This Week in Startups - How VCs decide to sell a position + Future's Jean-Louis Warnholz | E1575

Episode Date: October 2, 2022

On VC Sunday School, J+M discuss how and when VCs decide to sell a position. (2:01) Then, Molly is joined by Future's Jean-Louis Warnholz to discuss his startup, Future, which offers a climate-friendly debit card! (21:28) (0:00) J+M tee up topics for Sunday! (2:01) On VC Sunday School, J+M discuss how and when VCs decide to sell a position (9:07) Embroker - Use code TWIST to get an extra 10% off insurance at https://Embroker.com/twist  (10:14) Jason talks about his fund management strategy (18:13) Molly tees up today's TWiCS guest! (19:54) OpenPhone - Get an extra 20% off any plan for your first 6 months at https://openphone.com/twist  (21:28) Jean-Louis Warnholz joins to discuss his climate-focused debit card (31:10) Harmonic - Get $4000 off at https://harmonic.ai/twist (32:28) Jean-Louis Warnholz breaks down Future's business model Check out Future: https://www.future.green FOLLOW Jean-Louis: https://twitter.com/thefuturescore FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

All right, everybody, welcome to Sunday, both the end of the week and the start of the week at exactly the same time. Yeah, we're going to do a great VC Sunday school on how investors should decide to sell in secondary when they have the opportunity to sell some shares. Molly wanted to know, hey, how do you make that decision? Break it down and how fun managers think about pairing their positions in private transactions. And then we have a great this weekend climate startups that combines two of my favorite things, influencing consumer behavior and financial tools. I'm interviewing the CEO of a company, called Future. Future.

Future. Future. offers a debit card that gives 5% cash back on climate-friendly purchases. It is just simple, elegant, beautiful, changes behavior significantly

and it's just a really interesting idea for a startup. It's going to be a great show. Stick with us. This week in Startups is brought to you by in Brokers Startup Insurance Program helps startup secure the most important types of insurance at a lower cost,

and with less hassle. Save up to 20% off of traditional insurance today atmbroker.com slash twist. While you're there, get an extra 10% off using offer code twist. Open phone. As a startup founder, a lot of mistakes are easy to roll back, but using your personal cell phone number as your company number isn't one of them. Open phone makes it easy to get business phone numbers for you and your team, right on top of your existing device.

Visit openphone.com slash twist to get 20% off your first six months. And Harmonic. Need to speed up your growth without speeding up your burn? Harmonic gives investment, sourcing, and sales teams data superpowers. Learn how A16Z, Kraft, Notion, Brex, and many more source better leads and qualify them faster. Get $4,000 off at Harmonic. slash twist. All right, everybody, it is Sunday.

Happy Sunday, Sunday. Hope you're having a nice cup of coffee. Maybe you get one of those bagels. You know, I don't mind. I'll take a fresh bagel, an egg bagel, I'll take a sesame bagel. Some boi chick bagel. Boy chick bagel.

So good. You know, I'll take a fresh bagel. I'll toast it. I know some people don't like that. I'll have it with toast without toast. I'll put butter and cream cheese on it. How about that? That's how my grandma got a rest of soul used to make it.

she put a little bit of butter on the bottom then she put the cream cheese on and then my grandmother, the god rest or so she would take her hand and she would smash that bagel for you cut it in half. Yeah, she was great. Also my grandmother, when we were five or six

or seven years old, we'd be walking down the street we have something on our face. She would take out her handkerchief. She'd go and spit on it and clean our face. That was the Irish. You know, not everything that grandma do is great. It was a different era. It was a different era. It was a different era.

A lot more germs. A lot more germs. Yeah. No, that made you stronger. Why don't think I have such a great immune system? I'm unstoppable. All right, Molly, you had a question this week. I do. I do have a question this week for BC Sunday school. Okay. How to decide. I do not anticipate being in this position anytime soon, although I do anticipate being in this position on my road to becoming the greatest climate investor ever. Let's go. Boom. How do you decide when to, as a fund, sell a position and take out some money, basically, to return to your investors? Sure.

