Climb By VSC: Episode 38

Jay Kapoor: Hey climbers, welcome back to Climb by VSC. Today, I am so excited to have Michael DeLucia. Mike is the sector lead for climate investing at Wellington, which is an investment management firm with over a trillion dollars in assets, where he leads the growth stage investments into energy and climate technology companies. Prior to Wellington, Mike was the founding partner at Sidewalk Infrastructure Partners, which focused on investments in the energy transition and the built environment. And he was an associate director of investments at Sidewalk Labs, a spin-off of a little company called Alphabet aka Google. So, Mike, you've got a lot of really interesting and relevant experiences that we want to dig into. But I'll just start by saying thank you so much for joining me on Climb.

Michael DeLucia: Thank you for having me.

JK: Well, fantastic. So look, I gave a couple of your career highlights but since you've had such an extensive experience in climate investing, why don't we start there? How have you seen the landscape for investing in this category evolve since you first began your career?

MD: Yeah. Well, thanks again, Jay. And I would say you're right. It's been 15 years since I have been fortunate enough to work in climate investing of different types and different types of companies in different parts of the capital stack. And so there has been a lot of change, and I'm glad people care about it now, which wasn't always the case 10 years ago, so we're really excited at this point in time for all of the innovation that's going on. I would say Climate Tech 1.0 so called back when I started in 2008, as a fairly useful analyst. Working on different types of deals was mostly, I would say really capital-intensive industries that are maybe a little bit more mature today. So folks are building solar cells and making solar panels and then deploying them out into the field, in projects. And so there was a lot of activity in those businesses and up in wind power. And today, there are companies that are very large, publicly traded companies that are effectively leaders in those spaces, and what we're seeing is innovation, that same type of innovation where you're effectively taking one way of doing things and realizing how do we do the same thing and deliver the same outcome to consumers and end users but do it in a green way. That process is now bringing, you know, coming to basically all industries right? When we say net zero, that means Net Zero everything, and so every business today has to be thinking, how am I going to deliver the same outcomes affordably but now also critically sustainably. There's really a wide range of sectors to consider, and there's really even within sectors like energy where the so-called energy transition is further along. There's still a ton of white space for delivering exciting products that enable great consumer experiences with a lower carbon footprint.

JK: You know what's been really interesting to us as early stage, you know, backers, as we chat here in July 2023 Series B funding for climate startups is down, you know, 20% year on year. Series C is down 72% year on year, and yet we see that there are new climate funds raised all the time. And everybody talks about these IRA tailwinds. Can you help us understand a little bit of this sort of disconnect between what you know founders need in terms of capital needs and where we're starting to read that actually there may not be enough capital or you know, how you feel about the capital availability at those growth stages for those companies?

MD: Great questions and I totally understand how all of those when you look at them together, don't you ask yourself how do these make sense? And I would say first off, on the fund fundraising side for people that are raising capital to deploy into companies, that is really a multi multi year process. And so anything you see being announced today has taken a lot longer to put together than your traditional corporate fundraiser that a Series A or Series B investor would do, so I think a lot of that when you see that to the extent you still see that which I think has slowed down. It's sort of a little bit of an overhang. And then when you look at the actual corporate level deals that are happening, I would say all of this reaction and slower activity, slower pace of deals, does stem from later stage capital markets, which effectively repriced, very long dated future cash flows when interest rates became higher, and there became a little bit more economic uncertainty, and so publicly traded comparables, and you know, high flying SAS companies like a snowflake in the public markets saw immediate or very, very quick and very rapid multiple corrections, and privately held companies do not need to mark themselves to market every day like publicly held companies. And so there's been a much longer delay in how that revaluing or to recasting of interest rates has been a recasting even of growth rates has impacted private market valuations. But I would say it starts at a later stage. So we think of ourselves as very early growth investors when we're thinking about Series B, and C rounds. There are folks that work in Wellington looking at Series E and F rounds. They saw, initially, a dry period where no one wanted to raise money because you had to admit that your last round was probably overpriced from multiple perspectives. It's very hard to grow into that quickly enough. If you've got a high cash burn, like a lot of companies did. And so now you're seeing that flow through to earlier stages. The truth is, it doesn't always impact the earliest stages of Seed and A rounds because the numbers really just don't pencil to make sure founders have enough skin in the game. below certain valuations. And so there's a lot more exposure to interest rate risk, and this sort of changes in multiples at later stages. And so Series B and C are right caught in the middle right now, where effectively you have people in later stages that have admitted they sort of need capital even in a more difficult higher cost environment. And then you've got people I think that raise large C rounds that are really trying to extend their runway. And so that's why I think today, that C category is seen as sharpest year on your decrease, whereas I think you'll see the late stage now going forward start to actually see your on your increases because where they were was previously so dire and so I think eventually we'll start to see more see rounds in the probably the worst of the interest rate shock and expected economic impact of that is likely over at this point, in my honest opinion. But it's a slow process. It just doesn't happen as quickly as we see in public markets.

