CC027: raising an opportunity fund for a mission driven accelerator // a coffee chat with Barbara Bickham (WIF AX)

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Barbara Bickham 0:00
We wanted to help underserved community so we have a bent towards helping underserved communities. And the other bent we kind of have toward them in the effects are me and my partner’s have is towards, you know, helping move along and foster kind of women in technology. You know, I’m kind of the embodiment of that at some levels. But you know, they’re there still aren’t even enough of me.

Jay Clouse 0:25
The startup investment landscape is changing. and world class companies are being built outside of Silicon Valley. We find them, talk with them and discuss the upside of investing in them. Welcome to upside.

Jay Clouse 0:53
Hello, hello, hello, and welcome to the upside podcast, the first podcast finding upside outside of Silicon Valley. I’m Jay Clouse am accompanied by my co host, Mr. Air table himself, Eric corner.

Eric Hornung 1:04
Jay, you know, I love some good processing some good processes. And we have been under processed here at upside compared to the tools that are available out there for our use. One of which is my new favorite air table.

Jay Clouse 1:22
We are under processed says Mr. Not co producer himself, Eric or not?

Eric Hornung 1:27
Yeah, but I’m stepping into the role man, I think I least have like a quarter of the see I’m you are waxing and waxing into the sea. And eventually, I’m going to have a C and n o and a dash in front of my producer title, which I don’t actually have yet.

Jay Clouse 1:42
I welcome the opportunity for you to help out in that process, because there is a process but I must, I must say air tables looking good. It’s looking like it’s going to help a lot in our post production process and maybe even pre production process. So kudos to you and team interns forgetting that in a place that’s usable now.

Eric Hornung 2:02
Oh man, Sammy and Izzy, I could not have done it without them. They have put in so much time into just getting this thing up to speed. Because Jay we have, I mean, it doesn’t really feel like it. Because you know, every minute I spend with you is just the best, the best, the quickest time flies when you’re having fun, all those cliches, right? Because we’ve been doing this for almost 18 months at this point. And we recorded a ton of content. And we’ve learned a lot

Jay Clouse 2:30
We have learned a lot. And in this air table effort. We are still early on. Speaking of early on, we have a interview today with Barbara Bickham, the CO Founder and Managing Director of WIF AX a fund that just entered fundraising recently here in February of 2019. So WIF AX is a qualified opportunities own fund focused on building women led organizations within qualified opportunities zones. It’s based in Los Angeles, they a distributed team that is partially in Tucson as well. But Eric, we thought we’d take a look into the fundraising process or an early look into a fund getting started with their fundraise.

Eric Hornung 3:11
Yeah, I mean, Jay, we talked to companies all the time that are early, I mean, that are pre series A that are still kind of finding their footing their message. And there’s always some things to do better and, and grow into. But we have never talked to a fund that is in the fundraising process, and is kind of taking feedback from LPs, updating their pitch and kind of going through everything. So this should be an interesting one.

Jay Clouse 3:39
It’s been quite some time since we talked about opportunities zones in depth on the show, we talked to Peter Brock way back in the day about opportunities, own funds, before all of the final guidance from the US Treasury Department was even handed down. So I’m sure we’ll get an updated look at what that guidance looks like here talking with Barbara. This is something that I don’t spend a whole lot of time reading into Eric, so I’m sure I’ll ask him some stupid questions. If you guys have any thoughts on this interview, or my stupid questions as we go through it, you can tweet at us at upside FM or email us Hello at upside down FM and we’ll get into the interview right after this. Hey, guys wanted to give you a quick note and ask for a quick favor. Eric and I have once again enter the South by Southwest panel picker competition to have a panel or maybe two panels at this year South by Southwest festival. Last year, you guys came out in droves and voted for our panel and gave us the opportunity to go and speak with people at South by Southwest about geography versus investing does location matter. And this year, we have two panels up for vote that we appreciate your help in supporting. Eric, you want to talk a little bit about your event.

Eric Hornung 4:46
Yeah, so mine is quite the tongue twister, Jay. So if I get through this in one take, it’s going to be impressive. It’s called capitalists capitalist running a cashless fund. I nailed it. It’s about what Jay and I doing here on the podcast, which is essentially running a venture capital fund without making investments of money. But instead of making investments of time and giving people media attention, I think this idea can apply to a lot of other spaces. And we’re going to tell our story. And also talk about other ways that you can think like an investor act like an investor without making specific investments. What do you got on the docket Jay?

Jay Clouse 5:24
My panel is called connecting tech communities outside Silicon Valley. It’s not nearly as fun to say as yours. But this is a panel exploring the ideas of how to connect community builders and different ecosystems across the country to one another is sort of this platform role for community that we’ve talked about more than once here on the podcast. And so if you guys wouldn’t mind tossing us a vote, you just have to go to slash vote. I’ll say that again. Go to slash vote, please give us a vote on both submissions. And hopefully one of them comes through and we’ll see you again this year at South by Southwest in Austin, Texas.

