Beneath the Tip of the Fundraising Iceberg: What Challenges Come After Getting the Verbal Yes? | LSI Europe '23

Transcription

Adam Rosenwach  0:05  
Hi, everyone, thanks for joining for the panel. So we were speaking about putting together a panel that was going to be something different at this conference, something different than hearing VCs talk about what they're looking for, or hearing kind of how to help, how to lead a company and how to de risk it. We'd love to talk about something that's kind of a black box for most employees in a company, which is after you have commitment from your first investor, what do you do to make sure that that deal closed closes and you're going to start a good relationship with these partners. So I have a great panel here. We have a great panel here. I'm Adam Rosenwach. I started as a musician. I was a music producer. Then I ended up with the Curtea team as their bookkeeper. And now we're 12 years later and I'm Chief Business Officer of Deerfield catalyst, which is a joint venture between Deerfield management, the venture fund and createa. So why don't we go down the line with introductions and we'll kick it off.

Todd Usen  1:11  
Hello, my name is Todd Usen. I'm the president and CEO of Minerva Surgical maneuver surgical is a publicly traded women's health company located in California and focusing on on uterine health and pelvic health. And I've been 30 year medtech. industry veteran, I guess I cut my teeth at Boston Scientific I spent about 13 years there. And my last role around the United States and the neurovascular space stayed at big companies. From there I went to Smith and Nephew and one of the top four orthopedic companies located here in Europe, and had the opportunity my last role there I was the president of all of orthopedics, leading both trauma, joint and sports medicine. And then I was recruited to another big company Olympus where I was the president of all the medical divisions at Olympus, and we went from six divisions to 12. So why am I in a panel that says, What do you do after you get the verbal? Yes, I then went to the dark side and really enjoyed it. And I went to startup world and I was the CEO of a first CEO with Activ Surgical and active surgical had completed the world's first fully autonomous robotic procedure of soft tissue with advanced visualization and AI and software took that technology raised 92 million from concept to now it's commercial being sold and purchased in hospitals, and partnered with some of the scope and robotic companies in the world. So and then I came to Minerva Surgical, going a little back to the bigger roots, and still need to talk about some verbal yeses, even in this role. So it's nice to be here.

Claire Masterson  2:37  
Excellent. So I'm Claire Masterson. I'm the current CFO of Caresyntax. Although I stunt I'd say 50% of my career on the other side of the table, so starting off in financial services working for a very large family office. So I've seen things from the other side. And then from there moved into more commercial companies. So always in a finance role. So Stellar Lumens Greer, which was a listed allergy immunotherapy specialist, and then into the world of venture with care syntax for the last four years where I supported them raising about 180 million over the last three years. So how I feel I felt like I've pretty much spent the entire last three years rate fundraising in some form, or other so I feel like I have the bruisers to contribute to this conversation.

Kyle Faget  3:30  
Thank you. Hi, I'm Kyle Faget. I'm the attorney up here with my notepad and pen. I'm a partner at Foley and Lardner. I sit in Boston, Massachusetts, I'm the co chair of our national healthcare and life sciences practice group. And I co chair our medical device area focus group there. My practice includes regulatory counseling, compliance, counseling, and a whole variety of contracting issues. So clinical trial agreements, manufacturing agreements, commercial agreements, kinda you name it. Before joining Foley about seven years ago, I was in house attorney at two pre commercial stage startup companies at Santa Fe, also at Boston Scientific. So yeah, I'll be here taking notes. 

Adam Rosenwach  4:25  
Great. So we cover everything here. We have startups VC side, big startups, early stage, and we even have a lawyer so we're ready to rock. Okay, so first, we wanted to find what it means. What does yes mean? Right, because the title of this panel is what happens after you get that first. Yes. But as I think we're about to hear, there's a lot of different things that happened before you even get a term sheet from that 'Yes'. So why don't we open up to the panel? What do you consider the moment where you actually get a yes that you are about to be funded, or at least like on a very certain track that fundings coming in.

