Hi. This is Paul Zoellizer, and welcome to the Awarepreneurs podcast. On this show, we dive deep into wisdom from some of the world's leading social entrepreneurs. Our goal is to help increase your positive impact, your profitability, and your quality of life. Before we get into today's topic, I have one request. If you could hit subscribe and do a review on your favorite podcast app, it helps more people learn how to have positive impact through a values based business. Thank you so much. Today, I am thrilled to introduce you to Dan Barker, and our topic today is investing in climate, health, and equity tech startups.

Dan is the president and CEO of Halcyon, an incubator and investor in early stage and impact driven startups from around the globe. Dan joined Halcyon from the Mastercard Center For Inclusive Growth, where he was vice president focused on supporting cutting edge research on financial inclusion and entrepreneurship. Prior to Mastercard, Dan was vice president for social impact at BlackRock. Dan Barker, welcome to.

Thanks so much, Paul. Excited to be here.

I'm thrilled to have you. You've been doing great work for a long time.

Oh, thanks. I'm glad you think so.

So give us a sense. How did you get into this whole idea of investing and positive impact, particularly sometimes with founders who haven't always had access to the kind of resources that you and your team provide?

Yeah. It's kind of a a long and and winding road and on a straight path to to me getting into the space. I actually studied international relations, thought I would be a diplomat. That was the career path I was on. And actually swore that I would never do anything that had social in the name. Both of my parents were social workers who did amazing work. And I always say that it's a privilege to have 2 parents who are better people than you are. You have something to live up to, but I saw how much it took out of them.

And so social impact wasn't really on my radar. But early in my career working in international development and global health, saw how many models that we had created that were really focused around charity and development aid, which I believe is still hugely needed. It's an important thing, for us to do. But they weren't models that scaled. They weren't models that sustained themselves. They were models that empowered the people they were trying to benefit. So, you know, early in my career, having that experience, learning a lot, and getting to work with some of the best minded in international development, I did start asking some questions about what would it take to see a different model and got more interested in the private sector. I started off my career in nonprofits, mostly in think tanks, so in the world of ideas.

I wanted to get a sense of how do you make these big ideas about how to impact the world, how to improve health, how to make our environment better for us and for the planet, how to increase equity. Really started to think about what are those models and actually drove me to the private sector first in kind of a big corporate America. I got to see what that looks like in big institutions, many of which were trying to transform themselves. And how do we incorporate purpose and impact because the world had changed? And during that journey, I actually got introduced to Halcyon when I was running a pro bono engagement, one of the big firms I worked for. I got to see what it looked like to work with companies that were starting with impact at the core of their business model. And that was something that was really exciting, and they're very circuitous path. I actually landed back here at Halcyon almost a decade after I had started working with them in a pro bono relationship and now have the opportunity to work with businesses that, by their very nature, are gonna have a positive net impact on society and the environment and starting that out with their their core premise.

In a minute, I wanna ask you a little bit more about Halcyon. But first of all, just you've you've walked in 2 different paths that are very interesting, being the social impact person or on a social impact team for very large organizations and trying to have impact that way. And now Halcyon, like, pretty early stage trying to help social entrepreneurs along their journey and help them scale. Just just as somebody who sat in both of those seats, what can you tell us about, like, you know, what have you learned? What are some of the pros and cons of those two different approaches to having impact?

Yeah. They're both incredibly necessary, and it's it's both really valuable. Certainly in working in some of the larger companies, I recognize the power of scale, right, and how you could actually change the trajectory of economies and of inclusion through both, you know, direct impact of the the product and services, the big companies offer, but also through their influence. Right? Influence them in lots of different ways. You know, also some of the downsides of any bigger institution, it's a lot of people, can take a long time to kinda turn that turn that ship. And so for me, my career has always been sort of what is the question I'm interested in answering next. And after being in those roles in really big companies, I was interested in what it looked like to do that at early stage companies with companies that started it out with it as their ethos and really appreciated the nimbleness and innovation that you get when you're working at the start and when you're working at the very beginning of a company and getting to see entrepreneurs who can see beyond the systems that we've created. Because in any big institution, you can kinda get used to the the models and the routines and the way things are.

The founders that we support at Halcyon and Early Stage Ventures just see really beyond that. They see what the possible is. And sometimes we'll run head first into things that the big companies have already discovered do not work. Right? So that's maybe one of the downsides, but they also have the the grit and the desire to overcome those challenges. And those that's kind of what took me to this space and why I'm excited to to work here. You know, the other big downside is just the scarcity of of resources, and that's in in every sense of the word, but it starts with capital that leads to everything else. It's talent. It's time.