JK: You know, we're throwing these round names around Mike and you know, maybe because I've been doing this for you know, 9-10 years you've been doing it for even longer. I feel like the round names keep shifting, or the level of traction around keeps shifting. So maybe define for me, what is a Series B today, what is an early growth stage, you know, this the stage that you're talking about? What does it mean?

MD: So I will say there's good news and bad news on this front. From my perspective, the good news is all of it is made up and founders don't necessarily realize how much flexibility they have to call whatever their series whatever they want. We were chatting about a company a couple days ago, here in Wellington, they did three different rounds that they called series seed, one Series C two series, and there's just no rules about this. And so yeah, I would just encourage people to not feel so locked in and like if you cultivate series A but it really was your series seed. That's okay, like just call your next one seed one or a one right if you're not ready for the B. And so I think there's I just wanted to make that point that I think I don't like people to get too carried away and so called rules about What's this supposed to be like? What I would say is that series B on average, there's still you know, regardless once you decide to call what you want, you know, then we can look at the statistics and say, Well, what on average does a series B look like versus a Series A, or A Series C? And they're, I would say, the series typically increase obviously in size and quantum of dollars, right? But there's a really big range in between an enterprise SAS company or blockchain based solution that needs a series B versus you know, a company like span which is making hardware that we lead. There Series B one and previous co lead their series B, where they're making hardware and smart panels to install into residential homes. It's just a very different type of company. So I would also say not only Is there flexibility in what you call yourself, but there's going to be naturally flexibility within any category. So a see could be as little as $25 million, or as much as 60 or even $100 million is really not unheard of for more capital intensive businesses that have enough traction that they can you know, without too too much dilution, go after, let's say a longer period of time or give themselves more runway. And then lastly, I would say the important part is really with series a traditionally, I think you're demonstrating to your series investors that there is a product and then with your series A money you're going to go and sell that and generate traction. And when you're thinking about your series B it's a lot more about, hey, I've got a product, I'm selling it, it works really well people want it yes. But now you have to think about and what are the unit economics of that sale? What does the gross margin profile really look like? I think really, seed investors are really early stage venture investors. They're not as much thinking about that because they realize it's very hard to tell at that early stage, what the true unit economics of an innovation might be like, and what the true pricing power and revenue profile of a business. And so I do think that when you're at a B level, there's a lot more data that an investor can request from you and say like hey, you last 12 months show me what your average pricing has been like. So then they're hoping to actually say, hey, I can write you a larger check and take a larger quantum of risk on you. But because the flip side is I have a little bit more information that I'm using to make informed decisions.

JK: Yeah, yeah. I had a mentor of mine that used to say, you know, seed stage was founder Market Fit, Series A was product market fit, and then Series B was category expansion or, you know, new market expansion. When you look at the sort of climate world, or you know, energy kind of transition world, does that still hold true or are there different dynamics within sort of the energy world that like a Series B may not be, you know, product market? Like do you have to have product market fit at that stage?

MD: Yeah, I would say climate. I would try to maybe disaggregate a little bit, right, because we've got a few different things that fall within the asset category of climate deals. And so you've got truly venture deals which trip typically are high ROI businesses that are highly scalable, typically with a digital angle, like if it had nothing to do with climate it would still be a venture bankable company. Then you've got other companies that are climate innovation companies, but let's say they're scaling an industrial process which just inherently has a different ROP and a different multiple Exit Multiple associated with that. And so that is potentially more a fit for a private equity style investor, who's still investing for a 20% plus IRR 30% IRR, but they don't need a 10x that a venture investor needs. And then lastly, you've got infrastructure investors that also look at quote unquote climate deals. That is backing, you know, developers, they might be backing the folks that are actually deploying and implementing companies. And there they have even a different cost of capital, a different deal size, different return expectations. So if we just want to double click within climate on the venture side, I do think that we try to have those rules hold true within climate. I would also say one last category worth considering is like deep tech, truly disruptive versus more digital solutions that are kind of in the here and now you can really demonstrate what is your LTV to CAC What is your unit economics we do see B and C rounds that don't follow the rules that you say when they're generally doing something that is so deep tech, and so different, that the usual rules of validation of product market fit are not like climate tech. But they're almost more like biotech or really deep tech innovation in material science and things like that. So those deals tend not to follow the same rules, but typically software and hardware. You know, companies we do want to benchmark them against broader venture categories.

