How Founders Should Approach the TAM Question When Venture Capital Is Scarce:

And we have something very special for You next it is the ever popular Tam Panel if you don't know what Tam is You're going to learn more about it in The next half an hour than you ever Thought that you need to know but it's One of those metrics that is both Art And Science which makes it very hard to Nail down so we have Walter Thompson we Have Jamira from reach Capital we have Helen from phenomenal adventures and we Also have Monique from Cake Ventures put Your hands together this is going to be Great [Applause] Thank you Thanks for joining us today Tam total addressable Market We're gonna have kind of a jargon heavy Talk today so uh we're getting ready for Some acronyms but we're definitely in a Down Market uh but for Founders who are Eager to build and scale venture capital Is always scarce So today we're talking to three Investors to get their candid advice for Founders especially first-timers with Regard to how to calculate total Addressable markets how it differs by Sector and why there's no such thing as A tam that's too small Uh before we get into it I'm going to Ask each panelist kind of share their Investment thesis because I think it's

Relevant to today's discussion we can Start at the end with Monique Hi everyone I'm Monique Woodard I'm the Founding partner at cake Ventures an Early stage firm focused on seed and Pre-seed investments into companies that Accelerate based on demographic changes Like aging and Longevity The increased Spending power of women Rising majority minority communities Things like that gen Z Thanks for having me Hi I'm Helen great to be here thanks for Coming Um uh we started phenomenal Ventures Last year and closed our debut fund to Invest in early stage companies across Enterprise software fintech and commerce Which draws on our unique experiences as Operators we've invested in 18 companies So far including user clouds plenty and Creative Juice and you know we're Excited to be here thanks Hi everyone I'm jamiro Herrera I'm a Partner at reach Capital we're an early Stage Venture fund focused on investing In education and the future of work We've been around since 2015 and Recently raised our fourth fund it's a 215 million dollar fund and we focus on Investing both for financial returns and Also impact returns as well and really Excited to be here Lead role here thanks very much

Um like I said it's going to kind of be A jargon-heavy discussion so quickly Define our terms total addressable Market service serviceable addressable Market and serviceable obtainable market So I picked a hypothetical example bear With me for a startup that sells Plant-based dog treats Tam would be Everyone who has an interest in visiting A shop that sells pet food the Sam for This business is everyone who wants Healthy dog treats specifically and then Some is essentially how much you think You could sell to those people uh go to Market strategy essentially do I have This more or less correct or okay Exactly so thanks uh I studied last Night but basically tan helps it gives Investors a better understanding of your Company this upside potential and Sam And Sam help offset risk basically uh Let's Dive Right In so taking issue with Today's premise uh does calculating Tam Really change during a downturn Um or is it kind of a static kind of It's a thing you just have to do Basically absolutely not You know We are certainly in a very different uh Funding and fundraising environment than We were a couple of years ago but for For me as an investor the The Tam Calculation doesn't really change Whether we we are in a more flush

Environment or a less flush environment Um you know you're still going to be Looking for companies who are you know Addressing large markets and really Trying to Um you know trying to figure out like The biggest ham that they could get to Do we all kind of concur or yeah I Totally agree I think the thing to think About is what hasn't changed even with The down Market is the size of our funds And the exits that we need to realize in Order to return those funds and so the Calculation essentially stays the same With going going actually left to right What's what range of Tam interests you Like what's the is there a number of Kind of a ballpark as far as too big too Small Left to right or right uh let's go this Way I'll jump in I don't think there's Such thing as too large of a tam I think Investors generally get excited about Large Tams um it has to make sense for Venture like returns um especially the Larger the fund size they're really Going to care about Tam Um but I think you know and all Investors will say that they want to see A big Tam they I think most investors Would also say they want to see a small Initial Market you know a market that is Just your customer base that's just Obsessed with your product I think what

Makes us a little different at Phenomenal Ventures is we're really Interested in how you get from point A To point B so I mean how many companies Have we heard of that you know have a Really large Channel but can't really Ever break out of their initial customer Segment Um then they won't make it right so That's something that we help with Drawing on our experiences as marketers And strategists at big companies and We've seen these companies go from you Know their earliest stages to making it And um so my co-founder and I we've Worked at companies like Facebook and Dropbox and Uber and so we saw them make It eventually but sometimes they did it Very quickly sometimes they had a lot of Trial and error so I think really Focusing in so something that stays Evergreen regardless of what the market Looks like is just how are you going to Get from that initial you know segment To whatever however large that Tam is is There a tan that's too small for you Then probably I think if it doesn't make Sense for um for Venture Capital like so I think one question you could ask is Depending on really looking at you know The size of the funds that your Investors are investing out of having a 10 or 100 extra turn you know on their Investment in you if that doesn't return