Todd Usen  5:08  
So from my perspective, yes, there's probably a 'yes' from the investor. There's a 'yes' from the CEO. And then there's a real 'yes.' Yes. I mean, 'yes', to me is when the term, the term sheet sign, for the most part, because then diligence happens and things can go continue to go on. But in a bigger sense, yes, is when the money is in the bank.

Claire Masterson  5:31  
I was actually gonna say exactly that. So I'm a finance person. So for me, you know, I like to see the cache hit the bank, and the real close is the final 'Yes'. But, you know, term state term sheet is obviously incredibly important, you know, means that the investor has made that decision to progress. I think it's really, really important that before you get to that term state sheet stage, that you've actually had the opportunity to really go through a pretty deep level of diligence already, so that there's no surprises lurking whereby there might be any retreating of terms after that point. But certainly, I feel at that point, it's almost yours to lose as, as sort of a company that they're investing into and, and really, it's how well you can manage that process from that point to get them over that finishing line.

Adam Rosenwach  6:18  
So can you talk about a bit more the different kinds of commitments that you've gotten? Because Okay, so, yes, when we know what's going to happen, that's when money's in the bank? Definitely. What kind of different situations have you been through in the rest of the panel where you've gotten that first soft commitment? And how did you push that over the finish line to get the whole deal put together?

Kyle Faget  6:41  
So I think I'm more prodding you we talked a bit yesterday, when you get those soft, yeses, and how it can be difficult to get somebody to actually close? And how many investors will wait for that one closure to occur before they'll actually come to the table? And Claire, maybe you can add a little bit in your experience about that.

Claire Masterson  7:06  
Yeah, definitely. So, you know, on our experience, especially with market the way it is now there is even when investors have said yes, and they want to commit, you know, ICs will have different terms as to what that yes means. And let's say if you're raising 50 million of fundraising, and your lead tickets, 20 million of that, they may well have a stipulation to say, well, that's fine, but we're not closing until you've got 35 million syndicated. So that's where you can sometimes get into this sort of chicken and egg scenario where you're really trying to pull together the whole syndicate. So it's not just one 'Yes', you need. It's often several yeses all committed to closing at the same time. And, and kind of getting that commitment for the first person to pull the trigger can sometimes be a little like herding cats, quite frankly.

Todd Usen  7:56  
Yeah. And that, yes, today is even different than Yes, was two years ago. I mean, yes today, you have to you can't be surprised with the capital markets, where they are and what what's going on. And two years ago, or three years ago, I didn't think that it was going to be an investor that would do anything different than traditional liquidation preferences, or anything different with specific demands, because money was easy to get two or three years ago, if you just did your job. It's different now. So, you know, yes. Be careful what you sign up for, yes, we want that money, but know that what you're getting into? And remember, it is just a term sheet. It doesn't mean it's final. And you know, that's what I would say on a yes, because of all of a sudden you start getting these terms that make no sense for the company, and you believe in the company. You gotta keep moving. And it's, it's not always easy to look, look at a yes and actually walk away. But if yes, can turn out to be really dangerous process if you if you go on with the wrong partner that's truly looking out to just protect their money, and now looking out to help the entrepreneur build their business.

Kyle Faget  8:57  
So I think that's actually a really important point, particularly as you're maybe looking for the one that will sign and as you know, you're getting more desperate to actually find money, given that the market has shifted, understanding what it is that you're willing to give on before you go out to the market, I think is actually important. I mean, this is a principle that's true in contract negotiations to like, what's your giving point? What are you willing to give up? Is it a board seat that you're willing to give? Where are your flexibilities and then try to stick to that, to the extent that you can obviously, you know, depending on where you sit visa vie bargaining position, that may, you know, instruct your tolerance level or your risk level, but at the same time, at least pre defining for yourself when you go out, okay, here's where we're willing to go. And I say that just because I've seen clients over time, ultimately fold on things that were really important to them because they needed to actually get money in the bank. That's a super important thing obvious So you don't want to close the torso of the company. But having said that, you can have your company head in a totally different direction than you anticipated because you're willing to give in places that you didn't anticipate upfront.