Jay Clouse 6:04
Barbara, welcome to the show.

Barbara Bickham 6:06
Thank you for having me today.

Eric Hornung 6:08
It’s great to have you here. We like to start on upside with a background of the guests. OQ tell us about the history of Barbara.

Barbara Bickham 6:16
I have a computer science degree from Berkeley. So that’s how I got into computers. 15 years of very traditional kind of management, architecture and design development, did a lot of coding coated on a lot of famous products coated on thing that became Sportster modem, I coated on something called web shield for firewalls. That was a network associates which was McAfee as well, that became their biggest product. After that I kind of went into the wireless space, I started a company their tech deny was my company, I did that for nine years. In the intersection of that I got the opportunity to do private equity and angel investing. So I started an angel group 2007 2008, market crash lot less angels started that group, then I went into private equity did that for a year, went back to my coding roots, became an award winning REST API writer. So I did that for an Internet of Things platform came out of that became CTO, then I got into this block chain space. And with backs is kind of the culmination of everything I’ve done. So last year, someone approached me they actually, I was actually told me raising a different fund. But that kind of didn’t work out. So then my partners and with that said, Hey, Barb, let’s let’s do this one. So that’s kind of my journey.

Jay Clouse 7:31
Lot of bouncing around to new things there. What do you credit your interest in? So many spaces coming from? Or how did how did so many transitions happen?

Barbara Bickham 7:42
I don’t think it’s I don’t look at it as bouncing around, I have a very eclectic background. And it’s helped me kind of shape and evolve to what I am number one, the fact that I have such a large background means I can evaluate all different types of companies, I can evaluate all different technologies can evaluate all different types of funding ability. So that gives me an advantage to most people. And then being a technical person as well. It kind of helps me from speaking to investors and other types of people, which I’m asked to do all the time. So that they kind of understand the transition between text speak, and regular business speak. And very, very few technical people can do that. So my background is actually afforded me that which is great. I’ve just had an opportunity to do a lot of different things. And I’ve just tried it. So it’s okay, let me try it. Let’s see what happens if it works great. If it doesn’t, don’t just do something else. So that’s just got a bit my philosophy.

Eric Hornung 8:36
You mentioned another potential fun that you’re thinking about raising where we’re starting to raise, what didn’t work out about that. And what did work out about WIF AX.

Barbara Bickham 8:45
It’s all about the people. So WIF AX, I’ve been working with my partners and with facts and some other capacities in the blockchain space. And so we came together and said, let’s do this WIF AX. The other fun just didn’t work out because just the people. That’s just kind of it.

Jay Clouse 9:03
So with your technical background, you now found your way into blockchain, which is a highly technical protocol. When did you first start experiencing or playing around with blockchain?

Barbara Bickham 9:15
So I was aware of it in 2012. I know a lot of the blockchain pioneers in the in the world, they introduced me to one of my friends is like Barbie need to get in here. I was like, No, I thought it was fake. I thought I didn’t think it was real. Like just like most people, then 2015, I got reintroduced to it address out to Nepalis, I heard him give a talk on kind of the Internet of money and how money works and kind of the next gen of digital money. So that was great. And I tried to get into it as a developer. But that didn’t work either. So I went off in 2015. That’s when the second time and I went off and did a bunch of AI. So I literally have written six API’s for all the different types of AI, Google, Microsoft, and IBM. I’ve written all the API’s. So I know I know them. Well. I’ve a skill on Alexa as well. Couple skills. So then 2017, I had a client come in Colombia, to transfer that’s their name, they do payment a remittance on the blockchain cross border. And then that’s kind of the end of the story of 2018. I did I ran it actually was CEO, interim CEO of a company. And then kind of after that, it’s kind of the end of the story. Now I’m in there. Now I’m in here.

Jay Clouse 10:27
So what changed, not changed? You had that client come in, and they’re doing things in the blockchain? Do you remember like a moment or an experience where you change your mind from I didn’t think this is real to Oh, this is not only real, but really powerful. And I want to spend more time in it.

