Perspectives on the Latest Trends in Healthcare and Venture Capital Funding

Burton Goldfield: I am so excited to be here this afternoon with all of you. Please welcome me in joining Ellie Wheeler to the stage.

Ellie is a partner at the firm, Greycroft, a phenomenal VC firm here in New York. And as all of you know, capital investment is the lifeblood of many of the SMBs in the U.S. and as a CEO servicing 23,000 SMBs, it’s right in my heart as well. Ellie leads an active investment portfolio of over a dozen firms and she has a unique advantage of what’s going on today with small businesses, with CEOs and with investing for now and in the future. Please join me in welcoming Ellie.

Ellie Wheeler: Hello.

Burton: Thank you so much for joining me.

Ellie: Of course. Thank you for having me.

Burton: I appreciate it. Yes.

Ellie: All right.

Burton: So an interesting time for companies today and investors like yourself. If I’m a CEO looking for capital today, what should I be thinking about and how is this different than approaching you a year ago?

Ellie: Sure. I still think it’s a great time to be building businesses and a great time to be investing in them, right? There is a lot of capital out there. That hasn't changed. People have raised huge funds. We’ve stuck to our core strategy, but there’s a lot of capital out there. So it isn’t necessarily a lack of capital, but there is a change in what’s viewed as attractive. Fundamentals are back, right? Growing a little bit more, growing your costs a bit more in line with your revenue. People who are, of course, public companies or private equity backed, that hasn’t really gone away, but in venture it did. And in the businesses that we back, it moved a little bit closer to growth at all costs and a little bit further away from really making sure that the business was working before we accelerated. And that’s because capital was virtually free for a certain subset of these businesses. Granted, that’s a small slice and there are many companies that don’t have access to that type of capital, but there’s still plenty of opportunities. There’s huge, kind of, tailwinds in the markets that we’re spending time in.

I spend a lot of time in digital health that is growing tremendously. That isn’t changing. In fact, it’s accelerating. So there’s still really exciting opportunities. You just have to have a compelling story for why you are going to stand out in a time where people are taking a little bit less risk.

Burton: So you brought up a really good point, which is the cost of capital is going up. I’m not sure everybody understands how that works. There’s a lot of money on the sidelines and people are more reticent about investing and continuing to invest in non-profitable companies. So how do you think about that change in the interest rates, the cost of capital as it relates to the immediacy of a company becoming more successful, whether it’s measured by profitability or market penetration or some of the other metrics that you guys look for?

Ellie: Sure. Well, as it flows all the way down to the earliest stages, right? So we're going to start... We’ll start pre-launch, right? We’ll invest in the very first round before anything’s even off the ground. We’ll go all the way to growth. So we see the full spectrum as companies eventually will go public. But we see it show up in terms. So still a lot of capital venture’s a lagging indicator. It takes a little while for what’s going on in public markets to come all the way back to where we are, but you start to see the same amount of investment own more of a company, right?

Burton: Right.

Ellie: So it really just shows up in the terms for the entrepreneur. So it is more expensive to access the capital from the part of the investor. It means you end up owning more since you’re investing at a lower price. But what happens is the market speaks. So ultimately these companies need to be set up for whatever comes next. So you have to do things rationally upfront, but it has certainly changed. And so have the timelines.

Burton: So you have the good fortune and sense to be part of a phenomenal firm. Greycroft’s been around for over 15 years and is recognized as a top firm in the country. Does that change the perspective? And perhaps you can talk a little bit about some of the new startup VC firms that are out there facing their first significant challenge.

Ellie: Of course. So it’s... We’ve seen the cycles, right? So if you've been around long enough, you’ve seen when times are good, you’ve seen when times are tougher. I think even at the beginning of 2020, we all thought it was going to get quite bad. There was triage there for a few weeks but turned around really quickly and then started really accelerating. So I guess we didn’t see it then, but we’ve got the benefit of, kind of, the experience and the longevity of having seen the good times, seen the bad times and hopefully we’re maintaining a steady hand.