So if you're an early stage investor in a hot market like we've just had for 2020 and 2021, there might be people investing in a private company who say, hey, this company is now worth a billion dollars. We would like to invest 50 million. The founder says, great. I'll sell you 5% of the company. Say, hey, you know what? We kind of want to get to more like 7 or 8.

or nine or 10% ownership. Finally, says, you know what, we don't need any more than the 50 million. However, here are some employees, and here are some early angel investors and seed funds who might want to buy secondary shares. They call this a secondary offering. And so you remember SoftBank came in. They invested in Uber, and then Masayoshi-san made an offer. It's called a tender offer to shareholders.

I was lucky enough to take advantage of that. In fact, I think the price he bought shares for might have been the, $32, $33 a share. Maybe that was six years ago, five, six years ago. It's higher than Uber is trading for right now today. I think it will come right back up and go past that. But that was a good trade. I made that trade.

And we've seen that trade happen with other companies that are in our portfolio. This came up because we were doing a launch for fundraise webinar. We did three in the last three weeks. Had an amazing 2,000 people signed up for these webinars. Isn't that crazy? So awesome. Yeah. over $25 million in commitments already.

And we haven't even sent follow-up emails. So brave new world right now for us as a firm doing this public raise. But people did have a lot of questions. Hey, how do you decide when to sell? All right. Well, first off, you don't have the opportunity to sell every time. This isn't like a public stock market. So these opportunities come along very rarely.

When they do come along, I like to take advantage of them as an early stage seat investor. And I go through a very simple lens here. If people want to buy the shares in the company and they're paying a great price for them, then why wouldn't we put a floor into our investment? Lock it a win and sell 10 or 20 percent. Because if we sell 20 percent, you have 80 percent of your share still in play. You're sold 20 percent. So let's say it's a $100 million position you have just to pick a random number.

Okay, you sold 20 million of that position. Great. You locked in that win. Let's say that costs you originally, you know, $500,000 to own this, you know, $100 million sleeve of equity. Now you've sold 20% for $20,000. $500,000. You got a 40x return. This is an incredible cash on cash investment, but you still have 80% left over.

Now, if that 80% goes 5x, right? Okay, 5x for that 80 million, it becomes worth $400 million. Okay. you missed out on that 4x, you know, for the 20 million you sold or that 5x, you left a little bit of money on the table. But when you look at it overall, it's not that big of a concession or a loss because you also get to put that money back to work. Right. So it's not like you get that money and you can't place more bets. If you're a smart investor, if I sold that 20 million and I booked 19.5 million in profits for my LPs, they got the cash back. Okay, now I got my fund over the hurdle.

You know, we've returned the, you know, let's say it was a $10 million fund. You return $20 million. Okay, now you've returned everybody to X their initial investment. You've got all that, all those shares have to go. Now your LPs are going to go, you know what? I appreciate that. As an LP in a fund, when I see one of my fund managers do that, and I get that quick liquidity. Okay, now I've covered the amount of money I put in there or I doubled it.

And now I'm doing what they call on poker a free roll. anything that happens with this fun after this is gravy, it's profit. That's a really great place to be psychologically. It allows you to stay long in the game. Now, some people will say, Molly, ride your winners. Let your winners ride. Right. I feel like there is a little controversy about this.

I think I've even heard you guys argue a little bit about it on All In, right? Yes. So it's in fact in the All In song, Let Your Winners Ride, let your winners ride. Yeah. The truth is, you know, sometimes you can sell the entire position like Sequoia did with Apple. they sell the entire position too soon and they should have held it. So there is an art here.

For me, as a seed investor, the art is lock in an early win and then let the rest ride because you know that sometimes these things do better as public companies than they did as private companies. That is often the case that the public performance in the 10 years, 20 years,

after these companies go public is greater than the amount of money you made in the private market. So that's how I make the decisions. It's interesting because it feels to me like a very pragmatic way to look at this, which is because there was one chapter in venture deals early on that really kept me up at night, which is this idea of clawbacks. Like, isn't this also a way to make sure that your LPs are whole so that you don't have something terrible happen? Like, it feels like a bit of a, I like it,

because it has a little bit of a prepper vibe to me. Like, you're taking care of this early. Yeah. Like, you make your LPs whole early. So you're not like, letting it all ride until, I don't know, what, the end of the 10 years and then hope for the best. It just feels like good financial hygiene to me. Feels like good financial hygiene to me as well. I'm going to quickly explain one of the crucial types of insurance. Every startup needs E&O insurance. This covers errors and omissions.

