was there. And ⁓ so it could be anything. We had people who meet their co-founders there. ⁓ There was a local founder who needed a technical co-founder, met him at Raleigh and he’s from Silicon Valley. And so it’s just all these, we call it collisions, right? We have creative collisions, creative convergence, and this year is creative curiosity. We’re trying to figure out what next year is. It might be creative destruction. ⁓ And so it’s just all like…

come in with an open mind, think differently, and people are just blown away.

Anthony Codispoti (31:57)
And for folks who want to learn more about it, you can find them online rallyinnovation.com. Now, what you do, venture capital, involves a lot of high pressure decisions. Can you think about a story when you had a tough investment decision which really tested your resolve and how you navigated through that?

Toph (32:03)
Yep. Yep.

Yes. So here’s what I have. This is from my personal experience and how that is carried over to here at Elevate. ⁓ I believe in transparency and I’ve always appreciated a fast no versus prolonged silence. And so I just think people react well when you’re just honest and upfront.

And maybe one out of 100 times is an adverse reaction. But at the end of the day, companies go through difficulties. And so if you have to recap a company, and this happens with all VCs, and a lot of them don’t like to talk about it, but most of them want to prop up the value on paper until 13 years out. But all companies go through ebbs and flows. And so when it comes time for a recap,

The company didn’t do as well as they… Yeah, recapitalization. And so let’s say on paper that company was going to grow to $10 million in revenue, ⁓ but they only got to $4.7 million and they need another round, and they’re just so far off the mark that the previous valuation is not going to hold up. And you have that difficult conversation.

Anthony Codispoti (33:19)
Recapitalization.

Toph (33:47)
and you map out, you can kick the ball down the road and try to raise just enough money to survive for four months, but that’s not going to get you out of the problem where you’re upside down. So, for example, venture capitalists, when they invest at the next milestone of investment, they need to see at least a 3X step up in valuation, if not four. So let’s call it three, three extra graders.

Most entrepreneurs don’t run the math and understand that once you jump on that hamster wheel, you are part of a mathematical equation moving forward. And there’s no way to jump off that hamster wheel unless you want to buy them all out at some premium, which is not going to happen. So we really encourage founders to to look forward and then build backwards. And so. We have we work with companies all the time.

to help them lead a recapitalization of their company or to lead a bridge around, but whatever is needed to put them in the best position of surviving in the long term versus throwing good money after bad, in essence. And sometimes those conversations are unpopular with other investors ⁓ because other VCs would probably rather hold the current valuation. Even if has to stay flat.

They don’t want to down round because then they have to write down that investment. But that’s not the best thing for the company. And so we always try to think of what is the best thing for that company to survive and to thrive and try to make decisions from that point of view because most of the times that will keep you out of trouble. But I’ve just found one where we’re honest with entrepreneurs and we literally whiteboard out, here’s where you are, here’s where you said you were going to be, here’s where you want to get to.

There’s no path there. So the only option is to go to do this, you know, wind around and to do that, we got to make two or three really tough decisions here. And this is what that’s going to look like. Do you want to do that or do you want the company to die? It’s your choice because they’re making it.

Anthony Codispoti (35:58)
So in your mind,

the decision is let it die or recapitalize in this particular situation, recapitalize at a lower valuation. You don’t see it as a good idea to kick the can down the road and try to keep the same very similar valuation in that funding round. Because you’re saying at that point you’ve identified that this is just not sustainable for the company.

Toph (36:22)
It’s just not sustainable. And if you kick it down the road, then the entrepreneur also loses negotiating power. So we’re like, do this stuff early. Think through these scenarios early and do them six months or nine months or 12 months in advance instead of 30 or 60 or 90 days. Then it’s too late. Then you are going to get crammed down. And the only winner is the investor. And you’re going to get crammed down to nothing. And nothing good happens after that.

Anthony Codispoti (36:50)
I’ve got another question that comes to mind. And it’s similar to the one I asked about sort of picking from your children, you know, sort of some of your favorite investments. But I wonder if maybe there’s something that you guys have invested in that’s an area that the general public just isn’t aware of doesn’t know is a thing right now that at some point, this could be big, this could be a common household thing like, like the GLP example, like everybody knows the GLP is right. ⁓

And you’ve got a different approach here, but I wonder if there’s something that maybe would just blow people’s minds. Like I didn’t even know that was a thing.