JK: Yeah, yeah. Well, I mean, you recently led a $25 million round into a company called aranea. Can you talk us through that where you know, on the paradigm that you just laid out? Where does this company fit in and what excited you about making that investment?

MD: Yeah, I think that first of all, thank you. We are really excited about the company. They provide basically better data and information to energy companies, developers of projects, investors in projects, then really it has been possible to date so far. Usually if you're building a solar project and you want to find out where the interconnection queue is shortest, or where there are a lot of good properties to go and develop or if you're an investor, whether you should be investing in battery projects in Texas or in California, you would have to hire an expensive consultant and wait four to six weeks to kind of get a really good answer or any a delivers data and analytics to answer questions like that like at your fingertips through a single pane of glass, covering solar wind, batteries, hydrogen carbon capture or renewable natural gas. So it's both solving an important pain point that I think anyone that's interested in the energy transition has, which is how do I get better information to make better decisions? So there's a lot of different user types, but at the same time, they provide one very specific product to all those different users. It's highly scalable in that sense. They've got a great customer experience and sort of track record of having their customers sort of grow and get more excited about what they're doing and build that into their own internal workflows. And we think that that kind of information is pretty mission critical for a lot of their customers. So just that's number one is they're very focused, but they're solving a problem that a lot of folks have, and they're solving it in a way that's very standardized and scalable. I would say the second part that really, I'm sure as an early stage investor you can relate to is like the team assessment was critical here. They are just a plus team absolutely purpose built for the problem that they're trying to solve. Every individual has either worked together in a prior role or they have been picked by the CEO because they were working on a similar problem or a similar business. And then they combine that on the business side with a really strong CTO, that could actually deliver a better than market performance in terms of the actual technology performance, how quickly can you get the analytics? What is the user interface, all of these questions? So best in class people coming together to deliver a product so I can't speak highly of them enough.

JK: Yeah, no, absolutely. Appreciate that. And, you know, the team thing factors so much into our calculation. I'll tell you this, like I'm assuming you know, you met them you spend a lot of time with them. That was the hardest thing for me during COVID Is, is getting sufficient time with the team when you gotta do it over zoom. So I'm very glad that I now get to hop on a plane and you know, press the flesh as I say.,

MD: This was an example, we're actually flying out there based in Calgary, Alberta, and I you know, we were thinking about the deal. Other people were thinking about the deal, and I was like, you know, I'll be in Calgary tomorrow. And basically that was a critical component of building trust with the team and them seeing how excited about what they're doing. We really are.

JK: Yeah, even even in this remote world, right that goes the extra mile. Makes a big difference. You're right. So talking more genetically than about what you like to see in a series B company, a company that's coming to you for investment. You know, are there two to three common pitfalls or kind of missed opportunities that you see with companies earlier than that, before they get to you? That you know, you would advise them to say, hey, here are a couple things to watch out for. Before you're ready for that sort of Series B step.