Adam Rosenwach  10:15  
Diving a bit more into that into the terms. I'm curious, do investors and entrepreneurs typically have the same terms that they're not willing to negotiate on? Or do you find that they're different? Like, what are the most important things that you've seen as a lawyer from investors and the most important things from entrepreneurs. And then from you, I'm curious, but the most important things you look for in a term sheet are if we could start with with that, Kyle, I'm curious. 

Kyle Faget  10:40  
Yeah, I mean, I think, right. The two different parties. And again, this is always going to be true in a contractual negotiation, you're looking out for your interests. So liquidation preferences are going to make a difference, how much power and control you have, and you're willing to cede, those are things that matter equally, but in many ways, from an opposite perspective. And, again, something we sort of spoke about yesterday is understanding that your partner that you're bringing to the table, do they have the same exact goals that you do and goals for the company, and that can get reflected in the term sheet. And it can also make a huge difference after the money's in the bank and what that partnership looks like, moving forward.

Claire Masterson  11:24  
Yeah, agreed. And, you know, some maybe often overlooked terms and things like major investor writes level of reporting, and that sort of thing. And I think, you know, especially for early stage companies, really considering if you have a very minimal finance team and your investors want really detailed monthly reporting, you know, what impact is that going to have on your staffing and resourcing and your ability to spend time focusing on the business and growing the business rather than just serving, you know, investor reporting, and investors have a lot of different needs. And the other thing, you know, we talked a bit about board membership, you know, often the lead investor will take a board seat. So really understanding what is that? What is that investor bringing to your board? You know, do they have the right strategic contracts or commercial experience and, and one of the things I found is, you know, the board seat Belongs to the firm or the company that's invested. So, actually, the individual who ends up on your board, you might find that you actually need to be very specific and say, No, it's not appropriate for you to send an associate along, he's trying to get some experience. But actually, we have a very small board. And it's really important that those people can add the right level of value. And then the other thing you can end up with is a lot of board observers, which is definitely something in my experience that can have can either really enhance a boardroom where they are the right people, and really add a lot of depth and color to a conversation. But it can also, you know, mean that the board is much less effective, because you're not as focused. And so yeah, all of these sort of smaller points are actually really important. I think

Kyle Faget  13:01  
the board seat pieces is particularly important understanding, and even having a conversation to make sure you're on the same page with that investor about who's going to actually occupy that seat. Is it going to be somebody who sees and understands the business understands the industry and is actually in a position to move your business forward? Are they using that seat as a testing ground for one of their younger partners, and I have a client right now currently, that is experiencing that were a very green individuals sitting on the board and is sort of bowling around the company with very little understanding of what it means to actually occupy that position. And it's causing a lot of chaos. And, you know, again, they own the seat so they can fill it, but at the same time, if you can at least have a mutual understanding of what attributes are required for that seat that can go along with and it's,

Todd Usen  14:00  
it's really, I would jump on the board piece to it says a CEO, you're interviewing a venture capital or private equity firm just as much as they're interviewing you. And you know, I've had both situations one, you have lead investor who sends a really talented but not lead investor to sit on your board. It's shut down every vote, unless you present it everything to the lead the true head of the firm two days before because you will get back to we're not we're not putting our vote in for things that you had to vote on. The flip side is people that run the work for the partner that she was the best I've ever worked with, in the sense that she was a former operator of a major medtech company. She knew exactly the position I was in she knew exactly what we were doing. We set it up we were really excited. And then when they were a lead investor of around, and then the general practice practitioner, the whole four general partner I should say of the whole firm decided he was going to be on the board, brilliant, brilliant person, but didn't know the company wasn't the excitement that we had. And three years later, I don't know if he's ever stepped foot in the building of the company. And he does everything by zoom and really smart. I'm not beating anyone, I'm not at that company. And I'm not talking about who so I'm not going there. But it wasn't the reason that you so excited to work with the VC, it's really important because no one's interested, it doesn't help our resumes, or our companies to hear that, well, I sit on nine or 10 boards, that doesn't mean anything. I mean, that's, you know, so that's nine or 10 hours a month that you spend versus, you know, on different companies, and I lose that. So we're excited to work with VCs, but we really need VCs and that are real partners to the to the entrepreneur, and that that's dangerous. And a yes, you get a yes, sometimes you don't get to choose, they have a question for