Their fund it probably doesn't make Sense Um for them to invest I also think it's fine to express uh Sort of a beachhead market right and That but what we want to see is that You're able to go into a much broader Market after that right that you're able To get some product Market fit on a you Know maybe smaller not quite optimized Ham part of the market and then you're Able to kind of expand it to the much Broader broader scale Market Um you know I do see occasionally see Founders come in and talk about you know Tam you know to your point of Tim There's never a tam too big sometimes They're like oh everyone is our Market Well okay everyone is not your market so Let's let's try to refine that and Figure out uh what who your Market Actually is so sometimes there can be The expression of a tan that is too big But yes we are always looking for a Big Town yeah the only wrinkle I'll add is Most of us or at least have reached the Way we think about it is from a Portfolio perspective so in each fund We'll invest and let's call it 25 to 27 Core companies and For most of our companies we're looking For for opportunities that have very Large towns have very large exit Potential but because we are a

Sector-specific fund we are able to see And know when there is a company that Has a pretty good exit might not be a Billion dollar exit but from a Risk-adjusted perspective it's less Risky it might fall closer to the 300 to 500 million dollar category but because It's less risky and we think about it From like this portfolio we'll have lots Of outliers and then maybe we'll add in A few of these of like we're pretty sure These are going to be good outcomes for Us maybe not return the entire fund but Return a third of the fun or a half of The fund which is very much needle Moving And so there's there's a little Bit of a wrinkle there in that we it's Not just sometimes the individual Opportunity we think about in the Context of the entire portfolio Given the areas where you invest do you Have a preferred uh calculation approach When it comes to Tam like bottom up top Down value Theory I was just going to say it's really like A triangulation of all of it so you want To do Bottoms Up you want to do top down You want to do a ton of market research To kind of triangulate like what's the Zone in which the Tam is in as opposed To just relying on relying on one Um I I would say like between you know Between the ones you mentioned it's like I usually prefer Bottoms Up over tops

Top down because there's a lot of Details that are missing in the top down Analysis but really what you want is Just triangulation of multiple methods There's also Um you know making Founders making the Case that the Tam will grow and and Their unique role in growing that Tam so For example you know if you're a company Where you know we've made a couple of Cpg Investments one of them is in fish Wife and if you guys have been following Like the Tin Fish craze post pandemic You know they're a company that really They Count Their Tam as not just you Know everybody who's buying Tin Fish Today but you know there's they're going To play a role in making this really Popular and something that's already Very popular overseas to the United States so you know they're looking at Other healthy snack foods you know Charcuterie boards and things like that That will count towards their Tam and so You know if you're if you're either a Category leader in a growing category I Would say that you actually can explain What you know what your unique role in Actually growing that tan would be I Really think Founders should use the Tam Discussion with an investor as an Opportunity to show them how you think About it right so it's it's less about Do we prefer top up or top down or some

Hybrid version it's really allowing the Founder to say here's how I think about The market that we are playing in and Here's what I know about it and let me Show let me show you how we think we can We can get as much of it as possible Right and that point about being in a Growing Market is so important because a Market can look small today but it's Really up to a Founder to convince me That that market is growing right maybe And if the market is big but not growing That's also a problem right so we want To see a market that is not just what it Is today and it's going to remain Stagnant but we also want to see can we Extract additional value from that Market so how much should Founders show Their work and I mean we're talking About basically like a you know a 16 Slide Max pitch deck how much work can You present as far as here's my thinking The framework I use to derive this Number how much can you actually show on A pitch deck I'm starting to see a lot of sort of Standalone documents on how they arrived At their Tam that's outside of the pitch Deck because agree you want to keep that Pretty concise so there can be sort of Additional materials I would say that Show your work is actually the point so You know you tell me your you know your Tam is this like I'm not going to go