Toph (37:27)
Well, there’s a company ⁓ called True Essence that is about flavors. And so I never would have thought about flavors and flavoring. But when you try to preserve a flavor to inject into foods or even to preserve flavor in a food, ⁓ often when you’re extracting that flavor, you’re extracting the water out of it. And they have a methodology that keeps the hydration.

which basically keeps the original flavor. And when you sit down and taste what we all know to be flavors today versus its actual origin of flavor, its natural origin, it’s mind boggling. So that’s one example of a company that is trying to do some really cool, wacky stuff that’s behind the scenes that you would never think about.

Anthony Codispoti (38:21)
That sounds fun. Let’s talk about your book, Pillar-Based Marketing. Where did the idea come from? Why write this?

Toph (38:30)
So the

idea came from being frustrated with SEO. know, SEO originated back in the day at the outset of the internet, And everybody got accustomed to keyword stuffing and backlinks. And SEO kind of, if we’re honest, back in the day was kind of a black hat kind of initiative. People trying to game the system, you know? It wasn’t authentic. And so anyways, I never really thought about it for many, many years.

But then, you I had my own frustrations with marketing with previous companies, et cetera. And I met a gentleman, Sean Schwegman, who was the previous CMO and he had kind of the CMO and CTO roles at Overstock back in the day and was there when it just had crazy growth from like 3 million to IPO. And Sean is this kind of a mad scientist, kind of a technical marketer. But we brought in a couple of mathematicians.

And the concept was that the internet, our smartphones here, that we had trained the internet to basically be the human brain. So we brought in mathematicians that had a background in neurosciences. And the concept was that we have fed the internet now through our brains, down our arms, out our fingertips, onto a keyboard, into the internet, all these words and groupings of words and how we think about things.

And so the concept was if we could basically map the Internet and how words are connected to each other, then natural nodes would evolve where these super highways connect. And so think about our interstate system, right? You have your highways, your interstates to get us from, you know, from here to San Francisco, the fastest route. Well, I could go to San Francisco a whole bunch of different ways.

But the fastest way is for me to jump on the interstate and start driving, right? Or actually, if you want to take it up a level, just jump on a plane and fly there. And so our whole thesis was, could we map out the Internet and how the words are connected to each other, how people find my website? And so we built this, it’s called Pillar-based marketing. And so the concept is if I’m selling a coffee cup, ⁓

then I would enter coffee cup into this platform, my website, ⁓ my competitors websites. And by the way, my competitors might not be people who sell coffee cups. It does include them too, but it might include Starbucks. And so they’re not my competitor, but on the Internet when it’s talking about mind share of coffee, they are my competitor, right? I want people to find me. So basically, you put these words in there and it maps out the Internet around you.

in that cluster, that word or cluster of words, that keyword, short tail or long tail, and it literally would show you this is the content to write for how the human brain operates on the internet. so innovation, by the way, Innovation Capital World, how are we on page one for that? Pillar-based marketing. And it happens like this. And it stays.

Anthony Codispoti (41:46)
When

when was the book written?

Toph (41:50)
Oh, we started writing that. I wrote that with Ryan Brock, who was also on our team. And we wrote, we published it probably three years ago. So that means we started writing it four or five years ago.

Anthony Codispoti (42:04)
And there’s a platform, there’s a website people can go to and use this service. What’s it called?

Toph (42:09)
Yep. So, ⁓ so that was DemandJump and then DemandJump sold to DemandScience. And then Sean also built another tool called Co-Content.ai. They could go do a version of this through Co-Content.ai or reach out to Ryan Brock on ⁓ LinkedIn. So there’s probably several, several places they could go access it through DemandScience, through Sean Schwegman and Co-Content.ai or through Ryan Brock, ⁓ who I think set up a consulting company.

Anthony Codispoti (42:39)
I was going to ask if the principles in that book were still the same today. A lot has changed just in the last few years, but it sounds like this isn’t your core focus. Okay.

Toph (42:50)
Correct, yeah.

But the principles will exist there because it’s all math. It’s just math. You think about the Kevin Bacon, six degrees of separation. Connection points naturally follow and it ebbs and flows, right, how it works. It’s not like you can just do one and done. You’re always writing content. But if I’m going write a piece of content for someone to find me, what most humans do

is right about how great they are.

And that’s cool. That’s natural. That’s just that’s natural. But, gosh, if you could if you could write your content from the context of how the Internet is actually connected with words and then tell everybody how great you are once they get to your website, that’s a lot more productive way to do it.

