Fresh from raising two funds capitalized with more than $650 million, Drive Capital Partner Masha Khusid goes live today to talk about their interests in start-ups from Midwest America.
Based out of Columbus Ohio, Drive Capital is one of the world's most dynamic venture capital firms with investments in Pittsburgh tech companies, including Gecko Robotics and Duolingo.
Masha will give us more insight into what types of companies that Drive likes to make investments. She will also detail criteria and insights every startup needs to know as it begins searching for outside investment. And, find out why Drive Capital thinks the midwest is a hotbed for innovation.
Transcription:
So good afternoon everyone. This is Audrey Risa, President and CEO of Pittsburgh Technology Council. Today we are having our friends that are in Columbus joining us Dr. Capital. In a moment I will introduce one of their partners. I'm very thrilled that she's joining us today. And I also want to say that today, I have a very special co host and his name is Jamal, big staff and he has been an intern for the Pittsburgh Technology Council for four years. He is currently a high school student at Nazareth prep, but soon to be a freshman in business at Duquesne University. We're really proud of Jamal and we have learned a tremendous amount from Jamal and hopefully he has from us as well. He wanted Jamal's assignments this year was to learn about Angel and venture investing. From the perspective in terms of entrepreneurs, as well as investors. He was then tasked with helping to introduce some of the tech council members with a venture capital investor, he will be joining me today as our co host, and he will also help moderate some of the questions and answers from the chat. I'm thrilled that Jamal is with us, I am sad that he is leaving us and going to the university just selfishly, but tremendously proud of them. And I told him, as well as Brian Kennedy on our team, that he has to stay connected to us, he has to figure out a way to continue to at least teach us because that's really what we've learned over this time is a lot from him, we have a great relationship with Nazareth prep. And we had sister Linda on our show not too long ago to talk about all the work that they're doing across this region, which is really incredible. But Jamal is just a good egg. He's been a great friend. And he tells it like it is. And he has just a tremendous heart. So we're just we're just thrilled to have him. So today, he will be joining us. So a few things about the call, before we start is that, you know, we've muted your microphones, there's going to be a chat in there. You can you know, tomorrow, keep his eyes on the q&a, have any questions. Don't be shy. We are, you know, thankful to Huntington bank, for being sponsors and just believing in us the entire time that we have moved into these daily zooms since COVID. And Huntington bank, actually their headquarters is based in Columbus, and they know drive capital. So it's it's sort of a sweet day in terms of we're all things become connected. And then of course, we have an organization that's a wholly owned subsidiary of the Pittsburgh tech council called 40 by 80. And that's the longitude and latitude of Pittsburgh. And that's where we focus on all things that are helping entrepreneurs as well as pathways for education and development of skills for people in tech, and their tech future. So we're doing lots of fun stuff, Jamal has been a part of almost everything that we've done. So we're pretty thrilled about seeing him on his way into the next piece of his life journey. So thank you to everyone. And now I'm going to jump right in. We are here with Marcia cousine. And she is a partner at Dr. Capital. We're going to find out a little bit just about Marsha. And you know what, you know, what's she doing in Columbus, you know, a little bit about her background. So thank you, Marcia, for being here. thrilled that you're joining us. You're not that far away, by the way once the Hyperloop goes through, and I'll be able to see you in 20 minutes.
I love it. I hope so I hope that actually
happens. Yes,
yes. Big champions for that. So who is Marcia, tell us a little bit about yourself.
Yeah, sure. Hi, everyone. Thanks for thanks for joining the call today. So I'm a partner here at drive capital in Columbus. As Audrey mentioned, I started my career in investment banking moved out west immediately after college focusing on technology groups were joined the technology practice of the larger bank I was at spent, you know, my first kind of three, four years of my career doing that and then moved on to a to a big private equity firm that that folks probably know from some movies like barbarians at the gate called er.
Boy Yeah, did not
love it, frankly, a lot of focus on on, you know, creating capital for the sake of creating capital. So took some time off after that experience to travel a bit came back joined a startup also on the west coast on Seattle at this point. And through that startup got started getting a lens on what venture capital Trulia so I had been kind of seen all sacks of the capital food chain, and it was getting kind of earlier and earlier and earlier and I joined a venture capital out of Chicago originally that had looked at investing in my Seattle in the startup, I was out in Seattle, and then through and moved to Chicago with that with that venture capital firm. And through that experience, I actually met the folks that drive. And when I met Dr. I was kind of blown away by the the scale of the ambition and kind of the types of bets or swings that they are hoping to take and kind of the multigenerational approach they were taking to invest in that in the Midwest ecosystem. And before I knew it, they were convincing me to come down to Columbus a place I thought I would never live again and enjoy it. And I couldn't be happier to be with drive and in Columbus and in trying to execute some of the vision that the founding partners here brought to bear back in 2013 2014.