Ultimately, it’s the entrepreneurs, it’s the business builders that have the hard jobs, that are in the weeds, operating and building something from scratch, fighting inertia, doing all of that. The last thing they need is for us to show up frenzied because we haven’t seen things go wrong. And we are seeing that with a... I think it’s going to be interesting to see kind of a cohort of investors because there’ve been many money funds raised, which generally the more, the merrier, right? More capital for entrepreneurship is a good thing. But we’re seeing people haven’t had to go through that and are going to be learning on the go. Some of them will do a great job of it, and for some of them it’ll be a tough go as the entrepreneur most likely also hasn’t experienced it.

Burton: So that’s a perfect segue to the entrepreneur. Have you seen a change over the last two years in either the behavior or competency or attitude of the folks that you’re looking at investing in?

Ellie: Well, I think there’s startups overall and small businesses, I think, are just; have more visibility in the overall economy and are just more part of the narrative.

Burton: Right. Right.

Ellie: So I think it is attracting talent that we otherwise haven’t seen, which is great. And we’re also, with the rise of remote, seeing a much broader range in geographies where people are coming from, what they’ve done before. It really does. It doesn’t level the playing field. That’s not true, but it has made it easier and we’ve seen more diversity in the types of businesses and the types of backgrounds and the types of experience that the entrepreneurs are bringing and it shows up in the different types of problems that are being solved. So generally, I think it’s been great. And I think what we’re seeing right now, as there’s more kind of later stage companies, including some public companies where people have a lot of equity that’s underwater, is we’re seeing a, kind of, a new source of talent. People who otherwise probably felt more tied up in what they were doing, start to rethink the risk reward to going and building something.

Burton: So do you think the entrepreneurs are getting older, younger or the demographics staying somewhat the same?

Ellie: I think you do have a lot of... Well, it’s ultimately risk profile, so it does skew younger, but I think we are seeing a broader range, which is great. Just as the problems that are being solved, the things that are getting funded and the way that you can build a business has evolved.

Burton: So you specialize in digital health. Can you talk about your excitement there and what’s going on in that particular segment of the market?

Ellie: Sure. So obviously a ton, right?

Burton: Yeah.

Ellie: So thankfully, we were investing in digital health and health tech before the pandemic. So we got the benefit of the... Just huge penetration and adoption in things like telehealth that happened seemingly overnight, but it also meant that there’s been a lot of activity and a lot of change. So we’re really excited about what we’re seeing. We’re seeing new care delivery models that are kind of providing access and able to do things that offline can’t, right? We have a fairly siloed system offline as anybody who’s had to go to six different places to see six different specialists knows. So some of that is obvious. How can digital make this better? Now seeing the various models and how they actually find their customers, I mean, there’s a whole bunch of detail in making these things a success, but we’re seeing really interesting models that are driving down cost and ultimately providing more access.

In particular, we’re seeing a lot in behavioral health, so in mental health…

Burton: Oh, interesting.

Ellie: …both through the employer channel, so in providing benefits to their employees and being reactive to what the employees are looking for and need. We’re also seeing a focus in pediatric mental health and how do you speed up the time it takes to see a specialist from, the average I believe is... I mean it’s several months, which is several months too long. So there’s so many different approaches that we’re excited about—and that's just one slice.

Burton: And has the pandemic sped that up and is it enabled by pure technology horsepower or is it a behavioral change that drives the technology backbone?

Ellie: Yeah, it is. Well, it’s always about people, right? As you all know. So of course, there’s people involved even if it’s behind the technology, but often in some of these models it might be a tech enabled service. There’s also really interesting software models that are changing how the system is working. You’ve got to start in a small way. You can’t tackle it all overnight, but just making data interoperable between different systems, enabling the patient to take more of a role and having a sense of their various test results and having a sense of their records and being able to bring them from place to place. So things that in other markets might seem fairly obvious, it just, for good reason, takes a little bit longer in healthcare.

Burton: So you talk about the data and the technology. On a scale of one to 10, where are we on access, seeing our own health information, our own data, so I can choose the doctor I want and the care that I want?

Ellie: The regulatory is pushing and there’s some things that are really pushing these things forward. We’re starting to see APIs get exposed from various payers. We’re starting to see that. I’m sure you see it too, but it’s still so early. I had someone ask me for the applicability of Web3 to digital health. I mean, they’re still operating on mainframes. There's still a lot of faxing. We're very far from Web3 really having true use cases within digital health. So I would say we’re about a three.

