0:00:00 - (Paul Nolde): To be a good angel investor, you have to be comfortable with losing money. It's not necessarily a distraction. It's an amplifier of the core product and the value proposition. I'm going to be on the phone or, you know, over email with all the other groups I just mentioned, hey, let's, let's, let's fund this company. You have to figure out how to either pull in capital from out of the state or risk losing some of these companies that you funded in state to out of state funders.

0:00:26 - (Andrew Kazlow): Welcome to the Diligent observer, where we help angel investors see what most miss. I'm your host, Andrew, and every week we explore what works, what doesn't, and why through conversations with experienced startup investors and operators. My guest today is Paul Nolde, president and CEO of 757colab and executive director of 757 Angels, a Hampton Roads, Virginia based angel group. Now, Paul has worn just about every hat there is to wear in early stage four finance, from banking and family office work to venture capital and now ecosystem building.

0:00:57 - (Andrew Kazlow): In this episode, we dig into the rise of dual use startups, bridging commercial technology into defense and government work, how AI is reshaping the day to day of actually running an angel network, and his market map of the startup ecosystem across the Commonwealth of Virginia. I hope you enjoy learning from Paul as much as I did. Paul, thank you for being with me today.

0:01:27 - (Paul Nolde): I appreciate it. Thanks for having me on.

0:01:30 - (Andrew Kazlow): So, Paul, I got to start where I love to start, which is what are you excited about right now?

0:01:35 - (Paul Nolde): I'd say there's two things I'm excited about. One is just the, I'd say the rise of dual use companies coming through our deal funnel, which is probably no different than many angel groups at the current time. And I say I'm excited about that because I've been doing this for, for a while and, and you know, five years ago, really early stage venture didn't really touch too much the, you know, GovCon and, and you know, government tech.

0:02:07 - (Paul Nolde): And so now you start to see an embracement, you know, kind of embracing of that. I think it's no surprise that Andreessen Horowitz moved their first office out of or opened up their first office out of Silicon Valley in D.C. and so what's compelling about this is the extent to which you can effectively translate at a scale that venture funding demands this move from the commercial sector to the government sector.

0:02:41 - (Paul Nolde): And it's an and not an either or proposition. And so how is that going to flesh out? Equally compelling is Gonna is the opposite. So if you're in, if you're currently a company that's servicing the government and you're trying to position, you know, I'd say supplement that or get into the commercial side. How is that gonna look? So I, I just think that's an interesting time in, in our investing ethos.

0:03:09 - (Paul Nolde): And then the second one is just, and this is gonna sound cliche, but it's true. It's just the rise of AI for angel groups and what it means for the management of an angel group and the diligencing of companies coming through the funnel. So I'm not talking about AI centric companies. I'm talking about the impact of AI on the overall operating efficiency and burden of an angel network or an angel group or even early stage funds for that matter.

0:03:42 - (Paul Nolde): So those are the things that are getting me excited.

0:03:45 - (Andrew Kazlow): Okay, so I want to hit more on both of those. Let's start with the AI for angel groups and maybe before we get to the excitement there, give me a quick Overview on the 757 Angels and the COLAB ecosystem that you are deeply a part of today. Walk me through maybe the quick story and background just so I and our audience have a good understanding of your context.

0:04:07 - (Paul Nolde): Absolutely. So my predecessor, Annique Adams, founded and started 757 Angels just over 10 years ago in the Hampton Roads area of Virginia. That's in the kind of eastern part of the state. Historically it hadn't really been seen as an entrepreneurial ecosystem center. Heavily, you know, heavy government contracting, world's largest naval bases there, a lot of, a lot of military. So anyway, she started it with the backing of some prominent business leaders and it's a typical, even to this day, it's a typical angel network. Right.

0:04:49 - (Paul Nolde): So built up of members paying annual dues and then a board that helps screen down or down select companies to present to the members. And so through time and space, 757 Angels actually grew to a point and was active enough to be ranked by the ACA is one of the most active angel networks in the country, which is wild to think about given it's Hampton Roads. But to her credit and to that member's credit, that happened Covid hit. Obviously it really took a toll on a lot of in person angel groups like ours.