Kyle Faget  15:46  
that. To that point, though, you know, I think even understanding why you're getting a 'Yes', what's the interest, and I have a situation with a client currently, where the investor, they're at a very unique inflection point where they're replacing the CEO, they're really at this, you know, about to really launch and create something huge. And the initials at the company all want to grow the company and make it a very big deal. But the investor, as it turns out, wanted to come in and build to the point where they can sell. So now they're in this place of trying to replace the CEO. And there's two totally different visions for what this company is going to be and do. On the one hand, like I say, we want to build this practice thing, particularly the first CEO, right, because the first CEO, this is typically their baby, they've grown it, they built it, there's a lot of pride involved. And so they want to hand this off to somebody who can take their vision and explode it into something fantastic. Whereas the investor, on the other hand, is like, Yeah, that's really great good for you. We want to flip this and get a return on our investment and sell this thing as of tomorrow. And that really, really impacts the credentials of the CEO that's going to come in. And is there any way to solve for this perfectly? Probably not. But if, in the initial conversations when they got that, yes, they understood, hey, we're investing because we want to flip this company, that would have been an important thing to know, you might have walked away from that particular investor, because that is not your vision, you want to build this thing into the multi million dollar corporation that's really successful. And for that particular CEO, you know, they can go to bed at night and say, Listen, I started something really, really big. And this is my dream. And so they're they're just totally diverting paths. And they're, again, you know, at stalemate with who's the next CEO, what are the credentials of the next CEO? And some of that might have been able to be avoided if, when they got the yes, they actually had a conversation. Why are you saying yes? What is your actual goal for this company? Absolutely.

Adam Rosenwach  17:56  
After after the yes, you should definitely understand what your investor wants, because the investor, they don't always want what's best for the company, their job is to do what's best for their investment. And sometimes those aren't exactly the same thing in the eyes of the founders or the current CEO, we do have a question.

Todd Usen  18:22  
I think it's a it's a good question. And I don't know if it's the accurate percentages, I was very happy and pleased that 100% of sign term sheets lead to because hopefully, if you do that, if you have a good enough relationship and do the work with the VC partner upfront, like if they don't just get signed in a few days, right, so these are the people that a new entrepreneur meets here, if you're looking to raise money this quarter, you should have met them a year ago at this meeting and build a relationship. And that's, you know, so you have to have that time. And so hopefully the people you're talking to you've built the relationship, they know you they're watching the company, they're keeping an eye. And so I think 100% can be signed, but there's still time and it's still, you know, a pain in the butt oftentimes, because everyone has different if you're if you're in the round, second phase, you're in a B round, or you're in in a prime round, your major investor rights and everyone that was early says, I put all the risk in this guy's coming in with all this money. They're not getting what I get. So you know, so there's an there all right. So but I do I believe 100% should be if the CEO is the kind that just wants to shop a term sheet. I actually think that's almost disrespectful. Also, I'm taking the venture side on that one, but it does happen. But you know, you hope if it's a good relationship, that should be 100%. My opinion.

