General Partner, Intel Capital
In episode seven, we stop in Santa Clara. Dhani Jones speaks with Trina Van Pelt, General Partner of Intel Capital, about how she is making late-stage equity deals with some of the biggest names in tech.
Trying to source deals in either earlier or late stage is incredibly competitive and it is so much about your networks. If you're going to go find some of the best deals, you've got to be able to extend those networks and not just reaching out to the same people that you have in the past.Trina Van Pelt, General Partner, Intel Capital
Trina Van Pelt is General Partner at Intel Capital. Trina has more than 23 years of experience in technology investments, M&A, strategic planning and business development. She has led more than 85 technology acquisitions and investments worth >$50B over the course of her career, spanning the computing, communications, software, IoT and mobile industry segments.
What do you think makes a successful deal?
Trina Van Pelt (00:08):
In my career of 25-ish years of investing in M&A, I've seen at different times a spike of back to character counts and your reputation really matters.
Dhani Jones (00:22):
The Pathfinders podcast is presented to you by Ansarada. Ansarada is the modern deal in virtual data room technology designed to make M&A, capital raising, divestments, restructures and IPOs as simple as possible. Since 2005, Ansarada has been trusted in over 24,000 transactions and powered over one trillion worth of deals. Ansarada is a secure space that includes workflow tools, AI powered data rooms, built-in question and answer and integration frameworks. It's the data room trusted by modern deal makers. You can start for free today at ansarada.com. You know I like a winning team, so say it with me ansarada.com for your next winning outcome.
Welcome to The Pathfinders. The Modern Deal Maker series brought to you by Ansarada. Now here's your host Dhani Jones.
Dhani Jones (01:16):
Welcome back everybody to The Pathfinders, presented by Ansarada. I'm your host, former NFL player, investor and entrepreneur Dhani Jones. Joining me on the show today is general partner of Intel Capital, voting member of Intel's Investment Committee and Chair of Intel's impact investment initiative, Trina Van Pelt. For 17 years, Trina has been helping Intel grow their already stellar portfolio with their focus on late stage equity investments across industries like Intelligent Edge, Mobility AI, the Internet of things, and much more. Today, she joins us to discuss growth and show us she is making late stage equity deals with some of the biggest names in tech.
Dhani Jones (02:00):
Trina Van Pelt, welcome to the show. How are you doing?
Trina Van Pelt (02:03):
Great. Dhani, thanks for having me here. It's such an honor to be able to talk to you about this great subject.
Dhani Jones (02:10):
Well, since we talk about football all the time, I figured we'd talk about investments. We could talk about football.
Trina Van Pelt (02:16):
Well, we have to at least give some props that Michigan finally has overcome that 10 year drought. My children now actually realize Michigan Football can beat Ohio State Football. They weren't sure of what actually happened.
Dhani Jones (02:31):
It's like within their lifetime they actually saw.
Trina Van Pelt (02:33):
Within their lifetime. Yes. My oldest was just starting to walk the last time we won.
Dhani Jones (02:42):
Oh, well. There are some great moments in life and I got a chance to be at the game, and just to watch that fanfare. I was just reflecting earlier today, when I was on the field, fortunate enough in '97, I was a part of that crowd that was on the ground and then this time I get to be the fan and watch from the stands and it's mayhem. Michigan folks are everywhere. And I know you're a Michigan grad, so you know how prevalent and how amazing our community is.
Trina Van Pelt (03:13):
Yeah. And it's great that we just didn't give up. And I think even last Saturday's win was just a great show and testament to teamwork. So many players, and some whose names that you may not have recognized every single Saturday, all stood up and did their best. Honestly, it carries over into deal making. It's an approach and the culture that we have within Intel Capital. Frankly, when we redesigned it a handful of years ago, along with my former boss who was also a Michigan grad, the culture was "The Team. The Team. The Team."
Dhani Jones (03:44):
Trina Van Pelt (03:45):
Even my other partners who are not Michigan grads embrace it because they realize sports is such a metaphor for life and for business, and it's really important that we learn these lessons and deploy them in professional as well as personal life.
Dhani Jones (03:59):
Is that also a part of the paradigm shift that's happening in Capital Investments? Being able to think about things from an all inclusive standpoint versus putting people into their silos and into their offices and doing their own thing. How is it shifting right now?