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They do my insurance. That's all you need to know. In a situation where you were gambling in Vegas, let's say you're gambling in Vegas. You run, you set a budget of gambling $1,000. You run it up to 10,000. You go to the cage. You give them $3,000 in chips.

You get $3,000 in cash. You put it in the safe. I'm going to lock in 3x win. I'm going to go gamble the other seven. You lose it all. You don't feel so stupid, right? There's a technical term for this. It's called idiot insurance.

And so I remember I knew somebody who I was going to invest in a company called fab.com. This guy, Jason, great entrepreneur, was running it. And it was a gay social network. for gay men. And I logged into it. Oh, yeah, I remember that. Yeah. And man, it was super gay and super fun. And people were going crazy. And it was like LinkedIn for gay men. And I was like, this is awesome. Like, look at this like incredible concept. Like this is going to be huge. And they're like, you know what? I'm changing fab.com and I'm going to do custom furniture. And it's going to be flashails like vaunt privy and guilt group.

Remember that whole trend? Oh, yeah, I do. And I was like, oh, Jason, I kind of like the gay social network and I was about to invest in it. And he's like, listen, I've got to tell you, I'm going to do something. I was like, you know what? I'm good. I don't believe in the, not for me, e-commerce, retail. And fab.com went up to over a billion dollar valuation. I had known somebody who had like a $50 million position in it, right? They had done the seed, around the own 5% of the company. And I saw this person like doing private jets and whatever and they were getting a little loosey-goosey because they had made this like investment, you know, that had gone so well. And fab.com went to zero.

And this person was spending the money as if, you know, it was locked in. It was not. And so this is where you can get ahead of your skis. And I think locking in wins and being conservative, let you sleep well at night. That's always how I've, you know, managed my personal books. That's how I manage my funds. I like to lock in the winds. I like to have good financial hygiene.

I like to get people back their principal, you know, while, you know, still going long. And, yeah, I just think it's a very easy. For me, it's an easy decision to make. And that person did have the opportunity, by the way, the punchline is, if that person who put in 500K turned it to 50 million, I'm making up a number here, you know, they put in a million and turned it into 50, they probably could have sold 10 or 20 along the way in secondary because it was a very hot company for a while, Fab.com. And yeah, you feel like this is really maybe particularly good advice now, headed into a downturn. because if you are a fund that has only ever seen the good times, maybe this has not occurred to you. Talk to me about how a clawback works.

Like, that's a real thing? I don't know that. No, not inventory. No, clawbacks are for private equity, I think. Private equity gets paid a percentage of the gain in value of the companies. And then if the company comes back down in value, they would have to give back some of those gains. So that's not in venture.

A venture just works. You get 20% when you sell the shares and you liquidate. Right. So if that goes to zero, you don't, nobody has any more private jets, but nobody has to give the money back. No, because you never sold any of the shares. Right. Now, there are other financial instruments, and I believe most private equity firms look

like this. They will say, oh, you know, at the end of the year, you know, the value of our portfolio has gone up. We're going to pay people based on that increase in value or a mutual fund or something like that. Some of these actively traded funds, they get a percentage of the gain. Now, if the thing collapses the next year, you have to give some of that back, right? So that's the clawback. Got it. Because you haven't sold the shares, right? So how do you compensate if you don't sell the shares? Right. Yeah. And then finally, what are the opportunities to sell? Like, you said that

there's a big whale investor coming in. Are there other? Like, you're not always going to be able to unload part of your position. It typically happens because, it only happens. It only happens. happens in the best companies or what's perceived as the highest growth best companies. So you don't have this problem typically with, you know, your companies that are either struggling, meandering, or doing average. It's only for outlier companies like Uber or Airbnb or Stripe today. Like Stripe's not public. People like to buy shares in Stripes. SpaceX is not public. People like to buy shares in SpaceX. And SpaceX, I believe, does like every six months or a year a window where employees and other folks can sell buy and sell shares. And so it's kind of like an orderly secondary

process. I remember Zinga did something orderly like this where, you know, early stage employees, if they wanted to sell some of their position could when they're private. So that's another opportunity is. And Chris Saka did this for Twitter. Chris Saka put together a fund to buy shares from Twitter employees. And he said, okay, we think Twitter's worth $5 billion. I put up $500 million. We want to buy 1% of the company. Anybody want to sell their shares? Just, you know, email me and we'll do the transaction. And then you let the CFO know, you know, oh, Molly owned a million shares. We bought 100,000 of them.