Claire Masterson  19:44  
Yeah, look, I'd say we've also been pretty lucky in the sense that 100% of our term sheets have turned into final investments. We have had some back and forth you know, not everything is negotiated that terms, term sheet stage and there have been a lot Little bit of trading, just in one case a little bit on economics. But normally, that's the piece that is done at the terms sheet stage is pretty fixed. It can No, I would say, you know, in terms of timeline take, you know, anything from, I'd say, a month or six weeks to a few months between signing that term sheet, though with your lead lead investor in the final first close. And that's for sort of the reasons I mentioned before, you know, in terms of syndication, it depends, you know, how far along are you with those other conversations at the point of which the lead investor says yes, and the second thing is, there is quite a lot of due diligence, you know, as much as you want to get ahead of everything, in the first stages, they will go and they will look at everything from every senior leader employment contract to, you know, every contract that you have with all your underlying customers. So, you know, as long as everything there is, is ready, and you can, you know, backup every single number, you've shown your investors with the correct contracts and things, then you should be pretty confident, but you do need to be prepared and ready for that, because investors will want to see it. And so yeah, it's, and it can take some time to go through that process.

Adam Rosenwach  21:10  
There was oh, go ahead. Sorry,

Kyle Faget  21:11  
I was just gonna say, I think, ideally, if you have a good term sheet, and it actually reflects what it should reflect, which are the key terms, then there shouldn't be a problem getting it over the finish line, I think where things can fall apart, is if that term sheet doesn't actually express the important preferences of each of the parties. But having said that, they typically do, you know, you should have good counsel, you should be open in your conversations. But where I think it can really fall apart is in diligence. You know, if you're conducting diligence, post term sheet, and the investor, for example, uncovers for lack of a better way of putting it some significant warts, or there's something under the hood of the car that is really unsavory and wasn't disclosed, upfront in conversation, that can be really problematic. So that's where it's really on, you know, the company to disclose, hey, we do have a few concerns or being also strategic about how you how you enter into those initial contracts. So entering into a whole host of really unfavorable contracts, just to get out of the gates doesn't necessarily help you. Because then when you get to that diligence, and you have an investor that looks, you know, under the hood of the car, it's like, wait, you agreed that that we're doing you're giving up this amount and royalties, or what's the upside for us. So you do want to be a bit careful in the beginning, that you're actually agreeing to, you know, good, good contractual relationships so that you can leverage those. You know, when you're talking to VCs, and when they look under the hood of the car? 

Adam Rosenwach  22:59  
Yeah, I think we can all in this room agree, it feels like a big accomplishment when you get a term sheet. But a key thing is to make sure the correct amount of diligence was done, both on your side and the investor side. So after you get those term sheets, if more diligence is done, it's not going to change those terms. Because when that happens, it is it is always ugly, when terms are changed from the term sheets, the final documents follow up. Yeah. Yeah.

Todd Usen  23:33  
Even in the time that I was negotiating, these are my lawyer or lawyer, as a company was negotiating, the legal fees for the VC seem to go from more cover up to 50,000 turned out to 100,000 to end but then I, so I expected those extra fees, you know, to be part of it. But then I also realized that some part of me said, why would they charge us if they're trying to help us, but then I said, they're the ones giving me the money, they're just paying back themselves. So make sure I'm asking for the right amount up front. So if you ask for the right amount of front, knowing that you should probably put another, you know, not 10 but I mean, 1% If it's you talking millions, you know, put put numbers in there that you know, you're going to pay them back and don't fret over it. It doesn't if they ask for it great. You're paying yourself back and it's it's good. So I don't have a percentage, but I don't know, you might know specific more percentages, but it really fluctuated from I've seen everything from 50 to 125,000 Illegal fees to just close the deal.