Fact check that and spend a ton of time On and see if you know you've got really Precise on that calculation what I am Going to spend time on is like what are Your sources and you know where are you Getting the insights to actually Calculate that Tam and so it's similar To you know if you guys are raising Money and you know you arrive at we're Gonna we're gonna raise this much money For for this round you know I think as Investors you can have an opinion on Whether that's too much or too little But it really doesn't matter at the end Of the day if you're really showing Where that money is going to go and how You're going to put it to work it's also Similar to like the classic Consulting Interview exercise of how many ping pong Balls can you fit in a 747 it's like They don't really care what the actual Answer is they want to see how you Arrived at that number yeah I think also To the point Monica was making earlier It's a conversation it's it can be Voiced over it's meant to be a back and Forth I may ask questions dive deeper Dig into your assumptions and the truth Is there is no right or wrong like here Is the exact number it's more about do We have overlap an agreement in the Assumptions around your drivers I mean going back to the pitch deck Question though the Tam slide

Of all the slides in a 10 to 16 slide Deck how important is that one is it Like is it most important somewhat Important is it in the middle like where Would you put that as far as it's not Most important yeah the team slide is Probably the most important yeah Um but I think of it all as a jumping Off point for a conversation so I may You know before the meeting I'm going to Very honestly it's very quick I'm gonna Go like flow through flow through the Deck very quickly to determine okay is This something I should be having a Conversation about Um I'm not going to spend a ton of time Figuring out whether the Tam is too big The Tam is too small whatever right now Because this is really the the deck is The door opener to having a broader Conversation about the business itself Of which Tam is a really important part Not the not the only important part but Which Tam is a really important part of Um So actually you already answered my next Question which is how much of your deal That you diligence is spent checking Tam It sounds like not that much but later When you get into the relationship it's More of a consideration I suppose Um you know this is something you Brought up that it seems like investors Often have a better sense of the Tam

Than the person pitching them uh I I've Heard this from a few investors because They they get they get pitched on a Sector you know 10 times a day and the Investor is just learning about the Sector and they have they're trying to Get into it so there's a imbalance there Um and so I one of the quotes was it's Always going to be too large or too Small it's almost always going to be Wrong so it's more about being a Directional uh is that is that fair Assessment or well first I'll um push Back on the premise of the question Which is sometimes the investor knows Tam better than the founder so in our Case because we are sector specific and Our job is quite literally to go into Very very deeply into specific Sub-sectors more often than not we do Know the Tam better than the founder but I would say for most generalist Investors again depending on the Category they're learning and trying to Get up to speed as you are pitching them And so I think it just totally depends On who you're talking to and what the Sector is and the category and even then For us like there are some sectors that Maybe we've been investing in for some For some time but some new wave happens Some new technology pops up and we gotta Actually question all of our assumptions And start to push ourselves in our

Thinking Um and so and so even even the promise Of the question it's not it's not a Waster it totally depends actually which Is another thing with more companies Introducing AI to the mix how is that Changing the math as far as Tam or is it Not Starting with you Um I have plugged in what is the Tam of This category into chat jpt a couple Times Um no I I don't know how much that's you Know we don't specifically invest in Ai And that sector so you know we're not Using AI to to calculate the market Either but like so Founders aren't Trying to like find some way of kind of Shoehorning in an AI angle to increase Their oh oh I don't think so I mean I don't think It's specific to increasing their Tam I Think it's specific to Um what a lot of investors seem to be Interested in at the moment Um but I don't really invest in companies that Are that would call themselves an AI Company right I invest in companies that Are solving a problem for a specific set Of people and maybe they're using AI to Do that right and so then AI doesn't Really impact the Tam as much it impacts The delivery of the technology right

Yeah I um for us like just to share a Concrete example we've invested in the Category it's called lesson content Delivery in a company called nearpod That had a very successful exit and Um we actually found the AI equivalent Of that company and we recently just let Their seed round the market itself like Hasn't really changed it's still less in Content delivery and but we think Because this company is leveraging AI They have an opportunity to actually Become the incumbent in that market and So I don't think it necessarily changes The Tam maybe the Tam has changed but More so because there's more technology Adoption in school districts and it's Less so related specific to AI What about new products and services how Would you calculate Tam for something we Haven't seen before like you know Personal jet packs or flying cars like How do you find it comparable to compare And kind of calculate There's always an existing Market There's always a way that someone's Solving that problem now transportation In the case of flying cars right and so Like before Uber like you could use taxi Cabs before airbnbs you could use the Hospitality industry and so there's a Way that people are solving the problem Now and then you just kind of have to be Creative about how you think about