So So obviously, you're bullish, you're bullish on the investments that, you know, in the Midwest Pittsburghers don't necessarily think of themselves as the Midwest. But for this conversation, we will say that we are so there's there's sort of like a little feud going on in terms of Pittsburgh, but, you know, you, obviously, you bought into everything and drive capital, what makes you feel like that can be a place where you can be so successful
drive specifically, or do you think what
drives
so drive has kind of this, you know, like, I don't know, somewhat magical combination of of folks that have seen success, what success looks like in their past as it as it relates to venture capital and venture investing, and could have just kind of stayed doing that right and lived a very comfortable lifestyle in Silicon Valley in San Francisco and continue to get, you know, good line of sight to all the interesting companies that are being built and in San Francisco, but they had this really contrary, and at the time, it's not so much anymore. But it was pretty radical to think that you could build massive technology businesses in the middle of the country at anywhere outside of Silicon Valley. Just 10 years ago, no one really thought you could do that. So that type of kind of persona, is I for me, the type of people I wanted to learn from, you know, you'll you'll constantly hear that venture capitals and apprenticeship business. And you know, if I was going to do venture in the Midwest, I wanted to learn from the best. And I think that has really made me feel comfortable and confident that that I will be successful within the context of drive and drive will be successful in the context of the world, not just the Midwest, right? Really the the ambition is to be a world class venture
capital firm. Yeah. And it seems like you've achieved that. So that's awesome. Good for you. So Jamal, from I want to take the next question.
Yes, now. So my first question is, Can you talk to us about the history of drive capital, where the initial funds came from and how that has changed? And later funds?
Yeah, happy to. So the genesis of the firm really starts on the west coast. So So myself, as I already mentioned, was like in San Francisco, and Seattle, my partners, were all kind of in the same similar boat. So Andy, spill in sold a couple businesses, one of them to Amazon, Nick was on the founding team of Android at Google. And then the two founders of the firm Chris and Mark were were general partners at Sequoia. And it's quite as you may or may not know, is broadly thought of, as you know, the best performing venture capital firm of all time, frankly. And at the time, that Chris and Mark were there, Sequoia was investing behind this global strategy, where they had seen that Amazon had essentially democratized access to infrastructure via AWS, they saw that there are great engineers in great talent all over the world. So they were setting up shops in places like India and China with this kind of boots on the ground operation. And they actually were gonna send Chris to open the Sequoia turkey office. But when it came to the domestic United States, if a company was outside of this 10 mile bike radius, it was an immediate pass for the partnership like they absolutely would not look at things going on in Pittsburgh, they would not look good look at things going on in Columbus, they would not look at Chicago, New York, like kind of sounds crazy now, but that was their policy at the time. So Mark had left Sequoia to do a sabbatical. He came to work for the Ohio's governor at the time, john k sec, to kind of spin up an economic development opportunity. And while he was here, he you know, he kind of mark Silicon Valley born and bred his dad, his dad's our National Semiconductor, you know, he worked at Apple when he was 19. Like, this guy had no reason to leave Silicon Valley. And when he was in Columbus doing this type of work, he was like, Hmm, this Midwest kinda reminds me of what was going on in Silicon Valley in the 80s, kind of the types of people that the manufacturing, you know, background, the raw ingredients seemed to be there and he convinced Chris to come take a look. Chris was super skeptical. But after that initial meeting, really started digging into the data and saw that there was this you know, I don't want to call it an arbitrage opportunity, but kind of an arbitrage opportunity, right. There was a ton of academic research being done. None of it was being funded by venture capitalists, there was a ton of engineers being graduated from top tier universities. They were going straight to the west coast to take jobs instead of staying here to work on interesting technology companies. And the thought was that the one thing that was really missing was it was capital on was people that were willing to invest behind the smart people in the Midwest that could could build an iterate on product right next to the core fortune 500 customers that existed in the Midwest. So they left Sequoia and and started, Dr. Jamal, you asked about the funding of Dr. So Dr. has always been a venture capital firm that's been funded by institutional investors. So kind of the same types of folks that invest in Sequoia being pension funds and endowments, those are the same types of organizations that invest in Drive, you know, it's not like an angel or high net worth type syndicate. It's it's, you know, it's it's institutional capital. And that's been the case since day one.