Trina Van Pelt (04:16):
Yeah. I do think it actually has been where we put people to think differently about where do they source deals. Trying to source deals in either earlier or late stage is incredibly competitive and it is so much about your networks. If you're going to go find some of the best deals, you've got to be able to extend those networks and not just reaching out to the same people that you have in the past.
Trina Van Pelt (04:40):
I think also, as we think about paradigm shifts, there's been a handful of them recently that I've seen over time and that I wouldn't even name. One is the US-China relations and how that is impacting where you can source deals, and even what deals can get put through, or even acquisitions later. We're seeing monetary policy has been another big paradigm shift because of the low cost of debt and borrowing. The amount of capital able to be deployed, the amount of money that has been put into private equity and venture funds has been pushing pressure on the valuations as well. And unfortunately this leads to more inflation but on the flip side where I come back is another paradigm shift I think is the most marked is obviously COVID and the future of work. How it's really changed the perspective of many people of how you could actually get work done.
Trina Van Pelt (05:36):
I talk to a lot of other deal makers as well, where we are doing deals entirely remote through video versus kind of getting on a plane. People are able to also... There is still travel and I think it's still important to get to meet and have dinner, break bread with people that you're going to be investing in, but you can also identify companies much faster. You can get to a faster, no, because you quickly had a Zoom meeting and you realized this is not the right fit. Maybe you could end up making a couple more introductions for them, but you didn't spend a day crisscrossing the country for that one, one hour meeting.
Trina Van Pelt (06:11):
And then the other thing that it has, or even like with one of my companies that I've invested in is it's enabled a whole new set of entrepreneurs. One of the companies that I've invested in Mighty Networks, is really driving this creator economy. And what was fascinating, they got some tailwinds from COVID, but it's continued. And what was great to see even on that diversity point is that when they started looking at who are the new creators, the new entrepreneurs coming into their platform, 40% were diverse founders. And it's opening up a whole new way that is, again, I think that's going to help drive further change.
Dhani Jones (06:49):
Yeah. And I know Intel is focused on diversity and the companies you invest in, why prioritize that? Especially, with black entrepreneurs and other BIPOC groups, why is that important?
Trina Van Pelt (07:04):
Well, I think first of all, you find some of the best deals. And so the diversity initiative, something that a former colleague started in 2015 with the former CEO of ours, it's work I kind of got into more of a leadership role on it in like 2017 to 2018. And we first started making like a team. What happened when it first started was, oh, there's a woman founder, send it to me because I was one of the few women in the group. It's like, no, this is everybody's job. And we kind of made it a way that we all get business done, but it's where more creativity.
Trina Van Pelt (07:40):
I mean, there's been tons of studies, where you have a diverse group of people and experiences, some of it can be geographic areas, economic growth, work experiences, travel experiences that we're bringing to bear, studies have still shown that when you bring together diverse teams, you're going to create better products, better services and that type of dynamic just leads to better companies. The studies have all shown that. Now for us on the focus, as we've kind of looked at it where over the last three years, our diversity investments have now equaled about 30% of our new deals and new dollars on an annual basis. The rest of the industry is mostly in single digits, but then when we broke that down further, we were like, where is that going? And for us, we are a firm that's investing over 400 million a year, we have over 200 active portfolio companies and nearly 50 of them right now have diverse leadership. So we're doing a good replace there. When we break it down, half are women and about a third are black and brown and we're like, we can do better.
Trina Van Pelt (08:48):
Again, we're already doing well by industry standards, but that's not quite enough. But then we kind of take a look at there's one; the investments that we can make. And then secondly, start to get a little more creative on what else we do to help support the ecosystem. And as I mentioned earlier, investing in companies that are enabling new entrepreneurs to be able to launch their businesses. And some of those entrepreneurs are making 300 or 400,000 and a couple of people, a million plus a year. So they're like making real money.
Trina Van Pelt (09:20):
Then we looked at and we did one fund investment [inaudible 00:09:25] Capital, which again is now investing in more seed stage micro VCs as well as companies. That is not kind of our strength, of Intel Capital. So with that now, we're enabling more in the ecosystem that can be investments we do, but we're also not trying to hold it all to ourselves. We're trying to enable that for other VCs. So now there are more companies getting founded. And so trying to think about ways that you can scale beyond what a construct of your fund, your check size, et cetera, can go do. And some of that also extends into even like broader board advisorships and things of trying to get more people onboard.