Barbara Bickham 10:40
Well, in 2015, when I, when I understood about money, and how money worked, and how like money could be digitized, that’s kind of when I started started getting into it. And because I’m technical, I actually had other friends and other. So I did have a project in 2015, that we were going to try do the Ico thing, it kind of didn’t work. Because you had to set it up and switch, like the actual creation of the business was more difficult in 2015, than it is kind of now now the creation of a business for blockchain. And in these crypto companies, although you have to do very highly regulated things is fairly more understood back then it required way more money, because you had to set up these foundations somewhere else. And then you had to have your company and then you had to say what’s going to open source? What are you not going to, you know, it was a lot from a company. So I was a lot also from a technical side. So 2015, I did have a client, then that will, you know, we were talking about making a token and a coin. Now, but I’ve had other people where they want to use Bitcoin specifically for like, rewarding, or game game of buying things. So I do have a framework for that. Like if you want to say hey, I want to deploy Bitcoin as a as a gamification mechanism. I do know how to do that. So it’s not like I hadn’t like it was like a shock, surprise, but it’s just like some of these projects, just like anything, sometimes they work, sometimes they don’t work. But your knowledge, you still have that. So I just applied it to later. And then when to transfer came, they were just a more kind of viable company. It made sense. It was an international company as well, because internationally, the blockchain is is more widely accepted, more widely adopted, more problems are solved kind of outside of the US with the blockchain than in the US in the moment. So that’s kind of how thatcame about.

Eric Hornung 12:33
Something a little topical, would be curious to hear your take on Facebook Libra.

Barbara Bickham 12:40
Well, I haven’t said anything about that, why I’ve sent a little bit about that. Libra. So and Well, actually, I have I have said a little bit about this. And I’ll put it this way. Libra is a mechanism for Facebook to either do rewards or kind of do some type of monetization of all, and watching videos and scrolling through your Instagram feed. And this is my take on it. Because there’s some other messengers out there that are actually have coins that are actually going to empower economies. So you know, you can kind of guess what they are telegram is one cow talk is one. So a lot of these messengers have coins, and they’re going to empower economies. Why Facebook didn’t take that, that kind of like, stealthy, like, Hey, we’re going to do this lever, and then we’re going to kind of introduce it, I don’t know. But the other the other thing about Libra. I mean, Libra is a whole complete ecosystem. Most people are talking mainly about the currency or the token piece of it. But they have a language they have their own blockchain they have. So it’s multiple pieces. It’s not just like, here’s this coin, and it is permissions. So you have to look at it that way as well. Is that arm, you know that they take hyperledger? Did they take hedera? hashgraph? Like, did they take JP Morgan’s? Like, who’s watching? Did they use to create this? I don’t know. Or, you know, they kind of did by some developers last year. So maybe they’ve been working on that blockchain piece for a year? I don’t know. But I don’t think it’s going to be I mean, it’s going to be more than what people say. I mean, they released all the white paper and everything. And so I say go read it. We’ll see what happens. I mean, it’s it’s created a lot of Iran Congress, which is good, because at least now we’re having the conversations about here in the US, because we’re we’re very far behind on on even the regulation pieces of that. So it was good in that way.

Jay Clouse 14:34
Can you talk more about that? In what aspects were behind? or? Yeah. Can you talk more about that?

Barbara Bickham 14:40
Well, if you think about what the blockchain empowers identity, its efficiency, you know, clearly money transfer, kind of recording, like, you know, who, who has what, who did what, is this valid or not? You know, is this a real Louis baton bag or not? So if you look at it, some of the use cases that are here, we as United States citizen, do we really need the ability to pay with a blockchain? Probably not because we have credit cards, we have other ways to pay. And we’re kind of more advanced in that way versus other places where it’s hard to do anything, you don’t even have a bank. So, you know, in places where there’s no bank, there’s no kind of infrastructure for that, you know, they may have one bank, you know, and this the bank of the country, so, or the fees are so high. I mean, we’re doing a lot of work down in the Bahamas. And the fees for banking are just astronomically high. They’re taking, you know, 15 20% of your check just to process and thank you. That’s, that’s great. I mean, basis attacks, let’s call it what it is a tech. So how do you kind of resolve that, when you have people that are, you know, not as advanced or in these emerging countries? And you know, they’re taking 20% of your check, just a bank? No, that’s you. That’s what a blockchain is utilize for. So that’s why it’s kind of taken off in other places, versus here, because the first practical use case is money. You know, the practical use case wasn’t social media, or it wasn’t e commerce or wasn’t, you know, a little identity, a little more on identity verification, it wasn’t voting, a lot of us thought, hey, voting that, you know, that’s a great use case of the blockchain, by the way voting. But you know, none of this has happened yet. So the first use case was money. And therefore, you know, you have to look at one of the countries where they going to have more, they’re having more problems with banking, or money or access to money or access to capital versus the United States. We just don’t not having those problems yet.