Measuring that can each of you like talk About like just share like an example of Uh like a red flag that showed you a Founder didn't fully understands the Market they were hoping to enter Helen Um we did pass on our company I'm trying The the company that comes to mind is One that we passed on because we Actually felt like that Tam was a little Bit small and so to you know is there Too small I said yeah sometimes maybe There can be um and even for a small Fund like ours and you know I think That's it's mostly because even if you Start out with a small Tam you know and You have a big Vision you can really see How this really useful solution you know Product will be able to extend itself Into other sectors right and that's Going to become increasingly important As the company matures and seeks you Know additional rounds of funding and Then broadens Their audience and things Like that but I think even if from the Beginning you know you feel like where They can go with that sort of specific Product is pretty limited Um I think that that is a limitation and I say this is definitely the smallest One on stage um You you're doing checks in 100K to 500k Size or 250k yeah okay yeah Um yeah yeah so I I don't want to be too

Specific because the this company is Still the team They do something very unique Um but I think you know One thing that I've seen occasionally is A Founder not understanding how the Market has changed or shifted right so Found the founder has a product Um people are actually doing this Executing this on other platforms Um but they're creating a platform Specifically to to Sell this type of thing But that thing has now changed in the Wake of covid-19 right because user Behavior has some has shifted and the Founder has not shifted their Assumptions their hypotheses to now meet The new reality that we are find Ourselves in Um and I think that's really challenging Because sometimes you you fall in love With the solution or the product But would you should actually be falling In love with is the problem yeah Um and so The best Founders are able to shift and Morph and modify based on new Information And when I see an inability to shift and Modify or you know really loving being In love with that product so much so That they don't want to change course That's somewhat it's it's a British flag

I feel like such a great example of this Is the is the instacart IPO where there Were a lot of folks the last couple Years saying you know questioning Whether instacart can continue their Momentum and their growth and is the Market as big as we thought it was During covet and you know they have made Some strategic pivots to really you know Increase their Tam and sort of in Interesting ways and build out different Parts of the business to really really You know sort of meet that expectation And a lot of thought people thought that They couldn't do it so I think that's a Good example of just sort of adjusting Exactly the delivery of just groceries Too and like very Whole Foods embedded To now the delivery of everything I mean You can get Sephora on instacart Jumyra Uh I think the biggest red flags Honestly it's I won't I won't use a specific example But it's more so related to as you start Questioning the assumptions that they're Making do they fully understand as many Was saying the way the market has Changed do they fully understand how People are solving this problem today my Biggest pet peeve is when someone says We have no competitors and I'm like you Do you always have a competitor there is A way someone is solving this problem

Today and so almost being hand wavy About some of the unique dynamics of Their Market I think is some one of the Biggest red flags that I that I notice I Mean but are you willing to accept like You know jazz hands in other parts of Their other deck but you wouldn't in the Tan like we're we're like where's it Okay to make a mistake I suppose like This like and is it is it as a tan Mistake more critical than a team Mistake or a problem mistake or Not sure if I'm asking the question Correctly but Like how how badly can you mess up your Cam slide and still save the meeting With an investor that's the question I'm Asking I think I don't know is always an Okay answer as long as you're then Willing to like let's go through the Exercise of getting to a knowable point Right Um I would rather have an I don't know than Like pure jazz hands agreed I totally Agree like because we're also testing For just learnability and coachability And adaptability because that's going to Actually be the most important trait for Early stage Founders and so being Willing to say I don't know but then Being willing to actually do the work in Coordination with your with the investor I think shows a lot more than the jazz

Hands and the other thing is look like The best Founders are not going to be Great investment analysts or Finance Folks right and so I don't expect you to Produce this amazing Tam analysis or This amazing financial model that you Know shows you have everything put Together like I'd rather you be an Amazing product person a great person at Hiring people like those are the things I need you to be really good at but then For the tan piece and like the financial Model and all of those pieces I just Need you to be willing to learn and be Open and to having that conversation and So there is no necessarily I mean I Guess there are some mistakes on the Tam Slide that you can make but I wouldn't Treat those as oh I'm no longer Interested in this having having this Conversation or not being a non-starter Some of the best conversations or Interactions that I've had with Founders Have been after you know we go through a Meeting maybe they We have some sort of back and forth About a certain aspect of the business That we don't agree on right and then They come back and say hey with an email And very detailed answer about how they Think about it or you know they've gone Back and thought through things and said You know maybe I didn't Express that in The way that I wanted to here's an