Dhani Jones (10:08):
Is that hard to do? Is it hard to convince internally, sort of to make that effort? Because when you sit at the table and you have such a sizable amount of capital to deploy and when you're intentionally trying to think about how to diversify that portfolio, while at the same time trying to recruit and understand and get more companies into the pipeline, sometimes that can be a challenge in and of itself. And then you're kind of sitting there saying, let's go do this, but then sometimes the risk creeps in and people feel as though what they've done in the past is much easier. So how do you translate that and how do you get people to think differently and think forward leaning and not go into the past?
Trina Van Pelt (10:54):
I mean, I will say the leadership at Intel has been outstanding in this regard. There has not been a question of why should we be doing this? If anything about where we are and we hold very true is we're not going to do it and we're not going to invest just because, we want to make sure that we are investing in the best companies, because in order to help drive this paradigm shift, you have to be able to show the metrics and the results that these have been outstanding investments and holding the bar to the same. And everyone that I've talked to who is diverse says thank you. The bar has to be held the same. And so in where we are in situations at times like, well, is this the right deal for Intel to do or is this the right deal that we should introduce to somebody else?
Trina Van Pelt (11:47):
So that's the only place where I think we have some of that discussion of like, gosh, we really... There was one recently too, where it's like, we really like this concept, we'd like to go do it, but I don't know how we're going to be able to explain to our shareholders that this was an investment that Intel should be making. And so that's where I think you get that piece because you want to like, again, hold true to who you are.
Dhani Jones (12:14):
Do you feel as though people are following your lead?
Trina Van Pelt (12:16):
I think they are more. And again, the thing that I want to kind of push people to do and the challenge is when you make commitments to say, we're going to look to diversify the check writers in this round or we're going to look to diversify the boards, follow through and report on what you actually did. And so I think we are starting to see that a little bit more.
Dhani Jones (12:38):
So when you look at the world of investing, how do you differentiate or how do you decide between areas of which to kind of deploy capital around growth and then also venture? How do you look at those two? And then also, how do you think about it when you think about some of the diversified portfolio that you have within Intel?
Trina Van Pelt (12:59):
So putting kind of my Intel Capital hat on and just general investor hat, it all starts with a thesis of really kind of understanding from a thesis perspective, what is the market dynamic? Where is the opportunity? Where do you see the potential growth? What is the real customer problem that is being solved? And then looking to find companies that have some unique differentiation in and around solving that customer problem and then the team. I always have like three things I look at for every particular deal. Market size, product differentiation, and the team. And you need all three. And you need all three whether it's early stage or late stage investing. But it starts that in that perspective.
Trina Van Pelt (13:43):
Then as you kind of think through early versus late stage, many times at early stage you're proving is the market opportunity really there? Is the customer opportunity there? And are we able to acquire customers at a low enough acquisition cost? What's the payback period? Can we do this? Can we scale? When you get to a growth perspective, a lot of those questions have already been addressed. So it's de-risked to some extent. And I really think about it as now you're in like a scaling mode for the company, you're fortifying whatever mode of differentiation has been created because you have the product market fit, go to market's been proven so now it's try to grow fast, but grow fast in a capital efficient way. And then on the team side, maybe you're augmenting the team because there are some founders who can make that transition from like the early stage, in the garage or from the PowerPoint all the way through public company and other times not.
Trina Van Pelt (14:45):
And so I think finding teams that are coachable and recognizing, Hey, here's where I need other people to help me out who have gone through this before is great. But you also now at this stage have more metrics and more data analysis that you can do, but it's still in many cases as an investor, there is overall conviction that you have and judgment, but later stage you have more data that you can start looking at to start to understand, are there ways and different toggles that we can change that will all of a sudden increase the profitability or will ramp the growth? Or is there a certain kind of batch of customers that we need to fire because they might really like the product, but they're not profitable. And so for overall, for an organization we need to shift that.
Dhani Jones (15:35):
Yeah. They always talk about what got you here is not always going to be what gets you there. And I'd imagine with the portfolio of companies that you all have and from an Intel standpoint, from an investor standpoint, you're always trying to use as much data as possible. The whole world is based upon data, data, data, but you ever feel like it kind of drowns out sort of the overall mission which is to kind of get the right lead, the right team in place in order for them to go out and execute?
