We’re excited to announce our Fund V investment in Newcase.ai, a company transforming litigation in the insurance defense industry.

The Problem

Insurance defense attorneys face one of the most data-heavy and inefficient processes in modern law. What’s more, because 96% of matters settle, crucial past case data remains private and unindexed.

Take expert witness cross-exams: a single matter generates hundreds of transcript pages. To find weaknesses and contradictions, litigators want to research the opposing expert’s 50+ prior depositions and cross-reference testimonies and opinions across cases. Manually, such a review takes 60+ hours and costs clients tens of thousands of dollars. Traditional tools like Westlaw and LexisNexis don’t help; they index public case law, not private deposition transcripts.

The result? Wasted time, high costs, and limited ability for law firms and insurers to mine this valuable private data and respond quickly in high-volume litigation settings.

The Newcase Solution

Newcase has built the first AI-native litigation intelligence platform designed specifically for insurance defense. Its product ingests unstructured past matters, starting with depositions, and converts them into structured, context-aware insights. With Newcase, attorneys can:

• Research thousands of pages of testimony using context-aware AI

• Generate structured, explainable reports in hours instead of weeks

• Cut review time by up to 90%, while improving accuracy and consistency

Early pilots have shown impressive results: reviews that once took weeks can now be completed in hours with higher accuracy. In head-to-head comparisons with other AI legal tools, customers have found Newcase to be the most effective solution for insurance defense, with one insurer already exploring a rollout across its national legal network.

It’s not about replacing attorneys or existing systems. It’s about giving legal professionals the intelligence they need. Faster, more affordably, and with greater accuracy.

Why We Invested

Several things stood out to us:

• Founders with unique expertise and proven execution – CEO Nader Karayanni is a repeat founder, former Microsoft engineer, and published AI researcher. COO Mustafa Awad is a dual-qualified lawyer and accountant with direct experience in litigation workflows. 

• A compelling wedge into a massive market – By focusing narrowly on expert witness reviews, Newcase has created a high-value entry point into the $20B U.S. insurance defense industry. From there, the platform can expand into liability analytics, claims triage, and precedent search.

• Strong early validation – Early paid pilot programs have demonstrated clear efficiency gains and enthusiastic customer feedback, with signals of becoming the standard across large insurer networks.

That’s why we are proud to have led Newcase’s $1.15 million Pre-Seed round with an $800K investment. Joining us in the round were first-time co-investor The LegalTech Fund and our long-standing partner Plug and Play. As part of our investment, I have joined the board to help support the team’s growth.

The Road Ahead

The Newcase team is just getting started. Upcoming product releases will extend capabilities beyond expert witness review to include opposing attorney profiling and more features already being requested by customers. Longer term, Newcase aims to become the vertical operating system for insurance litigation, unlocking a multi-billion-dollar opportunity in legaltech.

We’re thrilled to welcome Nader, Mustafa, and the entire Newcase team to the Social Leverage portfolio as they build the future of litigation intelligence.

Learn more about Newcase.ai

We're excited to share that Seeds, a leading fintech company transforming personalized investment management for registered investment advisors (RIAs), has successfully raised a $10 million Series A funding round. This round was led by Portage, with continued support from us at Social Leverage and Blank Ventures.

Seeds empowers financial advisors to deliver deeply personalized investing experiences efficiently at scale, streamlining their portfolio operations and enabling advisors to maintain meaningful client relationships. With the RIA market growing dramatically - from $91.7 trillion to $141.5 trillion in assets under management since 2019 - Seeds is addressing the growing need for advisors to offer personalized portfolios without being overwhelmed by operational complexity.

This funding will propel Seeds forward by accelerating product innovation, expanding their talented team, and enhancing their go-to-market strategy. Seeds will also launch a strategic rebrand, aligning their visual identity with their evolving mission and future ambitions.

"We aim to build technology that genuinely helps advisors deepen client relationships rather than trapping them in outdated systems. We’re thrilled to collaborate with Portage and leverage their extensive network to build the future of wealth management."

At Social Leverage, we believe strongly in Seeds' mission to humanize investment management technology, empowering advisors to engage with clients authentically and effectively. We’re excited to continue supporting their growth and innovation in reshaping the investment advisory landscape.

Learn more about Seeds at www.useseeds.com.

This week, our partner Matt Ober joined Wells Fargo for a “Lunch & Learn” session with investors and equity analysts to discuss the rapidly evolving market data and information services landscape. The discussion centered on how data moats and defensible platforms are driving long-term winners in the age of AI.

Here are a few key takeaways from the session:

Proprietary Data is the New Edge

Matt emphasized that in a world increasingly powered by LLMs and generative AI, companies with proprietary, deeply embedded data assets are best positioned to succeed. S&P Global (SPGI) stood out for its breadth of proprietary content—particularly Platts benchmarks and their IHS datasets—while Moody’s (MCO) and MSCI also earned high marks for their defensibility in ratings and index products, respectively.

Startups Are Driving Workflow Innovation

New entrants like Finchat and AlphaSense are changing the game by offering modular, API-first products tailored for modern workflows. While these firms face the usual challenges of scaling against high switching costs and long sales cycles, Matt noted that their approach is reshaping how institutional clients expect to consume data—on-demand, not bundled.

FactSet’s Strategic Crossroads

Despite a strong reputation for service and a large aggregated data asset, FactSet (FDS) was discussed for relative lack of proprietary content compared to peers. Matt suggested that FDS could bolster its position through strategic acquisitions to deepen its moat, as opposed to continuing to build just more workflows.

AI is Redefining Scale

AI isn’t just enhancing products—it’s changing the operating model. Matt shared how startups are using AI to do more with leaner teams, streamlining data cleansing and structuring that used to require large offshore workforces. The implication? Efficiency, not just scale, is becoming the next battleground.

The Shift to Consumption-Based Pricing

Enterprise buyers are demanding more flexible, usage-based pricing, and Matt highlighted the tension this creates for incumbents. While great for clients, it challenges vendors’ traditional revenue models and forces them to improve observability and analytics around data usage.

This session reaffirmed Matt’s belief that durable data moats, AI integration, and operational agility are the ingredients that will define the next generation of market data winners. Thanks again to the team at Wells Fargo for hosting a thoughtful and timely discussion.