And and in many cases, you don't have the the runway to actually fully realize the the idea that's that that you have, which is why so many of our early stage companies broadly don't survive because they just don't have that that runway, which you've got a lot more flexibility when you're in a big organization.

Absolutely. So healthy in house, one of the unique aspects of the model, if we could call it that, is that there's a physical house. Right? There's a physical space, and that's very much part of the innovation and the ethos of what you're doing. Tell us about that physical space and why is it important.

Yeah. We were really fortunate to that one of our cofounders, doctor Sachiko Kouno, purchased this space and was really committed along with our other cofounder, Kate Gasol.

Where is this space that we're talking about?

Yeah. It's in Georgetown, Washington, DC. It is a 230 year old historic property first built by for the 1st secretary of the Navy, Admiral Stuttard, built by an enslaved population that lived here in Georgetown and built much of BC in those days. It's had many lives since then, but Doctor. Cunha really wanted to create an inspirational space for other founders. She is an incredible founder in her own right, has created multiple companies. And when she came to the end of that journey, that part of her life was reflecting on the time and space that she had to, to work on her idea and wanted to provide that to other founders and founders who are changing the world. And so she purchased this beautiful space and here we are 10 years later, more than 10 years later with the ability to bring together founders in a very unique way.

They actually live here while they're, what we call, in residence with us during their fellowship, which could be anywhere from a week to to 8 weeks and really get to come together. And I think the value of Halcyon, which, you know, we might have questioned in 2020 and 21, has actually really been proven in the years post because there really is nothing like having the founders altogether. And we, as Halcyon, can provide lots of different resources than we do from anywhere from funding to technical assistance and resources through skill series connections to mentors and advisors. But something that you can't recreate is the connection and the learning that the founders have between themselves, because we're not in their shoes. We're not experiencing what they're facing at this early stage of founding a company, and they take an enormous amount away from that community that they've built and the ability to share the pain struggles and successes with each other. Those are all things that are really demonstrate the importance of this physical space. Even in a moment where the world has moved to remote and hybrid, we see the importance of of bringing people together.

Absolutely. Tonight, as we record this after we record, I'm gonna get in the car and drive. Here in New Mexico where I live in Albuquerque, there's this wonderful group called New Mexico Startup Alliance. And in that group is something called Founders Syndicate. You can hear in the very name that founders are it's founder forward. Right? And it's an in person gathering that we have where founders are connecting with each other and resourcing each other and the walls they're hitting or the resources that they're finding. And I can't say enough about that. We give a lot of sort of verbal sometimes we talk the talk, but in the startup world, we don't always walk the walk that well.

So giving more space and more time, especially in person when we can, for founders to connect with and share with and resource each other is something that you know, I've been doing this for 17 years now, and I can't say just how much that's moved up my priority list over time. That the the talking app founders telling them what they need to do, the the pitch competitions are awesome. But, like, when the founders get to connect with other really hungry, ambitious impact founders, it that's we need more of that in the world. So thank you all for doing that. So talk to us a little bit about, okay, there's this house and there's resident component, and people are connecting with each other. And then there's these 3 buckets. There's health, there's climate, and there's climate I'm sorry. There's equity tech.

Right? So Yes. When somebody is coming in, is that, like, all together? Are there am I if I'm a climate tech startup or a equity tech startup founder, am I gonna be with other equity tech founders, or is it all mashed together? Like, how does it work?

Yeah. So this has actually been an evolution for us. In our earliest days, we sort of reported founders from a whole range of disciplines, industries, verticals, impact areas, whatever you wanna call them. And really, over the last, you know, 2 to 3 years, started to understand that as we became sharper in what we're doing and as our founders grew up, that we had these three kind of critical issue areas, which were both very important for the planet. Right? These are 3 areas that that really matter to the planet and to to our society, and also areas where we could add value. And so most of our programs are oriented around one of those verticals. And so that you'll be surrounded by founders who are focused within climate, who are focused within health, or focused within equity tech. And that's been an evolution for us over the last few years.

