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Hello, welcome to Stack Genius, the podcast for data-driven investment professionals. My name is Silvan, and I hope you have a smashing day wherever you are in the world right now. Today, I'm joined by Josh Firstes, who is joining us from Chicago today. How are you doing? I'm doing great. Thank you for having me. So before we get started, I recently had a conversation about deep dish pizza. We have to speak about Chicago pizzas if we have enough time in the end. But that's not what we're here for. We're here to speak about Incute. You're the CEO and co-founder of Incute. I think it's an awesome product. I had a brief look at it. If I would describe it, then you specialize in automated financial data gathering of portfolio companies. Would you describe it this way? Or what do you think is a good 60-second version of what Incute does? Yeah, I think that's pretty accurate. Ultimately, it's an investor relations and portfolio monitoring product. And I think what's special about you guys is that you connect to the financial systems of the portfolio companies very well, right? Yeah. So we actually support, well, QuickBooks, FreshBooks, Xero, NetSuite, Dynamics. We support 95% of the global accounting system. That's cool. And so then basically the portfolio company connects their QuickBooks, say, and then what happens afterwards? Yeah, I mean, so it's super simple. They log in, they connect their QuickBooks. In the backend, we're normalizing and standardizing all that data. They can create reports like monthly investor updates with this information so they can communicate with all their investors. But then on the other side of the platform, as the investor, you're getting all this information live. And it's worth noting that because we're going through their QuickBooks or Xero, these systems actually have back APIs to their bank account. So we can gather all the banking data as well. Now, we're not taking in individual transactions. It's more like high-level P&L balance sheet stuff. We do reconstruct all the balance sheets and P&Ls as well as the capital statements, stuff like that. You can get that on our platform. You can download those instantaneously as Excel documents and CSVs at any time, as well as get all the investor updates in the company. And you can see all kinds of trends, what the EBITDA of the company is right now, how much cash on hand they have, how much revenue. all about having to talk to the company itself. That's actually quite cool. I mean, a lot of portfolio management software relies on email reminders being sent out and then some sort of upload happening. Sometimes it's AI ingested, sometimes not. So this does give you very trustworthy financial data directly out of their systems. Yeah. I mean, the reason we did it this way is ultimately for accuracy. So when you're dealing with, I mean, like even emails or people sending PDFs or their own reports of some kind, a lot of times these reports are done, you know, a month before, et cetera, et cetera. It's always lagging data. So you're always working on old data. So if you're trying to solve a problem as an investor being like, oh, this company's kind of low on cash, it's better to know sooner than it is to know a lot later. Also, there's significant problems with like portfolio companies going dark when they're in a bad situation. I don't know if you've experienced this yourself. So it really helps in the whole strategy and execution piece of it, as well as like if a company is going really well, it can help on the pro rata piece where you can get in on an investment before everyone else knows it's going well. I don't know if you implicitly said that the data is updated in real time or daily. So can you check every day in the system or is it monthly uploads or how does it work? Yeah, so you're familiar with accounting data, of course, and I'm familiar with banking data. So there's some pieces of our data, I'd say, I don't know, 40% of it that's updated in real time. You can think about stuff like that, like cash on hand, for example, is updated in real time. It's really easy to understand that. But something like EBITDA is going to be updated when the books are reconciled. Of course. So our data ranges from completely real-time to monthly is the absolute latest that you would receive anything. But my question is, so once the data is in their system, you have it in real-time, or do you also? That's correct. All right, understood. Yeah, yeah, yeah. So we do get all the data in real-time. That's a good clarifying point. We just flag it as being like, hey. Yeah, that makes sense. I'm super intrigued. Can we look at how that works together a little bit? Of course. Where do you want to start? You decide. So maybe the reporting that you get out of it would be awesome. Yeah, so let me bring up something. Actually, I'm just going to show you our website, and I'll kind of work our way backward from there. So this is a standard report that a portfolio company can send via enqueued. They can customize it, their wins, their performance, challenges, asks, and then a few different metrics here. Everything here is customizable, and we're working on making this even more customizable so we can do cool new things in the future. The way that we get this information is obviously from the accounting data as well as the company can enter some of these things. I'm going to move over to kind of the investor side and start from there. Is that cool? Can I double click for a second? So when you spoke about that, so this report, the investor, you said they can send it. So does the investor get this into their dashboard or get a PDF? How does that work? Yeah, so the investor gets an email every single month that comes into their inbox that lists all their portfolio companies that have sent updates. And they click that, and then they can just open the PDFs. And then also, we have a... coming in a patch like next month basically a sidebar where you can view all previous investor updates and you can grab them out of the software itself you can also generate these reports inside of our software from the investor side without having to request the company obviously sans the qualitative data at the top okay that's helpful thanks yeah So I'm going to show quickly, this is the