At Social Leverage, we take immense pride in supporting innovative teams that are building transformative solutions for modern challenges. Today, we’re thrilled to celebrate Archive Intel, one of our portfolio companies, for successfully raising $1.5 million in a seed funding round led by Garuda Ventures, with continued participation from us at Social Leverage.

Addressing a Growing Industry Need
Compliance in financial services has never been more complex—or more critical. With regulatory scrutiny on the rise, financial institutions are navigating a landscape where non-compliant communications can result in billions of dollars in fines. At the same time, today’s clients demand seamless communication across diverse platforms, from text messages to social media.

Enter Archive Intel. Founded by Larry Shumbres, a seasoned entrepreneur with a proven track record in fintech, Archive Intel is tackling these challenges head-on with its AI-powered communications compliance and archiving platform. Designed to support financial institutions in adhering to SEC, FINRA, and CFTC regulations, the platform ensures comprehensive communication monitoring across channels like iMessage, WhatsApp, and email, without sacrificing client experience or operational efficiency.

Rapid Growth and a Bold Vision
Since launching in mid-2024, Archive Intel has seen remarkable traction, onboarding 220 clients and over 2,000 users in just six months. This rapid growth highlights the immense market demand for a modern compliance solution. With the additional funding, Archive Intel plans to expand its team, enhance its technology, and scale its operations to serve larger enterprise financial institutions.

CEO Larry Shumbres shared his vision for the company:
“Our mission has always been to make compliance seamless, efficient, and future-ready. This funding validates our approach and will allow us to continue delivering innovative solutions that empower our clients to stay ahead of regulatory challenges.”

The Road Ahead
We’ve been proud to support Archive Intel from the start, and it’s inspiring to see the incredible progress Larry and his team have made in such a short time. Their innovative use of AI to reduce false positives and streamline compliance workflows is already setting a new standard in the industry.

As compliance continues to evolve, Archive Intel is positioned to become a category-defining company in the space. We look forward to supporting their journey as they scale and solidify their leadership in compliance technology.

Congratulations to Larry, Shea, and the entire Archive Intel team. The future of compliance is here—and it’s being built by Archive Intel.

For more about Archive Intel or to explore their cutting-edge compliance solutions, visit ArchiveIntel.com.

At Social Leverage, we are thrilled to announce our investment in Commonwealth, an innovative platform revolutionizing the way sports fans engage with their favorite athletes, sports, and teams. Our excitement about the intersection of sports and investment has found a perfect match in Commonwealth, a community-driven platform that makes investing in sports as accessible and exciting as possible.

Howard first crossed paths with Commonwealth's founder, Brian, a few years ago in Mallorca, thanks to a serendipitous meeting arranged by our friend Roger Ehrenberg. Although we didn't invest initially, we stayed in touch, and Brian's vision continued to impress us. Since then, Commonwealth has achieved remarkable success, including backing the Kentucky Derby winner Mage and dominating the horse racing world with the highest-earning racehorses in America.

Commonwealth offers sports fans the unique opportunity to invest in their passions, starting with horse racing and now expanding into golf and tennis. The platform allows users to back their favorite athletes, giving them a financial stake in their success. As sports investments gain popularity worldwide, Commonwealth is at the forefront, creating a vibrant community where fans can watch live coverage of their investments, attend live events, and interact with other sports enthusiasts.

Our Commonwealth investment aligns with our belief in the growing trend of combining amateur sports and investment opportunities. Commonwealth's platform embodies this trend, providing a seamless and engaging way for fans to become part of the sports world beyond just watching from the sidelines. The thrill of owning a racehorse or having a financial interest in an athlete's success adds a new dimension to the sports experience, making it more immersive and rewarding.

We are proud to support Commonwealth's mission to democratize sports investments and bring fans closer to the action. As they expand their reach to new sports and athletes, we are excited to see how they will continue to innovate and transform the sports investment landscape.

Download the Commonwealth app, explore the investment opportunities, and experience the future of sports investments.

Recruiting is often cited as one of the most challenging and time-consuming aspects of building a successful team. From sifting through countless resumes to conducting endless phone screens, the process can be both exhausting and inefficient. Enter Ribbon.ai's latest innovation: Recruit AI. This new feature leverages AI to streamline phone screening, saving both time and money for businesses of all sizes.

The Power of AI in Recruitment

Recruit AI by Ribbon.ai is designed to address some of the most pressing pain points in the hiring process. Traditional phone screens require significant human effort, often leading to scheduling conflicts and lengthy turnaround times. Recruit AI eliminates these issues by enabling automated, AI-driven phone screens that can be conducted 24/7. This means no more delays waiting for mutual availability—candidates can complete their screenings at their convenience, and recruiters can access insights and reports whenever they need.

Efficiency and Cost Savings

One of the most compelling benefits of Recruit AI is the efficiency it brings to the recruitment process. By automating phone screens, recruiters can focus on more strategic tasks, such as evaluating the cultural fit of candidates and making final hiring decisions. The AI-powered insights generated from each phone screen provide valuable data that can help refine the hiring process further, ensuring that only the best candidates move forward.

Moreover, the cost savings associated with this feature are substantial. This is particularly beneficial for large organizations with high hiring volumes, as well as smaller companies looking to optimize their recruitment budgets.

A Perfect Fit for Various Hiring Needs

Recruit AI is not just a tool for large enterprises; it's a versatile solution that can benefit recruiting managers, recruiting firms, heads of people, HR departments, and anyone involved in the hiring process. Its ability to deliver consistent, unbiased phone screens ensures that all candidates are evaluated fairly, leading to better hiring outcomes.

Learn More About Recruit AI

To see Ribbon’s Recruit AI in action checkout this YouTube video:

Additionally, you can dive deeper into the cost analysis provided by Ribbon.ai, which highlights the financial advantages of integrating AI into your recruitment process.

If you're ready to transform your hiring strategy, consider booking a time with Ribbon.ai co-founder Dave Vu to learn more.

For those that know me, stand-up comedy is close to my heart, so it’s exciting that we finally get to announce our investment in PunchUp. Social Leverage led the $1 million pre-seed round with participation from Heracles Capital, Hustle Fund, Evil Twin Capital, and several angels. The round closed in November.

PunchUp has created a "Shopify for Comedians," providing them with a suite of high-quality tools. These tools empower comedians to communicate with their audience, expand their fan base, offer e-commerce solutions, and maintain ownership of their customer data.