Burton: Right.

Ellie: But we’re moving in the right direction.

Burton: I remember, even recently with all the digital capabilities, physically taking the radiograph pictures from one doctor to another because I wanted a different opinion. And the easiest way to do it was to physically take the film.

Ellie: That's right. And I mean, what is, I think, happening at a macro level is that the patient is being treated more like a consumer, right?

Burton: Yeah.

Ellie: So the consumer is starting to have more of a say. Services are starting to be launched and starting to be changed with that in mind. And even something like all the devices that people are wearing, whether it’s individual companies or somebody... Most people in the audience probably have something, whether it’s just Apple, the Apple Watch or something else. But bringing all of that data to your doctor, which people increasingly want to do, that’s still pretty hard.

Burton: Right.

Ellie: It’s still pretty hard and your provider isn’t necessarily paying attention to that at-home test that you took that you’re trying to get them to pay attention to. But it’s starting to change as the consumer takes on more of the cost and then gets to choose a little bit more where they’re going to spend their time.

Burton: But it creates opportunity for the future.

Ellie: Certainly.

Burton: I know that I never take my Fitbit off and every 30 days it gives me a six-page report that is frankly more comprehensive. I’m not saying it’s accurate, but more comprehensive than most of my doctor visits. So you can see where the future is going and you need the technology to enable it, but as you said, there’s no current capability to input it to the doctor and have that be part of your total health records.

Ellie: That’s right. And so what we’re seeing is new models that are being built that are trying to integrate all of that together, right? Some of the big guys are trying to do it too. Of course, this is a massive part of our GDP, like there’s a lot to go after, but you are seeing some new models that are trying to build all of that together. And because the consumer is starting to demand it as they have more access to being able to do some of this themselves.

Burton: And what role does the insurance company play in this?

Ellie: A huge one because most of the time they’re paying. So there’s a number of models, things that you’re like, “Well, why doesn’t that happen here in the U.S.?” And the answer is almost always because there’s no one to pay for it or there isn’t an obvious person to pay for it within the system. Good example would be really almost anything preventative. I’m being slightly hyperbolic, but getting people on an exercise program or nutrition and doing things ahead of a problem actually showing up, it’s really hard to bill for that. And since it’s hard to bill for that, it doesn’t tend to happen, because ultimately people want to get paid for their time and their expertise. In the way that we’re set up, we’re not there yet. It’s moving there slowly, whether it’s Medicare Advantage, value-based care, we're moving there, but it’s early.

Burton: So you obviously have a passion for this. We’re talking about passion and purpose and certainly perseverance. Where did you get this passion?

Ellie: Yeah, that's a good one. I just enjoy working with young companies.

Burton: Okay.

Ellie: It’s super fun. Every single day you have, and you know this, the most driven, excited... I mean, they’re creators. They’re fighting inertia, they’re fighting so much just to get this idea off the ground. So it’s really inspiring every day to get to empower them as much as we can, whether it’s through capital, whether it’s through other things. And then got to align natural interests of mine just within the sciences and healthcare and tying that all together to be able to do what we’re doing now.

Burton: So you want to move this industry forward. A lot of great ideas. We’re facing what appears to be, a challenging economy. How do you make decisions as far as where to invest? Where to reinvest? Is it the team? Is it the straight math of the business plans or is it the art and science of the mixture?

Ellie: Yeah, I think it’s all of the above, but we’re investing early typically. And so it has to be the team. Without a team that we’re inspired, that we’re excited about, that we think can really hire and recruit... And because ultimately, they’re trying to be talent magnets and the best companies are, right? The best companies are able to hire the best people and then are able to move things forward a lot more quickly. It tends to compound being able to be a talent magnet. So, we care a lot about the team. Obviously, we are thinking through themes and we’re spending time in specific areas that we think have big tailwinds and big opportunity. We’re having to invest today for something that’s probably going to happen in 10 years in terms of actually exiting the investment and being able to basically see it all the way through.

So it’s certainly about the team, but they’ve also got to be in an area that we’re excited about. And ultimately the opportunity has to be big enough. We’re looking for things that can hopefully be public companies. So they need to be able to get to a scale where that is feasible.