Update for you those can be really good Interactions and I think those are Helpful for investors to like understand How you think about things and Understand how you might interact with Us in a real life situation Yeah it's the conversation that you Mentioned going back and forth and so I I don't think it's always you know going To be the investor evaluating whether The founder is coachable or teachable It's also like how much am I learning From that founder because they've got You know insights into you know a corner Of a market a small one maybe at the Time that are going to help me become a Better investor and I think also the Best way to sort of differentiate Yourself and make yourself memorable is If you actually you know leave them with Something that they can that they've Learned that day right So if you believe in if you if it seems Like a good team then you're willing to Coach them through like how to be better With Tam that sounds like Um money your fund is really uh very Thesis driven around demographic change As you said Um a lot of investors don't seem Interested in backing companies that Cater to these demographics and Without being like jejun I don't really Understand it because women are you know

50.4 percent of the population it seems Like a pretty decent sized total decimal Market why aren't there more funds like Cake Ventures Um you know the flipping answer is Because they're not as good as me but Let me not give you that answer and give You like some Nuance Um I think you know I I invested in my first aging related Startup in 2016 right and now we're Starting to see a lot more people Interested in longevity interested in Our aging population realizing that we Have a care crisis Um you know we don't have enough Caregivers for the amount of people who Are going to age into needing care Um you know I still think people are Bit slow to recognizing the power of the Female dollar but as companies like Skims is a billion dollar company Finte's a billion dollar company modern Fertility kind body you know as we see More of these Billion Dollar Plus Outcomes a company like Fair it's like a Four billion dollar company teledoc Telehealth company Um women are the biggest consumers of Telehealth as you know and I write Insights reports and white papers to Show people especially other investors That this isn't just you know it could Be easily earmarked as diversity but

This is actually about markets and about Market building and the things that are You know the changes to the internet User base that are going to affect many Different aspects of Technology Um I think sometimes people get Comfortable and siled within what they Already know and it takes them even Investors who are supposed to be you Know risk-taking it takes them a really Long time to change their mental models Around certain markets I I think I have Been able to come in with a fresh Perspective Um around things like aging and Longevity or the increased spending Power of women or other demographic Shifts that are happening and I I am Slowly starting to see other people be Really interested in those those things As well That's that's good glad to hear it Um I want to talk about also back uh Going back the whole preparation thing Uh common mistakes with Tam Jomar I Think in our prep session you mentioned Like one of the things people will Co They will quote research reports kind of Lack Nuance are there other things you See people doing that you wish they Would just stop doing when it comes to Presenting a tam calculation Um Going back to that specific example it's

It's definitely kind of hey here's the Big large number and then the overall The overall pet peeve I have in general Is just not going into the drivers like Really going into the details of hey This is these are the ways this Demographic is changing this is the way The behavior is changing these are the Ways that our competitors are changing Actually going into the details is where I see really or the lack thereof is Where I see the mistake I often see hey Here's the big number here is the link To the research report that said this Big number and it doesn't account for a Lot of a lot of nuance so even a Specific example we we invest again in Education and I often see people use This large here is the Learning and Development budget dollars that are Spent across the US and so this is our Tam and they don't realize that like 70 Of that is head count and like a smaller Percentage of that is actually software Now you can make the argument that those Things are changing you can make the Argument that Um that you can capture more of those Dollars but oftentimes they just use This big like 70 plus billion dollar Market as opposed to actually looking at The Nuance under it So Helen question for you Um most first-time Founders they don't

Have that experience this is the first Time they've ever tried to analyze the Market so in doing the process putting The process aside For a first-timer who'd you recommend They run it past before they put these Out of the world as far as showing it to An investor like if I was just coming up With the Tam for plant-based dog treats Who should I show it to before I show it To you to make sure I've got my numbers Directionally correct Um I would talk to other people who you Know you think are in that sector of That for you know I think of it as like Layers of an onion or concentric circles And you know in the beginning you start Right from the middle and it's the Smallest and uh it's probably going to Be somebody it's probably going to be Like a community that the the founder Themselves is very familiar with you Know I think they're every large company We can large successful company we can Think of you know the founding story is Typically it's the founder and a problem That they were trying to solve and a Market that they knew because they were The market right and so I think that Validating that with you know people Around them I think that's that's Totally fine they don't have to grab Somebody Elsewhere for for the for the Overall sort of you know how large is