And we run programs that have kind of 2 different formats. 1 is our residency, which is actually where we got our start. That's the program that's 8 weeks that I mentioned that founders from each one of those verticals of 3 instances in a year are here for 8 weeks. We actually have our equity tech cohort in the house and residents right now, and they are getting access to all the tools and resources, connecting with each other. And then we have another model where folks not everyone can come and spend 8 weeks in DC. So we bring together folks around for 1 week. They're here for a week. Then we go virtual for 3 to 4 months, and then we bring them back together within in another location.

And those programs, which we call intensives, are typically more oriented around a geography. So in addition to the issue area focus, you're gonna have a specific geography. So this year, for instance, we have run a program, focused on climate innovation in Sub Saharan Africa. We have another program on climate innovation for Latin America and the Caribbean. And next year, we'll have a program that, again, focusing on climate for DC local founders of Greater Washington, what we call the DMV. So DC, Maryland, and Virginia. So that's kind of the way that the the the programs work in terms of them being here in residence. And what they're doing while they're here is really honing in on 3 areas.

Now we're looking at companies that are kind of in MVP or pilot stage or coming to us with a product that's hopefully getting some version of of customer feedback through revenues is fine. We want someone to be engaging with with the actual product. And then what we're hoping to help them get is investment readiness investment ready so they are able to have a full understanding what is the capital stack available to me, what makes most sense based on my stage and my business model, and then can go out into the world with that plan to to to finance their company. And when we think about investment readiness, it's inclusive of venture capital, but it's not exclusive to venture capital, which I think is also a distinguishing feature for us, particularly when we look at the kinds of ventures that we support. There's gonna be a whole range of ways that they might be funded. We want them to pick the one that's best suited for them based on on where they're at and on what they do. The next piece is really thinking about product market fit. You've got the product.

How are we fine tuning it so that you are able to get it to scale? How are we helping you with your sales process? How are we helping you integrate consumer feedback and really honing in so that you're be gonna be able to get into the market segments that you're hoping to to focus on? The third piece is really around leadership and thinking about the founder's own personal journey from founder to CEO and what that transition means. It's everything from the culture that you wanna build to what you have to give up. You know, founders hold their their companies very closely for good reason that they've created it. But the natural thing that comes with scale is having to think about how you create a culture even when you're not in the room. How do you create accountability even when you're not in the room? And how do you decide what is the highest and best use of your time? So we're thinking about both the company, how it's gonna be funded as well as the leader.

What does some of that learning look like? Let let's say since you started with the residency, got 8 weeks. Right? You're trying to work on these 3 great buckets, and I really applaud you to I'd like that model that you're using. You know, it's not just about product market fit. It's not just about getting investment ready, but creating culture and leadership. That's one. I I can just talk about that all day. Listeners, if you are hung around here for a while, watch so many impact brands just smash their head against walls that they wouldn't necessarily be smashing their head against if they paid more attention to team and distributing the mission and engaging folks and finding ways to share even in equity startups. You know, we use equity in a certain way in the impact world, but sometimes we don't share the resources very well.

Honestly, in this space, we don't think carefully about making sure that the benefit the financial benefits of a company are are shared in a distributed way, and then we wonder why our folks are not always as engaged and excited as we are as a founder. Right? So to think about leadership and that journey to a thoughtful and inclusive CEO that we're not just trying to get the world to change, but we're baking certain things into the culture of our start up. I could talk about that all day, but you're you're already working on that. But give us give us some examples. Like, how how do I'm I'm a founder. I got this idea. It's tech, but these are, like, big things. Maybe I haven't raised a ton of money before.

Maybe I've never built a team that is gonna scale to a 100 people in my 1st year or 2, and I'm like, I don't know how to do that. How do you what does the learning process look like at Healthsea?

Yeah. It's multifaceted. So, you know, we we do things that sort of traditional workshops. Right? And we try to to truly make them workshops where folks are interacting with your former operators or investors or whoever it is that has the subject matter expertise for the given topic that we're we're talking about and getting sort of knowledge that they can most immediately apply to the the functioning of their business. Sometimes that's about how to how to grow and scale your team and and do that in a way that's responsible, but also responsible for the employees, but also takes care of what you need to take care of as a business. Sometimes that's this is the full range of capital that's available to you, and this is how you should be thinking about it based on where you're at or how you understand a cap table, right, when you're going to a conversation, with with potential equity investors, whether angels or VCs. So there is that kind of knowledge transfer hearing from subject matter experts and figuring out ways to deploy it immediately. There's also peer based learning.