0:05:30 - (Paul Nolde): And so we've been kind of reconciling. Okay, how do we transition even now to a more engaging, more engaging and compelling platform that'll attract members? We've had to recalibrate some of our expectations, but today our angel networks Kind of fluctuates between 30 and 40 members and we have a bimonthly. So every other month we do a virtual pitch to the membership and we're pretty active so far with this kind of new model that we started at the beginning of the year. And so we have an affiliated venture hub called 757-CO-LAB that I also run that has an incubator and accelerator and a couple accelerators.

0:06:27 - (Paul Nolde): And as we'll talk about, I'm sure touch on later, it's tough to separate angel investing from ecosystem building for various reasons. So yeah, it's been a fun journey. I got here about three years ago, actually three years ago this month to the region and have enjoyed it and so far so good.

0:06:51 - (Andrew Kazlow): Love it. And what's the broad vision? So within the broad 757 ecosystem because I understand there's several brands here. What's sort of the macro mandate and then where and how you see the angel community fitting.

0:07:07 - (Paul Nolde): So you know, obviously with an angel network it's tough to zero in on a de facto investment thesis. But I will say that we were formed to focus on and invest in companies that are headquartered in or have major operations in the state of Virginia or the Commonwealth of Virginia. And so I would say that's probably the biggest kind of litmus test. And then obviously we're looking for high growth, high scale companies.

0:07:37 - (Paul Nolde): Usually what we find or what we invest in is tech centric. Don't do a whole lot of service companies or tech enabled service companies. We've done some CPG companies before. We do see a lot of medical devices, a lot of health tech, but increasingly more that dual use, advanced manufacturing or supply chain augmentation. Drones see a lot of drone tech. And so from a mandate perspective, if you look at Hampton Roads and then Virginia more broadly, there's a lot of kind of industry clusters throughout the commonwealth that, that feed into our deal flow that are in kind of defense, energy, aerospace, logistics, those, those kind of four general buckets.

0:08:25 - (Paul Nolde): We do see a lot of ed tech too. Um, so but that's, that's really, you know, since seven five seven Angels is statewide or in its, in its focus, that's that angle. And then 757colab is more Hampton Roads centric. So you know, we, we are aligned with kind of what we call the regional investment playbook which has these four industry verticals that are really unique to our region. So we, you know, work with, you know, focus really on that.

0:08:58 - (Andrew Kazlow): Yeah, Love it. I love it. Okay, so tell me about this excitement with AI, you're, you're running this investor community. You guys are doing cool stuff in defense tech and Some Ed Tech. 3040 members. What does it, what does this mean to you that you're so excited about the applications in angel Ops?

0:09:15 - (Paul Nolde): So you know, angel networks are interesting. I mean some angel networks you have the entire membership chipping in to due diligence and to help with diligence. And so the whoever's running the angel network is more on, more of an administrator role, herding cats, making sure that the train's on time. Ours is a little bit different. So you know, as executive director of 757 Angels, I'm charged with not only making sure the trains run on time and the admin stuff, but also diligent seeing our deal funnel and really bringing curating the most promising ally state startups around the state to our members.

0:09:54 - (Paul Nolde): Our board does assist when I bring to them the top five companies that I've kind of narrowed down, then collectively we decide on the top two or three that'll go before the members. So in our group it's more focused, I'd say on one or a couple people than the whole membership in terms of diligence in this whole selection process. So prior to AI or prior to the last year where AI has just exploded, I would often engage what I would call venture fellows.

0:10:27 - (Paul Nolde): These are individuals, these are students from either seniors or first year grad students from some of the regional universities who really were looking to get into this early stage investing industry or maybe they wanted to do VC when they graduated. And this would have been, this was, this was a nice experiential kind of thing they could put on the resume and that helped. I mean, they did great. That was great. Well, over the last year I've noticed that AI has gotten to a point where you can do this first diligence run pretty quickly and it just has changed the game in terms of efficiency.

0:11:18 - (Paul Nolde): Now I still have to obviously screen for. I'm still going to become enamored with the company. I still got to get to know the company. I do. Still the human side of interviews and stuff, that feeds into the AI.

0:11:33 - (Andrew Kazlow): But you haven't delegated your interviews to AI yet?

0:11:35 - (Paul Nolde): No.

0:11:36 - (Andrew Kazlow): We got to get you up today.

0:11:38 - (Paul Nolde): I know. I almost feel like, I mean, I'm sure a lot of people say this, I must feel like I'm cheating, like I'm getting paid to do this, but I'm like, okay, where's the human? You could literally, you could just outsource everything. To AI. But the problem with that is I think we're still not AIs still not quite there and our members demand, I mean again, they demand a certain human engagement level. Otherwise why hire me? Right.