Somalia, the next question, too, yes, yes.
So you make investments in companies, but do you also provide other services and resources to support companies that you invest in?
Yeah, absolutely. It's a good question. So I think one thing that really stands out about drive, and specifically in the kind of Midwest ecosystem is our platform partners. So you know, so of course, our investors like myself at drive, but I think the true strength of the organization are folks like yasmeen, who runs our customer program, and he asked me, his whole, you know, kind of mandate at work is to be one degree removed from every important decision maker at, you know, a fortune 500, fortune 100 company that our portfolio companies would want to get in front of so so she really kind of supercharges your sales efforts by getting you connected to the right person quickly, we have Robert, who's our talent partner, he now has two other people on his team. And all they do is connect the correct talent and and help recruit and help make sure you're making the right executive level decisions within your portfolio companies and really help you plan for headcount and plan for that next stage of growth from a series C to an A to A, B to A C. So they're, they're really invaluable. We also have a marketing partner, we have engineers on staff, we have a lot of people around the table. And because we now manage, you know, one, over a billion dollars in assets, we're able to kind of support that type of infrastructure, unlike, you know, some of the smaller funds in the region. So So we've really feel that's a differentiator. And when we make an investment and partner with a company, we like to say we put the full force of the partnership behind them. And that's a lot of the blocking and tackling that happens outside of boardrooms.
So there's a question I think, Jamal, do you see the question?
Yes. From Katherine, Brian, I want to pronounce that. Wrong. She asks, What is Matias educational background?
Yeah, so I went to Ohio State. So have been in Columbus previously, and I got an art history degree and a business degree. So that's kind of I don't know if there's questions like what do you need to get into venture capital? Like, it has a philosophy degree? Chris has a history degree like, you know, it's not, Matt. Molly has a math degree. So we're all over the board.
So were you born in Columbus?
I was born in Russia. So Matias in the Russian name. I was born in Russia. And I moved to America when I was three years old.
And in where where did you move?
We originally moved to Indianapolis, and then grew up for the most part actually in Cleveland, so not too far away.
Okay, great. Great. Thank you. So Jamal, you have another question, I think great.
Yes. Smile. So are there any specific type of companies that you guys look for? And can you elaborate on the area's?
Yeah, so drives we're pretty lucky as investors our drive, so we have a pretty wide kind of mandate in terms of the types of companies we can we can look at. So we're totally stage agnostic. So that means we'll fund anything from an idea on the back of a napkin, all the way up to kind of accompany that's maybe one one round of funding away from going public. We'll also we're also you know, as work for the Midwest is kind of our core geography and we bear hug Pittsburgh into that. And you know, what we'll also we're also able to look, you know, all the way up to Canada, down to Austin. So kind of our our geographic mandate is east of the Rockies, west of the Hudson all the way up to Canada to Austin. In terms of verticals, what you'll see, if you take a look at our website is a lot of a lot of different verticals. And it may look random from the outside. But what's happening internally is each investor is responsible for certain markets and we do a lot of work and we have engineers on our team that help us build out what we think of as market maps and something we borrow from the Sequoia days and what that is Tails is really getting to know every company top to bottom left to right within a certain market. So you'll see like, a good number of robotics companies in our in our portfolio and a couple of those investments we made in Pittsburgh, and that all comes out of my partner Nick's work. You know, we'll look at things like AI and infrastructure. We'll look at consumer apps, we'll look at, you know, I mentioned robotics, like hardware enabled, so we'll also look at b2b software, but we're really, and then Molly covers healthcare and Life Sciences. So so really quite a wide variety, I would say, of verticals that we look at. For us the main criteria is, is this a big market? Is there a clear line now? And is does this company have the potential to be the market defining company?
Is there another question out there, Jamal, before I ask my question?
Yes. Okay. There, Gibson, what our opportunities are there for venture capital projects and Western Pa?
Okay, I'm not exactly sure. I think we covered that right.
I believe so.
Yeah, I think we cover that. Right. Okay. So let me let me jump in. So Dr. Capital has invested in at least four companies that I know of. in Pittsburgh, you were early in on No wait, when they had an exit to Yelp. That was probably four or five years ago. I know about to a lingo. And I know about Gecko led a recent round one of them, you also are in fifth season? Is there anything else that I'm missing?