You can move those 100,000 to Chris Saka Twitter Fund, LLC, right? And so they just make that change on the cap table. And so it's kind of like the stock market, except it occurs only with everybody's blessing and the CFL records it on their cap table software or like literally in an Excel sheet. And people sign paperwork to that effect. Now, people can go around the company. This was another thing that was occurring back in the day. You have those million shares of Twitter.

You don't want to sell Twitter. You're selling them. I say, hey, I think those shares are worth a million bucks. I want to buy half of them from you, Molly. Let's create an LLC. This LLC is going to be called MJ, Molly and Jason, MJ Twitter. I'll put in $500,000 in cash. You contribute the million shares.

You can take the $500,000 shares in now and go do something with it. and then the million shares are sitting there and we own this LLC, we each have 50 units in it, boom, we now have done an off, off cap table transaction. Could be illegal,

could be frowned upon, but people have done those kind of concepts. Interesting. Before, yeah. All right, fascinating. We're moving. I say take advantage of it if you have the opportunity,

but I would never sell all of it because if smart people want to buy your shares, what does that tell you? they're probably not buying them to because they want them to go down. Right. But if you've already locked in a 50 or 100 or in some cases, you know, a 2000 X return, like how much more do you need to return than 2000 X or 500 X or 50X? Like reasonably you would want to take some chips off the table.

Could not agree more. It feels like great timing for that advice. Well, no, it's six months too late because there's no secondary. Well, yeah, good point. There is no secondary market. I don't think there'll be much secondary going on. If you are lucky enough. So, okay, so then is that part two, like that in a downturn that's not going to exist?

Or it seems like if it does exist, definitely take advantage of it. If it does exist, you might be in a situation where people are saying, you know what, Molly, you own those million shares of Twitter, at a dollar age, just when it was a private company. I think they're actually worth 40 cents. Do you need some money for your apartment? I'll buy 100,000 shares for 40 to help you put a deposit down or pay for some kid schools. So you might have some, you know, people looking at it as an opportunity to, you know, build a position if they were Sharkey or if they were savvy, something between Sharky and

savvy. And they might offer you a discount to it. And common shares would typically go in a discount. So if you had preferred shares like I did in Uber, they got one price. The common shares might get a little bit less because they were further down the stack, as we've talked about, the preferred have a series of rights that maybe the other ones don't. Love it. Fascinating.

There you have it. That is it for VC Sunday school. We have a really cool this week in climate startups this week. Who do you got? So you know I'm obsessed with financial instruments and consumer behavior. And our interview this week has both. Jean-Louis Warnholz is the co-founder and CEO of a company called Future that just raised $5.3 million in seed funding for a debit card for climate-focused consumers.

So financial rewards for making more sustainable purchases. Like you get 5% cash back on climate-friendly purchases, including like trains and buses and online marketplaces for resale, you know, EV charging. Like just incentivize these behavior changes. Great. So interesting. Love this kind of stuff.

The affinity groups and credit cards seem like a thing. I just had, my wife was like, you have to use this card when you're buying on Amazon because there's an Amazon card that gives you twice as much back or something, right? Totally. Yep. So I'm like, okay, how many cards do we have here?

Like, I was using this S, I was using the Bonvoy or SPG card. I was getting double miles on that. Then I have an American Air, a United card. I'm getting that. It's like, there's so many different cards here for different bonuses, but I kind of like it. And I love the idea. I kind of like, I personally find it kind of exhausting. And yet I could imagine, I mean, if it's like, like, you know, my chase card is whatever,

let's say, 5% sometimes. But like, you could have gotten a full six, percent cash back when you bought that crazy expensive e-bike, that's like reason enough to pull that card out, you know? Yeah. It's super interesting. $2,000 e-bikes, $100 or a $5,000 one, it's $250. Yeah, it could be good.

All right. Great job. You ride your bike to dinner. Yeah. Enjoy. All right, everybody on the phone today is open phones founder, Darina Kuya. Welcome to the program, Dorena. Thanks, Jason.

