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hello welcome to stack genius the podcast for data-driven investment professionals my name is sylvan I'm greeting you from berlin today and also I'm greeting steven who in fact is joining us from beautiful thailand somewhere right absolutely nice to see you so then so normally I think you guys are situated in brooklyn if I'm not mistaking so this is your your nice little gateway to get to somewhere warm right This is definitely an escape, although I have no complaints about Brooklyn. I love Brooklyn. Very good. We will speak at Brooklyn restaurants after this call. So, yeah, thanks for joining us today. So, I mean, you are a co-founder of Totem. When you read your website, you know, Totem seems to be a rather holistic investment suite, I think you're speaking about. an investment operating system. Can you tell us in a minute, you know, what do you do? So what is included, what's not included? Sure. So I think the word CRM gets thrown around a lot. It means a lot of different things to different people. What we're building is what I believe to be the most holistic fund operating system that gives fund managers, specifically venture capital funds, the ability to understand how their investments are doing, how that rolls up at the fund level, and how that rolls up at the firm-wide level across all the funds. And when I was starting a venture capital almost a decade ago, everything was stuck in spreadsheets. And I think people were hoping for tools to come onto the market to help make the process of running a venture capital fund more efficient. And here we are just about a decade later. And I think we have an actually exaggerated problem we now have you know hundreds of tools that have come onto the scene for you know point solutions for things that funds do but I think what funds still crave is something that really stitches that all together that gives them visibility into what's going on and that's what we have been building for the last several years That's a very good overview. And do you have a specific size of funds that your tool is well suited for? Or is it agnostic depending on whether you're a PE or a pre-seed VC? So we're definitely focused on venture capital funds, and I would say our clients today fall into one of three buckets. In the smaller range, I'd say there are funds that are just getting started. They don't necessarily have some of the pain points that a tool like ours solves for, but they can put in place a structure that will scale with them and avoid some of the pitfalls that some other fund managers who don't think about it until much later have. uh would run into um I'd say our kind of sweet spot are funds that are going from fund one to fund two fund one maybe was right back of the napkin now they're institutionalizing their process some of their companies in fund one have grown up and they have more advanced needs for collecting information from those companies and that's typically another point that funds will look for for software to professionalize the operations and then the third bucket are really funds with some sort of complexity Whether that's a complexity in the number of companies that are in their portfolio, like an accelerator, or an angel group that has many, many SPVs that they're managing, or funds with very specific needs for detailed information on each of their portfolio companies. That's super helpful. For me, it's always helpful to get a glimpse at the actual tool to get a feeling because words only mean so many things. Can we just look at the tool a little bit together maybe to make it more tangible? Sure. Awesome. Then if you start sharing, I will put you on. Here we go. okay perfect so I'm jumping into a portfolio company so imagine you're a venture capital fund and you you've invested in this company um here you get a really nice overview of this particular investment so you can see on the left hand side some high level information about the company the key contacts the location etc and on the right hand side some key metrics about the investment how much you've invested what is that valued at you know what is your latest ownership And scrolling down the page, we really have all the information that, again, you might care about for this company. Your full list of transactions that come from your back office, the valuations of the company, the financial performance of the company as reported by the companies, the cap tables of the company, which got pulled in from Carta, your relationship to the company. So all the people that work there, as well as any of the emails and calendar events that you've had. and a document repository for this. So really in one single place, if I'm a fund manager and I want to just understand my investment, I can jump in and very quickly see all of the information that I might care about on each investment. And how does all this data get populated? So this is manual input from somewhere or how does it work? So I think there's really three core pieces of data that we bring into the system. So number one is really going to be from your back office. So we tie to your back office in whatever format that they're currently recording things in. to pull in all of your transaction level details and valuation details. That's kind of component one. Component number two is what comes from the company. So we have the ability to set up outbound requests where you collect information from your companies, and they would submit their financial data on a monthly, quarterly, or yearly basis, as well as their cap tables. So that's kind of the second piece is what you request from your companies. And thirdly is what lives in email. And I think email is a treasure trove of information that is currently overlooked. Things will get sent to you in an email from an investor update. or a board deck, and that would often just sit there not really being useful. We've actually built AI, and I want to show you this, I think you're going to really like this, that will actually go into the investor updates and pull out insights using AI. Simply by you forwarding an email to our system, we're going to be able to, number one, figure out which company in your portfolio that's associated to. But