So with something that we do, something called pure case consultations, where founders are coming to their their peers with a particular problem. One of the ones that I already alluded to that we often hear is founders talking about, you know, I've made my first hires. I'm just struggling to figure out how do I get the team to work in the way that I wanna see them work? How do I get them to have the same attention to the mention and this criticality that I that I have? And, you know, hearing from others about how they've done it, how they've struggled, and also getting some good feedback on you know, from your peers about what they're what they're hearing. Then there's also connectivity. Right? How do we not only connect you to your peer group, to the now 500 plus alumni that Halcyon has that will also have many shared experiences to others in the ecosystem are gonna support your growth. So that's other investors, that's other potential partners and or clients, mentors, and advisors really surrounding you with that network of folks who could be supportive. And then particularly on the leadership piece in our residential program, we pair folks with leadership coaches, trained coaches who have experience working with executives and can really help the founders think through some of these big challenges that that we that I that I just mentioned. And the leadership coaching piece is really interesting.

I think that along with the community, it's the one that the founders come in potentially most skeptical about and leave the most impressed by because it can be really hard to say, I'm gonna take an hour or maybe a half an hour a week to talk with somebody and you'd feel in what feels like professional therapy. And then they walk away with these moments. Right? You know, we had one session with a leadership coach where she did an energy management work exercise. And it sounds a little woo woo, right, if if that's not something that that you are typically engaged in, your founder, who's describing every day. And we talked about sort of the need You know, you you can be in the performance quadrant, and you can and and then you reach burnout. Right? And the the coach described that you cannot actually go from burnout back to performance, or you actually have to to to go to recovery before you can do that. And to watch this founder is an incredible woman who's doing great work, supporting other women founders through financing and and other vehicles, to have her see her have this revelation about sort of how hard she was running and how in the long term that was going to have a negative impact on the outcomes from her business. And that's sometimes how leadership coaches can help us reframe things like wellness or self care, which can, you know, there's times when it seems a little bit indulgent or lack of focus, but recognizing that it's like an investment in any other kind of investment.

Right? And so that's kind of the range of things we provide. And you can see that's it is a broad range, everything from workshops to getting 1 on 1 coaching. And then a big piece of it, and actually how I came to Halcyon is working with our pro bono partners who are also bringing in other expertise. I actually mentioned that I came in through a pro bono partnership. I was a consultant at Deloitte, and I manage a relationship that still exists to this day 10 years later, where Deloitte is actually pairing consulting teams with each one of our founders and giving them that pro bono support. We've worked with legal partners like Arnold and Porter, Goodwin, Baker Botts, and others that provide legal pro bono services and and, you know, for a startup founder, getting the access to that that kind of support for free is huge. Amazon Web Services provides both cloud credits as well as the technical assistance and guidance. So it is us.

It's what we're doing. It's a community we're building and then also crowding in others who can provide support to our founders and giving them that range of experiences over, you know, 8 weeks if they're in the house over actually 6 months in both in person and virtual if they're in our intensive program.

I'm sitting over here smiling, Dan, and the reason why is partially because I do leadership coaching. That's one of the ways I make my living for Impact Brand. But use the use the image of running, and I'm a ultra marathoner. And a dear friend of mine here in Albuquerque, shout out to you, Joe Wissing, runs a business. He's a running coach. Probably the busiest running coach in Albuquerque is business called Run Albuquerque. And I learned from Joe who's training some of his athletes. And when he was getting certified, I was one of his guinea pigs.

Right? And with distance runners who were pushing too hard, I watched Joe say to people like me, look. You were trying to run at a sprint pace for an ultramarathon distance, and you know what happens to the human body when you do that? It breaks. Right? Do you wanna break your body? Because you are on a direct path to break your body. Right? And I literally said those words to a leader in a leadership session with a wonderful female founder who was just busting her tail because she's so passionate about the impact area. But she's she's saying to me, I'm going too fast. I can't keep this pace. I can't keep this pace. And I'm like, you're right.

You're gonna break. You know what you're gonna break? Your psyche. And we don't want that to happen. Right? We need we need to build in you can sprint or you can then you need more recovery or you can adjust your pacing like you were in it for a marathon. And, again, you're talking to an ultra runner, like, this is not a theory, founders. You have to choose your pace for you have to you have to consciously set your pace for the distance and the event that you're trying to do. And a startup is usually not a sprint. There might be sprints in the journey.