Burton: So we are seeing growth in our install base, which a lot of people find a little bit incredulous. You get to see the other side of that. And I think it has to do with what you’re saying, which is you’re investing in a core group who are growing our companies, and we see that growth on our side. How important is the team in attracting the incremental people, which is what we’re passionate about in making the companies ultimately successful? So are you betting on one founder? Are you betting on the dynamics of the team and how important is attracting and retaining more great people to get an idea to market?

Ellie: I mean, the team is usually the single most important factor. So certainly, it’s a founder, particularly in the early days. Sometimes just through sheer will, they’re able to get things done. Those first few sales are almost always founder-driven. No one can sell a dream better than them. But ultimately you need people to build the business and they need to be able to attract that kind of talent, be able to delegate to that talent and hopefully bring the company the whole way.

Burton: Yeah. So that leads me to the discussion around the war for talent. That’s the headlines. I am seeing it in our business and we have a few hundred open jobs and we love to hire more great people. What are you seeing from the companies that you are funding and supporting?

Ellie: Yeah, I would say it’s changing a little bit. It was terribly hard to, kind of, attract talent last year, I would say. Everything was on fire and with huge packages and stock was sky high and everything was going to the moon.

Burton: Right.

Ellie: And it was just so difficult and I think it’s getting a little bit better. Obviously, we’re seeing companies right size, we’re seeing companies make sure that they’re in a position to do really well over the next few years and that means making some tough decisions now. But we’re seeing a lot of hiring as well. It isn’t just one or the other, but what we’re seeing is more access to talent than we’ve had the last few years. So hopefully it gives the small companies, who are on their way a better shot. But what are you seeing? Are you seeing it change?

Burton: We are seeing it is slower than it was last year. It’s still double-digit growth and we are seeing not a lot of companies going out of business. So that’s not outsized, but people are still fighting for great people and we’re pretty excited about the fact that the people that can form the teams, back to what you said, it’s all about the people. And we can help attract and retain the right people with the right benefits, et cetera. They’re doing great because I think at the base level, which is what you discuss with digital health, there’s still a lot of problems to solve. The amount of the GNP of this country that goes into healthcare, the ability to disintermediate that and get either more value for the dollar or more access to healthcare, whatever it is, it’s an area that isn't going to be solved.

This isn’t a two-year or five-year. It’s a 10-, 20-year problem and when you solve it, those dollars will go somewhere else. So, I'm seeing better ideas today than I saw two years ago. I’m seeing more resolute CEOs than I did two years ago. And I’m also seeing very, very smart investors looking at things, as you say, from more angles than they did a few years ago. Because the problem was the founders were bidding up different opportunities and I’m not sure the level of due diligence was being done then because you weren’t afforded the time. If you wanted in, you got in and if you wanted to do the due diligence, you probably were looking at a deal that was already closed.

Ellie: That’s right.

Burton: And as you said, the whole aspect of dry powder, there’s a phenomenal amount of cash on the side, but nobody wants to be the stupid one to invest at the pinnacle when things may keep going down. So there’s certainly a delay year over year, but I don’t see a difference in the fight for talent. I don’t see a difference in what quality looks like. And you kind of said it, which is about, from my vantage point, hiring people with great core values, great motivation. There are two things that do not change in a business environment. You’re excited and motivated in digital health. You got that from an intrinsic desire to be successful in that area. And core values, it’s what you grow up with. And I’m not evaluating your core values. I’m saying, are they fit for the team that I’m building? And when there is that gel, that synergy, it’s phenomenal. So we have some questions from the audience. In what ways... This is a great question.

Ellie: Yes.

Burton: I should’ve asked it. What ways, other than giving companies capital, are you helping them to be successful in these times?

Ellie: Yeah. That’s a good question. So we have many... We’ve got a pretty extensive platform effort that in addition to the individual team that you’re working with and we do work as a team. So it isn’t just the one partner who is investing, but we also have a number of operating partners who are helping, particularly on the go-to-market side, how to set up your sales team and walking you through dashboards and helping you evaluate talent and make sure those first few hires or as you’re scaling, making sure that your processes are exactly where they should be.

