Round Zero: Meet the Future of DAF Investing

Watch this exclusive fireside chat hosted by OpenGrants, focusing on the innovative world of Donor-Advised Funds (DAF) Investing and the evolving landscape of capital raising.

🌟 Event Highlight: Exploring the Intersection of Impact and Investment 🌟

Join us as we delve into the exciting new ways to deploy impact capital and significantly enhance exposure to venture returns. This event is not just an opportunity to learn; it’s a chance to be at the forefront of a movement making impact capital more accessible and efficient.

🚀 For Startup Founders & Startups Raising Capital

Discover how DAF investing can revolutionize your fundraising strategies and open doors to unique funding opportunities.

💼 For Wealth Managers & Investors

Learn about the untapped potential of DAFs as a tool for client engagement and portfolio diversification, while driving meaningful impact.

In This 1-Hour Session, You’ll:

  • Gain insights from a veteran founder and impact investor.
  • Be part of a community committed to innovation and positive change.
  • Learn how DAF investing can unlock more capital for world-changing founders.
  • Learn how DAF’s can help make startup capital more equitable and accessible.

About the Speakers

Sedale Turbovsky, CEO & Co-Founder, OpenGrants

Sedale Turbovsky is the CEO and co-founder of OpenGrants, his fourth venture-backed startup and second in the public sector, which aims to transform the grant funding landscape by making it more accessible, equitable, and transparent. Sedale firmly believes that technology can be used as a powerful tool to democratize access to resources and opportunities, and is passionate about improving government and the citizen experience.

Prior to embarking on his entrepreneurial journey, Sedale worked as a issues management consultant supporting firms working with government and in heavily regulated environments. He has a long history of leading successful teams, raising capital, and building startups. Apart from his work at OpenGrants, Sedale is an investor and advisor to a variety of startups.

Alex Fang, Founder, Round Zero

Co-Founder | Philanthropist | CEO | Startup Mentor | Impact Investor | LifeMoves I Berkeley Skydeck Advisor

Alex has an extensive background leading organizations both for profits and non-profit through periods of rapid growth.

SaaS sales, fundraising, strategy, software, tech, MOOCs, E-learning, Non-Profits

  • Member of the World Economic Forum Civil Society Cohort
  • Created a novel crowdfunding framework enabling thousands of non-profits the ability to raise funds for donors at a fraction of the price.
  • Created the largest employee engagement program at Salesforce
  • Founder/CEO with recent success with $100MM+ company.
  • Serial entrepreneur/thought leader with success leading organizations across multiple industries including CPG, cannabis, technology, food manufacturing, finance, and non-profits.
  • Key areas of success and proficiency are: organizational growth, creation of AOP, Board governance, marketing and sales plans to hit top-line revenue numbers, product development, go-to market strategy and product launch, managing P&L to hit EBIDTA targets, leadership development, investor relations, M&A, fundraising, and creating a strong community of mission based executive leadership.

Read the Transcription

Please note, this transcription is automatically generated and may contain some spelling and contextual errors.

Sedale Turbovsky: Super excited to have you here. This is a webinar hosted by OpenGrants about Round Zero, the future of impact investing. And we’re going to learn about how Round Zero is unlocking billions in impact capital at scale. We are going to let folks trickle through the door here, so to speak.

So if you’re joining just now I’m just going to be sharing a few housekeeping things, and then we’ll get into the meat and potatoes of the presentation and fireside chat today in a moment, but this is the Round Zero webinar hosted by OpenGrants. We are super excited to have Alex Fang with us.

I’ll let him introduce himself in a moment. Just so you know, this will be recorded and you will be able to see it afterwards. So if you have to leave, no worries. We do have a Q& A period towards the end of this session. So you can use the Q& A tool within the platform to Post any questions that you have to, to myself or Alex.

Note that we have the chat fairly locked down. This is for everyone’s safety and security. If you do have questions for us, please do use the Q& A tool. My name is Siddal Trabowski. I’m the CEO and co founder of OpenGrants, and we are the easy way to win grant funding. And I’m super excited to be sharing.

The the presentation today with Alex Fang. He’s the founder of Round Zero. And Alex, I’m going to just go ahead and let you introduce yourself. And then we’ll get into we’ll get into a conversation here.

Alex Fang: Thanks Adele. Hey, everyone. Great to meet you. My name is Alex Fang. And yeah A little bit about Round Zero is an exciting new initiative sponsored by one valley, which is a global innovation partner here in Silicon Valley.

1 valley if you don’t know about 1 valley, they’re an entrepreneurship platform supporting entrepreneurs. Accelerator startups and what they do is they empower organizations across the globe who are running these innovation communities, right? So a great example of this and how it ties into one aRound Zero is a cradle to commerce.

Which is a department of energy clean tech accelerator that was co founded by one valley and the department of energy. And 1 of the reasons that round 0 came to be is because we identified a very unique and niche need for supporting these kinds of innovators. So yeah, that’s a little bit about a little bit about one Valley and a little bit of Round Zero.