Kyle Faget  24:33  
Yeah, that sounds fair. I mean, look, it also depends on the market. Right? So when money was easy, legal fees were not as extensive in large part because people were screaming through diligence we don't really care like money is easy. We're gonna go we're gonna sign everything and move forward valuations of companies were through the roof. Everybody was super happy. And as the market shifts and people are being more careful and conscious, there's going to be increased diligence, which just ultimately means increased legal fees. Having said that, there are ways I think that you can manage counsel. And I will say that, you know, having a point person for diligence, making sure that you have called the appropriate documents sets, and they're set up and organized in the data room in a logical way so that their counsel can come in and do an efficient review of your documents. And that avoids, for example, their side calling random people in the company, oh, we have a question about X, Y, and Z, I want to talk to your quality person, I want to talk to your CFO, I want to talk to set up your team that's going to be available during diligence to actually be responsive to requests, make sure you have like I say the documents called in in the data room in a very logical way. These are things that you can do to help create efficiencies in that process. Because sitting on the attorney side, when all of this is sort of gummed up. It's up to the attorneys then to try and unscramble it and sit on the line with opposing counsel to say, what do you expect to see what do you want to see, oh, this was there, this was there. And then explaining, oh, when you talk to that random person in the company, and they said X, Y, and Z, actually, they weren't operating with full information, you need to talk to this other person. And it's ultimately the attorneys that are quarterbacking that at, you know, whatever rate, they're quarterbacking that add $500 an hour if it's going to be a young associate up to you know, $2,000 an hour if it just ends up being you know, a senior partner. So there's ways you can manage costs by just being thoughtful at the outset.

Adam Rosenwach  26:51  
This, this is gonna be a bold statement. But I actually believe that you can reduce your legal fees by 50%, by just managing the process and owning and being the center of communication and not giving that job to them. Great. I mean, I'll always have a conversation. First thing, what do you expect this to cost and legal costs for closing. And I mean, it's not particularly nice, but you have to look at your legal bills and see if you're paying for the training of a much younger associate. But by the way, we've closed two or three deals in the past year, and the legal fees have on all of those deals been over $150,000 in an early stage. So I would expect that right now, in the US for closing deals, I can't say one

Claire Masterson  27:37  
thing I would say for early around investors is, you know, legal fees are probably not the area to skimp on when it comes to these documentation. It's so important that you have the right counsel in your corner, when those documents are drafted, you know, your series A documents are going to be the basis for your series B documents, and then you'll see documents and then your D documents, new investors tend to come in and start from the documents that are already in place. And yes, make changes and if necessary to those. But you know, you can also hold up the process, you know, going back to that original question, if there are strange rights, that look look fine, because it's a Series A and you've got one big investor in there. But you know, certain blocking rights and different rights for sort of that original first investor can be very problematic when you're getting into a series B and Series C, if those rights haven't fallen away, for example, or they maintain them, because it's something that other investors will come in, and that final diligence process, and it may just be uncomfortable, and then you might have to start retraining with that first investor. So actually getting it right at the very beginning, will save you so much time when you get further down the line.

Adam Rosenwach  28:52  
Because when you're closing that deal, that first round, you're not only closing that round, but you are setting the terms, or at least the starting point of terms for all of your future rounds. And on that. So in these terms, a lot of it comes down to control that can cause issues later on what have you all seen as points that have held up deals once you get into your final closing doc and instead of been real contention points that are not typically negotiated in the term sheet.

Todd Usen  29:18  
Major investor rights and based on each round, so you know, as your first round, that doesn't matter, because it's your first round. But then your first round investors, rightfully so are taking a bigger risk. And you get bigger investors coming in to lead additional rounds, which is great, but then they they want, you know, major, certain major investor rights and then all of a sudden the percentage of money that's in from some of your early investors doesn't come anywhere near the money. It's just the know that seems to be the one sticking point always. And then the the board seats because again, if you have an early investor that even led your first round, and they're on your board. But they don't put anything in for your next one or two or three rounds, I'm not taking them off the board. But all of a sudden, you have a new investor coming in with a big boatload of money and your B, or C. And they're saying we're going to be, we have this seat, and we'll maybe two seats, and we only want a board of up to this many. Someone is going off the board. Yeah. And they know it, but it's in there. So that's usually the those are the two to me that I've seen.