Trina Van Pelt (16:01):
Dhani Jones (16:01):
I feel like I'm getting all excited now just thinking about the world of football. And I know that the world of football is moving towards data analytics too, trying to figure out like, do you run the ball on fourth and one or do you kick a field goal? Those types of things. But sometimes there's a feel around that as well. So how do you meld the feel and the good sense that you have the right leader and the right team and the data and analytics with that too to make a right choice?
Trina Van Pelt (16:25):
So I do agree that yes, you can be drowned in data and there's so much different data, lots of noise that comes into it. When you think about it, even from an enterprise edge perspective, some of it is structured, some of it is unstructured. When things are coming into a factory, there's so many different types of protocols in which it's coming in to measure it. But as an investor, I think what's always really important is simplify down to, what are the two to three key issues? What is going to make this company successful or not? And you have to balance it to go, okay, when do I need to pay attention to this noise? It's getting a little louder maybe I shouldn't listen to this. And keeping your team and your management team very focused on that so that they can continue to execute so that they don't drown in it.
Trina Van Pelt (17:14):
It is very challenging. But I think that from like a board advisory perspective, is where you can really help in kind of those deeper, strategic decisions to say, what are we going to focus on this year? And what are we not? I've had some companies that just do an amazing job with fast experimentation and go to market. Where they're like, Hey, we're going to try this and they're like, but we're trying it for a month. And we may do more, we may do less, but we're going to measure it and then quickly learn. And I wish more companies did that, because that's a way of like, okay, we've got some noise here, let's state our hypothesis, define what we want to do, measure it, does it make sense? Is this something new popping up or was it just noise? But I think focusing on a few key issues and not letting yourself get distracted.
Trina Van Pelt (18:05):
I mean, I think it's the same thing even on a personal basis. If you kind of get up every day and have your head going with like a hundred things you need to do, you're going to feel like a failure at the end of the day, because it's not going to happen. You need to make sure that you accomplished a few ones. And honestly, one of the best pieces of advice that somebody gave me was about and I think it's on an individual basis as well as on a company basis is, leave the capacity in your day for what else might come because if you focus on a few things and you have capacity for now when that emergency or something new comes in, you have the opportunity to go, oh, I'm going to take that phone call, I'm going to meet that person, maybe that leads to something else, I'm going to go pay attention to this. Where if you have everything that you're just trying so much, you're going to have your head down and you're not going to be open to more learning and opportunity.
Dhani Jones (19:05):
So, you talked about a million things going around in your head and I am the exact example of a million things going around in my head. And some days maybe I feel as though I didn't get to all of them. I don't know if I necessarily feel as extreme as a failure but I think that there's also like a responsibility of some to kind of source some of these ideas and maybe some people have a greater capacity. Maybe I just have a little bit of greater capacity to have some of those things in my brain, but I think you're right. The world of simplicity is necessary in order to kind of achieve that focus, especially when you have such a heavy responsibility to provide alpha to the investment vehicle of which so many of your shareholders are dependent upon you.
Dhani Jones (19:52):
And when you're looking at the landscape, you have to kind of push towards the edge of things. And so I'm curious about how new technologies like 5G and edge are affecting the way that you look at in investments and are those maybe some of the things that you're investing in. And then also, how does that relate to the world of mobility? That's an area of which I feel as though is a prime area of growth. Like I'm obsessed with all these electric vehicles moving all around the place and people don't realize like it's all being directed back to one source of information and they're all talking to each other. I mean, you look at a Tesla automobile and you can provide an upload which therefore takes all these cars and lifts them up a couple inches because they've had some of the cars run a little bit low. I mean, that happened a while back.
Dhani Jones (20:39):
So just curious about 5G and edge and how you think about investing especially around the world of mobility, because I think you invested in a company called Zeekr and I think that the world of mobility is fast approaching and people need to recognize and realize that.
Trina Van Pelt (20:53):
Yes, first of all, intelligent edge, 5G is a very important investment area for me and Intel Capital. So much of these, when you think about intelligent edge, there are many decisions that are being made at the edge. You need artificial intelligence running right there. When four cars reach a stop sign, there's not time for it to go up into the cloud to make a decision of who goes where. There's an immediate mesh network that needs to be created and those cars need to communicate with each other to signal who's going to go what. But then it brings in other challenges about, I mean, obviously compute at the edge and where you need to have things that can last a long time in the field or a short time in the field over their updates, but you need security as well, very, very strong security so that it cannot be hacked.