Eric Hornung 16:45
So let’s circle back to WIF AX. What does WIF AX stand for? And how did you come up with the name

Barbara Bickham 16:52
WIF AX, WIF AX is the women’s Innovation Fund accelerator, it’s supposed to be an accelerator. And we came up with the name because we have this x thing like equity x is AX and we just have this thing about x at the end. That’s how we came up with the name. But what what it represents is exactly what it says it’s, it’s an opportunity zone fund. That helps it has three pillars to it. The first pillar is that is a sustained, it has sustainability efforts in it. So all the companies that we’re going to work with, we’re going to put through a program to make sure that they’re protecting and kind of preserving the environment. So that’s number one, because that’s actually one of our monetization is inside of the fund. Number two, we’re kind of training, we’re going to be investing in the next generation, entrepreneur, next generation invest or next generation workforce. So we’re doing all advanced tech, doing AI, blockchain, AR and IoT, because at some point, all of that’s going to start playing together, when 5g kind of comes and some of these other things happen. All these things are going to start playing together. So you’re going to start seeing blockchain AI, blockchain and AR blockchain and in in IoT, IoT, and AR, you’re going to start seeing them, and then they’ll all kind of come together. So we’re looking at companies like that. And the third thing is, is that in order for us to deploy power to you, you must have kind of a gender balanced C suite at the sea level. So you can have more slightly more women than men, you can but if you have one man, you must have one woman, and I have all the statistics from IDC proving that and all the studies are there, if you have kind of a balanced sea level, then your company’s more profitable your culture is is is more friendly, you know, other you have you have more diversity of thought, which is important. So that’s kind of the thrust of WIF AX.

Eric Hornung 18:50
When you’re thinking about these kind of edge case, technologies. How far out are we going on like the hype cycle? Like our are you talking? Are you going to be investing in like smart dust or edge AI or exoskeletons? Like how far are we pushing down this to come?

Barbara Bickham 19:10
The only thing I want? Yeah, I would do smart desk, potentially, if it had a good business model, I would do it. So yeah, I would look at as far as I could go. But the only thing we wouldn’t do, the only thing we wouldn’t do is kind of the biotech thing. So like if you had smart nanotech, we probably wouldn’t look at that. Because like, we don’t have that expertise. So we also have to look at what is our expertise as well, and how can we help serve these companies, because when you’re investing in companies, then really, you have to have those expertise. And those are also long cycles. So because our fund is opportunities often and we already have a long cycle, anyway, 10 years is the holding period, in order to get the maximum tax advantage for an opportunities on so on, we don’t want to start putting things in there as well, that are going to happen, like 20 year returned back, you know, and then are also very capital intensive. So if you’re going to do a biotech firm, or you’re trying to cure cancer, you know, something like that, which is awesome. It’s a long pole, if you don’t get FDA approved, Fast Track your you know, we’re talking about 10 years, wait, just do that, then you have to do trials. And yeah, so it’s very capital intensive. So you have to look at, you know, the capital, and their people to do that. And so, you know, I would say, hey, refer them to those people. That’s what I would do, because it’s like, we wouldn’t do it just from, you know, we’re already slightly disadvantaged because we’re entrepreneurs on the phone.

Jay Clouse 20:36
Can you talk about when and how you decided to create WIF AX and do these three pillars and make it an opportunities, own fun? There’s a lot of intentional decisions that are here. So how did that process happen?

Barbara Bickham 20:47
Well, it was intentional, because we wanted to help underserved community. So we have a bent towards helping underserved communities. And the other bent, we’ve kind a path toward him in the effects are my partners have is towards, you know, helping move along, and foster kind of women in technology. You know, I’m kind of the embodiment of that at some levels. But you know, there, there still aren’t even enough of me. So I’m in the CTO forum here in Los Angeles. And we went from four women to a women, but there’s still like, 390 men. So if one one man, mentor, one woman, we’d have kind of parody. Or even if a quarter the men mentor, one woman, we’d have more parody. So you have to look at it as like, how do you move the needle on these things, you know, men are involved, and we have to get them involved. So we have a great set of men on our board. And we have, you know, we are at WIF AXR walking our walk as well, we have equal amount of men and women, we actually have more women, there’s some women, we could put on the website for, you know, professional reasons. But yeah, we walk our own walk. So you know, this is our legacy towards technology, it’s our legacy towards trying to help and foster the next generation of, of entrepreneurs, because that’s important as well. deal flow comes from everywhere all over the world. And there’s a lot of deal flow that’s missed, there’s a lot of deal flow that isn’t evaluated, there’s a lot of deal flow that isn’t looked at, just because of the nature of of who you are. And, and we’re trying to level level the whole thing out. So the fun prior to was eSports. And it had the same kind of thrust. So I wouldn’t work in a fund that doesn’t have these kind of same kind of thrusts, otherwise, it kind of doesn’t, you know, just being a traditional fund is no fun. So that’s kind of how with backs came about. That’s our bent here WIF AX. That’s my personal bent as well.

Eric Hornung 22:41
So when you think about these five opportunities zones you’re working in and you mentioned deal flow comes from across the world, yes. How are you getting that deal from from across the world to relocate to these five opportunities zones, or do you need to?