0:12:04 - (Andrew Kazlow): Well, this is the essence of what makes an angel network an angel network is that it is a network of people that get excited about this thing. And we've done primary analysis that shows the community is the single most valuable part of an angel network membership. And so yeah, the deal flow needs to be done with excellence. But to your point, you pull the people out and now you're just investing, you're not investing in a community.

0:12:26 - (Paul Nolde): Right. And, and I think a counter argument to that I guess I could come up with is, okay, so let's just say that we outsource all of our diligence to AI. Then that frees up my role to go build the membership base, do the other human elements that are so critical and is the life. I mean the two aspects for lifeblood of an angel network are the people and the deals. Right. So if you can effectively kind of automate the deal side, then you can focus on the members.

0:12:55 - (Paul Nolde): The thing that's exciting me about this though is I have engaged a small group of students at UVA to do a very deep dive and study on the impact of AI on angel networks and angel investing and seed fund investing. They're working on it. We engaged them a few weeks ago. They're going to work on it through the summer and into the fall. And then my hope is that it's going to be that the finished product is going to be a quality such that I'll be talking to the ACA and seeing if we can't, you know, publish it or put it out because I, I'm stress testing the bounds of, okay, what's, you know, what, how is it fundamentally changing the operational side of what we do? Again, the diligence and all that this is.

0:13:55 - (Paul Nolde): There are some funds, VC funds obviously that have been doing quant, you know, selection for a while, but I think a, in the angel space, it's going to have a profound effect. So I'm excited on what the, what the out, you know, the findings will be. You know, it'll be kind of like a fact versus myth, potentially type of study. So, so we'll see.

0:14:16 - (Andrew Kazlow): Well, sounds like we're going to have to put another podcast on the schedule here in about six months to digest that.

0:14:22 - (Paul Nolde): I would, yeah, I mean these are really bright students and they, I think it would be really cool to see

0:14:29 - (Andrew Kazlow): well, we'll look forward to that when we find out about it. I'm sure it will get amplified through the diligent observer. So let's talk more about dual use and what you're seeing there, like this transition as you describe it over the last several years. First off, define dual use for us. And this is obviously deeply ingrained in the DNA of your community given the massive presence of naval technology and logistics and all the things happening there in Virginia.

0:15:02 - (Andrew Kazlow): Walk me through what this means and then articulate a little bit more deeply what this transition that you've seen happen over the last few years is.

0:15:10 - (Paul Nolde): Yeah, so for us, dual use is at its kind of simplest a company that's been operating in the private sector, the commercial sector, and is, is not stopping that, but their technology is now coming to play in the, in the government sector. And for us we see a lot of defense applications. So the dual use takes on that defense aspect. Think about this as an example. We had a company that came through one of our accelerators and it was a robotics company that had been doing the way that their robots were kind of changing commercial and industrial painting and applications on surfaces.

0:15:53 - (Paul Nolde): And so obviously when they came through and they were not from the area when they came through our accelerator, we've, you look out the window and there's again the world's largest military or largest naval base and massive shipyards and a lot of these military, a lot of these aircraft carriers and battleships are coming in, they're in dry dock to get, you know, upgraded or upfitted or whatever. And I, and, and they're looking at this going, well, we've got a canvas right here that we could apply our technology on in the, from the commercial sector to the government sector.

0:16:28 - (Paul Nolde): And so that's what happens. So now you've got, effectively speaking this other side of the business, which is different in a lot of ways. But if you can lock in a government contract that has predictable cash flow and a predictable model for the next X years, that somewhat allows you to keep the lights on over here and really expand the innovation and the R and D over. On the commercial side previously, I think investors kind of saw this dual use as maybe a distraction to being laser focused on one go to market I think through time and space and just the nature of things that it's not necessarily a distraction, it's an amplifier of the core product and the value proposition.

0:17:21 - (Paul Nolde): Now it does mean that you have to diligence it a little differently because obviously the government side of things is just such A different world than going to market and the commercial side. And there's some subject matter experts that you need on the government side, especially in the military side. There's security protocols. There's all those things that you don't necessarily have on the commercial side. But again, it's to me just all of a sudden you've just expanded your market opportunity pretty greatly and you look at government contractors, which essentially is what you're talking about for that side of the business.