This Market you tend to know like how Larger Community is based on sort of the Channels that you spend time with or the Different groups things like that I Think that not to answer you know the Question that you asked Monique but it's Like one reason why we're seeing you Know a lot of um The same types of companies get backed Right is because we're we're not really Um looking at the companies that are Building like massive companies that Were the target market is really Everyone and we're really not dissecting Kind of how they get from each of those Layers of the onion you know from from Start to finish and you know one way to Really reach into more pockets of your Tam is to have a diverse set of Investors a diverse set of founding you Know members of the team a diverse set Of early customers and things like that Because I think otherwise you know you Might hit that limit of like that that Concentric Circle and never really be Able to break out I mean is it would it be fair to say That it it's kind of like a Rorschach Test and stuff or like a personality Screener as far as like you get the Tam Slide and you're kind of you you get a Read of where this person's coming from And what they're capable of is that fair We definitely assess whether you know

This team is going to be able to either You know connect with the next set of You know two three four layers of that Audience Um whether it's through channels that They've built before communities that They know how to plug into are they Great at hiring and they're going to Bring in people with great experience You know who have done that before and So yeah I think Um definitely like there are so many Examples I think the last you know five Years or so of like YC companies that Are amazing and they're they're like Addressable marketers like other YC Companies and those are actually Fantastic businesses there are so many Great examples of companies like that But I think that the bigger question is Like what happens after they've got Penetration of 100 of YC companies I Mean you could say the class sizes keep Growing every year but like you know I Think that that's where we really pay Attention of how do you break out of Sort of your own Circle We've got about nine minutes left I'd Like to see if we have any questions From the audience Um on this topic I don't really sorry I don't I don't think we oh wait hold on Yes yes please I'll give you a chance to get to the mic

Thanks Uh we cannot hear you but if you can Speak up a little bit I'll I'll repeat your question for the Room okay thank you oh oh here it is all Right Um it was great hearing about all the uh Like red flags and pet peeves and things Like that I'm curious if there were any More examples of something you've Experienced when you look at somebody's Deck and you're like oh this gets me Excited to ask more questions something That's maybe on the Tam slide or if it's On an adjacent slide it could be Anything else as well Most of the things that we identify are Truly not pet peeves and red flags to be Honest Um I you know I really like it when Founders teach me something about about You know a potential uh investment uh They can teach me something about the Consumer or a difference in behavior That is new Um I I think we're all looking to be Taught something by Founders that we Want to invest in and so you can use Many different parts of your slide in Your deck in order to do that it's not Just the Tam slide I totally agree I just to double down on What Monique said one earlier this year Uh some one of the Decks that I received

Had this really interesting stat on a Change in consumer Behavior particularly With Gen Z that I hadn't realized and to Be honest like I don't think I would Have had I not run into this company and That alone made me say hey like I want To actually meet with these Founders at The very least I'm going to learn a lot More about this demographic and also I Was interested in the company we ended Up Investing For What It's Worth but uh Being able to see like new information That I wasn't even aware of is super Interesting Thank you so much yeah I think there's Sources right that we mentioned like Reports and things like that there are Um uh and then there's also yeah so Insights and things that you've learned You know sort of early days and then There are assumptions and I think Assumptions Um are some of the areas that we've had The richest conversations about like oh Why is that your assumption right and Then if we have a different one I think That's like a really great starter of a Conversation to really get to understand You know how you look at the world so I Wouldn't be afraid to even have those in There Thank you Yes over here Thank you so much I wonder if you could

Drill down a little bit for me between Tam Sam and Psalm and if you're seeing a I now change the calcs on what the Service or what the psalm is and really Where we can you know generate a revenue Prediction I mean none of your AI first found Investors so I'm not sure if you can Answer I mean I guess just to sharpen that Right is is uh the implementation of AI For us as startups right allowing us to Reach a larger percentage of the Tam and You guys take that into account or do You think that's a valid argument So are you asking uh when startups use AI within their businesses like they're Not an AI business but they're using AI To to execute something within the Product Um does that impact the the addressable Market Um I think So I think it will it often allows the Company the startup to do something Faster or with fewer people Um and that's not necessarily a direct Impact on on Tam or on on Sam or Sam but It makes for much more efficient Companies right and so it makes it much Cheaper faster may make it much cheaper Faster easier to build that company and To scale really quickly using the Technology using the AI even if it's not