Sedale Turbovsky: Awesome. Thank you. And, just so y’all know that, Alex isn’t just some dude I found in a coffee shop in San Francisco. Why can you share a little bit more? Can you share a little bit more about yourself and just your background? I know that you’ve been in both the the founder shoe as well as the other side of the table here with the Round Zero initiative.

So would love if you could share just a little bit of your background and experience, and then we’ll get into what Round Zero is and why we’re so excited about.

Alex Fang: Yeah, absolutely. I am a. I am a serial entrepreneur and I’m one that hates the word serial entrepreneur. I say that way too often. I founded mission driven non profit startups.

The first one was Hope Corps also known as Surf for Life. And what we did was we ended up mobilizing the Bay Area workforce to build schools, clinics, and medical centers all around the world, culminating in over 62 projects helping a half million kids all around the world get access to clean water, shelter, health care Health care and education, and we did so through an innovative business model that took advantage of volunteer resources and corporate foundations in court and broader corporate philanthropy also found that a consumer package.

It’s company got that through series C raised 28 million and that was around started that around 10 years ago, exited it, exited that to a public and it’s so wild to think about how a 28, raising 28 million through series C It almost sounds ridiculous nowadays because, in your series C, you’re raising 280 million but we exited that to a public and then ended up coming back into the innovation ecosystem through partners like One Valley and Cradle to Commerce, Lawrence Berkeley Labs, Berkeley Skydeck now I support several impact projects.

As an advisor, a founder and director of social impact.

Sedale Turbovsky: Awesome. Yeah. Thank you so much for sharing that and that’s such a cool mission and trajectory you’ve been on. And I think, just as a another housekeeping note, now that we’ve got a full house here. Please do use the Q and a tool.

And then Alex and I will break after our discussion for a Q and a here towards the end of the session as well. So thank you all for being here. So Alex, we are here to learn about this initiative that y’all are launching. The reason I’m super excited about it is as far as I understand, it’s about activating.

DAF money to support early stage ideas and technologies and could be a really like interesting, not only opportunity for founders raising capital, but a really interesting way to hopefully make venture and impact capital more equitable and accessible. So I’m super excited. I’d love to hear just like the high level kind of pitch of what it is and what you’re doing.

And I know that you and I have traded some notes and we’ve looked at and like thought about very similar paths here. So I’m excited to hear your take on it a

Alex Fang: little bit more. Yeah, absolutely. So Round Zero was born primarily out of A fascination that I’ve had with donor advised funds.

And that fascination has existed for probably 15 to 20 years. And for those of you who aren’t familiar with donor advised funds are designed to be a vehicle that allow donors to make a tax deductible donation to an account with the intent. Of having that donation be directed to a charity eventually, but what it does is it was what it does is it gives the donor tax control.

So it allows you to control the timing of your deduction and allow you to defer the timing of your grant or distribution. And, in concept, it was a great tool. It’s supposed to encourage philanthropy, but in practice what has happened is that you have. The largest the largest nonprofit in the U.

S. By assets under management is now Fidelity Charitable. And essentially what has happened is you have brokerage houses that have created donor advice fund sponsoring organizations that are holding tens of billions of dollars. They’re managing that capital. And that capital is not being invested in early stage impact.

And it’s not being granted out to nonprofits. So it’s just sitting there. So you have people who’ve taken advantage of the tax control, but that capital is not being deployed. And if you all follow impact and philanthropy one of the key rocks is that everyone’s trying to crack is how do you get the capital out there faster to the people who are doing the most as quickly as possible, so you can have the greatest impact and have that impact compound.

So we created Round Zero. We did that. We’re trying to look at interesting use cases. There’s a lot of people who have started investing in their deaths, a handful of administrators. But what we realized was that Round Zero lines up very well as a source of risk and mission aligned capital to support innovators through the valley of death.

Now it can be tech transfer. It can be a scientist that Lawrence Berkeley lab who invented a technology that needs to create a prototype so that he can pitch That prototype to precede investors or maybe de risk the business plan and the operational plan to a point where angels and precede investors come in.

It could be a valley of death where you’re an innovator and you’ve created a software company but the capital requirements of early stage companies have increased so much that you need some funding to de risk your thesis. And you can do that with donor advised fund capital. So as the size of funding rounds grow, and as capital needs increase, we see Round Zero as this new Round Zero, where we can actually support innovators in that free angel pre precede.

Precede life stage and we think it’s going to become a more normal life stage. So that’s what we do. If you had to sum it up, super duper early capital that is risk aligned in the form of these philanthropic dollars.

Sedale Turbovsky: Awesome. And do you have I know we’ll get lots of questions about all kinds of all kinds of aspects of this, but one of the things that I am super excited about, and we can talk about the mechanics of some of this, maybe a little bit later.

One of the things I’m super excited about is the opportunity to activate this money, right? It’s billions. It’s an incredible amount of money. And to be able to deploy that to early stage companies really efficiently. Is it is a huge deal? What do you think? For founders, how should they be thinking about one, just how to engage people with DAFs?