Barbara Bickham 22:55
So we do need to have them relocate. Well, partially into the opportunity zone, the way it works is you have to have kind of half the revenues coming out of the opportunities from a business side. And then we have to have a real estate component inside of there. So WIF AX itself has, is going to have five kind of CO working spaces, this the other uniqueness about us, we’re not doing most opportunities, also doing kind of traditional real estate, I’m going to build housing, I’m going to build these hotels, I’m going to build like Convention Center complex, which is great. The other reason why we said we’re different from the opportunities on fund is that we said, hey, these are just one off job creation abilities, we need to have a continuous kind of job creation machine. So this is the other bent that we have was, which is we want to create as many jobs as we can. And the only way to do that is start creating businesses, honestly, because then the businesses can then support the house. It’s not the reverse housing does not support businesses, businesses support housing, is if you look at like what happened back in the 80s, like Lockheed Martin left, all that whole town disappeared. Basically, it had to kind of recreate and reinvent itself, because it had one main source of revenue. So that’s the other thing. We’re kind of trying to create other sources of revenue. But you have to have your businesses Porsche personally an opportunity, though, that’s kind of the world.

Jay Clouse 24:14
Pardon my ignorance here. There’s been a lot of specifications that have come down about opportunities, own funds, since we first covered on the show months ago, you just mentioned there needs to be a real estate component. Is that a guidance? That is a requirement of opportunities, own funds? I know that real estate is a good play for it. But you have to have real estate involved.

Barbara Bickham 24:33
Absolutely, yes, that’s, that’s what the role, say. So you have to have a real estate component. That’s why you see a lot of these guys like, Hey, I have this real estate and opportunities own, you have to have a real estate component that has to be in your opportunities. And so many people have come down with just real estate, but you can also have a qualified opportunities on business, they’re going to be qualified opportunities on business. But that business has to be inside the opportunity zone, it has to be inside the real estate inside the object. So that’s just kind of what the IRS, you know, these are Department of Treasury rules, these are my rules. So you know, we’re always kind of making sure we’re following the spirit of the law. So you know, there’s no confusion or upset but you You must have a real estate component side of a fun. So if anyone comes up with opportunities, often it says, Hey, I’m just gonna invest in companies. That’s just not, I don’t know how the Department of Treasury is going to take that I’ll say it that way.

Eric Hornung 25:25
So what happens when someone decides to relocate, they want to be part of WIF AX? You guys think they’re a good pic? Like, what’s the process to getting in and getting funding walking through that.

Barbara Bickham 25:36
So what we do is, is we have a product, you know, we have an application process, you’ve got an application, and then we actually put you through with FX as an accelerator, which we’re running some companies for right now. So we actually have two accelerators, you have to we’re doing your traditional acceleration. So we run this due diligence intensive to make sure you’re fundable because everyone as much as they think like, Hey, I’m going to get all this money, they’re not ready money, most people are not ready for money. So we make them ready for money. I mean, we do the traditional pitch deck and stuff like that. But we actually do, we actually kind of uncover like, here, this is what all the VCs are looking for. This is kind of what we’re looking for this, you know, my due diligence is very intensive, it’s 23 pages. So I give them a checklist, and then kind of go through it. And then we start going over, like, here’s the sections of the data room that you need. So that’s the first thing that makes us unique. I mean, we we run a series due diligence over here, then the second thing you have to do is you have to go through the sustainability portion to see kind of like, Okay, how do we make sure that you’re following our sustainability goals inside of our fund, because because we have the real estate component, we have the capability of making sure that we are sustainable as well. So we’re doing the same thing that everyone else is doing. So if there’s something that you’re doing, that’s going to kind of impact our, our footprint or sustainability, then you have to know that and we have, but we have to educate you on that as well. So you kind of go through two vectors, and then we kind of see where you are, how big you are, how much money you need, and then we kind of fund you from there. That’s that’s the process. It’s very simple. It’s not complicated.

Eric Hornung 27:16
So different companies get different levels of funding

Barbara Bickham 27:19
We’ll do, yes, we’ll do it kind of depends on their size will do up to like a million dollars of checks will do up to that level will kind of start at 121 50 ish, 150 ish, and then kind of go up there, it kind of depends, you know, because then you got to look at how many slots Did you give up? What company is not going to get it? Because then it becomes kind of that kind of game. But we’ll go up to that.

Eric Hornung 27:42
I saw on your website that you’re looking to bring in 200 companies, or I just want to clarify are those 200 companies in this hundred and 50,000 to $1 million check size range?