number two, and more importantly, actually go into the body of the email as well as any of the attachments and pull out insights for you to be able to look at. I like that actually, those little summaries and even the indication whether it might be positive or negative update. So where does it live in email? So do you have to connect your Office or Google Workspace or how does it work? So we've taken a different approach than some of the other tools in the market that read your inbox. I think that there tends to be a lot of noise in email, and I think there can sometimes be privacy issues. So we actually have set up a forwarding system. So if there's something relevant that you as a partner receive that should be included in the firm-wide tool, you simply take that email and forward it to our system, and the system will do the rest. The system, again, will figure out which of the companies to map that email to, as well as go in and pull out those AI insights for you to be able to then quickly understand and look at. Okay, that's helpful. So it's by choice that it is being recorded. I want to go two steps back. Earlier you said that the data from the portfolio companies, the financial data, would come into this and you can set up the requests. Do the companies need to go to a specific form to a user interface? Do they send just their formats? How does that work? Yeah, so let's talk about the data collection because I think that's also unique to what we've built here. So I'm just going to jump to our data collection tool. And this is where a fund manager can set up, you know, for each company, you know, what information do they want to collect? At what time, you know, when do they want to send it out? And they'll do this for each of their companies. And I'm going to just open up an example so you can see what it might look like on the company's end. So the company would receive a simple link that they can click on. They don't need to create an account. They don't need to connect their QuickBooks. And all they do is upload their standardized financial statements, as is whether it's a QuickBooks format, whether it's an Excel workbook, whether it's a PDF, they simply upload their standard financial statements. And behind the scenes, we've actually built AI that will extract out the top line numbers. So I think the name of the game is really reducing the friction for the founders by not having them create a login. This is not a tool for companies. This is a tool for fund managers to make it easy for companies to submit their data to them. And I think, you know, this gives the companies a very easy ability to just upload their standard statements without having to key in a form and on the receiving end, the investors to get structured financial data for each of their portfolio companies. I really like it. If it works, how do you ensure quality or what's, what's the feedback from, from your customers? Yeah, I mean, we've done a lot of work to make sure that there are no false positives that get in. So I think, you know, particularly with gap account accounting statements, there are often ways that you can double check things. So for example, you know, on The balance sheet lists cash as well as on the cash flow statement lists cash, and you can reconcile those. So we have a bunch of double checks that are in place to ensure that the right data gets put into the system. But of course, I would say humans will still want to be able to review this. So there is an option that you can turn on so that you, the investor, have the ability to approve or reject every submission. What would happen is this would go out to the companies. They would upload their data behind the scenes. The data would get extracted with AI and populated in the structured format. And you as the investor can then go in and approve or reject that submission as well as verify that what the AI pulled out is accurate. I like that. I mean, I probably would want to have that before it goes out into the LP report. So I like the ability to do that. Okay, understood. So what else do you want people to remember about Totem? Yeah, so I think we kind of walk through what it looks like at the company level. Let's just quickly have a look at then being able to see things at the fund level. Yes, please. Right, so here you can see the fund. This is going to show you all of the performance metrics and how this rolls up for this particular entity. I can see, for example, by industry, you know, the count of companies. I can see my performance over time, as well as a full list of our companies in this fund and a full list of the LPs. And then zooming out one level further is being able to see things at the portfolio level. So this is going to show you across all of your funds how the companies are doing. So I can see here how much we've invested and what our ownership is. And this is just a default report. Every firm, of course, has their own unique way of how they like to look at things. And we've made it super simple to be able to come in and create reports using all the data in the system. So I can very easily, for example, come in here. create a report and see how much we've invested by a particular industry and filter that down you know to just see that and we've even gone further as to allow you to filter by transaction so let's say you didn't want to see the invested let's say you wanted to just see the first check that you've written into those companies you could even drill further I think this gives you a lot of advanced functionality for being able to query the data in ways that are useful for your internal analysis or for reports that you might create for lps Um, the last thing I'll show you here is this timeline view. So this really gives you then a nice feed of everything going on across your portfolio. So in the same way that you, you know, you'd look at Instagram to keep up with how your friends are doing, we've created a really nice and easy timeline that you, as someone working at a, uh, a fund can log into. and understand all of what's happening across the fund. So you can see here, right, here was an email that was sent in and here are all the positive and negative things and asks that the company might have. And you could easily