MD: I think being really thoughtful and careful about your resource allocation, being really scrappy, because everything I guarantee takes longer than you think. So there's folks that are like, Hey, I've got this huge amount of money. It seems like a big amount when you first get it when you raise money. It goes really quickly and just not forgetting that it just pays always to be scrappy and frugal, because humans just naturally underestimate how long things take to get accomplished and how hard they are. But the flip side is, you really do need to set milestones that you can hit because you need to be able to then say, hey, Series B investors these were my objectives, look at how I've kind of done them quite well. And you need to be able to share, you know, we look at a lot of the details. We talk to your past investors, we're going to ask to see your latest board meeting notes. Like it's not like we won't figure this out. And so I think knowing that in advance is just sort of helpful and so being candid with investors then to say like, Hey, here's what works. Here's what took us longer than we thought: don't try to play everything as a rosy scenario. And so the maybe the last thing I would mention is being unable to focus on an initial market and thinking that your tam is the whole world or at the you know, if you've got a prop tech solution and your tam or som or Sam or whatever is every building, you know, there's a problem. I know everyone thinks that whatever product they have to offer is just widely applicable. But you gain more credibility with later stage investors by nailing a couple of key initial markets and earning the right to expand to do other things, rather than sort of feeling entitled to be like, Hey, I've got a great solution. I'm entitled to sell it to everyone and sort of like no you need to earn that right? By showing subsegments of sort of victory. And you know, often the most powerful thing you can say in the meeting is I don't know, right? You want to underline Hey, hit this is what I don't know. Right. And so, especially with later stage investors, there's a high element of bullshit detection going on. And so I would just advise folks that you know, earn credibility in various ways by admitting not every single person who's your customer or by admitting you don't necessarily have all the information but you'll be back with it. And so those are just some some thoughts

JK: Talking about successes then, go back even before Wellington, you were doing earlier stage investments. Are there any that you know, you kind of look back today that you're excited about making and have today surpassed sort of even your your expectations for how well they would do and we'd love to hear the thesis then and success.

MD: One of them that I think is a fun sort of full circle story is that I was the one of the largest investors at the seed round in a company called AMP robotics. And those guys effectively make industrial automation based on AI and neural networks to enable lower cost recycling and basically they create robots to sort all of our recyclables that are plastics or bottles are cardboard, because that's one of the trickiest jobs in creating a circular economy. And there's tons of brands out there that have made significant commitments to solving plastic waste issues and others. And so, amp was started by a PhD from Caltech that we knew had the technical chops to build robots that could at least initially sort, let's say about 30 or 40 objects per minute, which is about the rate that a good human can do. And we had you know, I want to say there were about three robots out there that you could go visit and he could show you his prototypes, and he had willing initial customers and so that was you know, I think we invested about a, you know, from Sidewalk Labs as part of alphabet invested about a million dollars as part of a larger seed round, and the technical accomplishments of the company vastly outweigh anything that we thought was possible. The power of artificial intelligence and improved robotics hardware and the different layers at which advancements can occur mean that their sorting machines today can do not 30 objects in a minute, but like 80 to 100 or 100 Plus depending on the type of hardware they're deploying. And so just better technical performance than we ever expected. A wider array of hardware and What is exciting about that, is that then, here in Wellington, being able to track the company and knowing it really well, we were able to co lead the series see the amp did earlier this year, alongside congruent ventures. And so it's a great example of the world is very small and you never know where people might hop up but I think very highly of the team and so it was one of those where when you see a team outperforming what you ever thought was possible. It's maybe a good idea to keep backing that team.

JK: That's really cool. I mean, I liked the AMP robotics example there because it comes back to our conversation of when you see a founder set a goal and execute against it. It buys a lot of trust with an investor. And then you happen to be in a position where you could, you know, cash that trust into the next round basically. So I like that example a lot. Let's flip it on its head Michael, because you've been so generous and transparent with your learnings here. Without naming names, was there an investment that you made where you felt really confident about it? And yet ultimately, it didn't work out and what were some of the takeaways you had from that experience?

MD: I think that anyone that says it never happens, you better head for the hills because they're not being honest. There's always things that are unexpected, even in good outcomes, and sometimes you don't necessarily think your best outcomes are even going to be good outcomes until they are and so what I would say is we had a company like you said without naming names involved in a massive problem. Particularly in this case, it was in the water industry, which is you know, everyone needs water, big Tam. Let me tell you about that. Also lots of pollution, lots of problems in our water system. And some really smart people tackling a problem I would say, it was a great example of like when a really smart group of people try to go up against an intransigent, very difficult industry in the industry usually wins, unfortunately. And in that case, it had a lot to do with: are there sufficient incentives out there to drive change on the part of a group of potential customers? If you've got a group of potential customers out there who are buying acts to solve problems, why do they regard that as sufficiently okay today? Why would they try a new solution? What is their incentive to do so? Just because your widget is better and delivers better outcomes if your customers aren't measured on those outcomes? Or incentivized on those outcomes? It might be a big case of nice to have, but maybe not able to sort of really be a scalable business. And the other thing I'd mentioned is that business did have sort of an IoT component to sort of make it even more exciting and awesome. So they had a lot of physical deployments out there. And what I learned as a second piece of wisdom is, you better make sure all of your physical deployments are absolutely standardized and identical because when you have to service them over time, cost to serve as a real thing. And it's not just all about getting revenue in the front door. It's then about making sure you're gonna have a high margin business at the end because your products can all be serviced at reasonable headcount costs. Let's put it that way.