Anthony Codispoti (43:45)
So it’s this idea

of identifying the right word clouds, if you will, sort of these cluster of words together, then string those words together into an informative article that will help you rank. it.

Toph (43:57)
Yep. Yep. And what we found was,

so back to those words we used earlier, keyword stuffing, backlinks, etc. What we discovered is that’s all garbage. So, like, literally we found that, if I remember the numbers correctly, that there might be only five to seven keywords in anyone given an article that would be a focus of that article. No backlinks were even necessary.

Anthony Codispoti (44:24)
That’s a big change from how it started years ago. Yeah. Yeah. Interesting. All right. Let’s shift gears. So if I want to hear about big serious challenge that you’ve overcome in your life, personal or professional, how you got through that, who you leaned on, what did you learn?

Toph (44:26)
my gosh, huge change.

Yeah. So, ⁓ most people ⁓ that I run across when we start to talk more and more, they think I grew up with a silver spoon in my mouth. ⁓ And I didn’t. I grew up with a dirt cloud in my mouth, right? I mean, from farming. But I grew up in a very abusive environment, physically abusive environment. ⁓ And so, you know, we can… ⁓

We can take the bad and let that drag us down, right? Or we can choose the good. So the flip side of that is I learned work ethic and how to think ahead three steps. And so ⁓ I think it’s what we, you know, it’s a mentality of choosing to be a victim or a victor. And I chose to be a victor, right? And I didn’t know how.

⁓ But people knew what was going on when I grew up. ⁓ so, you my fifth grade teacher was very influential, Mrs. Rice. Wonderful. She was very strict, but she was fair. And I had a high level respect for her. And so she was very, very helpful. ⁓ She just did it in a very silent way. ⁓ But I knew she saw me, if that makes sense.

And the next person was my ninth grade football coach, Coach Manir was very influential and would stand up for me. So I think it’s like find and then as opposed to my junior high principal that told me I was going to be in jail the rest of my life when I was 16 years old. ⁓ And my computer ⁓ coding class teacher that told me I was a cop out, was it my junior or my senior year?

while I was in advanced calculus right next door, ⁓ which also was a great gentleman. Mr. Chastain was an awesome, awesome inspiration. I think the story of all that is, ⁓ you know, I don’t know what it’s like to grow up in a community where bullets are flying. Right. ⁓ And so there everyone has a backstory. Everyone has a set of experiences somewhere in their life. It could be

You know, it could be abuse, you physical abuse, sexual abuse. ⁓ It could be, you know, divorce, know, death, ⁓ health issues. ⁓ Everybody, you know, poverty. Everybody has a backstory and a set of experiences. And everybody’s backstory and set of experiences are the most important in the world to them. And so

I back to I told you about that group I’ve been meeting with for 25, 27 years. It’s like, find your tribe, find your people, find your peer group, find people who will believe in you because they’re there. They’re sitting all around you. We just have to pick the people out of the crowd that want to be helpful and pull us up versus push us down. And ⁓ and I don’t know where I learned this, and I’m not saying this is good. This is how I dealt with it. So this might.

I’m not a psychologist. This might not, this might be good advice or bad advice or experience sharing. But if people are causing drama in your life, ⁓ it don’t mean you can’t still love them if they’re a family member, for example. ⁓ But it also doesn’t mean that they have to control your life and you don’t have to engage with them. You can choose not to engage with them.

And so now I had to, to a certain point, right? To, to survive. I guess maybe I could have explored other things. I didn’t run away from home when I was 16. They had the sheriff take me back home several months later, but I don’t think I’ve ever said that story publicly, by the way. So we’re going deeper, Anthony. But it just is what it is. Like I don’t hide it anymore. It’s actually a badge of honor.

like for me. And so I’ve just found that when we have these kinds of conversations that we are now, and you start to open up with people about what your background is like, what your experiences were, they’re like, holy cow, I never knew. Can I tell you 25 things? Now we’re getting somewhere. And when those conversations are asked to keep them in confidence, keep them in confidence, right? Don’t be a jerk and go tell your, you know, 30 best friends.

But obviously I’m saying this publicly, so that’s going to get shared wherever it gets shared. But I think it really comes down to like, we can make things really complicated or we can simplify them. And so it’s slightly repetitive, but like just shed the noise, up on a shelf. It doesn’t mean you suppress it, but stick it up on the shelf. It doesn’t control you and go find people who add positivity to your life because they’re all around you.