The Company was co-founded by Danny Frenkel and Alex Dajani, two former Meta employees. Frenkel worked at Meta for 13 years, most recently as a director for its advertiser ecosystem; Dajani, PunchUp's CTO, spent four years as a software engineer for Meta, working on products across AI, Reality Labs, and Meta Ray-Bans.

Data is the most valuable asset in this world and what’s exciting about Punchup, is not only is the team super experienced, but they are really focused on helping comedians leverage data for their decision-making. Everything from touring locations, merchandise, where their audience is engaging and coming from, ticket sales, and more. Starting with comedians, but eventually, you can imagine all creators leveraging their powerful tools. 

Some of my favorite comedians are already using Punchup. I listen to a lot of comedy podcasts and so many are already talking about the company and getting ready to make it their home. Comedians already on the platform include Steve Byrne, Rachel Feinstein, Mark Norman and Sam Morril. 

In November, a big win for PunchUp was partnering with Morril to sell out his MSG Theater show in November. When they first started working with Sam his agency anticipated he would sell ~3k tickets and have to put up a curtain in the theater. He was one of the first comedians to fully adopt PunchUp as his website, which allowed the Company to hone in on which social platforms he was selling the most tickets from, what time of day, which days of the week he was selling tickets most and work backward from there to determine how to increase his sales. In the end, PunchUp was able to help him sell all 5k seats- something he gives Danny and Alex and the team credit for. 

With the new funding, PunchUp intends to stay lean and streamlined, using the capital to support its engineering, make technical hires, and build out its current monetization models.

Please tour around PunchUp and check out some of the comedian pages and have a few laughs.

Ribbon.ai, a portfolio investment of SocialLeverage Fund IV, recently unveiled its latest AI feature named 'Chat AI.' Unlike conventional chatbots, Chat AI serves as a digital career coach, offering personalized guidance and responses to various career-related queries. It aims to alleviate anxiety and boost confidence in navigating today's competitive job market. In comparison to other chatbots like ChatGPT, Ribbon's Chat AI stands out for its contextual understanding of your work experience and access to pertinent job data. Its effectiveness improves over time as it familiarizes itself with your career goals and aspirations.

A Closer Look at Chat AI: Your Digital Career Coach

Chat AI stands out by focusing solely on career advancement. It was created in response to the growing number of tools targeted at recruiters, with little to no AI-powered tools targeted at job-seekers. 

Whether you're contemplating a job transition, negotiating a salary increase, or exploring entry into a new industry, Chat AI is poised to assist you at every stage. It harnesses Ribbon’s database of career insights and Ribbon profiles to provide advice customized to your unique circumstances and objectives and will serve as an invaluable resource for anyone seeking to make well-informed decisions about their career. 

Beyond Chat AI: Ribbon.ai's Suite of Career Tools

Ribbon.ai's vision extends beyond Chat AI. The company has also introduced an array of complementary products, each designed to tackle different aspects of the career development process:

• Resume+: This AI-powered tool provides critical feedback on resumes, suggesting improvements and highlighting areas that might catch a potential employer's eye. It's like having a resume expert at your disposal 24/7, ensuring your resume stands out in a crowded job market.

• Interview+: Preparing for job interviews can be daunting, but Interview+ aims to ease this process. It offers AI-powered interview practice sessions and mock interviews, providing real-time feedback and tips to improve your performance. With Interview+, users can gain the confidence and skills needed to ace their interviews.

• Jobs Copilot: Navigating job applications can be overwhelming, but Jobs Copilot simplifies this task. It's a comprehensive tool that helps track applications, follow up with potential employers, and even identify new job opportunities. Jobs Copilot ensures that job seekers can manage their applications efficiently, increasing their chances of landing their dream job.

The Future of Career Development with Ribbon.ai

Ribbon.ai isn't merely streamlining the job search and application process; it's empowering individuals to seize control of their careers in unprecedented ways. As the workplace undergoes continual evolution and the job market grows more competitive, tools such as Chat AI, Resume+, Interview+, and Jobs Copilot will prove indispensable for professionals striving to stay ahead.

You can watch a demo the Ribbon team put together here.

I'm excited to announce our investment in Heliose, a real-time solar marketplace that brings together consumers, installers, and lenders. Social Leverage, alongside Origin Ventures, Junction Venture Partners, and Revelry Venture Partners participated in the company's pre-seed funding round. As part of our investment, Social Leverage will be a board observer.

Founder Jason Owen and the Heliose team have long held a steadfast belief in the transformative power of solar energy. They view it not only as a crucial element in building a more sustainable world but also as a means of empowering individuals to make informed energy decisions. Their ultimate goal is to revolutionize the solar industry by making solar energy accessible, affordable, and easy to install.

In the US, energy prices continue to rise, while less than 4.5% of single-family homes have solar. And even though it’s the world’s cheapest energy source, solar is twice as expensive in the US compared to other developed nations.

Part of the reason is that today’s process of getting solar is siloed, fragmented, and all-around frustrating. Residential solar in the US is ten years behind other home services industries where very few parts of the ecosystem 'talk' to one another. Everything from quotes to installations to management happens in opaque ways and markets. As for sales, it’s essentially the Wild West where people are often sold their system in high-pressure situations on their doorstep. It’s hard to get multiple quotes, and it can often take months, not minutes.

Heliose’s technology and marketplace are set to solve these problems, making it easier, faster, and more cost-effective than ever to switch to solar. Their platform will control the entire process from the point of getting a click onto their website all the way down to contracting the installer. 

The Heliose platform is designed to make going solar the most obvious financial decision for homeowners. In the next 24 months, the Company plans to slash the price of residential solar by 50% and cut the average 60-day post-sale installation time to less than 72 hours.

Heliose invites all homeowners, installers, and lenders to join them in their journey. The Company is launching beta markets Arizona, New Mexico, and Texas and will be available for >90% of the US population later this year. If you want to explore rooftop solar, you can find more on the Heliose site or you can check out this in-depth review.

I’m excited to announce our investment in Birdwatch, a homeowner services startup. Social Leverage led the Company’s $3.2 million seed round, with participation from Starting Line, Berger Investments, FJ Labs, Path VC, and others. I’ll be taking a board seat.