Barbara Bickham 27:52
Yeah, so we’re kind of doing the Y Combinator 500 startup model. So we’ve studied all those models. And that’s kind of of what their model is, we can do. Yeah, 100 companies at 15 mil, that’s 125 k pop. So we can and then we because of our sustainability efforts, we can kind of extend that out. So we can take our take, you know, do like carry bags and take our kind of fees and Carrie Becker back. So that’s how we’re going to fund it.

Jay Clouse 28:22
So you have these five co working spaces in these five locations and and you find a company, they move into the space to go through your due diligence process. What happens if they grow too big for the CO working space? Is there new buildings in that zone that you guys own that they headquarters in? Like what happens if they want to move out?

Barbara Bickham 28:39
Yeah, we’ll have to we’ll have to relocate them somewhere else in the zone. That’s what I’ll have to happen.

Jay Clouse 28:44
Okay, this is again, this is just all ignorance on my part, I’ve not looked deep into the opportunities, own funds, it’s all this guidance is new to me.

Barbara Bickham 28:52
That’s fine. But the thing about being an opportunity is often they you know, the companies have to be in an opportunity, though, or else they just don’t quit, you know, they won’t qualify. So they need to move out, we’ll put them either in a bigger zone will move them somewhere else, we do have a couple of other partner opportunities zones we’re working with them in looking at so now we’ll be able to service them.

Jay Clouse 29:14
Is there any risk there? You know, if you put a check into them, and they operate for three years and go through your check, and they say, Sorry, we want to move to San Francisco, because it’s just what we think is best for our company right now.

Barbara Bickham 29:27
They think it’s best? Well, I mean, they have opportunity that you know, all vocal is like an opportunity zone. I mean, we could we could put them up there. I mean, we know we know where all the opportunities zones, at least I do in California. I know we’re all in California. So, you know, they need to go and relocate to San Francisco because they think that you know, it’s going to be better, whatever. You know, good luck with that. Yeah, San Francisco’s gotten cost prohibitive, as far as funding, you know, funding a company as far as living as far as finding talent is, yeah, so the other thing is, if you do move to San Francisco, we’ll put you in a zone, but are you going to be able to afford everything because now you’re competing guys, Facebook, Google, and you know, all those guys up there for talent. So you have to look at it from a resource inside as well. It’s nice, everybody wants to be in San Francisco, but they only have so many people. And it’s gotten very cost prohibitive.

Eric Hornung 30:20
I get it from a LP, and from a GP side from a entrepreneur, why am I picking WIF AX over essentially YS For everyone else?

Barbara Bickham 30:31
You know, WIF AX is unique in that, you know, we’re kind of an impact driven, we’re sustainable, we’re kind of bouncing out sea level. So that’s kind of a kind of one of the throws out in the world now. So that’s a reason to pick us, we’re kind of looking at things in a different way than the traditional VC, we are looking at you from that vector, I’m not, you know, we’re not naive over here, where it’s like, oh, we’re just doing this socially impactful stuff. I mean, the socially impactful stuff happens to be a part of who we are. So that’s important to us. But we’re also looking at you from a traditional company side as well. So like, hey, if we can get 100 x exit, great, like, we’re not going to be crying over here. But we have to look at you in that light as well. So we just look at look at companies in many different aspects versus just a traditional VC where they’re just going to look at you and one aspect, that’s number one, number two, we’re going to look at all different types of companies as well. So we do have a very large pipeline, we have about 70 people in our pipeline already. And so we look at all different types of companies in that pipeline. Some of them are women known, some of them are minority owned, some of them are kind of in underserved communities, some of them came from various and sundry backgrounds. So you know, it’s the traditional people that aren’t getting the capital, but have wonderful ideas, have great companies, but are not going to necessarily get funded by a traditional VC either. So you know, that’s a reason to pit pick WIF AX. The other thing is, you’re also going, our portfolio that we’re creating is going to have a lot of synergies across it. So you’re going to be able to work across with each other. And then we have huge networks. I mean, we have global networks. So like to be able to reach into Korea, or, you know, the UK or, you know, even into Mexico, or Colombia or into kind of Africa to be able to reach globally, you’re going to only grow and scale your company. So that’s another thing that WIF AX kind of can do that a lot of people don’t think about, like how am I really going to grow and scale my company for real to make it like the next Google or the next Facebook or the next fill in the blank.

Eric Hornung 32:52
Is the women and minority funding gap most prevalent at the early stage, or like when you’re sending someone to a follow on investor is there still an inherent bias to a series a raise where all things considered the demographics of the founder or higher in a series A or is it like, once you get past that early stage, I just don’t know the research on this. I know early stage funding is super limited.