So, anyway, I just wanna say, anybody who thinks that energy management is woo woo in this space, I have seen it, and I'm sure you have seen it. Unfortunately, a lot of founders break themselves. They break their teams. They break their relationships, and you don't wanna do that. Your relationship with a partner or a kid or your body or your mental health, make sure you're learning in whatever context you can about setting pace, recovery, and how to be sustainable because these issues that we're dealing with here feel and are so critical, but we have to plan for our humanity along the way, or we break things that we don't wanna break.

Absolutely.

So let's do this in a moment. I wanna ask you about success stories, some of the strategies you'd have for somebody who isn't in the Halcyon, couldn't yet participate in a program, but maybe there's some ways they can learn from you, where you're going in the future, and a bunch of other things. But before we do that, I just want to take a quick break and hear a word from our sponsor. Are you passionate about making a difference, but feeling stuck on how to take your mission driven business to the next level? You don't need a lengthy coaching program. You need targeted advice from someone who understands the unique challenges that social entrepreneurs face. With my strategy session package, we'll focus on your most pressing decisions, whether it's clarifying your value proposition, optimizing your marketing strategy, launching a new product or service, or adjusting your pricing to align with your mission. These sessions are perfect when you know the direction you wanna go, but you need someone with the experience to help you get there. If you're ready to unlock your potential and amplify your impact, book your strategy session now.

The link is in the show notes. So welcome back, everybody. I am here with Dan Barker. We're talking about the wonderful work that Halcyon does. And, Dan, before the break, I was saying, I really would love to hear a success story. Like, give alright. This all sounds good in theory, but, like, give us, the let's use your 8 week residential program because that was your prototype. Right? Like, somebody who came in, great idea.

And by the time they kind of aged out of your program, you had really moved some of the needles that you were aiming to move. What did that look like?

Yeah. I mean, it was we it's hard to pick 1. And then glad you asked for success right now. What are your favorites? Because we do we never pick favorites at all.

Oh, no. That's like that's like being a parent. You're not allowed to have favorites. Right?

Yeah. Yeah. I'll give the example of one of our founders who who came in fantastic. Right? So I will take credit for the things that we can take credit for, but we there's a selection bias. We select amazing people to join our program. Right? So they're coming in with with great ideas and any great products, and our goal is really to accelerate their journey. So preface all of that, but it's in a company called Trussell Labs based in India. That's really focused on helping the blind complete their education journeys by doing something that seems very simple, but in practices can be quite difficult translating handwritten texts.

That's not in Roman script to, to voice. Right. And doing that across, starting with Indian languages and now doing that across, you know, tens of languages, maybe 100 at this point. And they created this tool to be able to do that and what they were able to really focus on during their journey at housing. They were already serving thousands of people when they joined us. And we're thinking through what is the right way to grow and scale. And one of the things that we realized and part of the the thing that I think we can be overly bullish about in the social enterprise sector is talking about fundraising. Right? And talking about fundraising particularly for equity.

It's the thing that that we all that we all promote. It's the thing that ends up in headlines. And so they come in came in and thought, okay. Well, how do we figure out our fundraising journey? How do we raise equity? And this was a company that was already profitable, already generating either substantial revenue for being at the stage that they were. And we're able to have the conversation about, well, why do you wanna raise? What's it for? What does your growth plan look like? And then it was a recognition that, actually, our growth plan could be fully enough be enabled by the revenue that we're currently generating and that we could focus on growing over the short to medium term to be in a position that when we are ready to raise and bring on equity, that it will not only preserve our own position in in the company, our ownership of the company, but we'll be poised for that exponential growth that is actually best aligned with with venture capital. And I think the thing that I always say as a former strategy consultant that what you're not gonna do is just as important as what you're going to do. And it could have been they came here and spent 8 weeks just focused on who are the VCs we're gonna talk to, how are we gonna raise capital, instead of what what they ended up doing was, how are we gonna enter these core markets and get to scale in these core markets and deepen in in the what is the largest market on the planet? When it talks to a number of people, which is which is India, which is where they started. And that it enabled them to focus their time and their energy by taking a step back and saying, what's the real goal here? It's not just being, you know, hitting the metrics, that others have and externally or the things that that we that we validate externally, but it's really about growing this business and what's best for that.