Trina Van Pelt (21:45):
And when I think about mobility, it is one of the hardest intelligent edge examples when you think of autonomous driving to be able to execute on. And I think in so much of what we're seeing too and I think the intelligent edge is going to be pervasive for us all. It's there in healthcare. This is not just in like sexy autonomous driving. I mean, healthcare and healthcare at the edge is in to help making decisions where there's going to be more home care and opportunities, there it is incredibly important.
Trina Van Pelt (22:19):
Retail is another one also where kind of that combination of brick and mortar and online and recommendations at. But specifically going into a more global mobility and Zeekr, what's really interesting is, I mean, mobility is a challenge every country, but they have different ones and even states have different situations, cities have different topography. Whether there's hills, temperatures. I mean, how a vehicle works in Minnesota in the cold winter versus LA is very different. So, electrification is obviously a huge part of this in thinking through where do you have charging stations? How much energy is being used to go up those hills? When can it get back to recharge? Et cetera. But it's important for us, as we've made our different investments, really beginning with Mobileye on the acquisition in Israel.
Trina Van Pelt (23:14):
Moovit was another equity investment that I drove, which then Intel later acquired Zeekr now in China, Beep is another company. But as we look at it, each country is going to have different regulations and different mandates. And where government policy can all of a sudden encourage something where the U.S. is interesting. I mean, you have NHTSA but you also have different states and cities and the infrastructure, the quality of the infrastructure is incredibly challenging as well for like where can that vehicle pull over and work through? San Francisco as a case in point.
Trina Van Pelt (23:53):
And so we're seeing a lot within... China has an opportunity where you can really get more adoption faster. And a lot of these countries are going to require that you have indigenous solutions. So it's not like you can just have one provider who's going to be able to be the global leader. There's going to be a mixture of where Germany's going to want to see some of their own companies in there, China, Israel, the U.S. There's going to be a blend and it's going to just be interesting to see how that further develops.
Trina Van Pelt (24:29):
When we first made an investment with the Mobileye, we knew this is a long term investment. And one of the key things like back to even the point with the executives is like, this is not something we can change our mind on in a couple years. This is a 10 year investment, period. And it is a huge market opportunity. So you can't all of a sudden get too nervous about how things are in the first couple years, because it's a long game not a short game.
Dhani Jones (24:57):
Yeah. It's the long tail investment is important for people to consider and to realize. I mean, just look at the world of supply chain right now, everybody just expects things to show up. When the world shuts down, it takes two or three years to kind of get back on track because everything came to a screeching halt. I mean, if you're in the world of distribution, you know that what you're creating today is going to be what's distributed two years later.
Dhani Jones (25:21):
And just personally, I just want all of my things to work. I'll just let you know, you talked about Minnesota, you talked about California. I'm not going to say what kind of car I have, but I would just say this, some days I just want the technology just to work. I just want it to kind of work and that's also part of the long game, is understanding sort of the challenges that are going to come along the way, some of the investments that are going to come along the way, some the decision making that's going to come along the way, let alone the AI and the edge computing and the mesh networks, they have to work, but then we also kind of have to make those decisions. And so I just love the fact that you're sitting right there in the middle of it and you have purview over so much of what's happening in our industry today.
Dhani Jones (26:08):
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Dhani Jones (27:01):
So I'd imagine that things have changed over the last 25 years, but when you think about the world of deal making, what are the two or three things that you feel as though is really, really dynamic in what it was before and how it is now?
Trina Van Pelt (27:19):
I think that in deal making, probably the biggest challenge has just been the high amount of dollars that are available to invest. Again, kind of back to the point where money's been really cheap, funds are raising mega funds, they have to put the money to work, and you're seeing later stage investors keep moving down into the stack, so that puts pressure sometimes on valuations. And so that's just one of the things that you just continue to see about. And I think the encouragement I would say is almost like, be true to who you are. And I know some funds really are like, look, this is what we're good at, this is what we're not, but it gets really tricky because it's a business and they need to keep raising the next fund.