Great to be here. What about the situation where you have, you know, a phone number that's a common number. So customer support number, or maybe you wanted people to just be able to call you and generally talk to the sales team. How do you handle that when you have a group number, a shared number? That's actually one of the super unique things about the way we've built open phone is that we allow you to have a shared number for your team. First of all, when you call into that shared number, you can set round robin if that's applicable. Or by default, everyone's phone would ring. The first person to pick it up will be able to have a wall.

I like that for customer support. Wow. Exactly. Exactly, exactly. And also, if I am on a call with a customer, I don't want to be interrupted. There are other people who can pick up new calls coming in. But I also really think what's very cool is that this workflow works as well for text messages. And not only can you just like share responsibility for responding to text, but you can also use this as a training exercise because the way that it works is that if I am a customer

support rep, there is a text message from a customer. I don't know how to answer. I can actually tag my teammates privately on that conversation and get help and say, hey, is this okay to say or how would you respond? Okay, everybody, Twist listeners can get 20% off any plan for their first six months at OpenFone. Just go to openphone.com slash twist. If you got an existing number, they'll put it right over for free. Head to O P-H-E-Hon-E dot com slash twist today for 20% off. Jean-Louis Warnholz is the co-founder and CEO at Future.

welcome to this week in climate startups. Molly, thank you so much for having me. It's great to be here. It's great to have you. So you just closed a seed round of $5.3 million for a future. Yeah, that's right. Tell me what you're working on.

Yeah, so we are basically... And why you didn't call me for that round. We'll make sure to call you for our A round. Great. Yeah, so future is building payments for the low-carbon. economy. In a nutshell, we're paying you to reduce your carbon footprint and are building a movement to make it simpler for folks all around the country to make low carbon choices that are good for

the planet and good for their wallet. And it looks at all, it all starts with a rewards card, right? A debit card? Like you were rewarded for your spending when you say your choices, like that's right. Very, very simple. It's the future card, visa debit card. We're basically turning rewards upside down. rather than giving you five or even 10% cashback, if you fill up your tank or eat out at restaurants or fly around the world, we're basically giving you cash back to charge your car, take the train,

shop at a thrift store or shop in the circular economy, whether it's new devices that are kind of relived or it's secondhand clothing or secondhand furniture. What made you want to do this? So for me, to be completely frank, I was completely ignorant about climate change for most of my life. My big passion was building startups in countries in East and West Africa and bringing more investment and more business to those markets which are thriving in many ways. And about two years ago, I was in Kenya and I saw kind of firsthand the impact of climate change on communities there.

We've had a number of severe weather events. We've had droughts. We've had flooding. And we've had this kind of toxic mix of very high humidity and an incredibly high heat. And I saw what happened to farmers and parts of eastern Kenya where there's no safety net. And it was clear to me that everything I was so passionate about for all these years was ultimately threatened by climate change. And I became obsessed trying to see what I might be able to do on my end to make. a small contribution.

And then how did you land on this solution? This really ultimately, it seems like consumer behavior solution. Yeah, I mean, first we started with myself. So as I said before, we had an atrocious carbon footprint, right? I won't even mention it because it's so embarrassing. But so it's a really high carbon footprint. And we looked as a family with four kids, right? What can we do?

How can we cut this carbon footprint? What's the right solution here? And first we looked at planting trees, right? that seemed like a natural choice, right? We're planting a lot of trees. And then we did the math and we realized that our household alone would have to plant over 7,000 trees. So a forest of over 7,000 trees, plant them, look after them, make sure they, you know, grow up and thrive. And no one takes them down.

And they just seemed like a daunting task. And so we turn to what is actually a much easier solution. And that's to figure out how can we emit less carbon in the first place. And that's what feature is about. It's basically rewarding you to make choices that are better for the planet. But at the same time, realizing that often these choices go hand in hand for choices that are better for your wallet as well. And that's really what feature is focusing on constantly offering you opportunities to do what's great for your wallet and what's great for the planet. And I think that is often overlooked in the market today.

It is really the sign of a natural entrepreneur to say that starting a company is easier than planning $7,000. I feel like there may actually be people who disagree with you there, but thank goodness you did this. It is a lot of trees. And I think there's a big focus, I think, on kind of tree planting and, and, yeah, carbon offsets, etc. But once you really kind of look into the nitty gritty of it, it's pretty hard. And I think what we don't talk enough of is how easy it is actually as a household to just slash your carbon footprint. Right. I think there are lots of choices out there that we can make now with a whole host of innovations that have happened that kind of happen in the economy that make it relatively simple to take, you know, tons and tons out of your carbon footprint.