An AI company are you seeing that in Pitches now are people starting to Mention that Um I think people not they're not Necessarily making that argument in the Pictures that I am seeing but they are Using AI in the within the product in Really interesting ways a company that I Committed to just earlier this week is Actually using AI in a really Interesting way even though they are not An AI company and that is allowing them To build something that other platforms Of the same type have not been able to Build right and I and that's what's very Exciting I look at developer tools companies a Lot and actually and that's that's maybe One example of like an assumption you Know that their founder made and Actually with AI they're seeing more People be able to start you know Technical companies because the the Development time and sort of the the Learning curve to be able to you know be Able to get like a prototype is is Actually you know reduced with AI and so If there are more Founders who are able To get to you know a working prototype Quickly than maybe they would be we're Increasing the Tam of you know sort of Like the number of people who might use Something that you know developer tools Yeah so that is something probably one

Example of that I've seen Did you want to weigh in no it's been Great I think we have another question Over here please hi Uh Contreras I work I work accessible technology and People with disabilities we hear a lot About diversity and as my new friend Paul was saying it's so cool to see so Many women here and and women of color And a man of color which is not Something we would still be from when it Comes to this ability we're still really Behind and when you are investing in Companies I mean let's say that you Invested in lift or Uber for example There Are Rules taxi companies have been Uh you know had to full to to fulfill Like there have to have taxes that are Accessible we see Uber and Lyft big Battles and now there is a way when all All these new new companies that are Just keeping all the rules and that is That means that if I want to get a Just like everybody else I can't and all These things are barriers that are uh You know just being put there Um I'm wondering like and Monique Mentioned like you are talking about you Are seeing that there is also like the Elders market and there's a you know People with disabilities is another Market so I'm curious like do you give Extra points to those Founders that come

To you with a plan to be really Inclusive and are thinking about Diversity is that something that is Actually in the conversation when you Are talking with between Investors and when you are recommending Like do people get extra points thanks For your question or what do you or what Can you do to be sure that disabilities Is not you know farther behind thank you Thank you That's a it's an excellent question and Um I'm gonna cheat a little bit because the At least for us because of the sector That we're investing in you actually Can't afford to not serve certain Subgroups of the population so we invest In education if you look at the Population of students that exist in This country increasingly we're seeing Students with disabilities with Identified disabilities uh increase in English language Learners we are now Majority minority country you actually Can't afford to not focus on diversity And build a large business and so for us Like we do take actually quite a bit of Time to think about hey if you're Putting Tools in front of students like How do you think about accessibility to Make sure they can actually use it and Leverage it and give value out of it so It is something that we think about very

Deeply because it's just in the in the Nature of our work I think we have time for one more quick Question I'm sorry uh and then we also Will be another uh q a session in the TC Plus Lounge uh but if anyone has a short Question I guess over here yes I have a question about you mentioned Earlier Founders oftentimes coming from The markets that they're representing But what about a case when your Founders Are good at the technology that they're Creating but not so much at the industry That they're representing what do you Like to see with those types of founders I think I like to see an acknowledgment That they don't know everything right I Love technical Founders technical CEOs Um you know sometimes those those Founders or those CEOs are not as good As at the business development or the Selling Um and knowing that they can build a Team around them to support them in the Areas where they are less experienced That's that's a big green flag for me Yeah just to build on that I would say Just work on your story and selling your Vision if you're one-on-one able to Convince me that this is a really Exciting category to get excited about Then I'm going to be able to imagine you Bringing on board you know a really Great part partner or early hired really

Help you with that side or you know I Think in the beginning the CEO founder LED sales is real and so if you can't Convince me one-on-one you know I'm Gonna have a diff more difficult time Seeing how you're going to convince your Early team or your early customers to Sort of Follow Your Vision so I think That's something that anyone can work on And even if you're not you know you Don't self-identify as like an extrovert One-on-one I think everyone can really Inspire you know and share your vision Yeah I I would plus one what Um what's already been said and I would Say you know you could also even if you Don't have the funds to bring on team Members that have those skill sets you Can find advisors you can find folks That will be able to actually look at Your product give you advice give you Feedback so it's always possible to Actually complement your technical Knowledge with some industry expertise And not maybe in some cases not Necessarily have to pay for it before You raise capital Thanks again for great questions thank You for a fantastic conversation I will See you in the TC plus Lounge afterwards Thanks everyone Thank you thank you

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