0:18:03 - (Paul Nolde): The exits on government contractors are very, very compelling. And so yeah, it's something that I'm excited to continue to see that how early stage investing handles dual use companies.

0:18:19 - (Andrew Kazlow): So you guys have clear. You personally and then your community in general seems to be pretty good at this. Walk me through. What are those three or four questions that should be asked when a deal hits my desk that's claiming to be dual use.

0:18:36 - (Paul Nolde): Right.

0:18:37 - (Andrew Kazlow): I don't know anything about what that means. Or maybe I know a little bit. What are the key questions you would press on that are unique to that claim versus the next.

0:18:45 - (Paul Nolde): Maybe the best way to answer it is this. So bear with me a little bit because I don't know if I have a simple answer. I wish, but. We launched a defense technology accelerator in the region earlier this year. It was, it was the first one in our region and it just made sense. Right. Given where we are. And so these are companies that are coming. The companies that ultimately were selected, there were 12 of them from around the country that were selected to meet five critical needs of the military. So that's number one. What critical need or needs are you fitting or are you addressing that is coming down from whatever government entity there that is because that plays into the contracting and all that.

0:19:31 - (Paul Nolde): You've obviously you can diligence and validate the efficacy and the, you know, the worth of the, of the product or service on the commercial side, just like you would any other deal. But on the government side, you also have to get subject matter expert buy in. So it's not just meeting a critical need. It's okay because there are so many layers of protocols that go into getting a government contract. And again, I'm talking more about defense than anything else because that's what our region is.

0:20:03 - (Paul Nolde): It's not enough just to say, well, I meet that critical need. Let me, you know, now let's get a contract. No, you've got to have buy in from subject matter experts on that side. So this defense technology accelerator really took these dual use companies, or burgeoning dual use companies through the contracting world to get them their first or sometimes second government contract. There's nuances like, okay, are you a prime contractor with the government? Which is a whole different ballgame than being a subcontractor to a prime contractor to the government.

0:20:37 - (Paul Nolde): So there's layers. Exactly. I mean, just so there's. From a question standpoint, you just have a few more what I would say, hard gating questions that can't be ignored that you have to do to even get to that ultimate contract, that government contract. Whereas on the commercial side, you can kind of live in the gray a little bit. And you can with, you know, as I'm sure you've heard many times, fake it till you make it.

0:21:07 - (Paul Nolde): Not so much on the government side. It's really tough to fake it till you make it there because they, they, especially on the military side, I mean, they, they really want to make sure that you know what you are claiming to be able to do, you can do. And so there's just, you know, that comes with it a little bit more subject matter expert diligence versus just general market diligence, if that makes sense.

0:21:32 - (Andrew Kazlow): A quick note before we continue the conversation. Alongside the Diligent observer podcast and newsletter, I also run an outsourced operations service specifically built to serve Angel Networks. My team handles things like initial screening, social media, newsletter prep, platform management, and a whole lot more. The kinds of things that either aren't getting done or shouldn't be done by busy community leaders.

0:21:53 - (Andrew Kazlow): If that sounds interesting to you, send me a note. Now back to it. So this is a question that's nagging at me, like, how do companies end up going the dual use route? In your experience, is it typically like I do? I have an idea. I want to build, you know, robots to solve some problem for shipping. And then I'm focus on that. And then I meet somebody that comes from a government contracting background and they're like, hey, by the way, this would probably be interesting.

0:22:19 - (Andrew Kazlow): Or is it more strategic? Like, we're going to do this thing and we're going to deploy in both cases or the inverse, like, how does, how does the typical story go?

0:22:28 - (Paul Nolde): I think it's a good question. I don't know if I have an answer to that. I mean, because I guess, you know, let's say that, let's take that same robotics company, right, that I was talking about earlier, that commercial industrial painting company. What if they hadn't come to Hampton Roads and looked out the window and saw a whole different use case? What if they let's Just what if they were in Iowa and maybe they looked at it and outside they were looking at something else. I mean, last time I checked, Iowa was not near an ocean. So, you know, I guess with all due respect to anybody who's listening from Iowa, but I guess what I'm saying is I don't really know. I think some of it could be exposure at the right time, at the right place, just by happenstance.