We also have a talent capability in order to both help in some of the executive level talent, some of the executive level searches, to be able to help manage the recruiters, make sure that we’re setting up those processes for success as well as kind of sourcing throughout our network. And then we have a pretty extensive board member matching program as companies grow and are starting to think about next steps and starting to think about getting public-ready. We have a bit of a focus toward underrepresented candidates as well. So it’s a really exciting effort that enables us to spend a lot of time with corporates and that kind of next generation of corporate leaders and helping them get exposure to board roles and really moving our companies forward too. So we view it as a total.

Burton: So you mentioned a great point. What is the board’s role in these young startups which changes radically, I can tell you as a public company?

Ellie: That’s a huge understatement. So at the earliest stages, you are a sounding board, you’re support. Sometimes they don’t necessarily have a co-founder. So while you are... Of course you’re their investor, you’re not operating... You’re not their co-founder, you can help them up level, help them think about things from a 30,000-foot view in terms of what do they need to be doing to prove out the business to be able to get to the next set of milestones. So it does start out as, certainly, governance, but also more support. And then as the company evolves, the board starts to resemble more of a growth-stage board, which ultimately kind of morphs into a public company board. But we are huge fans of independent board members early to be able to have an independent perspective, have another operator on the board to be able to, in some cases, coach and mentor. In other cases, to challenge. Sometimes those are the same things, but to be able to round out the opinions.

Burton: So does the independent board member in a startup have the same standing as a board member who invested in the startup?

Ellie: If it’s done well, yes. In the very, very early days, probably, no. It gets better as the company starts to scale and then they do. And then particularly around certain inflection points, they are worth their weight in gold. So particularly as M&A comes, and perhaps they’ve been through that process or there’s a bit of a pivot in the business or something that they’ve experienced themselves, they can be amazing and can change the trajectory of a business. But in the very early stages, it’s a little bit... Maybe it’s a little more even.

Burton: Yeah, that’s fair. That’s my impression as well. Everybody wants to go public. Do you see different exit strategies today and in the future that may or may not involve a liquidity event around the public offering? And how do you guys factor in private equity and some of the other things that may be another way to allow companies to continue their journey

Ellie: In certain sectors private equity outcomes or more of a secondary transaction absolutely works. And 10, 15 years ago wasn’t something that private equity firms wanted to do. That’s changed. So, that certainly is an option, but the way that we view it, and I think the way that most people view it is, if you aren’t building for a public scale outcome, your other options are also limited. So it is better to be shooting for that if it’s feasible, and it tends to drive more of a strategic process, even if it does go M&A, because you have a viable outcome.

Burton: Right.

Ellie: Another viable option. So obviously along the way there are oftentimes M&A opportunities and sometimes that’s absolutely the right call. So it really depends on the company, but more options are better. But I think still the IPO retains its top spot.

Burton: Yes. I never dreamed of ringing the bell at the New York Stock Exchange, but I will say to you in the entire audience, it was really cool. So a question from the audience. What excites you most about the future of healthcare? Vast opportunity. Is there an area where you think we’ll be able to wrestle to the ground and have meaningful impact over the next five to 10 years?

Ellie: I sure hope so. No, there’s a bunch of really interesting things. So we are spending a decent amount of time at the intersection of healthcare and fintech, and that sounds like a bunch of jargon, but really it’s not just in how services are paid for and how people are reimbursed, but it’s also getting back to the consumer, enabling them to understand what they’re going to be charged, when they’re going to be charged and who they have to pay. And that is not a small problem.

Burton: Right.

Ellie: It is a huge problem and can really unlock a ton throughout the ecosystem if that is even able to be solved 10% of the way. So that’s just one example of something that we’re really excited about in that segment. The other thing is, what we’re seeing is, there’s a lot of discussion in circles around health equity and social determinants of health.

So the fact that your environment and oftentimes socioeconomic status and other things have an impact on your health, that seems fairly obvious. And there is a ton of evidence that says, "Yes, that is of course true." But how do you actually change that and how do you change that in a business model? And I think what we’re seeing right now is most of the... Or there’s a bunch of exciting approaches to that, that are taking more of a financial technology approach, so more of a consumer fintech solve or that health equity piece, which is a really interesting kind of intersection of a bunch of themes.