You just have to choose to engage with them versus the ones that they want to push you down.

Anthony Codispoti (49:51)
So Toph, when you were growing up in this environment, was there a point where you realized that it wasn’t normal? Or did you realize that from early on?

Toph (50:07)
I don’t know if I ever thought about it that way. ⁓ I thought that for whatever reason that was just that was the environment that God placed me in for whatever reason. ⁓ Because we would sometimes get to go to a friend’s homes or whatever, and you could definitely feel a different and a different energy, so to speak. And I’m sure all those folks had issues they were dealing with, too. Right. ⁓ But I know if I ever thought about it as normal versus abnormal.

I think I just thought about it more of this is this for whatever reason, this is the journey that that God has placed me on and and let’s go explore that journey. some of the things I wouldn’t be able to get out of for a while until I got old enough and it was kind of like just deal with it. my brother and I, when I was a sophomore in high school, there was a situation that started to happen. And I’ll just say my brother and I gave

my father a choice, that he could continue to do what he was doing or something different was going to happen. luckily he chose to stop because I don’t know what would have happened if he had kept going because something was not going to work out very well for somebody. Whether that was him or us, I’m not sure. But so yeah, I just don’t know if I ever thought about normal or not normal, but I knew it was bad.

Anthony Codispoti (51:30)
And that choice that you’re talking about, how did that coincide chronologically with your decision to run away?

Toph (51:39)
So that’s a great question. cannot remember if that was before or after. No, it was before. I’m pretty sure. I’m pretty sure that happened. It was close in timing. But I believe that happened. Maybe I honestly can’t remember if it was before or after. But it was in close proximity, I know.

Anthony Codispoti (52:00)
And where did you go?

Toph (52:01)
A friend’s house. friend, I don’t know why his parents agreed to this, but a friend’s house and I negotiated rent with them. I bought my first car, I worked a lot, you know, so, but I bought my own first car, 1976 Dodge Charger for 150 bucks. I bought my own motorcycle, bought a motorcycle for $400. I was living there at their house in their basement. I can’t remember why I was paying them in rent, but I remember I paid them something. It was literally like maybe a hundred dollars a month or something, plus pitch in for food or something like that.

⁓ But I had a whole set up in our basement, you know, it was a concrete floor, but threw a piece of carpet down and had a bed. And ⁓ yeah, and got them to go into high school and go into work.

Anthony Codispoti (52:43)
So that’s a situation you don’t wish upon anybody. But I’m wondering, as you look back in the rear of your mirror, Toph, do you think you’d be where you are today if you hadn’t gone through those hardships? Are you here in spite of that or maybe partly because of?

Toph (53:03)
Yeah, I get asked that question a lot and I don’t know, that’s the answer. ⁓ I think that hunger, ⁓ maybe related to, I think hunger can inspire or destroy.

And in my case, it inspired. And I don’t know why that is. ⁓

But for some reason, here I am.

Anthony Codispoti (53:35)
So, you know, a couple of things that you mentioned there that I think are worth repeating, ⁓ know, this idea of focusing on the people that can help you. was lots of drama in your life and up until a certain age, there was no escaping that. Rather than that being your sole focus, it was who around here can help me and support me. And you mentioned a number of teachers and coaches along the way. I think it’s a big life lesson.

you know, whether you’ve got family members or coworkers or quote unquote friends that are drama in your life. Can you put less attention on them and more attention and focus and gratitude towards your tribe, towards the people that are helping to uplift you, right?

How did you find your tribe? Because this is something ⁓ I like to talk about on the show a lot, finding a peer group that you can exchange ideas with, that you can be open about, that you can learn from. And this is a group that you’ve been cohorting with for a long time now. How did you guys first come together? Guys and gals, maybe.

Toph (54:43)
Yeah.

So for us, it was guys and gals for us. It’s it was EO entrepreneurs organization. And there’s multiple types of organizations like this, but always. And I know people who are part of other other groups, ⁓ but I’ve never heard the exact set up is EO and YPO young presence organization that used to be called WPO, which meant you got old and you weren’t like you anymore.

Now they call it something different. So for all the WPOers out there, I’m teasing you about being old. I’m probably in that category too now. ⁓ But what I really loved about it was ⁓ the format was pretty basic. ⁓ So you have a forum and that forum is eight to 12 people and you get together once a month and those are at least four hours, right? Maybe six hours, but at least four hours. ⁓ You have a presenter every month.