Those are the those are our Pittsburgh, hopefully more to come.
So So tell us about how you identify those companies and your expectations for their success?
Yeah, um, so So the way we identify them is is back to this market map work that we do. So, for example, both this season actually and Gecko came out of our robotics market map. That's one that we've made multiple investments out of, it's actually one of our probably our best source best, most comprehensive market maps. And Nick's been working on it for a number of years. So the point of the those kind of market maps knowing is because we've talked to so many companies when we see good, we know we know what good looks like. And we also know where the gaps in the markets are that need to be filled. So fifth season is a vertical farming operations, completely robotics, growing, growing leafy greens and putting together salad kits that hopefully you guys see in giant eagles and are just playing Giant Eagle. But it's a it's an incredible operation, if you have a chance to go visit. It's a really cool one to see. And the team. There's excellent came out of Carnegie Mellon. Similarly, Duolingo, probably a lot of folks have have at least tried it for a couple couple weeks on their phone. So Julian go came out of our education technology market map. So we have a number of investments in edtech. So Duolingo in Pittsburgh, Udacity. You know, we actually have a couple that we just signed recently, we also have a PI board up in Waterloo. So attack is also kind of a rich vein for us. For us when we invested in Duolingo. Actually, we had seen the company a number of times before we ended up making the investment and I think probably one of our biggest regrets at drive is not investing either earlier and Duolingo. Because Duolingo is frankly like no, no, like there's no equivocation like they are the market defining company and language learning. In terms of user base, it's a company we expect to see on the public markets here. You know, at some point in the next couple of years, Luis is just a visionary when it comes to product. So all those types of kind of signals pointed us to make that investment and it's a company we're really excited about and I think one special very special thing about Duolingo as it relates to Pittsburgh, Luis feel so strongly about keeping talent in Pittsburgh and hiring in Pittsburgh and making sure people stay and you know, I think he's one of the leaders and kind of having people come back into the office and because all that great product iteration happens when people are in a room together so I think he's you know, such an excellent an excellent example of the type of talent and innovation that comes out of your your neighborhood there in Pittsburgh.
What has anything surprised you about Pittsburgh? Um,
so, you know, it's funny, I kind of grew up going to Pittsburgh, because such great art museums and in such great history. Sure. And so I have always like you will I am not just kind of gassing you guys up. I really think Pittsburgh is one of the most underrated cities in America. You have all major sports, you have great art, you have very culture. There's so much to love about Pittsburgh, you have great universities like Duquesne and that pit and I think Pittsburgh, unlike other cities has done a great job of retaining youth and retaining young people and giving young people like opportunities to stick around and work in interesting jobs and And that might surprise people but it's like it's a thriving city. So
every time I think about leaving something pulls me back here. And now the amount of really smart people here and concentration is really, really amazing. Yeah. Go on. I'm sorry,
our head of our head of data science to at route one of our model. Yeah, we also have Carnegie Mellon grad. So he actually ta for lease so small world. But yeah, so it's such, like so many smart people. And we couldn't be more excited to continue to to hopefully invest in in Pittsburgh entrepreneurs.
So there's a question tomorrow about women.
It is from Marga. And why do you think there are a few woman VC partners? And what do you see as the as a path for to get more women? And then second?
Yeah, it's a great question. And and frankly, something that very much attracted me to drive is, I think drive, if you looked at our website, looked at our team page, like you will see actually more women than men, which is kind of shocking. Like, I don't know if there's any other venture capital firm in the country that has that. That split, you'll see on our website. And I think it's because Chris and Mark, the founders have been really intentional about bringing women on board. And for Chris, specifically, it's all about kind of filling top of the funnel. So he does a lot of work locally in Columbus. And hopefully, there are people doing similar things and other ecosystems like Pittsburgh, that are bringing kind of opportunities for coding for young women. And it's just exposing them to the opportunities and both technology and venture. I know, I didn't have any exposure to that when I was growing up or in college, it really took me like living on the west coast and kind of living and breathing it to realize what opportunities there were. So I think it's a top of the funnel issue currently for for VC and women. And I think as long as there are people that are intentional, like you know, myself, and anyone on this phone call and my partners to continue to fill that top of the funnel as early as possible, we'll continue to see kind of change in that sector. And certainly, there's like other ways that we can be more diverse to not just from a gendered way, that I know are really important to drive something we think about and talk about a lot. And, and and hope to continue to see that change broadly in the ecosystem as well.