Chris Rosenbaum, along with his co-founders, Stephanie Toler and Ryan Troll, recognized through past experiences that marketplaces and review sites cannot control in-home service quality. Local service providers have been commoditized and are ill-equipped in customer service. The industry primarily caters to episodic needs such as single, big projects or low-skill, hourly gig work. This leads to painful customer experiences when finding providers, assessing skill, scheduling, scoping, dealing with no-shows or late appointments, pricing surprises, quality control issues, and more.

So what’s the opportunity? It’s to avoid outsourcing the most crucial driver of customer value. In-home services hinge on the actual customer experience in the home, not just within an app. Birdwatch hires, trains and empowers their own service techs so that they can delight their customers with every visit. Whether it's repairs, enhancements, safety checks, or year-round proactive maintenance programs, Birdwatch enables customers to put their homes on autopilot. Service ease and reliability end up being the cornerstones of the customer relationship.

This funding will facilitate the expansion of Birdwatch's technology platform, aiming to be the 'easy button for your home,' and support staffing increases to keep pace with member growth. The company launched in January 2022 and currently operates in D.C. and Philadelphia. 

It’s a product I wish existed as I would definitely be a user and ardent supporter. But just as importantly, Chris has assembled a purpose-built team that is mission-driven to bring this product to market in an intelligent fashion with customer satisfaction as their north star. I’m just excited to be a part of their journey.

If you happen to be in either Philadelphia or DC and own your home, I’d love for you to try the service for yourself. The team has generously created a “leverage” coupon for the Social Leverage community which offers 25% off of the membership price for a year (a saving of $237 during the year). Check it out (apply the coupon on the payment page) and let me know what you think; we’d love any and all feedback - and hopefully to turn you into an ardent supporter and promoter of Birdwatch!

I had the opportunity to interview Surfboard founder (Fund IV) Chuhan Wang before her appearance on Panic with Friends to share her founder story. 

Chuhan spent the last decade working in investment banking at Morgan Stanley, as a Venture Capitalist, and growing a company from Series B to initial public offering (IPO). Having worked closely with many founders from both the board side and the company operations side, Chuhan realized three things:

• No one likes board meetings – they’re time consuming and useless.

• Nearly all first-time founders have zero board experience. It’s a by-product of founding a company; and isn’t what they signed up for.

• There’s tremendous variance. A few boards are highly functional, but most boards are ineffective. Boards that do a good job either have someone with a lot of experience to guide the process, or have pieced together several existing tools and built a workflow around them.

Of all the successful companies Chuhan’s worked with, an engaged board and helpful investors are the common themes. She realized if it’s something no one likes, but it’s important, and only a few people do it well, then she’d have the opportunity to productize the experience and build the interface for founders and their boards to work effectively together. “Building a company is hard,” Chuhan says. “Managing a board and investors shouldn’t be.” This is more true now than ever as founders are increasingly coming from more diverse backgrounds and need to learn to cultivate relationships with their board. These insights led her to found Surfboard. She wants to empower all founders to communicate confidently and efficiently with their board, regardless of their comfort and experience levels.

Founding Surfboard led Chuhan to Social Leverage as a seed investor. She found them through her college friend Scott Law. Scott runs Meridian Street Capital, which focuses on early-stage healthcare investments. When she mentioned she was looking to raise seed capital, Scott immediately recommended Social Leverage. To her delight, she found out later Scott was a Limited Partner as well. 

Chuhan says working with Gary, Howard, Matt, Tom, and the rest of the team as Social Leverage has been a great experience. She says Gary’s experience as a founder who’s ‘been there and done that’ provides practical advice on product strategy and go-to-market. She’s enjoyed having Gary on the board. “There’s a common misconception among early stage founders that taking on board members means giving up control of their company and putting their CEO job at risk,” says Chuhan. “The stories of Uber and WeWork certainly played a role in shaping these impressions.” But she says it’s most helpful to get a board as early as you can. The more years founders have running the board, keeping records and engaging in corporate governance, the more trusted their company becomes – which can be huge for the M&A or IPO opportunities down the road. Founders gain so much more from the expertise, time, and network of their board and investors, and this should outweigh any other concerns they may have.

Some of the best advice Chuhan’s received as a founder was to ask for help when you need it. She says being a founder can be incredibly lonely. It may seem like you’re fighting alone and no one can help you, but you should remember there are people, like your board members and investors, who have faith in you. Rather than providing them one-sided updates, engage them by asking for help. You’ll build stronger relationships from these interactions. 

On the flip side, “Ship fast and iterate” is popular entrepreneurial advice Chuhan doesn’t agree with. She says it over emphasizes speed and downplays the importance of being thoughtful when developing a product. Users are busy, skeptical about your product, and don’t have the time to learn things. Shipping too fast can introduce friction and noise into the user experience before you get any signal on whether or not a new feature is working – you end up switching gears and moving on to the next thing. Being thoughtful about what you’re building and shipping can minimize this friction and save you money in the long run. 

Founders all need motivation and on that front, Chuhan says she loves the movie “About Time”. It makes her rethink the concept of second chances and what we should do to really live our lives to the fullest. She looks at everything she does, every conversation she has, every decision she makes, and asks herself if this is what she’d really want to do if she never got a second chance? It’s about being conscious throughout daily life. When you’re more aware of what you’re committing to, you become more motivated to do it well. 

When it comes to books that have inspired Chuhan, her favorite is “The Three-Body Problem” trilogy. She’s a big fiction reader in her limited spare time. And “The Three-Body Problem” is a reminder that startup life is not everything. There are bigger unanswered questions out there. The books are a way to smooth out the everyday ups and downs while making challenges appear more manageable. 

When I asked Chuhan how being an entrepreneur has turned her into a better person, she says, “Since I started Surfboard, I’ve become more aware of my health, as I want to make sure I have a strong body to work hard and make Surfboard successful. I used to never be able to find time to work out, and now I purposely carve out time 2 or 3 times a week to do it. I’ve lost 20 pounds since I started working out more regularly, and despite working longer hours, I’m feeling the healthiest since maybe college days.”

Finally, when it comes to defining success, Chuhan says when she was on the investing side, she defined it as buying optionality to the upside and keeping a diverse portfolio to hedge risk. This required her to go broad and make educated guesses quickly. But as an entrepreneur, her success is tied to her ability to find the riskiest assumption in the business and remove that risk. Rather than stay on top of every major trend and news headline, her focus has shifted to diving deep into problems and solving them. 