Burton: So the access part of that is really key. And the access is tied to who pays for what.

Ellie: Right. And sometimes it’s how do you incent a certain set of behaviors and doing so through paying for it or making it easier to access or giving you rewards for doing such things. Things that are actually tangible is we’re starting to see, gain some traction, which I think could be really interesting.

**Burton: **And do you see that as a government role, an entrepreneurial role or a collaboration of some sort?

**Ellie: **Yeah, I mean, I hope it’s a combination because certainly some of the programs and some of the pockets of capital need to be there for people to be able to make a business model work, but enabling innovation to drive that is going to be better for everybody.

Burton: I was blown away by the vaccines and the quickness and the efficiency that industry stepped up with the vaccines. To me, it came together, the technology to map the coronavirus, companies working together, the government funding. I think 20 years from now, we’ll look back and look at that as a public-private effort that was pretty astounding from the messenger RNA standpoint.

Ellie: A hundred percent, yeah.

Burton: We’re living in some amazing, amazing times. So it looks like there’s a few people who want to talk to you. So they’re asking, “What are you evaluating today from an investment standpoint? What are you excited about listening to?”

Ellie: All sorts of things. I mean, we’re excited about any founder who’s passionate about what they’re doing in a market that we’re excited about that has a big opportunity. So I, of course, am spending my time in digital health, but we collectively also do consumer internet and fintech and enterprise software. And what, as I was alluding to, some of the most interesting areas are at those intersections. So that’s between fintech and healthcare as well as kind of more consumer-driven models and putting the consumer at the center of the journey and also kind of integrating all of the behaviors that consumers are already doing and having it matter in their health. Of course, it does, but how do you actually build services around that in these integrated models? I think we're starting to see more and more that are reaching beyond pure healthcare.

So things that are pulling in nutrition that are pulling in things that otherwise people are kind of left on their own to figure out. And we’re seeing it in new approaches, in different payment models that’ll be coming to market. I think we’re going to see generally a lot more, related to nutrition, start to show up in just about all the models that we’re seeing.

Burton: I think that’s because it works.

Ellie: Yeah. Yeah. It does. And just the sheer amount of spend on chronic illness that we’re seeing and how it’s fairly fundamental to the vast majority of these things. There’s different approaches than the ones that we’re taking and we’re starting to see more innovation there.

Burton: So you alluded to it earlier. How do you shift the focus to preventative care as opposed to sickness care?

Ellie: That’s all in how it’s paid for. So that is ultimately moving to a value-based world where you’re able to get a case rate for solving a certain problem. And that certain problem can then be solved really however that company sees fit. And typically, they’re pulling in all sorts of things. They’re pulling in diet. They’re pulling in exercise. They’re pulling in mental health services to be able to drive that outcome. We have an investment in a company that’s focused on substance use disorder and treating it digitally. Obviously, gigantic problem that was only amplified during the pandemic, but with regulatory change, they were able to roll out digitally, but through a case rate model, which is how they got started and how they were able to build. They were able to build the business through that lens. They were able to pull in a bunch of different services to be able to ultimately drive a different outcome. But if you aren’t paying for it as a bundle, it’s much harder to do.

Burton: Right. Right.

Ellie: So we’re starting to see it. It’s just taking its time.

Burton: So do you see telehealth being even more a factor in the future than it is today?

Ellie: Certainly. I don't think... We had probably 10 years of adoption in an 18-month period and that’s not going away. There are some things that... Of course, there will always be offline healthcare. It would be absurd to think that that’s not the case. Of course, that will always be a big part of it, but we will... The sheer number of people who had to try telehealth during the pandemic and then realized, “Hey, this actually has a lot of utility,” means that there’s lots of opportunity.

We’ve seen it across our companies. We’ve seen it across payers. We’ve seen it across traditional, more traditional pockets of the healthcare system. That’s not going away. The question is, how do you... I think the first wave was moving from offline to online, right? Okay, this is how we did it offline, now we’re going to put it on a screen. And that’s not enough anymore. And I also don’t think that the outcomes of doing that in terms of actually lowering cost in changing outcomes have been as much as people were hoping for. So what we’re seeing now is actual changes in the care model and changes in the approach. So it’s not just channel switching, it’s actually changing what’s happening, which I think there’s a lot of promise around.