Do you, okay, so I know you have the card and then there's also an app. And I, to what extent is discovery of those lower carbon choices built in to your platform? Are you helping people find those in order to do that spending and get that cash back? Yeah, absolutely. So what our app does is basically is blending, you know, all the kind of financial tools that you expect from an app, right? You can make transfers, you can fund your card, you kind of see what you spent money on. But it's blending it with kind of rich content that constantly gives you new opportunities to, yeah, save some cash and reduce your carbon footprint. And I think what we've seen in building future is really two kind of core elements. I think one, a little. lot of folks around the country just don't know how many new opportunities exist to make low-carbon choices. I'll give you an example. So we've have, you know, we live in a neighborhood where, you know, folks love the outdoors and they love to kind of shop at thrift stores. But very few kind of in our group knew that most of their favorite brands all have great secondhand options, right?

that cost you often 40% less in terms of cash relative to getting it new from the rack, and the carbon footprint can be, you know, 80, 90% lower. And so it's choices like that that I think are not yet readily available for everyone. And part of what the future is doing is building a movement to make these choices accessible, accessible because you know about them, accessible because you can afford them, accessible because we give you some cash back on top of it to really make it a no-brainer. And you partnered with Visa to launch the card? It is a physical card?

As right now, it's a virtual card, but it's, you know, accepted, gosh, at 90% of businesses that now take, you know, Apple tap to pay or Google pay or Samsung pay. We are printing a physical card as well, and it will be up to our members to decide whether they feel they still need a physical card or not. I mean, I love the idea. It just as a simple matter of training people and industries that maybe you don't need a physical card mailed to you. Look, we're actually just writing a piece. It's one less, right?

One less piece of plastic. And I think that's really the ethos across the company. It's, you know, we're not telling you how to live your life. We're just giving you choices. And I think you might love some of those choices because you realize that, you know, there's actually, yeah, good stuff that's happening for my family. and it's also good stuff for the planet, and these kinds of choices are becoming more and more,

and we love to bring them to our members. I mean, I love, like, this solutions is so straightforward and seemingly simple, although I would imagine that rounding up all the retailers and the options and creating this content, like clearly that must be a lot of work. Yeah, it's actually, so we have, you know, one of the kind of fun parts of building future

is just learning about new companies that are popping up right, left, and center. So I'll give you an example. We have, you know, four kids. We, everyone has cereal in the morning all the time. And so we don't traditionally eat much meat, but we have an enormous amount of dairy and, you know, just gallons of milk that we go through. And so, you know, we brought the family together. We tried eight different varieties of plant-based milk, right? Didn't like a lot of them.

Love two of them. And, you know, that's the one we, that's the one we switch to. And so I think it's really making it a lot more accessible. I think there's been a debate that kind of centered a lot around kind of things that you shouldn't do, right? You shouldn't fly. You should become vegan, et cetera. And so it's often presented in very stark terms when a lot of the choices that we can make are really fun and exciting and not hard at all. And then what else goes into the platform? Is there tracking? Like, is there carbon tracking for people? Yeah. It's all there. And so if you check on the app and you just, you know, you took a scooter or you just

kind of charged up your electric vehicle or you took a train somewhere or went thrift, kind of thrift store shopping, you can check out on the app and we'll give you the kind of carbon footprint. And that's really what a lot of the seed money is now going into is. kind of refining our carbon tracking and the carbon analytics more and more so that you really know with every purchase like, you know, does this matter for the, for the planet or doesn't it, right? What are the kind of levers that you can push that actually make a real difference? And so we're trying to bring this to you directly with with every purchase and make this something that you can experience on your daily grocery shopping run and kind of throughout

each of the transactions that you might be making. Listen, Harmonic is a database that finds companies before any other provider and refreshes them daily. It's pretty amazing. It works really well for VCs who are trying to source those new startups and for B2B sales teams looking for new qualified customers, which is really important right now. For example, Brex, you know, the startup corporate card, they use Harmonic to find newly incorporated founders to sell their product to, right? Talk about product market fit. And we love Harmonic here at launch. Our investment team uses Harmonic to source and vet deals faster and more accurately because, hey, listen, they've done the work. They got all the data