Trina Van Pelt (28:03):
And then when I'm talking about these things that are long game, when you have a 10 year fund cycle, you have to show those wins in that short period of time. So you have to kind of figure out how you're balancing that. I think that's been one of the real key challenges, but the second thing of what I think sometimes maybe in my career of 25-ish years of investing in M&A, is I've seen at different times a spike of back to character counts and your reputation really matters. And it seems like we've maybe gotten to a little bit where people got a little ahead of that and was like out for whatever they can go get. And I think that in the end is also coming back too.
Trina Van Pelt (28:42):
And maybe this is the hole that COVID created for people to like more time to kind of think a little bit more about that. But that's the thing that always has been held very true to me, where I've said multiple times to bosses, I'd rather be fired for doing the right thing than keep my job for keeping my mouth shut or not. Because I think that you are you and that goes with you wherever you go. And I feel like in deal making sometimes where people may want to like cut some corners, what the case may be, now I think people are really recognizing that importance of who is going to be there when we might be thinking this is an amazing company, what's happening when we're out of money we're trying to figure out, how can we make that next pay roll? What else do we do? So, I think that character is a piece of it.
Dhani Jones (29:31):
Where did that come from for you? Because there's a lot of people that are investors that I'd imagine don't think like that and some that might, but where did that originate from you? I mean, obviously like the Midwest personality and the ability to kind of understand The Team. The Team. The Team," when it relates to the world of Michigan, but into such a challenging world of investing when everybody's kind of going after these deals and everybody's chasing alpha, everybody's raising money, and everybody thinks that they're the best. A lot of times character to your point kind of becomes a part of it but it's more about getting the job done. Where does this part of empathy come into it? Because out of all the conversations that I've had on The Pathfinders, I don't think I've ever crossed the threshold of empathy, but you kind of brought it up and I was just wondering where your empathy came from, where did it originate from and how has it affected and supported you along the way?
Trina Van Pelt (30:25):
I guess it came from where I grew up and just kind of being instilled by my parents. I just remember even in high school, it was like the cool kids and the nerds and I was like, I hang out with everybody because I was like, I want to know what's interesting thing about you. I don't know, it was just part of how it started. I always was really curious. I wanted to learn. I always have this view, like if I hear people talk bad about somebody, it was like, well, until they actually do it to me, I'm going to give them the benefit of the doubt and go figure out why. And so I think it just started really early where I was very open-minded, which for where I grew up is not necessarily the norm, but just always, I was just curious and wanted to go see. Maybe also my parents taking me at my first flight to Germany when I was 11 and getting to go visit like five different countries at that time were nobody in my town was doing that.
Trina Van Pelt (31:26):
I opened up seeing new cultures and every time I've done a deal internationally, it's been so much more about, I want to know the culture and the people and the culture in business, because it makes a difference in how you actually can get deals done. In some really tricky negotiations, listening and realizing that people are talking past each other and trying to help find that thread to go, wait a second, we're actually trying to help you, this isn't trying to take something from you. And when you say it in that way, it's like, oh, we are actually in this together. And so I just think I've just always been listening to people and trying to figure out kind of, is there some sort of disconnect? But that being said, look, I've had some people who have outright lied to me in deals and like well, but they have to live with themselves.
Trina Van Pelt (32:20):
And I think for me, I had a point in my career, maybe it was about eight, 10 years ago where I was just frustrated. It was like, how come? I wanted things to be going faster or different or whatever and I was like, what really matters? And in the end I was like, wait a second, the job is one thing, but in the end it's like, I am raising two boys and I want my boys to be proud of who their mom is and what I'm doing. And if I can kind of live each day that maybe I left a good impact, maybe I also show some vulnerability or to be like... In the end, that's what matters most and kind of that character and reputation.
Trina Van Pelt (33:02):
And when I kind of just started with that mentality, everything just started to grow great because I think sometimes people hold on so tight and I think it's even a message for founders. You can hold on so tight, you can go back and stay rooted in like the couple key things that really matter or why you're driving the company that you are driving, what you're looking to accomplish, many things will fall in place.
Dhani Jones (33:26):
Wow. Thank you for sharing that, because I think a lot of times people overlook that simple fact of the character of which you've been cultivated to be and the legacy that you wish to leave for your children is important and those two together kind of make the mind of who you are as an investor and also a great partner, because when you get into these deals, oh, you're united for a long time.