This week’s [co]founder in focus is Denise Thomas, CEO and co-founder of ApplePie Capital. ApplePie Capital (Fund II) is a marketplace lender that enables franchisees to get new and more efficient sources of capital for their business.

Denise says the idea for ApplePie Capital came about as banks became more regulated and began pulling out of a lot of smaller loan financing. Most banks only do SBA loans for people who want to build out a franchise - Proforma. They’re heavily focused on financing cash flow loans. And the franchise brands make more money when they open new units; it’s key to their hearts and wallets.

Another key is obtaining proprietary data. Denise observed 33% of all loans that defaulted in SBA programs came down to 10 out of 3,800 brands. She knew she could build a data-driven underwriting model that would be consistent in targeting brands to serve. The industry is huge, and Denise knew she could build finance-in-a-box for businesses in a box. Franchise is data-driven and all about consistency. 

Early on, Denise received key advice worth heeding. She asked an early stage equity investor how to measure her success for the first 12 to 18 months. He said, “When you start out, you usually have 5 or more big obstacles to overcome in a new venture. If you can get it down to one problem in a year, you are going to do well.” Other advice that’s served her well: Choose your board members wisely, and don’t allow a major capital markets deal to be negotiated by anyone but you. 

Franchises / Franchise Lending

When it comes to misconceptions about franchising, Denise says it’s that a brand does not employ franchisees. They license the right to open a franchise location using a blueprint and guidelines. 

Most lenders are focused on the top Quick Service Restaurant (QSR) brands and don’t fathom how anyone could lend to so many other franchise brands safely. These banks aren’t structured to pursue a vertical business model. They’re horizontal and mostly provide services on a geographic basis. Creating a data-driven model to pursue an entire segment is just something they don’t do. 

Denise says franchise is unique because there are multi-unit owners, along with various guarantors and entity structures. It is complex. Systems have to be built to handle complexity and save time for the returning customer. ApplePie Capital has a 30% repeat rate and must make it easier and easier for clients. These are busy people running multiple small business locations, and their loan size continues to get bigger and bigger over time. Denise has sought banks that are comfortable with that growth.

Social Leverage

Denise connected with Social Leverage through her lead seed investor, Freestyle Capital. She says both firms have done a lot of co-investing and are of the same mind.  

“Social Leverage is a wonderful and inspiring firm for early stage investors and beyond.” she says. “They know how to support an entrepreneur and have empathy for them.” Denise notes the firm supports founders in any way they can: introductions, fundraising, and some of the partners in the firm committed capital to purchase loans when ApplePie Capital ran an open marketplace. And they are not a burden.

One-on-One

Pete: Where did you get your entrepreneurial spirit?

Denise: Probably first from my father. When I started my career, I worked for a very large company for six years and the CEO of that company invited me to join his next venture. It was at that company that I began to branch into originating my own ideas. I had great mentors who followed and supported my entrepreneurial spirit and actually backed me to pursue my first.

Pete: Are your parents entrepreneurs?

Denise: Both of my parents have passed. My father was a serial entrepreneur and during my youth I actively participated in learning about his businesses. He was way ahead of his time without the internet. He created a car mart using drive-in theaters that were not used during the day to create a marketplace where people could come and sell a used car with an estimating service to value the car. That’s just one example. 

Pete: What was your key driving force to become an entrepreneur?

Denise: I am endlessly curious, don’t mind well. I don’t follow rules, I find ways to do things better, faster and easier. When someone does not see the possibility, I am very impatient and don’t want to spend my time with narrow thoughts or people so I gravitated to more and more freedom to do what I believed was possible and that no one else had thought of or done. I also like creating order out of chaos and the rewards that can come from doing this and taking risks. Lastly, I found I had a knack for selling and fundraising. It was part of my DNA. I can also quickly assimilate complex things and focus on the most important thing. 

Pete: How did you come up with the idea for your business?

Denise: In my last company, I met a firm that was purchasing Prosper and Lending Club loans through a fund and learned all about alternative lending. I wondered why no one else was funding new small businesses and a friend and colleague, who became a seed investor in the company, brainstormed with me where to begin in the vast world of small business. The criteria was that he had to be somewhat standardized and that led him to recommend looking at franchises. My family had been an investor in a master franchise for over 20 years and my brother-in-law came back to the US after running Coca-Cola in Mexico for years and decided to buy franchise rights for all of San Diego. Both of these experiences were positive and I had a place to start my inquiry and research the market. 

Pete: What was the toughest challenge starting the company, and how did you overcome it?

Denise: The toughest thing was our chicken and egg problem. How do you get Franchisors to commit when you don’t have money to lend and how do you get investors when you have never lent money before? 

There were several things that solved this problem but the central and first part of the solution was to raise money from individual investors/family offices and start a marketplace where high net worth investors could fractionally invest in these loans. We also created a very plausible credit model that was driven by historical data from SBA loans to franchise businesses and a very qualified credit executive who joined our team early. 

Pete: What makes ApplePie Capital stand out of the crowd?

Denise: We are the only 50 state conventional lender that has served over 200 franchise brands in 7 years and financed new franchise locations as well as existing franchisees with cash flow loans. We’ve lent over $1.5B to date. 

Pete: How do you generate new ideas?

Denise: By constantly thinking about how to make things easier whenever I encounter a problem that applies to many people or many companies. I like replenishing markets where there will always be a need. For example, franchise has been around for decades and is not a business model that is going away. There are always incoming franchise brands starting out. There is always growth in brands that have not met their footprint goals. There is an international market. 

Even outside the business I created and am running, I see things that could be done or I invest in things that I believe in even if I am not going to be the one to do them. Everyone in this country will eventually get Presbyopia where they will need reading glasses or other solutions to their problem. My family invested in fundamental technology to make a difference in this area. Once a solution is found, it is a huge market that will never fade away.

Pete: What best motivates you?

Denise: I like the tension that comes from finding a way forward on a problem no one else seems to be able to solve. The other thing that motivates me is making a difference and building something that will provide a legacy for my family and others who help me do it. It is not often you get to create and work in a business that will still be around after you have gone. I think we have one of those businesses. 

Pete: How have your entrepreneurial motivations changed since you first started?