0:23:10 - (Paul Nolde): It could be that some of the IP that they are, that some of these companies leverage. We were looking at one company actually recently through a company that just pitched in our last round actually for some Bob seven Angels that got their technology from the Air Force and had been tested, validated, used at the Air Force. And then they had the exclusive on that and then they were essentially taking that and applying it to some use cases in emergency response systems.

0:23:44 - (Paul Nolde): And so that's the other way around. Right? That's still dual use, but on kind of the other way. And there was a clear, I think, vision of the founders of that company to say, okay, we're going to do it this way. I think too, it could be that there's just the opportunity aspect. So if I'm a founder right now, who's got a technology that is working in the commercial side and I'm looking at the news going, well, look at how much money is being pumped into.

0:24:18 - (Paul Nolde): And again, I keep coming back to defense, but again, that's kind of the world I'm living in right now. Why wouldn't you maybe look at grabbing some of those dollars? And yes, it's a little painful upfront to go through the process of getting a contract, but once you're in and once you've gone through it, then it, like with anything, it gets easier and then the payoff is better. So I don't know. It's a good question. I mean, I don't think maybe some founders go in with the intent to be dual use. But I also, my concern too is dual use becomes almost as cliched as AI or anything else. Right.

0:24:51 - (Paul Nolde): So how many companies, every company says they're AI. Are they really AI companies? Are they not dual use kind of the same thing? So.

0:25:00 - (Andrew Kazlow): Well, it's just an interesting category to me because, I mean, first principles, right? We're talking about taking something that's been developed for one application and putting it into another application. Like this fundamental thing happens all the time in multiple industries, all over the place, every day. It's just this specific. The line between government and not government is a pretty Significant one. And so it's got its own definition, so to speak, which is just fun to think about.

0:25:30 - (Andrew Kazlow): Okay, so Paul, I want to hear more about your journey and some of your unique perspective because you, you have a really cool journey which is banking to venture to community management and a whole bunch of things in between. I'd love to hear maybe just a quick flyby of your journey and like key moments in your story. And then I'd love to ask a couple questions on what it means to be a good angel investor in your opinion, given that background.

0:25:59 - (Paul Nolde): Yeah, it's funny, I mean when I was coming through, when I was going, when I was in college, I mean entrepreneurism and investing, venture investing and angel investing, I mean obviously it was around but you didn't really talk about it. I mean I went to school and people were becoming doctors, lawyers and I was I think foreign affairs major and got into banking. Like you just didn't really just wasn't a thing.

0:26:20 - (Paul Nolde): And you certainly didn't have entrepreneurship minors or majors like you do now. So enjoyed banking. You know, I was not in investment banking, I was in retail banking and went to some group banking stuff and then did some other things in banking. But really what, what kind of stoked my desire to leave banking and get into more of this early stage investing spaces. I don't know why or how this really happened, but when I was in banking I had enrich and I still live in Richmond.

0:26:59 - (Paul Nolde): I just had a lot of people that I, I was working in wealth management and so a lot of clients obviously drive their, you know, created their wealth through selling a company or what have you. And for whatever reason I, I started to have some entrepreneurs in the, in the area reach out and say hey, can you take a look, I want to raise money from investors. Can you take a look at this business plan and all that. And being a banker obviously that was somebody you went to. So started moonlighting doing that. I fell in love. I mean I come home every night and just immerse myself in angel investing.

0:27:31 - (Paul Nolde): I taught myself. What does it even mean? Certainly didn't teach myself how to angel invest. I come in for later on. But I don't believe you can just teach that in school. But in any case through time and space got to a point where my closest friend ended up selling his company at an early age and created multi generational wealth. But he, he was like the type of founder every investor would love to invest in.

0:27:56 - (Paul Nolde): I ended up managing for a brief amount of time his family office and doing those Deals. And once you are in that space in a, I'd say a tier two city like Richmond, where there's not too many of us doing it, you just see everything, it all comes to you. And so the exposure to this world and the experience in it really was, it was a quick learning curve. And then I ended up just, I'd like to say that I had some grand plan. I didn't, it was just all about, you know, as I say, is who you know, I was at the right place at the right time and knew the right people. Basically. There was no other thing too. It was your network. It's your classic building a network, building a brand for yourself. And when a time and the opportunities came, I was there to take advantage of them and hopefully, you know, did so in a manner that continued to enhance, you know, my network.