Are you seeing any efforts that you really think are making a difference whether it's in Columbus or anywhere, any programs or any strategies, or any outcomes that you could share with us that you think are working? Like? code? Yeah, Girls Who Code she's amazing, right? And, to me, ha, who has been on our show before? And it's, you know, very intentional, she's passed, the baton has a new CEO. And, you know, is working really sort of both vertically and horizontally across many ecosystems? Are you seeing any other examples?
It's a good question. And I think like, you know, part of part of the problem is just seeing the change feel so slow, right? It almost feels like, you know, Lindsey night out of Chicago, who's a partner at Chicago ventures started I know, Chicago blend to try to at least make everybody aware of the lack of diversity. And I think that's probably maybe the first step like bringing it to people's forefront. You know, Dr. We publish our diversity report, and we put it on our website with absolutely no fanfare, because like, there's nothing to brag about, we could go in so much better. We track we've realized we've noticed at dry, I mean, I guess I can really only speak to what we do, first, like kind of what other folks are thinking about. But we've seen that where we can have the most kind of say, like on board seats and exact roles. There's a real you see the trends changing toward more women and toward more people of color. But when it comes to kind of like the lower level of hiring again, that top of the funnel that's like where we can't have as much impact. It really falls on our companies and our leadership within our companies to make that a priority. So we continue to hope to see improvement there, but but it's slow.
And now it is, but I'm glad that you're leading the way. So thank you. So tomorrow, is there another question that you have?
Yes, ma'am. What's the best way for an entrepreneur to contact?
Yeah, just my email. So I'm Masha m a s h ey at drive capital Comm. We also have a general inbox, we try to answer every single email that comes in through that I certainly try to answer every email that comes in through my inbox. So we're happy to talk about an idea you have help you kind of think formulate some of that, you know, which really see kind of our roles as as partners in the entire Midwest ecosystem. And, you know, the next great founder might be someone just With an idea today, so so we're excited to speak to anyone that's really passionate about the sector and what they're doing. There are things that are like super far afield of what we can be helpful for. So like, you know, we don't look at like medical devices or things like that. So just be like maybe like, do a little bit of research and look at our website and see if what you're working on has some kind of semblance of a connection to what we're thinking about. But you know, for the most part, happy to happy to chat with most folks.
So Marshall, do you sit on any of the boards? Do you have a board seat? Yeah, yeah. So
so we're pretty flat organization at Dr. So so if you lead an investment or bringing an investment to the table, that's you know, that's the you've built that relationship with the partner, the entrepreneur and then they're probably want you on the board anyway. So that's how that works.
So good. So you're pretty active there. So what do you do anything for fun? to work for fun?
I do. I mean, I'm obsessed with my job if you can't tell, and I think Dr. feels that way, but I do a lot of trail running, I do a lot of that kind of it took me a little while to figure out where I could go trail running in Ohio after doing this for so long. But have been able to continue that do a lot of things like yoga. You know, try to be outside as much as possible when I'm not kind of zooming all day every day. Um, but yeah,
I bet so soon, we'll be ready. We'll be ready to see people in person. Yes, absolutely. have a chance to meet you in real time. I I can't thank you enough for spending the time with us and having Jamal big stuff with us. It's bittersweet to say goodbye to him for now, but he's not going far. So we're trying to keep him tethered. And we hope that he gets into business and he understands everything that's happened in terms of you know, he we've watched him go from saying he wanted to be a hand surgeon to maybe going into marketing's now talking about business. So it's been a joy to be able to watch him go through his own journey.
Larchmont, he
needed an internship in Columbus. Come join us.
I appreciate it.
So, Marsha, thank you so much. It's been a delight to talk with you. Thank you, everyone for joining us today. Jonathan. What do we have on hand for
tomorrow? First off, like I say, Jamal, awesome job all the way around man. competition there dude. Very good. So forgive me around. Tomorrow, Audrey. I think actually Masha might tune in with us tomorrow because we have Diane's third house. He's the venture capital advisor for the PBC Ed so it's come to fund the funds here in Pennsylvania. So and they actually put $5 million across I think three VC firms one which was for one to insure fun, so good, good conversation around all things venture this week. does love it.
Thank you. Thank you, Marcia. Thank you so much. Yeah, it's safe everyone and we will see you tomorrow.
See you guys later
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