investor side. We have a custom logo uploaded at the top. As an investor or a lender, you can upload and brand this as your firm's name. Then all of your communications coming out of InQued are presented as whatever your VC firm or your bank may be. To invite a company, it's super easy. So you come over here, you add their email, their company name. You can add multiple at the same time. It's very easy. When the company gets added in, it gets populated here. Obviously, this is a company that's completed its onboarding. As you can see, we're on the staging environment, so this is fake data. We can't actually show real company data currently for privacy reasons. So I click into this, and I'm immediately looking at this company's cash over time. I can download their balance sheet here. I can create the reports that we were talking about earlier right here. We have additional metrics like liquidity, runway, et cetera. Revenue, this is where you download an income statement, Excel or CSV. Burn, and then a variety of other metrics down here. What's worth noting about these Excel documents, by the way, is that these are standardized in form. So if you, a lot of bankers and VCs, they really like creating kind of macros and things like that. I'm just gonna pop this up as an Excel window very quickly so you can see how this looks. But it comes out like this. OK, so it's got the full information, basically. Yeah, it's everything. Nice. But so a lot of people like these. They like them standardized. They see a lot of value in that. It seems like something small. But if you are getting tons of different Excel documents from tons of different startups, it can be very confusing as an associate or analyst to switch between them when everyone has them organized differently. Most definitely. From a security perspective, Enqueued is SOC 2 Type 1 currently. We have all kinds of things included as well. So there's two-factor authentication. We have full audit logs. Come in here and you can easily add users, control their permissions, everything like that. And that's basically a simple overview of the investor side of this product. As for the founder side, the first time they log in, they will see a screen like this. The reason I'm pulling it up in Figma is because this is a new user experience. So they only really see this once. Of course. So the user creates an account. They can log on to Google. They select the accounting software that they want to use. They click next. And then they will see a screen like this again, dev site. So we're not showing any actual real data on this company. When the company comes in, they will see all their financials. They can go into a deeper dive on this and et cetera. They can see all the same information the investor can, and then they can create those customer reports that we were discussing earlier. So, okay. Okay. Yep. and then they can preview them, send them, and then they can choose who those get sent to, and they can also download it. It makes it very easy. So if I'm trying to think through what we've just seen, so you do get all the financial data. You get it in the same format for you as a VC. The port co has the ease of use, basically. They... then need to put their wins into this window. So if not all my investors however use this then I have to put data here or copy it from a report that I produce anyway right such as maybe metrics I don't know maybe I'm used to giving cac or maus or some sort of metric um so that's not included right Yeah, we're getting there. So we're going to make this report more and more customizable, which will include custom metrics, adjusted metrics, things like that. So the companies can put in things like CAC. They can put in things like monthly active users, LTV, etc. These things that more are going to be calculated somewhat on the more or less on the company side and can't really be extracted from accounting data or CRM data or anything like that. It's super hard to do that actually, right? I mean, you can connect to some systems such as, I don't know, Google Analytics or Shopify or these type of things, but it's so diverse probably to build all those integrations. Yeah. And what we've gotten down to is that there's, this isn't a fully quantitative thing. Like we want to solve the quantitative problem here, but it really is a storytelling issue for the founders. Like the founders want to be able to, or larger business owners, they want to be able to tell the story of how their company is performing. They calculate these things different ways. It's kind of like when you look at a TAM and people might be able to justify how they created their TAM in all different kinds of ways. And just by typing it into ChatGPT, You know, it can do all the math, but it's not going to end up with the number that founder might have ended up with. It's about how people justify how they've come to certain conclusions. So I view our job in that perspective is letting the founders tell their narrative in the most streamlined way possible. And then making it easy for them to send over the financial data and the qualitative data to back that up. I hear you. Yeah, that makes sense. awesome so maybe trying to think in tech stack for vcs for a bit so they will have their crm somewhere they might have some sort of portfolio management system that helps them with their lp reporting in turn and they could have this that is tied in with all the portcodes for them to get the base data right Do you typically see integrations with specific other tools, or is that invisible to you, how the VCs use you? Yeah, so upon request, we get a lot of actual requests for this. Connect Enqueued to their HubSpot, their Affinity, their Salesforce, things like that, to... In you know, this is more of a custom thing, but we can map our data on to from their portfolio and include on to the opportunities that they have in, say, Salesforce. If that's where ultimately they're managing all of their deal flow and opportunities and those kind of things. So include in that effect can act as middleware for data gathering and data entry to make lives a lot easier. I didn't prepare well for this interview by not checking how long you guys have been in the market. So how long have you been going, actually? We started building this at the end of 22. Okay. So we are like... How