But you talk about the five percent best and worst. The most important thing is the worst in your life. Personal family business. And you also cannot give advice. You you get you share experiences and if you don’t have an experience to share, you pass, but you do not give advice because a lot of times people actually don’t like advice. It kind of creates it creates divides like, well, what do you mean telling me that? You know.

Anthony Codispoti (55:52)
Hmm.

interesting.

Toph (56:09)
So it is amazing. Even if your experience isn’t like spot on with whatever the presenter is sharing, if it collects some other experience in your life, you share that experience because somewhere there’s a parallel. There’s an interconnectivity of thought. And when you walk out of that meeting, you have anywhere between one and 20.

experiences that were just shared with you that helps to create a roadmap of how you might navigate this issue that you’re dealing with. It is so powerful. I just can’t even describe how powerful it is, but it’s awesome.

Anthony Codispoti (56:54)
That’s really interesting. Do you approach life outside of your peer group in that way? Somebody comes to you with a problem, are you less likely to offer direct advice and more likely to give a shared experience?

Toph (57:11)
It’s a great question.

Maybe 50-50. I still tend to do the whole human thing of like, let’s just fix it right now. Here’s what you need to do. I’m sure somebody’s gonna listen to this and be like, well, he’s given me advice before. So to be honest, probably 50-50, but I do find myself trying to think of experiences and share those for sure. But probably 50-50, if I’m honest.

Anthony Codispoti (57:36)
What’s something fun you like to do away from work?

Toph (57:40)
hang out with my son, play basketball. He’s a senior in high school and he’s just awesome.

Anthony Codispoti (57:42)
How would your son?

What do you guys like to do together?

Toph (57:49)
⁓ Anything from nothing staring at each other. No, I’m kidding. like just hanging out watching a game or something And then for vacations always ask him like where you want to go to wait where you want to go? We won’t go see ⁓ He started trash can cleaning business this summer, which was a lot of fun ⁓ I tried to expose him. I take him with me to a lot of work things and Just expose him to various things. We do that a lot ⁓

I had a great moment a few months ago where, know, when you teach your children all these things, they’re like, yeah, dad, yeah, mom, whatever. I know everything. Stop telling me stuff. We had a wonderful moment, ⁓ where he came home after he started his trash, trash can cleaning business. And he started to educate me on how entrepreneurship works. And I’m just like, wow, I didn’t know that. Yes. Tell me all about it. Right. It was awesome.

Anthony Codispoti (58:31)
Ha ha.

That is

great because when you can explain something to somebody else, when you’re able to teach it to somebody else, you understand it better. You really codify it in your brain more. And how great of you to set your ego aside and allow him to, and I’m using air quotes for those who aren’t watching, allow him to teach you about entrepreneurship. I think that’s great. Yeah, yeah.

Toph (58:52)
you

Right, teach me. Yep, that was so awesome. So those are

some of the things we like to do.

Anthony Codispoti (59:01)
What advice would you have for somebody who’s getting started in the investing space, whether it’s angel, PE, venture capital?

Toph (59:13)
Yep. So I think several things. ⁓ So number one is making sure that you can place enough bets and have enough dry powder to follow on with enough of the winners of the winners to to mathematically put yourself in a position to succeed is number one. Number two is I think the days of ⁓ used to have a lot of, you know, SAS series A funds, for example, are

or growth, Series B, SaaS funds. I think the days of those narrow sectors are over. especially with software, things are moving so fast. I just think it’s a dangerous spot to be in, to be single threaded, quote unquote. I just think there’s a lot of these lines are melting between sectors. And I think we’re going to see more of a proliferation of generalist investors.

And generalist doesn’t mean everything, right? It might mean three or four things, but not one. I think it’s a much smarter way to go. Another thing I think will be interesting to see is ⁓ fund life. ⁓ Will we?

Will have a 10 year closed in fund? that be like evergreen historically has been a very, it’s a thing of the minority, right? There’s hardly any evergreen funds out there.

Anthony Codispoti (1:00:45)
Meaning that Evergreen, you you hold the company instead of, you know, most investors, hey, you’ve got some sort of a five, seven year plan that you want to turn this around and make a profit.

Toph (1:00:54)
Yep.