click into this. And again, it will then open up to that email or to that document where that insight was pulled from. And this is great because at the end of the quarter, when you're going to put together your LP report, You also often will want to include some of the qualitative things happening at your portfolio companies. It's not necessarily just that the companies have been marked up, but you want to speak to some of the qualitative points happening at the portfolio. Like perhaps there are new partnerships that you want some of your companies have signed or big hires that they've made. So you can come in here at the end of the quarter and I can say, let me see highlights as of a particular date for a specific fund and really then drill down and export all of this qualitative data. So I think between having the structured data that gets extracted out of financial statements and the qualitative data that gets extracted out of emails and documents, we really then give you the ability to draw from all of that for the purposes of easily creating the LP letter that will go out every quarter. I really like, by the way, just to give you kudos. I really like the, the user interface is very clean, but at the same time, very, very functional. Um, so I think that's, that's definitely up there in the best practice. Good job. I appreciate that. Yeah, we've, we've definitely, I think, spent a lot of cycles on trying to figure out how to make something complicated, very easy. And I think. You know, one of the things that we hear again and again when demoing our tool to people is, you know, they've looked at all the different providers in the market and I think they see our tool and they just get it. They understand, you know, how to navigate it. We try to keep it very simple for the people that are just coming in and wanting to consume information while still giving flexibility to the people that are ultimately managing the data at the funds. Yeah. No, that seems to have worked for sure. Maybe if we zoom out for a second. So if I try to summarize in my head who this works for. So I can definitely see this to work for mid tier and early stage funds. I can see it work for some larger funds, but also the PE world might have slightly different requirements. So what have you seen your customers combine your solution with? Which other tools do they stack together to build their perfect world? Have you seen any best practices? I think one thing that we haven't done, because there are a number of other solutions that have created great solutions on the market for it, is the broader relationship management. Tools like Affinity, I think being the obvious one in the venture space and BuildCloud in the private equity space, they built great tools for what I would call general relationship management, whether that's creating lists of contacts that you want to bring to an event or other co-investors that you want to keep in close contact with. We're not necessarily trying to solve for that. So often when you use a tool like ours, you may complement that with a CRM for some of the more general purpose relationship management needs that you have. Just to interject, though, you do have a CRM module, right? So you do have the base functionalities. I would say we have a lot of functionality that you might find in a CRM, but we're not necessarily trying to... go after the general use cases. We really care about people to the extent that they're associated to investments that you've made or deals that you're looking at. Less so about some of the, again, general purpose CRM needs that you might have. Okay. That's super helpful. Thank you. Awesome. So looking at the time, we're almost through. So that gave me a good overview of what you guys are doing. Is there anything else that you want people to remember? Yeah, I mean, I think this is the year of AI. I think, you know, we've been building this now for many years, and I've been reinvigorated by what is now becoming possible with AI. So I think, you know, all of the providers in the space are trying to grapple with how this affects them. So I'm very excited about what this is going to enable. And you've seen some of the early signs of this working in what I demoed today, and there's gonna be a lot more to come. That's exciting. I'm definitely looking forward to speak about the next product update with you guys. I do like, by the way, what you showed, the little highlights and lowlights. I think that's already a very distinct use case that is helpful in creating value to people. maybe then almost in in closing so because you alluded to it a little bit let's speak about the industry for a second I mean there is the ai is you know looming and might become the new interface so do you see a future and you know nobody can tell when it happens is it two years five years or ten years do you see a future where the user interface becomes irrelevant because ai will be the new interface I think there will definitely be certain things that are currently being done in software that might get abstracted away to a chat interface. I do think though, with chat becoming more prevalent, in a way, the visual aids become more important as well. So when other use cases start moving to chat, I think what remains becomes very critical to be in a visual format. So I would say AI is going to aid more so in the data input rather than the way that you consume this um so I think that's the trend at least in the near term I mean who knows you know beyond that what may happen but I i would I would guess that uh the data input is going to be the thing that gets affected first very interesting Wow. Thanks, Stephen. A lot of stuff in there. And I hinted at it at the beginning. So my only restaurant tip for Brooklyn is Champ Steiner in Williamsburg. It's really good. It's vegan, but it's really, really good. And I will send you recommendations for good islands in Thailand after this call. There we go. There's really beautiful places out there. So we won't keep you from the beaches any longer. Thanks for being with us today, Stephen. And looking forward to Connect Next. Thank you very much, Sylvain. Thanks for having me. All right. Take care. Bye now.

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