do I put it? I'm trying to be as candid as possible. I know this will exist in the internet for a bit. So it is currently February of 24. We have finished all of our pilots and our betas and got all the security stuff. And we started launching into some larger funds. Um, that's kind of where we're at. Well, I mean, I actually, I have to confess that I haven't seen someone else that has all the integrations to all the financial systems done yet. So, I mean, there's other tools out there that have been in the market longer, but I haven't seen somebody do that. So kudos for you guys to do that for sure. Thanks. Yeah. I mean, this is just where it starts, right? There's going to be more and more data sources. The dream of this is to create a Bloomberg terminal for private markets. We're getting all the data you could possibly imagine. on your portfolio company, from the qualitative to the quantitative, what the founder is doing on LinkedIn or news articles about the company, as well as Google Analytics about how that company's website, how many hits their website is getting, all the way down to the important things like how much cash they have. Ultimately, I think that venture, in business in general, it's really about giving humans the best intelligence so they can make the right decisions. So, you know, we're just here to provide that actionable intelligence to people. I hope I don't do anybody injustice by making comparison, but it feels like you're building what SEPRIS has built for the PE world. You're building that for the VC world. It sort of feels like if I try to look for comparables, but what else? I mean, I'm just looking at the time. What else do you want people to really remember about, you know, in Qt? Yeah, I think something I failed to mention, or even demo, we have actually standardized encrypted data rooms on both sides of the product. For VDR, virtual data rooms? OK. Yeah, I can show that, actually, if you want me to bring that up really quickly. Please do. So like right here on this portfolio company, right, you can see their full data room. This is standardized for every company, so they don't actually need to set it up. And, you know, I mean, you can move the file to the right, to the right bucket or whatever you need to do. And then as the investor, obviously I can click on these companies and go to the data room and I can get out the files that I need really, really easily. Yeah, it's a super small feature, but a lot of people requested it because during due diligence, They want to be able to do this all comprehensively. They implement Enqueued basically the very end of the, not really the super end of the diligence process. You've done the deal screening, you've talked to the founder, you feel like you're going to write a check, and then you invite them to Enqueued. You're like, okay, dump everything into this data room and then connect your accounting. And it makes for a pretty seamless process. And we figured, not even figured, but basically told by our customers, we're like, have a data room because half of our founders don't know how to set this up correctly. And every single one has a different data room. Just make the categories so they can just dump it into the right bucket. So we're looking at the same data room every time. And I'm like, easy enough. I'm glad you mentioned that actually that is uh it's small but very handy actually yeah yeah well because you can grab all the other things so like in the meantime before we have say um a billion different apis on top of these if you wanted all of your companies like I don't know trying to think of a good example sales pipeline you know the data room is a great place for them to put the sales pipeline to put their intellectual property all these things on the side and also it's a great place because the company is getting this um on their side where, you know, they have it all standardized, but you can grab those documents out whenever you need without having to go to a hundred different websites to be like, Oh, this company uses box. This one uses Google drive. This one uses notion. This one uses Dropbox. Right. And try to figure out where. you left this document, which is a struggle a lot of analysts and associates have. They're like, you know, like where was the articles incorporation for these guys? Like what was like, where is this? Half the problem here is really where is the thing? Yeah, that's what's happening back home all the time. I ask my wife, where's that key? I don't know where it is, right? But I mean, Josh, thank you so much for giving us this very authentic inside out view. Very, very helpful. I think you're building a fabulous product. I mean, now we need to get to the more important and more sober topics such as deep dish pizza. So I did have accommodation with Ablordi from Four Degrees recently in another interview. And he was highly recommending Pequod's. So is he right or wrong? So I'm going to preface this with that I've lived in Chicago for over a decade. But I think at heart, I would claim myself as a New Yorker. So that all said, I like Pequod's a lot. We got a lot of luminatis. I've had a lot of loos. Um, but I would say that Chicagoans actually eat tavern style pizza in Chicago. It's, I think it's mostly tourists that are coming here to get deep dish. Like I was telling you like earlier, but it's like, if people had deep dish as frequently as I think people like, okay, when you're a New Yorker and you get New York style pizza, you're getting New York style pizza, like relatively frequently. Right. If you ate Chicago deep dish at that frequency, you'd have a heart attack. i know what you're getting at yeah yeah I mean I'm german and you cannot have you know schweinshaxe all the time right you will die instantly exactly no very good um so yeah so any recommendations for a specific pizza place before we close Professor Pizza is my current favorite. I have no idea where they're located. I just have their phone number and they deliver. Sounds fabulous. Thanks for sharing that as well, man. So Josh, thanks for your time. I appreciate everything. I'm looking forward to see more of what you guys do and have a fabulous day. Awesome. Well, thank you so much and I'll see you soon. All right. Take care. Bye now.

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