JK: Yeah, I like that. I like that a lot. So Mike, I mentioned this at the top of our conversation, but we'd love to do a segment on the show called hyper hopeful where you know, we kind of do like a quick fire round, I'm gonna mention a trending topic, and I'd love to get your thoughts on it. And if there's more to unpack than, then we will sound good. Absolutely. Let's do it. So the first one we'll talk about carbon capture and storage. It's being hailed as a game changer. We're seeing, you know, giant fans out in the desert that are looking to do carbon capture, but it's also facing some criticisms around feasibility and costs. In your experience, in sort of your opinion, is carbon capture hype or actually hopeful in terms of making a dent in climate change.

MD: I will say, hopeful, because really, if you look at all the sort of responsible modeling about how we get to net zero, negative emissions technologies, i.e. carbon capture, and storage does play a role. I would just say that not all carbon capture and storage technologies are equal, right? We want if you're going to store it needs to be done really thoughtfully. If it's going to be captured, it needs to be along a pathway that can lead to lower costs over time. If solar was originally built as an industry by tax credits because it did not make sense and there were a lot of rules that forced utilities to buy renewable energy and that allowed the learning curve to do its work and bring solar to be the low cost solution it is today. So I think we will see a lot of that around things like direct air capture and carbon capture even more broadly, I think we just need to figure out what are the couple of technologies that really are going to lead to a cost of carbon around maybe $20 to $50? Because that I think is where the willingness to pay is, current solutions today are still in the $700 to $1,000. And so that's a big curve to come down. And folks need to be focused in particular pathways that have that type of trajectory.

JK: Yeah, one and a key criticism I think for that industry is that the customers for it are oil and gas or natural gas because they're using the byproducts that compressed air whatever it is to actually go and pump into wells. I'll ask to add on even though I'm breaking my own rules here. Is that a problem to you when you see a climate company that is servicing the collective fossil fuel industry? Can they still be considered climate?

MD: They call it enhanced oil recovery, is what your reference says that's right. Those words are not incorrect. That is when I said that not all carbon capture and use and storage is equal. That's a little bit about what I was referencing, right. So if you're actually a climate investor, like we are where all of your investments need to be measurably impactful positively. Yes, I think we would think about things as mineralization for example, or turning carbon into building products which are durable which might have a life of over 100 years. That's a great use. I am a lot more skeptical where you're right. This is a little bit of a license to pollute on behalf of oil and gas companies and so completely empathetic with those who are critical. At the same time. I think all third party scientific bodies sort of making responsible projections on how we get to net zero do need to include this technology. So it just seems a little bit short sighted if you kind of disqualify the whole category.

JK: So we talked about IoT earlier and it makes me think about all the smart city solutions, going back to 2015 2016, the big boom era of IoT solutions, and now it's kind of come back. There's like a growing buzz around transforming cities to be intelligent, energy efficient, interconnected. But then there's concerns about, you know, privacy costs feasibility. So the concept of smart cities Mike is this hyper or hopeful?

MD: It definitely was one point of hype. And I worked at Google Smart Cities projects, Sidewalk Labs, So I'm intimately familiar with the concerns around privacy and how we can design privacy into software and hardware solutions. So privacy by design is one concept that I'd encourage people to look up and get familiar with, as an important approach that technologists should take if they are dealing with PII and other sensitive types of information. What I would say is, cities desperately need the outcomes associated with so called smart cities, cities need to be more affordable, they need to be more sustainable. They need to be more resilient, which means more connected with better communication systems. I think that, you know, IBM and others made a great sales pitch out of that, when the technology was still really nascent. I think we're really only just now seeing really incredibly exciting software companies and folks that are providing solutions to cities so I'm again on that one. I think today there is more hope than hype.

JK: So I'm gonna, I guess, build a little bit on some of the other conversations that were happening. So we'll jump out of hyper hope for a minute, you know, as we look sort of 10 years out, right, you've you've spent all this time in this world of energy transition. Where do you feel like the biggest opportunities still are and in your mind, what is the sort of most ideal and most realistic state for energy transition? If we look, you know, the year 2033, so 10 years out?