Denise: I am a serial entrepreneur and have done half a dozen start-up’s so if I think of this current one as my last, I would say that what has changed is that it is no longer just about an idea I am attracted to, it is about how I can make a lasting difference in the world. 

Pete: What’s your greatest entrepreneurial achievement to be proud of?

Denise: I would say raising over $1B in lender commitments and building a brand and a company that is well thought of. We have doubled our team in the last year and we have only had one person turn us down in a market that has been very hot. In every interview I do, and I interview everyone who wants to join the company, I hear the same great things about our team and culture. That is very rewarding.

Pete: What book has inspired you the most?

Denise: I really enjoyed the book between the Dalai Lama and Paul Ekman: Emotional Awareness: Overcoming the Obstacles to Psychological Balance and Compassion. 

Pete: What do you do on a daily basis to grow as an entrepreneur?

Denise: Ask myself what I can do better than yesterday each day.

Pete: Do you believe there is a winning formula for becoming a successful entrepreneur? What is yours?

Denise: The Ability to set a Vision. Perseverance in the face of obstacles. Resilience and the ability to pick up and not just carry on, but thrive. Modeling what you expect from others and leading by example. Being in service to others and having empathy and clarity.

Pete: What popular entrepreneurial advice do you agree/ disagree with? Why?

Denise: Never give up. Wholeheartedly agree with this one because it is never easy and if it were, someone else would have done it already.

Pete: Who is the one entrepreneur to be your greatest example and inspiration?

Denise: I think more about great leaders. I have always struggled with this question because I don’t really know what other leaders are really like until their memoirs are written. Steve Jobs, for example, was an incredible innovator, he pushed people to their limits including yelling and degrading people in meetings, but you never knew about that until the book was written. I don’t like to name people for this reason. I think there are leaders who created amazing brands with great values like Southwest and I once heard the origins of the values of Starbucks and how they originated from the founders experience as a child whose father fell down some stairs as a diaper delivery man and he had no worker’s compensation. The family almost did not survive this and when he created Starbucks he valued benefits for every employee. I think a great leader leads with heart and authenticity. One who creates clarity, connection and trust with their teams and drives sustained business performance. 

[Let me share] a quote from an investor and culture development firm, Trium Group, on what he observed when he started his company: 

“Most leaders were not focused on leading with heart and authenticity, nor were they creating the levels of clarity, connection, and trust with their teams required to ultimately drive sustained business performance.”

Pete: How do you define success?

Denise: True leaders help both themselves and those around them to do the right thing. They chart a course by inspiring others with a shared vision and, in turn, create something new out of the familiar. Leadership is, at its core, the ability to map out the best route to success.

On success itself, I think a life well lived, sticking with your values even when it is challenging and creating value for yourself and others (employees, customers, shareholders) is what it is all about. 

Pete: What entrepreneurial tricks (hacks) have you discovered to keep yourself focused and productive in your day-to-day busy schedule?

Denise: I decide the day before every day to focus on my top 3 things. I know I can get that done.

Pete: What would you advise to people who want to go into business?

Denise: It is too specific to be general. It depends upon what they want, how hard it will be, what they are willing to sacrifice, how much they want it. 

Pete: How do you think being an entrepreneur has turned you into a better person?

Denise: I think it is challenging to be an entrepreneur and it develops a greater capacity for many things. When you don’t think you can do another thing, you find strength, when you make a mistake and can own it and grow from it, when you get feedback and respect, when you climb a very high mountain and end up in a valley of death but survive it. You learn you can do almost anything you put your mind to. 

Pete: What makes you feel out of your comfort zone? How do you handle these situations?

Denise: Anything that is very important for the first time. Whenever I am not comfortable, I lean in and research, get active, ask others, etc. Sitting still and frozen when you are uncomfortable will get you nowhere new.

Pete: Share some of your failures and the best lessons you have learned from them?

Denise: I would say the most painful failures are when you fail a person or feel like you did. I try to learn and repair. I have found that most people are very forgiving and thoughtful even if they were impacted by something you did or did not do as long as you demonstrate true care. 

Pete: What sacrifices have you had to make to be a successful entrepreneur?

Denise: My greatest sacrifice was probably not spending time with family when my children were younger. I would also say for many years my social life suffered due to the amount of time I was working. Lastly, and this does not happen anymore, my health may have been relegated to the back seat - sleep had to be sacrificed for a period of time.

This week's Founder in Focus features co-founder Tyler Denk of beehiiv, a Fund IV portfolio company that streamlines the ability to create, customize, monetize, and scale email newsletters. beehiiv was co-founded by Morning Brew alums Tyler Denk, Benjamin Hargett, and Jake Hurd.

Tyler’s entrepreneurial drive is a combination of four things: physics and engineering, eternal optimism, a general annoyance when things don’t work properly, and he’s hyper competitive. He fell in love with physics in high school and studied engineering in college. Tyler is completely infatuated with learning how the world works while pursuing the most optimal solutions to complex problems. 

This combination keeps Tyler looking through the lens of “how can this be done better?” He says this approach has been both a blessing and a curse, but he loves solving problems and the challenge of trying to do it better than anyone else. And if you really have an entrepreneurial spirit, Tyler says’ it’s hard to find a well-defined “job” that scratches that itch. While some people love direction and boundaries, others thrive in open space and ambiguity. Tyler has always enjoyed the latter. 

His family work ethic runs deep. Tyler’s father ran a car detailing business on the side while working full-time. He did this throughout most of his career, waking up at 4:30am every morning for his full-time job and detailing cars on his day off. Tyler says his dad’s work ethic was next level, and he never once complained. But more than work ethic, Tyler observed the passion behind it. A love of cars. His dad took tremendous pride in his work. He knew he could provide better service than the larger chains. Tyler says, “It’s as cliche as it gets, but I truly don’t think he ever felt like he was ‘working’ when he was detailing these cars. He truly loved the craft.” In addition, Tyler’s grandfather started a large shoe business in Baltimore when he was in his 20’s. And at 95 years old, he still shows up to work every day. 

Birth of beehiiv

Tyler had joined Morning Brew back in 2017. He was the second employee. His role spanned engineering, growth, and product; the classic early startup employee roles. He was able to build a lot of impactful custom tech: the website, the referral program, the content management system, the ad management platform, the cohort analytics, and more. Tyler did everything needed behind the scenes for a newsletter sent out at 6am every morning. It was an entire bespoke tech ecosystem that fueled internal operations and growth. He had a front row seat and a hand in building what would become a 3.5 million subscriber behemoth, and the true leader in the newsletter space.