Trina Van Pelt (33:59):
Dhani Jones (33:59):
And you're in for the long haul. And we saw it happen in 2020 when people were in a challenged positions and VCs and private equity and people had to back them in order to kind of double down on the ones that they believed would survive and those that they thought that may not necessarily make it, it's all about being a good partner. So two more questions. What do you think makes a successful deal?
Trina Van Pelt (34:23):
The people. In many ways it's kind of where things start and it's kind of the team on both sides for doing it, but I think overall on the fundamental basis, it's one; making sure that there is actually a real market for the opportunity and a market that's going to be growing, that's going to be of sufficient size, that's going to warrant like, is this a VC-backable company or it's a great business but it's a lifestyle business? And that's okay too. But kind of knowing, is this a market opportunity that supports venture or growth or late stage investing, is one. The second is what is the real differentiation that the company has? What moat have they created? Are they going to be able... Many times too we look at, if someone is trying to unseat an incumbent, there might be three times better, maybe five, can it really be there?
Trina Van Pelt (35:18):
And early on you have to have a lot of conviction and judgment of assuming kind of what might need to happen to get there. But does that really play out? And the third is the team. And from the negotiation perspective, it's really, truly making that a win-win. And I think people sharing, like here's what matters. And when I think back to some early deals that I was doing and again, people were talking past each other, spending hours debating all the different cases. I'm like, I'm going to go have a drink with these guys and go figure it out. And we solved it in 10 minutes. I'm like, so what's the issue that you have? And they told me like, well, that's not a problem, but in the room with all the lawyers, nobody could actually talk that way.
Trina Van Pelt (36:01):
And that was just one of those things I just kind of cut through was like, how you kind of get things done in a way that people feel good about it in the end. I mean, on the M&A side, sometimes there's too much of like, I've got to feel like I won. And I saw that with other people too, it was like they want to feel like... Well, that's not... Everybody needs to feel good. The sellers need to feel that they got a fair price. The buyer needs to feel that they got a fair price. Otherwise, the contracts is going to be there and then the rest of the business may not. And I think with people we're just like balancing that short and long game.
Dhani Jones (36:34):
Well, if we end up ever doing a deal together, I know that we won't have any lawyers around. We'll just kind of go relax and have a drink at a restaurant or somewhere like that.
Trina Van Pelt (36:43):
There are some good lawyers, I've got some good lawyers who will join us for the drinks to make it happen.
Dhani Jones (36:47):
Well, how about this? We'll invite some of the lawyers to come along with us, but along that route, one of the things we talk about at The Pathfinders is "meals and deals," we call it. So where do you get to celebrate and where do you like to celebrate some of the bigger deals that you've done?
Trina Van Pelt (37:04):
You know I love to travel as well, but so from a team perspective, I'm going to probably give props to now locally in my town, Michael Mina just opened up an amazing new restaurant. San Francisco has had quite a few of its challenges. So if there was something out here on the west coast, I'd get people over here with some beautiful views of the city and the bridge and the food is spectacular, such a great place for a team to really go have fun. But otherwise, depending if the deal would be international, where else to be would certainly look to be celebrating there, kind of embracing that culture. On a personal side, once the team celebration's done, I would go find a really fun trip to some place on my bucket list as a little thank you to myself.
Dhani Jones (37:49):
All right. Give me one of the places on your bucket list.
Trina Van Pelt (37:52):
Maldives. Haven't been there yet.
Dhani Jones (37:54):
Maldives. Well, you can save that for the next deal that you close. And I will say, Bo Schembechler would be proud of "The Team. The Team, The Team," as you stated over and over, and the character that you have maintained as both a person, most importantly, and a mother, even more importantly, and also as investor to those that you represent and work with. So Trina Van Pelt, I'm grateful for your voicing and your stories here on The Pathfinders. And thank you so much for being on the show today.
Trina Van Pelt (38:26):
You're welcome. Thanks for having me Dhani, it was a great joy to have you kind of get some of these ideas out of me that were probably buried in my head.
Dhani Jones (38:35):
Thank you, Trina.
Dhani Jones (38:46):
Thanks again to Trina for joining us on the show today and exploring the future of late stage equity investments and growth. If you like the show, remember to leave her a view so that the show can reach even more deal makers. Until next time I'm Dhani Jones and this has been The Pathfinders presented by Ansarada.