Yeah, yep, that’s exactly right. So I think it’ll be interesting to see to watch how that plays out and how that morphs. There’s regulatory things involved in that as well and what you can and can’t do. And so I think it’ll be interesting to see if we see some of those regulations loosen up to enable more flexibility with an evergreen concept. You’ll see some of the big funds today doing, you know, becoming RIAs, right, getting registered with FINRA and

and become registered investment advisors, ⁓ which opens yourself to a whole ⁓ regulatory, back in investment banking days, for example, we remember Finron, I took all the tests and all that kind of stuff. So we might see that morph into investments or we might see ⁓ more flexibility with how you set up a fund. ⁓ I think I’ll be interested to see how the SEC reacts to some of these changes. ⁓

Those are a couple of things I would, think I would share at a high level.

Anthony Codispoti (1:01:56)
What’s the regulatory free up that needs to happen to make the evergreen more popular?

Toph (1:02:05)
So there’s a lot of regulation around, ⁓ you like the SPACs, for example, which SPACs don’t have a great history, where you can’t raise money blindly to go buy something that’s unknown. ⁓ And then also accredited investors. So you or I right now can go download

gambling app and invest wherever the heck or not, I’m sorry, not invest. We can gamble whatever we want to. But if we don’t have a million dollar net worth, excluding our home, our primary residence, or make what 200 as a single or $400,000 household income, then for some reason, we’re not considered smart enough to invest in alternative investments. But we can go do gambling apps all day long.

That is making sense to me. ⁓

Anthony Codispoti (1:03:07)
I’ve not heard it framed like that before.

Toph (1:03:10)
Yeah, it’s just like the purple commercials, right? Just mind blows. And so I think that they’re starting to become, I think people are starting to get this more. And by that, I regulators and legislators are starting to understand this actually doesn’t make any sense. And so I think that’s really exciting. That’s an opportunity for innovating policymaking ⁓ to enable more people to get in the game ⁓ for wealth building.

Anthony Codispoti (1:03:39)
Yeah. Tof, I’ve just got one more question for you today, but before I ask it, want to do three quick things. First of all, anybody who wants to get in touch with Tof can find him on his LinkedIn page, ⁓ Tof Day or Christopher Day and Elevate Ventures. And we’ll also include a link to it in the show notes. ⁓ Also, if you go directly to elevateventures.com, there is a portal there where you can submit.

your decks if you think that there might be a good fit there. And as a reminder for listeners, if you want to get more employees access to benefits that won’t hurt them financially and carries a financial upside for the company, reach out to us at addbackbenefits.com. And finally, if you’ll take just a moment to leave us a comment or review on your favorite podcast app, you’ll hold a special place in my heart forever. Thank you. So last question for you, Tov, you and I reconnect a year from now and you’re celebrating something big.

What’s that big thing that you hope to be celebrating one year from today?

Toph (1:04:40)
that we’ve launched the first-ever growth fund in the state of Indiana.

Anthony Codispoti (1:04:45)
And what does that mean? How is a growth fund different from what you’re doing now?

Toph (1:04:48)
So today our entry points are up through series A. So those are companies, know, roughly $5 million or less in revenue from an entry point standpoint. ⁓ And so we don’t have the ability to write a big enough check to enter at the risk adjusted portion of the funding continuum, which is series B. So those companies are raising, you know, 20, 50, 75 million ⁓ having the ability to ⁓ lead if necessary ⁓ investments into series B.

companies.

Anthony Codispoti (1:05:20)
And how will that come about? Is that all funding through the state?

Toph (1:05:24)
So no, so that would be a separate fund, a separate for-profit fund, so returns driven. so this got approved, the original fund got approved to go do it like back in 2021. It just takes a lot of work, complications of documents and stuff getting set up. But it all got approved late last year and then just getting ready to ramp up and go to market. But there’s a $25 million anchor.

the returns that we’ve driven over the last 15 years. So there’s a $25 million anchor and then we got to go out and raise another $50 million to get to a $75 million first close and then hopefully raise it all the way up to $200 We’d love to do first close around $100 So that’d be a lot of work to pull off, right? To get to first close will take every bit of a year, maybe longer.

Anthony Codispoti (1:06:15)
We’ll make a note to follow up with you and check in, see how it’s Tofday from Elevate 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.

Toph (1:06:18)
That sounds great.

Enjoyed it, Anthony. Thank you so much for the invite. Really enjoyed it.

Anthony Codispoti (1:06:29)
Folks, that’s a wrap on another episode of the inspired stories podcast. Thanks for learning with us today.