And now they are raising. They were just on Shark Tank India and got an investment. Nice. And and in such a better position to do that. And so I think it's just a great example of, again, also founders realizing that that we we bring lots of resources to the table, help them reflect on where they're at, where they're going, and that they also have all of the things that they need innately to succeed within them. And that was like a really good case of seeing that. I mean, I think, you know, we, as Halcy, and I wanna do a better job of promoting those kinds of story stories. And we, as an industry, would love to do a better job promoting those kinds of stories and focusing in on the depth of the work of the the scale of the work and the impact of the work versus saying, well, they raised x amount in a series b, and we won't hear anything about it until they raise a series c or until, you know, they've gone under, and that's the headline.

I think there's a lot of work that we can do to to kinda transform those stories.

Awesome. I love that. But sometimes, what the the road not taken is as important as the road you choose to take. I love that wisdom. Yes. Thanks for mentioning that. So let's give our listeners a sense. Right? So we're talking, first of all, congratulations.

10 years celebration. Not not that. When when was that that you celebrated 10 years?

That was actually a month ago. Oh, wow. So it was a couple weeks, but it's it's already a month ago. Yeah.

It seems like forever, but congratulations. Right? And 500 companies over the course of those 10 years. So do the math, listeners, about 50 a year. That's pretty robust given the kinds of comprehensive and the depth of the wraparound support that you're providing. Right? And one of the things I think if I'm a listener, I was saying, wow. I've got a climate tech company, or I got a health tech company, or I got an equity tech company. I should do this, but you can't help everybody. Give us a sense of, like, who's a fit for Halcyon and and what kind of companies might not be a fit at least yet.

Yeah. I you know, it's a few things. One was a stage. Right? I mentioned that we're we're now looking for folks who are coming to us with a product. So, you know, if you're at the stage where you've got an idea or you've just got a business plan, that's great. And it's will be a time for you to apply later for for us because we're we're looking for folks who are coming in with a product. So that's that's number 1. The other is and, you know, we we kind of look at companies and that we rate rate them as we go through the applications on 4 metrics.

1 is innovation. You know, how novel and new is is the the solution in addressing the challenges trying to address. We think about the scalability of it. We think about the potential for impact, and we think about the team. Right? So those are kind of the four factors we're looking at. The things that I think will most often knock folks out early on is when we think about scale. Right? What is that scale potential? There's some folks who are building businesses that might be good brick and mortar, traditional small, medium sized enterprises, which are fantastic, super necessary in the economy of some some time in my previous world supporting those kinds of businesses. Not necessarily the right fit for us because we are looking for when we think about scale, companies that will have the potential to impact 100 of 1,000 or if not millions of people.

Right? So that scale is is one of the the the important pieces there. And the other is impact. Right? And that is either that can even within the issuers that we've defined, how climate, and equity tech can be a little bit in the eye of the beholder, which is why why multiple people read every single application that we received to ensure that that that is eligible for us to ensure that we're getting multiple perspectives on that. But if you're a company that does not have impact at the core of the business model, it's not the right fit for us. And I will make a distinction here. There's some great companies out there that are, for instance, selling apparel and on the back end, maybe making donations of apparel to as a part of of their business. It's not necessarily that as their business grows, the impact grows because they've got kind of something on the back end versus the company that is starting with the thesis. I'm a financial services provider, and my core goal is getting folks who are currently not banked into the banking system so that they can improve their savings, build wealth, and reduce debt.

Right? And by the nature of that company growing, we know that that impact on that consumer is gonna grow. So that's that's something that's also an important distinction. We're not looking for companies that are you're going to be doing good and and doing well. We're looking for companies that are gonna do well by by doing good.

Beautiful. That triple bottom line is not a light touch. Triple bottom line. Right? People profit and plan it. That's that's baked into the DNA of who you're looking for. And those 4 criteria, folks, they are on the website. I'll put a link so you can go see what they're looking for in Halcyon's own words so, you know, you don't waste your time and you don't waste their time. Like, you know, let's make sure we're doing our homework so that, you know, it's a good investment for everybody.

Cool. One of the questions I have for you, Dan, I was reading, you know, the economy is a little wobbly, and overall, the amount of investment through VC and angels in 20 24 is down over 30%. I read 38% since 2023. So in 1 year, pretty significant more than a 3rd drop. Right? What what does the state of the economy you know, we're we're coming into q we're we're in q 4 right now of 2024 as we're recording this in our middle of October. When you're, like, reacting to or adjusting to market forces and there's less overall funding, has that impacted how you all are operating, and what kind of work is happening in these intensive programmings just in terms of there's less funding to go around? And are you having to respond to that as founders come and are doing the strategy work and planning about how they're gonna get their plane off the runway?