Barbara Bickham 33:19
So all the funding is limited at all levels. So it’s not just early stage, if you came in, as you know, well, it, I think if you get kind of past series A Series B, you’ll be okay. But it’s all that kind of early, a little bit up to series A, and then kind of after series A if your company then you gotta grow and scale your company. So it when you’re growing and scale your company, you better be going international, you better be thinking about, you know, kind of the global nature of what your company’s going to do. Because then you’ll be able to get serious because then after, after that, you’ve proven everything, you’ve got product market fit, you’ve got, you know, you kind of have everything. So if you’re an investor, and you you’re looking at it from a transactional side a, you know, traditional money side, and like, is this company a viable company? Have they been around long enough? Is their team good? You know, things of that nature? You should just look at it that way. Now, is there bias? There’s bias and everything, bias and AI, you know, everybody was doing that face app? You know, I didn’t do it. Everyone’s like, why not? I said, Well, bias, you know, why do I want my face in an AI? You know, honestly, it was just like, you know, what they’re going to use that for, right? So, you know, there’s biases everywhere, we’re all we all have bias. We all have kind of our unknown biases to ourselves, ours kind of subconscious biases. So how do we got to get over that? We just have to get over it. I mean, look at things in, in the in the vein of how you look at it from anywhere else? Like what, why does it matter where it came from? If it’s a good Bible, strong company, what does it matter where it came from, but we do have outputs to all those, we have outputs to all those levels, you have to as a part of being a part of a fun, you have to also not only from LP, and GP, you also have to be able to make sure like, hey, you’re part of the stack is going to get taken care of. Because if I’m investing you early, I want to make sure I’m getting something later. And it doesn’t always happen, because you’re always thinking about it that way, either. This is why you have a team of Pete, you know this, why fun to have, you know, multiple partners in it. Because you know, some partners think certain ways other partners think other ways. And, you know, this is why it’s powerful to have a team and have fun too. Because, you know, there may be some things that some people are thinking about that you’re not vice versa. So it’s important to have that.

Jay Clouse 35:39
Can you talk more about your team. And WIF AX, I saw you guys brought on a lot of advisors to help cover all kinds of areas. Can you talk more about the partners or the founding team.

Barbara Bickham 35:49
So I’m one of the founders, I’m one of the managing partners, my other co founder is Jessica controllers, she actually is very successful in the alcohol business. And in she’s that’s a family business, as well, which is very fascinating. Her grandmother taught her that that’s a family recipe is a tequila company. So the way I Jessica and I came together was I’m advising her on her blockchain portions of the company. And so we kind of have this separate applet project, which is everything kind of blockchain. And so that’s how we came together. And then we said, hey, let’s just keep going. So we’re very synergistic. You know, we have, we’re very strong, two very strong women, which is great. And we get along wonderfully, which is important goes sometimes, you know, like I said, other fun didn’t work because of that didn’t quite get along didn’t quite synergistically match. So that’s kind of Jessica in a nutshell. So she’s kind of managing, you know, we’re both doing fundraising, we’re raising, you know, we’re raising for this fund, as well. And we’re both kind of doing our work to get the width x kind of off the ground, we both have identified opportunities all as we both have. So we’re synergistic. And then we each kind of have our role in the fund as well.

Eric Hornung 37:04
How long have you been fundraising for?

Barbara Bickham 37:06
This is July, February. So after we set up the bank accounts, we we’ve been fundraising since then. But you know, there’s a lot to do to raise a fund, you have to get all your paperwork together subscription agreements, you have to set you know, get all your you know, we have to get all our proper reg D reg, Mo reggae plus, we have to get all you have to get all your paperwork together, you’re not just gonna say, Hey, I’m gonna raise a fund, and then think that that’s just going to happen. So we had to get a lot of paperwork together, we had to get, you’d have to get special bank accounts, because you’re not just gonna put that money to work, you know, like a traditional bank, I won’t say Wells Fargo, but a traditional bank, you’re not going to put it into a regular bank. So like you have good special accounts that can handle that kind of money, and then managing the money. So we actually have a very special account, we have somebody that’s going to like manage the money for us as well. So you know, because we’re emerging fund managers, sometimes that’s kind of a sticking point. But when I say like, who’s managing the fund, and they’re like, okay, we’re good. So they don’t have a problem with that, because they’re like, Okay, that was smart. And then, you know, once we start getting some more powder in there, that then the person that’s helping us manage the fund, that’ll kind of unlock some some things as well. So.

Eric Hornung 38:16
What’s the biggest area of caution that LPs tell you about your your idea and your race?