From his front row seat, Tyler witnessed a ton of inbound interest from others wanting to leverage some of the tools used by Morning Brew. His eyes opened to the potential utility of some of the things he’d built, and he saw a void in the market. 

Simultaneously, a few other platforms in the newsletter space were gaining notoriety. But from a pure product perspective, Tyler was unimpressed. He felt his unique perspective on what it takes to scale a massive newsletter and his first-hand experience building tools, along with the gaining popularity of newsletters, was a real opportunity to build something special. Tyler, along with his co-founders, are “democratizing” access to the tools that give other newsletters the ability to flourish.

The experience and perspective beehiiv brings to the space has made them stand out. The early days at Morning Brew and the caliber of the team has made their platform unique. They’re not just copying everyone else's playbook. They’ve spent years honing and refining content, sales, and growth. They’re building tools, dashboards, processes, and customization that fits creators exact needs. The granularity of insights and feedback has compounded over years of iterating and scaling. This gives beehiiv an advantage and unique edge in separating what moves the needle in the industry from what’s vanity. 

Entrepreneurship

Coming back to Tyler’s own journey into entrepreneurship, I rounded out our interview looking for some insights useful to up-and-coming entrepreneurs:

When it comes to generating new ideas, Tyler says it’s hardest to come up with new ideas if you’re consciously trying to come up with new ideas. Surrounding yourself with smart, curious people and engaging with others is the catalyst that will take you to the next level.

For motivation, Tyler has reached the conclusion that there’s no one thing that motivates him. It's the confluence of expectation, emotions, and aspirations moving the needle together. And Tyler continues to evolve as an entrepreneur. He says he’s enjoying the process more now than in his younger days. He grew up reading TechCrunch and viewed the startup world as all glamour and upside. And though he realized it would be difficult to scale a startup, he’s come around to genuinely enjoy the day-to-day challenges versus growing frustrated.

I asked Tyler what has been his greatest entrepreneurial achievement so far, and he says he’s still very much in the thick of it. He hasn’t had a huge successful exit to hang his hat on yet. He’s not filed any life-saving patents; it’s the small victories. For instance, successfully hiring someone to join the beehiiv team really resonates with him. Tyler notes everyone is on their own career trajectory. They’re looking for ways to advance their careers and position themselves for success. So when someone makes the decision to join beehiiv as what’s best for them, it just hits different. There are so many layers of validation packed into that decision for Tyler. 

One of the books that’s inspired Tyler most is The Go Giver: A Little Story About a Powerful Business Idea by John David Mann and Bob Burg. As for growing as an entrepreneur, Tyler says it’s important to read and listen. “I think one of the best things to acknowledge is that there’s way more that you’ll never know than the inverse.” according to Tyler. Tap in to other people’s experiences and extract that knowledge, whether it’s articles, books, podcasts, etc. Position yourself to be well-informed and malleable. Constantly learning and adjusting is the key to succeeding as an entrepreneur. Other than that, there really is no winning formula. The best entrepreneurs often fail many times. Tyler says you should develop the ability to keep learning and trying.

In the weeds

What popular entrepreneurial advice do you agree/ disagree with? Why?

The ‘hire fast, fire faster’ mantra is one of those bits of entrepreneurial advice Tyler disagrees with. He says hiring is exhausting and firing is even more exhausting. The constant shuffling and instability of a startup team in the early days does more harm than good. Tyler also recommends you avoid putting yourself in a position where you need to make a quick hire out of desperation.  

Who is the one entrepreneur to be your greatest example and inspiration?

Elon Musk. 

How do you define success?

I think it’s totally subjective, but for me it’s having the ability to spend time doing what I want to do, when I want to do it. 

What entrepreneurial tricks (hacks) have you discovered to keep focused and productive in your day-to-day busy schedule?

I try to cluster all my day’s meetings into a 2-3 hour block. That gives me the rest of the day to focus and do deep work without the constant context switching. 

What advice would you give to people who want to go into business?

Start with something you have a true competency in. I’ve attempted several side projects in industries and disciplines that were flashy and popular, but I had no business being there. Being able to really command the space you occupy due to experience or reputation really helps legitimize your business and have others (customers and potential employees) believe in you.

What is your greatest fear, and how do you manage fear in general?

Not spending enough time with the people I care about. More often than not I try to keep it top of mind because it's usually less scary to face it than to suppress it.

In what way has becoming an entrepreneur turned you into a better person?

It’s forced me to create a ton of great habits. To put myself into the best position to succeed, I need to be locked in and feeling good/motivated for sustained periods of time. To do that I’ve developed a ton of great habits like waking up early to go to the gym, eating healthy, meditation, reading at night, going to sleep early, etc.

Share some of your failures and the best lessons you have learned from them?

The biggest failures (or at least the times I’ve felt the lowest) are when we haven’t been able to close a hire I was really optimistic about. For all the reasons I see a successful hire as incredibly validating, having someone reject your offer is just as extreme in the opposite direction. It’s more so amplified on a small team in need of additional bandwidth, and after spending weeks working your way through the hiring process. The few lessons I’ve taken from this is that it’s never done until it’s done (so keep the pipeline flowing), and more importantly you need to do everything you can to position the company in such a way it’s in their best interest to take the offer. No ones going to accept an offer because you really need them. They’re going to do what’s best for them. So build the company in such a way where they’d be foolish to decline an opportunity to work for you. And don’t forget part of hiring is selling too.

What sacrifices have you had to make to be a successful entrepreneur?

Mostly just time. There really are no shortcuts. It's a lot of work, a lot of long days, and a lot of weekends staying in. Fortunately I’m a bit of a sicko and really enjoy it, but it’s come with its fair share of missing out on spending time with others.

Gary, Tom and I are excited to announce Matt Ober is joining the team at Social Leverage. Matt and I connected about 11 years ago at Stocktwits, where WorldQuant became the first customer to buy and integrate the Stocktwits data feed. Over that time, we'd catch up whenever either one of us was in New York or California. Subsequently, Matt became a limited partner in Social Leverage Fund III. Now we've brought Matt onboard as a general partner. He brings a wealth of experience in fintech, data and analytics.