It absolutely does have an impact. So one thing that I will note is that over 70% of Halcyon founders are people of color. Over 70% of companies that have been supported by Halcyon have been co led or led by a woman founder. Those are groups that are already used to having, unfortunately, to work and build building and scaling their businesses without necessarily venture capital, particularly at their early stages. And so there is absolutely you know, we see a downward trend. In some ways, it's a a pie that is decreasing and then the slices that those founders are getting is even even smaller. But we're also seeing a lot of resilience and folks who are already focused on building really strong business models focused on revenue and profitability at the earliest stage, not just kind of coming under the myth that we can just grow, grow, grow, and lose money until, until some of the magic all happens. We were already working with a lot of companies that look like that.

And I think that we've had to emphasize that even more. Right? And it's also why for us investment readiness isn't focused on one particular part of the capital stack or one particular asset class. Venture capital is really important. It's been a driver of innovation in the US and across the globe, but we also know that folks have to think about other other ways of getting supported. And, you know, there are, you know, luckily enough in some places, particularly in climate, some new non dilutive tools and money that's flowing. But in the US, we're seeing that through inflation reduction act and and and ways that folks are getting access to to support. We're seeing that through some of the the small business lending as well as the innovation grant funding that's come out of out of government and even foundations and philanthropy getting more interested in supporting for profit scale business models that have impact. So again, it's really helping folks get a full sense of the land the of the lay of the land, be really crystal clear and crisp on creating models that are going to generate revenue and be strong businesses because we're not going to have the same just VC fueled growth that we had in, you know, the pre 22, pre crypto winter era.

And in some ways, you know, I think the folks have argued and that that that may be a good thing. Right? This return to kind of some some fundamentals when we're looking at what a business should look like. So I think it's it's all of those things. Our founders are already working in a tough environment and they're showing their resilience and, you know, we're trying to support them and and giving them that broader sense of what the capital stack is. And and again, that that focus on creating really strong business models.

So let's say I'm a founder. And and by the way, our founders who listen to the show are pretty similar to your founders. You know, marginalized founders who haven't historically had access to capital in the same way. So to somebody like that who says, Dan, this is awesome. I love what Halcyon is doing, and I wouldn't qualify or I can't you know, I got a family. I can't pick up and go to DC for 2 years. Right? That's I I mean, I'm sorry. 2 months, 8 weeks.

2 years is a really long time. 2 months. Right? And, yeah, I like what you're saying. Like, can you distill down some of the learnings? Can you help our listeners? We have more than 500 listeners. Right? And so how can what you've learned and what Halcyon community has learned, how can our listeners you know, go take a look, listeners. If you think you're a fit, please go apply. It will be in the show notes. Right? We'd I'd just be thrilled to hear that somebody heard about Halcyon on this episode and applied or 10 people got in.

But we have more listeners than you could take in in the next couple of years. So how could somebody benefit from if you were gonna distill down or point them to a resource or make a couple suggestions based on this pretty big sample of and this very holistic approach? What what would you say to one of our founder listeners who fits that demographic, really resonate what you're saying, wish they could go but can't right now, and they'd like to learn?

Yeah. It's a big, big question to think think about. One of the things that I've always talked about and this is actually something I took from my experience working in sort of big corporate America, but also thinking about products that are focused on low, middle income consumer, maybe bottom of the pyramid, however you wanna will call that segment, was to fall in love with the problem and not the solution. Right? And that's something that I think a lot of us in who work in this space often say, It can be really exciting to create a widget, a new product, and solution. Are there very few cases that I've seen from any founder that the first thing that you create is going to be the actual thing? But the founder that I've seen most successful are the ones who can constantly go back to their customer and figure out what is the problem. And if it's not working, what's the gap that it's not solving for? Sometimes you get folks who say, well, I just need to teach people more about how to how to use my product, how to do use my thing. And that's always kind of, for me, a failing premise. Right? The people have a pretty good sense of what's gonna add value to their lives.