Claire Masterson  30:25  
I say very similar experience in that sense. Also, I think, where you might have, especially in the early days, I think it's quite common for a strategic to lead early rounds, rather than financial investors quite often. And, and sometimes they come with their own unique terms, especially when they are combined with some sort of commercial arrangement. They can cause difficulties, especially if you know, there are, let's say, even if it's a perceived block, I would say often it's not really a block, but a perceived block on working with other companies in the same space or, you know, some sort of conflict that can sometimes create issues down the line as well, I think. 

Kyle Faget  31:12  
That.

Todd Usen  31:15  
I would say just one thing with the board. And for any even earlier stage entrepreneurs, if you can get an operator on the board, in addition to your venture partners, absolutely do it early, because you're going to just run out of space, and then it's no disrespect, it's Venture Partners, they have to protect their money, that that really is their job, they want to protect the company, the best ones and demonstrate that and are great helps. But if you don't have a real partner on your board, it's really difficult to just run a business without any other operators that have their independent directors. So I would do that early, no matter how early stage you are.

Adam Rosenwach  31:52  
So we only have a couple minutes, are there any questions there?

Todd Usen  32:05  
Well shopping and you can still put dates to different groups, you really have multiple people that you know, want us submit a term sheet, you basically said, Hey, we're accepting, it's almost like selling a house right now. It's like, you're going to do three days of open houses. And we're going to accept our offers on Tuesday after the Sunday. And so it's a buyers market, assuming it's a seller's market. But same thing, if you really know that you just you set the expectations that you know, we're accepting term sheets by this date. And this way you if you think you're getting multiple, I just feel if you're worth this, my personal opinion doesn't mean it's right or wrong. It's just if I got a term sheet from someone that I've been working with the last month, and they've always said that we will only do this if we lead. I don't feel I feel it's not it's disrespectful for me personally to shop it. I'm sure many people say you're crazy, Todd, because you could do so much better. If you do shop, I just don't.

Adam Rosenwach  32:59  
Depends what you're shopping for it too. I mean, right valuation and liquidation pros, all these things. They're important, but I actually really do believe it's much more important that you're shopping for the best investor and partner in this company. Because all those things don't matter when shit hits the fan. And it always does. It matters that you have good partners at that stage. So the term sheet shopping?

Claire Masterson  33:27  
I probably agree to you know, I do think that, you know, small horse trading on valuation, for example, or what have you is, yes, it will help you in the short term. But actually, in the longer term, what's more important is knowing that that lead investor, and maybe the one or two larger investors around there, and for you in the long haul, will be a good partner. You know, actually that was the question is, Who are you getting into bed with? Is this a one off ticket, they might give you a massive ticket, but it's a one off, and they're not offering you any strategic value over and above that, where you might be better off going with someone who is slightly more conservative on the valuation, that actually is going to put money in every single round for the next however many rounds, which when you're trying to syndicate and will be incredibly valuable. When you get there, you know, and we'll support you. 

Todd Usen  34:16  
That's a huge, huge point to know what kind of dry powder because look at this market. If I'm a VC, I'm protecting my portfolio companies first you have to. Yeah, if you if you know and so it's nice to know that they can continue that to your point.

Kyle Faget  34:30  
I thinkif anything, and this is reflected in the legal fees or shopping, term sheets or anything else. It's when you're thinking about money, of course you want to be conservative, and of course you want to be thoughtful, but I guess my best advice is don't be penny wise and pound foolish. Make sure that you're actually as you say getting into bed with the right partner, somebody who shares your vision that you can imagine working with in the long term And that sometimes is worth letting go. A few things here and there and saying, you know, did I get economically the absolute best deal I could have possibly gotten? Maybe not. But on the reverse side, maybe you also got the best partner that shares your strategic vision and that in the long run is worth everything.

Adam Rosenwach  35:23  
So this sign is yelling at me that we're 46 seconds over. So we're gonna wrap. Thank you all. This was super, super helpful, a lot of great information. I hope this was beneficial for everybody. And yeah, thank you. Thanks for joining us.