0:28:51 - (Paul Nolde): So what I did find is even if you look at this, my passion's on the investing side. But because of the stage at which I was investing and the networks that I had as this term acceleration started to become big over the last decade or so, 12, 14 years, it was hard to separate that from angel investing and so early stage investing. So I found that I had opportunities that were presented to me to go and run an accelerator or go and run a venture hub. And so the lines kind of blended there and really that's where I kind of am today. I mean what I'm doing today is probably the culmination of just a lot of that experience coming all under one roof.

0:29:47 - (Paul Nolde): And so again I think you mentioned what is a good angel investor, what makes a good angel investor? I think fundamentally you have to know what type of angel investor you are to even begin to answer that question. Are you an absolute return minded investor where you don't care where the deal is, you just are looking at the return and the exit potential, which is fine, no harm in that. Exit is not a bad four letter word.

0:30:18 - (Paul Nolde): Or are you an investor who does obviously want a return on their investment and is focused on to some degree, absolute return, but you also want to catalyze your local entrepreneurial ecosystem for more of the impact side of things? I'm not going to call it impact investing. I used to teach that at UVA and I, I, that gets thrown around a lot. But I guess what I'll say is there is some altruism there where you're, you're almost willing to take a flyer on a company that's in your own backyard that you probably wouldn't take otherwise because it's in your own backyard, and you want to see where you live thrive from an entrepreneurial ecosystem standpoint.

0:31:01 - (Paul Nolde): So I think you just have to reconcile that. And Believe me, with 757 angels, we have members who sit on both sides, and somewhere in between, it makes it really tough then to run an angel network and deliver companies that promise the absolute return or the returns. But also sometimes maybe wouldn't have gotten through to the end but for the fact that they're kind of in our own backyard. So I think you have to reconcile that internally to some extent.

0:31:29 - (Andrew Kazlow): Paul, this is so fun. And this is one of the things I love about angel investing, particularly angel networks, is that the definition is kind of a mess. If you say you're an angel investor, you kind of are, because the definition is so flexible. Obviously you have to have capital and be deploying that in some way, but the categories are pretty wide, and I certainly think it creates confusion in a lot of cases. But this core question of what am I doing here? What is my plan? What kind of investor am I? What am I trying to accomplish?

0:32:02 - (Andrew Kazlow): Defining that for oneself is just so essential because there's an innumerable amount of opportunities to just get pulled into, and you can show up to these meetings and find interesting deals. It's just a question of if that's a good fit for you. Each individual has to make that call. And that's part of what makes angel investing so fun and running a community so difficult, because you're like, there's no entity that's aggregating all this around a specific plan objective. Here's our points.

0:32:34 - (Andrew Kazlow): It's very messy and beautiful and having a risk tolerance.

0:32:39 - (Paul Nolde): I mean, there are a lot of angel investors that say they're angel investors, yet they're going to be the first ones to call you up and complain because they lost money on a deal. And I'm kind of like, well, you knew that the risk coming in. Nobody likes to lose money, but you have to be willing to lose. That's another thing. To be a good angel investor, you have to be comfortable with losing money.

0:33:02 - (Paul Nolde): You should expect to lose money as an angel investor. But at the same time, if you've done your asset allocation and you've diversified your portfolio and you've invested in more than five companies and you've tried to build a de facto portfolio, then those are the. Those are really the angel investors that are going to succeed. And it's not about how much you put in the deal. I think that's a common misconception. People think that they might have to put in a minimum of 25,000 into each deal or whatever.

0:33:36 - (Paul Nolde): All that does is just juice your returns at the back end. Right. So you could put. We have members who are investing in a multitude of deals, five grand a year, ten grand there. They're every bit as an angel investor as anybody else. So it just is a perspective and just being aware of how you're deploying your discretionary assets and how much of that is an allocation of your overall alternative assets. And again, what your internal investment thesis is.

0:34:08 - (Andrew Kazlow): Love it. Paul, I want to ask you more about the Richmond ecosystem and maybe in Norfolk as well, but tell me more about this place. Like walk me through Paul's mental map of who's doing great work locally in the startup world. Obviously 757 Colab being the best place to go around that you've been a part of this community forever. You know, everybody, like you said, who else is doing cool work that we should know about.