there. And we love to use the advanced search features to find information like, hey, a founder's background, their previous companies, if they've had any exits, how much money they've raised, and more. And we create perfectly customized searches that meet our investment criteria. Maybe we're looking for B2B. Maybe we're looking for marketplaces. Maybe we're looking for people who've raised a certain amount of money. And if you're watching the video that's playing right now, you see my team doing a really quick search for pre-seed and seed stage SaaS companies. These are critically important for us in terms of our bets as an venture firm. Get better data, make better decisions, and grow faster.

You can do all of this at harmonic.a.i slash twist, and you'll get $4,000 off your company sourcing and monitoring product. That's harmonic. Dot AI slash twist for $4,000 off. What an amazing deal. What is your business model? Is it sort of traditional fintech card? business model?

Yeah, so it's, yeah, so it's a, it's a card model, right? So we make money when, when folks use, use the card. Now, we have fairly rich rewards, right? We give you 5% cashback for a lot of kind of everyday spending item, right? Whether it's kind of secondhand fashion, or it's all sorts of public transportation or using scooters or bike share. So there's a pretty significant range where we give you cash back. We also partner with a number of groundbreaking brands that are really pioneering in bringing you low carbon options.

And so we make some additional kind of revenue for us when you make those low carbon choices. And is there a fee for the card for the consumer? No, there's no monthly fee. And obviously it's a debit card. So there's no interest. There's no credit pull. And I think the idea really is to make it accessible, right? right from the start wanted to make sure that

we can come out with a debit card. Because again, very often sustainability is always seen as something where you have to pay extra, right? Like the kind of green premium that Gates and others spoke about. And the association and some of the kind of thinking that we've seen as we built future is that you know, the association is kind of your Tesla vehicle.

It's the solar roof. It's things that you know, are fairly kind of expensive still. And so what we want to do is really celebrate, you know, everyday choices, right? Whether it's taking the metro or even taking the bus or, you know, buying good secondhand that really everyone can make, right? It's not a requirement that you have a certain amount of wealth or a high credit score for you to engage in sustainable choices. What does the, tell me about the partner companies.

How does that work? They give you a little bit of revenue if someone ends up shopping there. It's like a leads model sort of. Yeah, exactly. So we basically go out. We find brands that are truly decarbonizing, right? So when we look at brands, we don't care whether they are climate neutral or climate positive. What we care about is whether they are introducing products and services to the economy

that are helping households lower their carbon footprint. Right. So one of our first partners was Rod Powerbikes, which has really made it a lot simpler to switch to an e-bike, whether that is to get to work or that's to do your grocery run or to bring your kids to the nursery. We are looking for more and more companies that have been really innovative in how they think about the supply chain as well.

So Just Salad is another one, a kind of fast casual dining brand that basically gives you extra rewards when you use their reusable bowl program, which they've had for years. They not you to, you know, not get extra kind of cutlery and napkins, et cetera, at checkout. And so I really designed to help you lower your carbon footprint. And these are the kinds of partners that we are looking for and we're just getting started. How do you evaluate these companies? That feels like a lot of lift. It is. And so we are kind of very data-heavy teams, a lot of kind of scientists that have really been looking at climate change and carbon analytics for a long period of time.

There's now a fair amount of transparency. Like if you look at a company like Patagonia, for example, which is one of the companies where we give 5% cash back, we look at their sustainability metrics. They have done studies that they've published. on how they decarbonize their supply chain. So we have a team that looks at this and then makes an assessment. For other companies like Backmarket, for example, which we love because they are kind of revolutionizing how you buy Relove iPhones and iPads and MacBooks and Samsung products, etc.

There's pretty straightforward, right? You're buying a re-loved iPhone instead of kind of going for the new iPhone. lining up outside of the Apple store. And that has a dramatically lower carbon footprint. And so some of these choices are pretty straightforward, right? Charging your car relative to fueling up your tank or taking the train to New York rather than flying there. So there are choices that we understand fairly well already.