Barbara Bickham 38:22
I think the biggest area of caution has been kind of that it is an opportunity is all fun. And when you say that, in the beginning, everyone thinks you’re doing real estate, and it’s kind of like an initial kind of turn off. But then when you say what it is there, like, Wow, we had no idea then when you say like, how is this fund going to be monetized? Then they go like, wow, this is really different. This is not like anything we’ve ever seen. And so I said, Yes, this is true. It’s not like anything you’ve ever seen. And then that kind of opens up the conversation. But you have to get past that first, like, this is an opportunities, all fun because more people think it’s just real estate, you know, like we’re doing another housing project, or we’re doing another like hotel, but we’re not. So you have I have to really explain like, I have to say some opportunities, often because it’s tax advantaged. So like there are tax advantages for that. But then I have to explain Well, how are we different than every other opportunities zone out there? And then that’s where our uniqueness comes in.

Jay Clouse 39:20
Awesome. Well, we’re, we’re at time here, Barbara. So obviously, I have I have lots of questions about opportunities ends that we can continue to talk about if we had more time, because I’m so green to I don’t even know how to ask!

Barbara Bickham 39:32
We can come back and have another conversation.

Jay Clouse 39:35
If people want to learn more about you, or WIF AX after the show, where should they go?

Barbara Bickham 39:38
You can go to our website, www. WIF AXWIFAXVC. All one word calm. That’s how they can learn more about me and with.

Eric Hornung 39:52
Alright Jay, we just spoke with Barbara from WIF AX. Early fund here still in the fundraising process. What’d you take away?

Jay Clouse 40:02
I know less about opportunity zone funds, than I even thought!

Eric Hornung 40:07
Jay, we had someone on who talked to us for a full hour, shout out to Peter Brock, and you still don’t know anything?

Jay Clouse 40:13
Well, my understanding was that real estate was a prime use of the opportunities, own fun guidance. And some people thought that startups could work as well. I did not think or know that. Even the startup focused funds need to have a real estate component.

Eric Hornung 40:32
Yeah, that was a little confusing to me as well, I thought you could invest in startups that we’re physically located in opportunity zones. And maybe there is a little bit of miscommunication. Or maybe we just don’t understand the newest guidance that came through.

Jay Clouse 40:48
As Barbara said, she’s had an eclectic background that’s given her a lot of insight into a lot of different industries and topics, which brings her to a unique intersection of a lot of those topics here with this opportunity zone fun investing in women led businesses, or at least in balanced businesses, from the C suites perspective, how long do you think it takes to raise a fund like this, Eric?

Eric Hornung 41:08
Well, we didn’t ask for a total commitment that they’re looking at, she did say 15 million divided by 100 companies is like roughly 150,000 a check. So I’m guessing there’s a real estate component on top of that, I don’t know how big this fund is going to be. So I’d be completely speculating. That being said, there’s a lot of nuances in this structure. So it’s not as plain vanilla, as I’m going to go raise a fund, we’re going to invest in this many companies a year it’s going to spit out this and we’re going to do that. And here’s what we’re looking at with our batting averages. There’s real estate component, there’s an accelerator component, there’s this long due diligence process, which you said was 23 pages. So it’s a different kind of model, which is fine, I just think that means you’re gonna have a longer time horizon until you raise so they say to raise your first fund, you should plan on 6-18 months. So probably put it towards the back end of that 6-18 months until they do their hard close.

Jay Clouse 42:05
There’s a lot going on. And I think, as a country, and as anybody in the opportunities don’t fit space, opportunity than space, there’s going to be a lot of learning with what happens when companies want to move. You know, Barbara was very much in the camp of what will happen will help them find an opportunity zone where they’re trying to move to, which is great if the founder wants to listen and take that guidance. But literally what happens if they don’t, you know, if the money has already been consumed, it might be something that you just contract, you have to put in the investment terms to say, if you move, we can take this investment back, I don’t I don’t know how that all works. It just seems like it could get messy for any company in any opportunities on fund. One thing that I do like about WIF AX is these kind of three pillars that they talked about, they really stand for something, right? If you can get your branding right around these three to four pillars, depending on what we look at here, then you can be the place to go for this certain type of company as an accelerator, which I think right now is a very underserved demographic. I agree. Well, Eric, this just spurs me to think that there’s more I need to learn about opportunities zones, maybe we bring in someone who’s close to the legislation side of things that can help explain it and even more finite detail for us. In the meantime, if you dear listener know a lot about opportunities and we’d love to hear from you. Or if you have a recommendation for who we can speak to, you can email us Hello at upside down FM and let us know or tweeted us at upside FM.

Interview begins: 06:02
Debrief begins: 39:50

Barbara Bickham is the co-founder and Managing Director of WIF AX.

WIF AX (Women’s Innovation Fund Accelerator) is a Qualified Opportunity Fund building women-balanced and environmentally-sustainable organizations within QOZ’s nationwide. They plan to use a mix of incubation, shared workspace, and business finance while requiring participants to have a C-suite made up of at least 50% women, and operational plans which contain environmental sustainability considerations.

WIF AX was founded in 2019 and based in Los Angeles, CA.

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