Prior to joining Social Leverage, Matt was the Chief Data Scientist at Third Point. He built the data analytics and technology platform used to enhance the firm's investment capabilities. Prior to Third Point, Matt was the Head of Data Strategy for WorldQuant and was part of their team focused on private investments in fintech, data, and technology. He's been an active angel investor for over 10 years and holds a Chartered Alternative Investment Analyst (CAIA) designation. In addition, Matt sits on the board of governors for his alma mater, California State University Chico.

Social Leverage is excited to announce a $1.5M seed investment in FinChat, a Toronto-based generative AI startup that is shaking up the investment research and analytics landscape.

On behalf of Social Leverage, I will be joining FinChat’s board of directors leveraging my previous experience in data leadership roles at both Third Point and WorldQuant to help contribute to the company’s continued success.

Founded by Braden Dennis, FinChat's journey began as an experimental AI tool alongside sister company Stratosphere, aiming to enhance research on publicly traded companies. Braden and his team drew on their experience from co-launching Stratosphere to conceive FinChat, a platform that merges large language models with financial data.

With FinChat’s access to rich financial datasets and their own unique segment and KPI dataset, they are positioned strongly amongst others in the space.

The platform's growth trajectory has been phenomenal, surpassing 100,000 users within a month of its launch in April 2023, a milestone that Stratosphere took two years to reach.

The company offers a subscription-based public equity research platform tailored for both retail investors and professional portfolio managers.

However, FinChat's focus is not just consumer-oriented; its key strategy includes selling its API to businesses, allowing them to integrate their data into FinChat's platform. This dual approach positions FinChat as a versatile player, catering to both individual investors and larger firms.

FinChat addresses a critical need in the investment industry by automating data retrieval and analysis, thus freeing up analysts to focus on more strategic tasks. Their AI-powered solution aims to significantly enhance efficiency and decision-making in investment analysis.

Leading FinChat’s seed round which brings their total funding to $1.75 million, reflects our confidence in their vision and strategy. As early backers of many other successful FinTech companies, we recognize the potential for FinChat to be a first-mover in applying generative AI to investment research.

To test out the product and learn more, visit FinChat.io.

The 4th of July festivities are behind us and the US Women's team has won the World Cup. Now it's time for us to take a quick look at the first half of 2019 for Social Leverage and our companies.

1upHealth took first place honors in MassChallenge HealthTech's 3rd co-hort pitch event. They also took home the startup's choice award via popular vote. Between the two awards, the company received $110,000 in non-dilutive funding. We had invested in 1upHealth earlier this year.

Validately was acquired by UserZoom. Social Leverage Fund II invested in Validately with the belief that the user testing market was ready for a better solution. Founders Steven Cohn and Mark Bathie delivered by building a terrific product that their customers love. We're looking forward to seeing what Validately can do as part of UserZoom.

Distil was acquired by Imperva. Distil had been a Social Leverage Fund I portfolio company since we first invested in 2013.

Kustomer raised a $40 million Series D round, led by Tiger Global. Earlier in the year, Kustomer had raised a $35 million Series C round, led by Battery Ventures. These two funding rounds culminated a total of over $100 million raised in a single year. Kustomer is building a modern customer service platform, used by incredible companies like Away and Ring.

Life360 went public! The family tracking app made their initial public offering in Australia on May 9th, raising over $100 million. The stock rose a little over 5%, giving the company a market value of $535 million. Life360 is the biggest tech IPO on the ASX in three years, according to CEO Chris Hulls. Life360 was a Social Leverage LLC portfolio company.

Return Path was acquired by Validity. Fund I had invested in Embarke in 2013, which in turn split their assets in selling the company to both Return Path and Seismic. Seismic raised their Series E last December.

Shippable was acquired by JFrog. Shippable had been a Social Leverage Fund I portfolio company since we first invested in 2013.

StayTuned Digital raised $2.5 million to help video creators distribute their content. TechCrunch covered the funding and we had our viewpoint on it as well.

ChartIQ completed a $17 million Series B financing. They have begun to role out their Finsemble product while also expanding the team in the US, London and Hong Kong. ChartIQ is a Social Leverage Fund I portfolio company.

Open Roles: Social Leverage companies are continuing to hire great talent. An updated view of the companies that are hiring in our portfolio is visible on our site via AngelList. We’d appreciate help finding terrific candidates.

We continue to thank and celebrate our founders. Our success is truly because of them. We're looking forward to what the back half of the year will bring.

Most of us have never tried to import a pallet of goods manufactured abroad. It seems so easy though. Order a new iPhone and it's on your doorstep, all the way from Shenzen to Kansas City in less than a week.

Wikipedia defines freight forwarders as:

If you're not at the scale of Apple or Amazon, transporting goods internationally is extremely challenging. Freight forwarders reserve space on trucks, trains, ships and planes. They ensure cargo is properly transported from carrier to carrier and port to port. And they prepare and provide customs documentation. They are the project managers of the shipping industry, managing logistics and transportation. These are all specialized skills, performed by upwards of 500,000 worldwide companies. This is a multi-trillion dollar industry that is largely unknown.

And yet, the front end of this industry is manual and outdated. It takes an average of 50 emails back and forth between a shipper and a freight forwarder to agree on details for a shipment. Behind the scenes, freight forwarders scramble through spreadsheets, send out emails and figure out logistics each and every time. The user experience is broken.

Founder/CEO Julian Alvarez and his brother Juan Alvarez have created Logixboard to positively impact this industry. Their first product improves the user experience for freight forwarders' customers. Shippers can now long into a modern web app, easily create new shipments, see the status of their inquiry and ultimately track their shipments.

When I met Julian, I quickly understood that he is a special entrepreneur. He's deeply passionate, committed and knowledgeable. He has the integrity, tenacity and grit to turn Logixboard into a large scale company. The idea originated with Juan and his direct experience working for Pilot Freight Services. Juan heard first hand from his customers that were pleading for a modern solution.

Logixboard was introduced to us by our friend Chris Devore as the team was graduating from TechStars Seattle.

To learn a bit more about the problem Logixboard is solving, take a quick look at this video:

We're thrilled to support Logixboard at this critical point, and believe the company is well-positioned to democratize digitalization for thousands of freight forwarders across the globe. I'm pleased to be joining Logixboard's board and look forward to helping them with their mission.