0:34:35 - (Paul Nolde): So, gosh, I mean, I will say the Commonwealth of Virginia has, I think a pretty strong angel network kind of syndicate. So you've got Commonwealth Angels out in kind of the Verona, Blacksburg area, western part of the state. Virginia Tech is. You've got Shenandoah Valley Angels, kind of where the, the northwestern part of the state where James Madison University is. You've got a whole host of angel networks in kind of Northern Virginia, D.C.

0:35:05 - (Paul Nolde): some that are, are less known, others that are focused on maybe just one industry segment. Like, you know, Meta Angels is strictly medical. You know, they invest in medical and health tech. And in Richmond, well, you've got, in Charlottesville or University of Virginia is, that's just up the road from Richmond. You've got a couple angel groups there. You've got Charlottesville Angel Network and Cab Angels are kind of the two biggest ones. Cab Angels is more aligned to UVA alumni in Richmond.

0:35:38 - (Paul Nolde): It's interesting. Richmond is, it's an interesting city. You've got a lot of multi generational wealth.

0:35:45 - (Andrew Kazlow): Interesting is a special word. You mean a lot of things.

0:35:48 - (Paul Nolde): And I'll say this because I've said it many. I mean it's where I live and I love Richmond. But we, we have a lot of multi generational wealth here, a ton of money, but it's in more risk preservation mode in my opinion. And so you don't see, you do see angels investing, don't get me wrong, but the angels who are investing are not necessarily coming together more formally like you would think, in a de facto angel network.

0:36:10 - (Paul Nolde): It just hasn't been the case and so it's a little tougher. I think technically, Richmond is a market of Venture south, another massive successful top 10 angel network based in the Southeast, across the Southeast. We were actually a market of theirs for a while and I think very highly of Venturesout. So shout out to them. But yeah, Richmond's not as coordinated as one would think. And then you've got in the eastern part of the state with us and Pop Seven Angels is the angel network in this region.

0:36:46 - (Paul Nolde): And then actually in the kind of south side of Virginia, right on the border of North Carolina, near the Triangle, there is something called the Launch Place. I've been on their board for years and that's more of like a seed fund and a pre seed fund. So lots of. And these are just a few. Right.

0:37:02 - (Andrew Kazlow): So this is just angel communities.

0:37:05 - (Paul Nolde): Right. And so if you look at the, where Richmond and Hampton Road stand out, Richmond stands out because it's the capital of the Commonwealth, it's capital of the state. So you're going to get a lot of people wanting to just gravitate there for whatever reason. It's got, you know, you see a lot of, you know, the work life balance here is nice. The, you've got a lot of stuff to do in the weekends. It's, it's a great city to live in.

0:37:31 - (Paul Nolde): Hampton Roads has, it's just, it's huge. It's so geographically diverse. Population diversity. As I've talked about before, the regional investment playbook for Hampton Roads has outlined defense, aerospace, energy and logistics as the four main industries. You could also stick healthcare in there for a lot of reasons. But in general, what I would say about specifically Richmond and Hampton Roads, they are complementary in a lot of ways because of the assets that connect and entwine them. There is something called the RVA 757 connects mega region.

0:38:13 - (Paul Nolde): That's Richmond and Hampton Roads. And as a mega region together, there's a lot of leverage and a lot of impact you can get there. This could be a whole nother podcast because it gets on the economic development side and gets into the collab side of things. But suffice it to say there's I think a lot of technology that can be harnessed out of Hampton Roads and some of their world class centers of excellence. But then you've got some very prominent Fortune 500s in Richmond. You don't have a whole lot of Fortune 5000 in Hampton Road.

0:38:48 - (Paul Nolde): So there's the, there's the difference there. And so you've got potentially channel partners that are in Richmond that can engage with the startups. To date, they haven't done a great job of that, but there's always hope. Capital One actually has been a big supporter of the ecosystem for a while, but in any case, two very distinct and different ecosystems for various reasons, but yet complementary in a lot of ways. And so I can say that though about so many of the other regions, I'd say this. In general, Virginia is more at a cooperation stage versus a competition stage.

0:39:28 - (Paul Nolde): So you know, if you go out to Silicon Valley, deals are seldom shared amongst, you know, capital providers because it's so competitive. Well, in Virginia, if we get a deal, if I were to get a deal that was really attractive, I'm going to want to invest, but I'm going to be on the phone or, you know, over email with all the other groups I just mentioned, hey, let's, let's, let's fund this company. Right. So there's a little bit of more collegiality I think right now and that's not a pejorative against what's happening out in Silicon Valley. It's just where we are in our history of early stage investing.