Burton: And that goes to the reimbursement. So they have to go hand in hand.

Ellie: That’s right.

Burton: Because if they’re not getting reimbursed, that’s just not going to happen.

Ellie: That’s right. It’s just a smaller market.

Burton: So the next question from the audience is what advice do you have to an entrepreneur entering the market today? And what coaching would you give somebody who’s saying, “I want to do this?”

Ellie: Definitely do it.

Burton: Do it.

Ellie: If they’ve got the fortitude and the stomach for it and the support from people around you that it’s going to be a rough road, definitely do it. It’s a great time to build a business. There’s lots of support out there for entrepreneurs far outside of just VC, right? There’s plenty of platforms, plenty of places to help you. And it’s the backbone of our economy, our small businesses. And the more, the merrier. So get out there and do it. It’s what actually changes things in our communities and it’s something that should be applauded. So absolutely do it, but it’s not easy.

Burton: Right. And there’s a lot of problems to be solved.

Ellie: There are a lot of problems.

Burton: Good news is that there’s still a lot to be done.

Ellie: Yes.

Burton: That’s what keeps me excited is, the companies I’m seeing started today, they’re going after real meaty problems.

Ellie: They are. We’re seeing more and more in climate. We’re seeing more and more... I mean, it’s like it’s very exciting what this generation of entrepreneurs is tackling.

Burton: And now we have a question, “What if I want to become a VC? What advice would you give somebody who wants to work at a VC firm?”

Ellie: I mean, I think it’s great. So it’s... Look, it’s fun. It is. You have to be truly excited about working with young companies and excited about their ideas. And also accept the fact that 99% of the time you’re going to say no. Even people you’re really inspired by, ideas that you’re really excited about, because there’s only so many things any one person can back or any one firm can back. So it is... There’s a tremendous learning curve within venture. So it is still an apprenticeship business and you learn by those around you and understanding how they deal with problems, seeing how they work with companies, how they guide them through difficult times. So if you’re able to get in with people who have experience, all the better, so you can learn from them. If your first opportunity is in a new fund, that’s okay too. There’s a lot you can make of it. It is very exciting.

A lot of people will say, “Go operate first or go do something else first.” And there’s a school of thought that that is the way to do it. But also investing is a career. So if you start kind of honing that skill early, hopefully you get better at it over time. So there’s value to having multiple experiences in venture, bunch of different partners. That’s great. So I don't think there’s any one path and if people want to get in early, good luck.

Burton: And what about the education background? I hope you take people from all backgrounds. Engineers…

Ellie: We definitely…

Burton: ...finance, et cetera.

Ellie: Yes, yes. We will.

Burton: That’s what I thought.

Ellie: It is across the ecosystem though. It’s still pretty... There is not a ton of diversity still in terms of background, in terms of really everything. I think that is changing slowly and we’re getting different experiences and kind of different educational backgrounds, which only helps entrepreneurs because ultimately then different types of entrepreneurs get backed. So all of that is good. It’s changing and we need to keep the pressure on to keep it changing.

Burton: And do you see a lot of camaraderie within the VC firms or your firm, particularly. Over the years, I’ve seen changes, particularly with people like you joining.

Ellie: Yeah. So, I... absolutely. It depends on the firm. Obviously, I wouldn’t... I’ve been at Greycroft now over a decade. I wouldn’t still be there if I didn’t love it. And a lot of that is… it’s the people, as you know in any organization. And we do work really collaboratively and we’re all aligned. We’re all trying to do the same things. But there are other places that are more individual and that’s a great fit for other people. I’m not sure that there is a good or a bad. It’s just like most businesses, there’s a bit of a continuum on how things work.

Burton: Well, thank you so much for joining us today. I appreciate it. I learned so much from you and I love your passion for small businesses. If you’re not a VC, you got to work at TriNet because I get to work with small businesses every day and I am optimistic, like you, for the future of the entrepreneur. So thank you.

Ellie: Thank you for having me.