And there's a huge body of science that is kind of pecking us up. Right. You're also a part of this thing called the Sustainability Consortium. Yeah, that's right. Tell me about that. What is that? Yeah, so it's essentially a, it's kind of started as a research consortium, working closely with the Arizona State University and a really talented team of scientists there. And they've been at the leading edge to really help companies understand their carbon footprint

and then figure out ways to lower them across their supply chain. And part of what future is ultimately looking to build is a movement that rewards, you for shopping more sustainably. And to do that, I think we're looking for partners in the corporate space, you know, big ones and small ones that want to work with us and that also want to call attention to the fact that, you know, hey, we have completely revolutionized our packaging and we have slashed our carbon footprint significantly in the process, right? Tell your members about this, right?

And so these are the kind of authentic stories that we love to tell. and we're building a movement of people that are looking towards these choices. And I hope we'll kind of poke the market and inspire more and more companies to offer low-carbon products. Well, and it sort of feels like for good or for ill, there is competition for what you're doing, right? That this is becoming really, I think, a way to drive consumer behavior, whether it's apps that let you put a little bit of money toward a renewable energy project, or I think there's Aspiration Zero, which plants a tree every time. So how crowded do you think the space gets?

And is that ultimately good for you? Is it a rising tide for everyone? Yeah, I think it's, I mean, there needs to be a lot more competition in my mind. I think there's been a lot of really exciting development when it comes to decarbonizing the supply chain. So there are a whole host of alternative dairy companies, alternative meat companies. There's some exciting developments in the kind of circular economy and kind of secondhand fashion space. but there's still too few companies that really help consumers look at the choices

they can make, kind of day in and day out, and then basically notch and kind of help understand the low-carbon choice. I think that is an area that is still largely unexplored. And I was just getting an email actually just before coming on the show from my legacy bank that has now kind of further increased the cashback they give every time I fill up my tank.

And so I think if you look at this kind of broadly speaking, right, almost all of the rewards go towards high carbon activities, like filling up your tank, flying around the world. And so we were actually the first card that says, look, let's just turn this upside down and really reward you for doing things that are good for the planet. Like very simple, but we are the first to do that. and I was as surprised as you were that that is the case. Yeah.

Wow. And you make a really great point, too, that competitive moat for you is this education factor. The fact that you are not only a platform, a fintech platform for conducting these purchases and getting cashback, but also a resource for discovery, which I think, you know, everybody is out here saying, what can I do? Right. And you're saying, shop this way. Here's a list.

And we pay you to reduce your coverage. footprint, which I think is, I think there's been a fair number of kind of banks. And, you know, you've mentioned aspiration that essentially use the card fees to, to plan trees. But I think there are, you know, a few of any kind of companies that are actually paying you to make the low carbon choice and also empowering you and kind of giving you the agency to say, look, you can do this, right? there are a lot of choices, right? You control about 66% of the world's carbon footprint with the choices that we make every day. Let's exercise this, right?

Let's be empowered and let's kind of show the market and let's show our peers how we can kind of climb out of the kind of challenging situation we've created. Last question, then I'll let you go. But there must be certain purchases and certain actions that consumers take that are more impactful than others. Like certainly public transportation, I imagine, would be a big one. But I wonder as people are directing their consumption or their shopping or their choices, like, if you had to list your top three things, what would you tell people to do? Yeah.

So I think if you look at the kind of big buckets, right, it's, you know, how you get to work. Like, is there a way to do this more sustainably, right? Like, I take the scooter to work. You know, I probably looked ridiculous, you know, going through my neighborhood on a scooter, but I'm having so much fun. and that's kind of a big low-carbon choice for me. For a lot of folks across America, if you look at what you spend money on as you shop, looking at kind of relive devices,

second-hand fashion, I think, is a huge lever, often much bigger than kind of flying and some of the other things that come to mind. So figuring out, yeah, how do you get tuned from work and more sustainable way, kind of get around in a low-carbon way and then look at your shopping behavior and see if there are secondhand options that help you save money and also slash your carbon footprint at the same time. I love it. I'm such a big fan of nothing new. Nothing new. Jean-Louis Warrenholds

turning shopping on its head, co-founder and CEO at Future, which can be found at future.orgreen, which I love. This is fantastic. I love it. This is such a simple, delightful, Congratulations on the raise and hope to hear more from you soon. Awesome. Thank you so much for having me on the show, Molly. I really appreciate it. Thank you.