0:40:03 - (Andrew Kazlow): Well, it's funny you mentioned that I feel my sense from talking to 40/ Angel Network leaders on this podcast is that that spirit is very common across angel communities. Is there's just this almost by nature of being a minority investor, not typically leading rounds, you know, a loose collaboration of a bunch of individuals that care about this and are showing up because we want to. Yeah, there's this unique spirit of collaboration that's different from yeah, other capital provider. I mean venture. Right.

0:40:34 - (Andrew Kazlow): I've got to return.

0:40:35 - (Paul Nolde): Right.

0:40:36 - (Andrew Kazlow): My, my fund and it's really hard to be top decile, but everyone wants to be top decile. And so this deal is amazing. It could get me there. It's, it's different incentives. Right. And so incentives shape behavior in the angel space. One of the things that I think is so fun is that this collaborative spirit is just so present and then particularly within local ecosystems like the Commonwealth.

0:40:59 - (Paul Nolde): I'll say one other thing too, and I left them out, not intentionally, but so Kuretsu is such a large and well known angel network angel group and they've got chapters all over and I would suspect that for them to open up a chapter somewhere, they've got a, you know, they probably have a pretty high bar to do that. And in fact there is, there is a chapter, it's part of the middle, I guess the Mid Atlantic group. That's one of their main people operates out of out of Richmond. So again, I think that where we lack is at the later stages of capital.

0:41:41 - (Paul Nolde): So if we have a pretty robust angel network, we don't have Series A. The Series A is a big gap in the, in the state. I've also heard that in ironically in North Carolina too. So I don't know what it is, but it's just. Yeah, it's not. Which means you, you have to figure out how to either pull in capital from out of the state or risk losing some of these companies that you funded in state to out of state funders.

0:42:14 - (Andrew Kazlow): Yeah. If you're an ecosystem builder listening to this, think about how you can get some Series A B finance in house. That would be fun for the ecosystem. So, Paul, what else do you feel like people miss or often misunderstand about the Hampton Roads ecosystem or about dual use? Anything we've talked about today that you feel like people just commonly don't quite get it even after you've explained it a time or two? Maybe even new members, like what are things that are hard to understand?

0:42:43 - (Paul Nolde): Don't be intimidated to lean into an angel network and consider starting to invest, even at a very small amount, into an early stage company. There are angel investors that have been doing it for years and years and that would consider themselves pretty savvy. But as you said earlier, the angel space is very accommodating. It's very collegial. There is, you know, you can almost look at in some cases like the buddy system. I mean, a new member pairing with a more experienced member.

0:43:19 - (Paul Nolde): It's, it's, and at the end of the day, no one has the right answer. I mean, you're placing bets, it's legalized betting. So you know, you, you know, just because somebody puts in a $200,000 check into a company that doesn't, that doesn't mean that they have any other inside scoop on if it's going to be successful or not versus the person who puts in 10,000 into a different company. I mean, it's, it really, this, this, this business takes time. It takes, you have to be humble about things. You have to be practical about the realities. And I think just going in, eyes wide open as an angel investor. But don't be scared about it. I mean, embrace it. It's fun. You get to see what's coming around the corner and think about the fact that it usually on average is about a $250,000 commitment to get into a venture fund.

0:44:18 - (Paul Nolde): With angel investing, you can get in for, I don't know, whatever the group decides. I mean, for us, there is no minimum. The only minimum is what's dictated by the minimum investment amount on the. On the deal terms. And then we'll do an LLC to accommodate somebody who could put in if they wanted to, a dollar. So you just have to. Yeah, I don't know. You have to take that. That first check is the hardest one. And then from there, you know, gets a little easier. So.

0:44:45 - (Andrew Kazlow): Love it. Well, Paul, I think that is a fantastic place to pin it for today. Thank you very much for your time and I look forward very much to our next one.

0:44:54 - (Paul Nolde): Likewise. I really appreciate it.

0:44:58 - (Andrew Kazlow): Thanks for listening to this episode of the Diligent Observer. I'm your host, Andrew, and if you're an angel investor looking for essential angel intel in five minutes every week, I think you'd enjoy my newsletter. I send my best stuff, interesting deals and more straight to your inbox so you never miss a thing. Subscribe today atthe diligent observer dot com.