MD: Yeah, I think there is so much exciting innovation happening within the energy transition, even today, even though people have been talking about that for a very long time. Obviously, parts of the transition, so called, are more mature than others. But I think the electrification of mobility is likely to be the largest change to our mobility systems in my lifetime, and, and possibly some of the listeners out there. Yeah. And so that from an opportunity perspective is sort of the gift that keeps on giving, right, because right now, we're in the stage where we're actually just building new supply chains, right and then those supply chains need to be connected. Those then need to deliver incredible value propositions to customers. Right now, anyone that has a Tesla and a Ford f150 can't even really have a great experience yet as a car owner between having a single app that provides lots of different functionality to manage just their own to personal vehicles. Right. And, you know, utilities are just figuring out how to give consumers incentive to be charging at the right time of day. That something they never had to think about before. People don't really know where to put public charging stations. So there's all sorts of data and analytics to think about, like, Hey, if you put it here, it'll get this utilization and if you put it over by the grocery store, and then on top of it, people don't really know when you install chargers or batteries. How long does it last? How will it perform over time? How much will that cost me next year? So much room for optimization, so much room for predictive analytics. Whether it's understanding at a physical level, how the battery itself will perform, leveraging all the telematics data in the car to drive outcomes for drivers for commercial fleets. There's just so so so much there, and then I think you take that as a blueprint for other industries, right? And so whereas energy was more mature, and mobility is like Ground Zero today, I think then you'll see that playbook then get applied to shipping. You'll see it applied to not just other modes of transportation, but then other other industries entirely right where they're still more out of the money with respect to decarbonisation today. So I think that's part of my vision. I would just say in terms of energy transition and 2030 that I'm an optimist in terms of deployment versus expectations. Almost all forecasts in the past have rapidly underestimated the pace at which the energy transition will happen, whether that's the number of solar panels installed or the number of electric vehicles deployed. And so I think we're really at this tipping point where people want to do the right thing and they want to purchase the thing that is the Greener Option. That's sort of a mindset change. People are confronted with climate change in many different ways. Now, it's very, very real. And so now we're at that point where people actually are starting to get good choices. That delivers good consumer experiences that are the greeter options. It's not the Prius anymore. It's the Tesla. Right. And so that line of thinking, I think, is going to drive a lot of deployment.

JK: Yeah. Well, look, I think you've already started touching on it, but I'll close with a question that I asked all of our guests which is, you know, there is a lot of doom and gloom out there. There's a lot of climate anxiety out there. But what is one thing that gives you hope and optimism as an investor as a human on this planet about the fight against climate change?

MD: The thing that really gives me hope is a story an analogy to datacenters when the internet was created, 20-ish plus years ago, you can go online and read all these articles about how very soon data centers would consume all of the electricity made by humans on planet earth. And the truth is that never happened. And the reason that never happened is because a data center is a complex machine. With many levels of hardware, software, and human intervention all working together. And they were able to innovate at every single layer of a data center tech stack to drive efficiency and actually keep data center energy usage, even as AI and Chip usage exploded, data center energy usage has actually been very, very efficient and able to be maintained within a slow growth. And so that same type of thinking where the economy is right now, projected to use all of this carbon, and it has many layers, and there's so many different innovators thinking about each different particular problem, that I think when you add all those up, you're going to see just a tremendous and huge impact that right now every forecaster who's just thinking about one individual, business as usual versus some innovation they're not seeing that all these innovations will together. We'll be working to drive a much faster reduction in carbon emissions than what we currently project.

JK: Yeah. So listeners you heard it here. First, Michael Delicia says to ignore the forecasters and support the entrepreneurs. Listen, this was a fantastic conversation, man. I learned a ton, especially about, you know, the ways that I think founders even before they're gearing up for that series B can start thinking about establishing the right guidelines, the right, you know, trust with the investors and sort of saying what they're going to do setting goals that are ambitious, that they can hit, and then by the time we send them over to you, they're in a great position to get funded. So appreciate all of your guidance today. Appreciate you sharing your experience. And just thank you so much for joining me on the Climb.

MD: Thanks for having me, Jay. This is a lot of fun.

JK: Well, that's all for this week's episode of Climb by VSC.