So if they're not engaging, remember that you're what you're trying to do is solve their problem. Right? You're what you're not just sell the thing that you've created. And I think going back to that principle will help founders weather the storms, weather the the ups and downs of having to to pivot in dealing with the doing kind of, oh, with the with the whims and fantasies of the folks that you're you're engaging with. And then speaking of whims and the fantasies, the other things I would talk about is for folks who do decide to take on investment, that focus on the the so the on the problem that you're solving for will also provide a north star of who you want to bring along with that journey And who is also interested in seeing you solve that problem is gonna be supportive of you along that journey. I have a great example of a founder who came to the room maybe 2 years ago. Dynamic young woman, probably 22, 23 years old, had some term sheets offered to her by some really big names in this space. And got the just got the feeling that when she was talking to to these folks that they were not aligned. They were not bought in to her mission, and she's been so incredibly impressed.

Her foresight and her fortitude to say, you know, you're you're you're not in this with me, and I'm actually gonna turn you down. It's really hard to turn money down for any of us. Right? Everyone in nonprofit, it's hard it's hard for us to turn to turn money down. But that knowledge of what you're trying to create, who you're solving for will give you that sense to be able to make those hard decisions and choose who's gonna be along that journey with you. And I think that's true of you can put investors in that category. You could certainly put cofounders in that category. You could put in potential partners in that category. So I'd say those the core of it is, you know, that that who and that why, letting everything else kind of drive you from there and and guide your decision making from there.

Love that. Fall in love with the problem and not the solution. And if you are gonna take money, make sure you're taking it from people who also love your problem. Right? Yeah. That are aligned with you and really going deep. Such great advice. So, Dan, I could hang out with you all day, and I know you're busy. I know our listeners are.

As we start to wind down, give us a vision. Like, where do you think Halcyon House is going in 5 years from now? What does it look like?

Yeah. 5 years from now, I really want us to not only be able to continue to add new founders to to our story through the programs that we're running, but actually to grow and scale alongside the founders that we're supporting and to do that in ways that maybe we can't even can't foresee for right now. We created our investment vehicles in order to be able to close the gap that we saw with our founders. Right? Or the Halcyon Fund, the the Angels Network of Investors, our microloan fund. And I think we're now even seeing a further evolution of other companies grow in scale. There's not yet a series of tools that is built to support purpose driven, impact driven businesses. And I would love, yeah, as we grow and grow alongside them, to be able to put provide more tools for those founders to grow as, you know, when they're done with acceleration, when they're done when they're really thinking about how to to grow as a business, that enable us to continue along that that journey. That could be financial tools.

That could be ways that we impact a broader ecosystem that makes it the norm than the expectation that businesses are having a positive net impact on the planet and on society. That's really, for us, the the vision moving forward. We've got an incredible group of over 500 founders, as I mentioned, and we'll be adding more in the next few years. How do we do really well in our programs, but also stick with them for that this long journey, which is entrepreneurship?

Final question, Dan. If there was something you were hoping we were gonna get to today and we haven't talked about it yet, or there's something you wanna leave our listeners with as we say goodbye, what would that be?

Yeah. And we are in a time when there's a lot of headwinds, and it feels like insurmountable problems, whether you're if you're sitting in the US, the political environment, if you're on the planet, the, yeah, the crisis the humanitarian crisis across the globe, the climate crisis, it can seem really overwhelming. The thing that I mentioned before that I always go back to is the core optimism that founders and innovators have. And I'm a native New Yorker. It's easy for me to be cynical, but the work that I do every day really allows me to to see a world that is quite different. And I think that having that as a touch point when the news seems overwhelming, that there are people out there who are really working hard to to change to change the world. And, you know, we there's something that we can we can do about it. There's some folks who are founders and folks like me whose job it is to to support the founders and help them along their journey.

So that's the the thing that I would leave is to to to hang on to that sense of of optimism and possibility.

Awesome. Then if somebody resonated with what we talked about in this episode and they wanna get a hold of you, what would be the best way for them to do that?

The best way would be via email, d.barker@halcyonhouse dotorg.

I will put that in the show notes. Dan, thank you so much for the important work you're doing, and thanks for sharing these strategies with us today.

Thank you.

So, listeners, let's do what we do. Especially, go find your people who are health equity founders, climate founders, and equity tech founders. Let's get the message out about the awesome work that Halcyon is doing. Also, a reminder, we love listeners suggested topics and guests. If you have an idea, please go to the AwarePreneur's website, and on our contact page are 3 simple guidelines. We try to be really transparent what we're looking for. If it feels like a fit, please send your idea in. And lastly, I wanna say thank you so much for listening.

Please take really good care in these intense times, and thank you for all the positive impact that you're working for in our world.