Is that how you go about it? Would you, is Round Zero sort of the middleman or are you just helping make these transactions? What’s the role that y’all play and how should founders think about starting to engage with that ecosystem

Alex Fang: more? Yeah, no, that’s a great question.

Round Zero is seeking to normalize this type of investment in impact factors and while we are we are the infrastructure to make that happen, we are by no means a cool place to get money from your uncle who has a DAF and Fidelity. We could be, and absolutely should be, but what we would like to be in terms of infrastructure is we want to be, We want to be the equivalent of when you have a, when you have an investment lead in around, we want to be the equivalent of your impact lead for your round.

And what we encourage all of our founders to do is, lead with the potential societal and environmental impacts. That you hope to bring with your startup. Make sure that you’re clear with that because that’s what the donor advised fund investors at Round Zero are going to be investing in and that’s what they hope to get in return is an understanding that you have a clear impact thesis that you have that you’re providing.

The potential to scale and to affect change at scale. So that, we want to be the infrastructure, but we want to make sure that we’re a mechanism to help connect these potential donor investors. With startups that have an outsized potential to help with some of the world’s most complicated problems.

Sedale Turbovsky: I love that. That’s incredible. And are you finding are you finding that the people who have DAFs do they under, do they even know that they can do this? What do you feel like the level of understanding? Because this is a, In my opinion, at least it’s a relatively new kind of approach to deploying this capital.

But I’d love to hear your thoughts on just like where the industry is at as you’re moving this forward.

Alex Fang: That’s a great call out. And I haven’t actually clarified the disbursement mechanism for aRound Zero or DAF investing. And so I think it’s great that we Take a second to go over that. So Round Zero is not granting funds in the form of a donation to impact startups.

Round Zero is actually taking the DAF, simply allowing the donor advised fund, we call them donor investors, to deploy that capital as an investment into a startup. And most people don’t know that you can do that. My first Professional job was in financial services. I’m a CFP and that’s a big part of why I’ve been obsessed with DAFs for so long.

Logically what you’re doing is you’re looking at. These donor advice funds that a fidelity or Schwab that are invested in mutual funds. And at the end of the day, that money is invested and taking ownership in these large companies. So the question we ask is why can’t we invest in small companies and fulfill that similar investment requirements, but allow investors to invest in direct investments and private equity.

In these kind of early, early, early rounds on. That’s what and that’s what we enable. So it’s not a grant. It’s an actual investment where the death would be investing in your startup. And most people don’t answer question. Most people have no idea that you could do that. And the reason is it’s a fair amount of work to actually enable that on.

And that’s what we’re focusing

Sedale Turbovsky: on streamlining. Awesome. No I think that’s huge. And yes, I intimately familiar with the, this level of effort. And there’s some incredible, I think DAFs have been this kind of well kept secret for some time in terms of just what’s available there. I know there’s some incredible startups that are doing things like just making it easier to accept DAF investments and so forth.

And I think one of the things that we’ve been running into a lot and we get requests from is we have. Capital allocators and other groups are interested in having more direct impact. They’re like, hey, you give our gift to UCLA again, but, we’d rather do something directly with someone who’s, working on cancer or working on fixing climate or so forth.

And I think this is a huge opportunity for that kind of direct action, really empowering some of these folks who are interested in deploying their impact capital to take more direct action. With this vehicle. I would love to get your thoughts on the structure and talk a little bit more about that since we started talking about it is the investment itself.

Is it a safe what are like the mechanisms or if you all haven’t. Dial that in, or maybe it’s specific for each startup. But what sort of mechanisms are the, companies using in terms of are they issuing, a safe or warrants or

Alex Fang: so forth?

Yeah, that’s a great question. I think the mechanism can be deployed for any kind of instrument. DAF as an investor. And so that investor has the entire realm of. Any anything that you would use as an early stage as an early stage, platform to invest so it could be safe It can be a convertible you can negotiate warrant coverage.

All of those things are possible You just have to make sure that contractually you’re you’re doing the same things that you would as a, between the company and the DAF, as you would with an angel investor in the DAF. So anything is possible. The platform generally works best right now With convertibles, but that doesn’t mean that we can’t do anything with saves.

We can’t do anything with with warrants. And one of the other things that we’ve done is as part of the research project impact warrants are a new device where that we’ve created. That actually allow you to transfer the ownership of the impact from the DAF to the original donor at fair market value, which is usually a buck.

And it’s the first instance that we know of. Where an actual donor realized financial upside from a transaction, as opposed to just the donor advised fund. There’s a lot to unpack there, and if you’ve ever worked with DAFs, you’re probably buzzing and really excited. And if you haven’t, you’re probably just okay, I stopped listening five words in.

But what I will say is that as you start to look at these different mechanisms, And you have questions. You should absolutely feel free to reach out to me. Because I would say over the past, over the past three years as we’ve done this research sprint and built up this apparatus and platform, it’s it’s not a huge industry and we need more people to come in and have eyes on it.

We need more people to have a community to share in the wins and losses and to think through some of the other problems that exist to advance the ability to do donor advised fund investing.

Sedale Turbovsky: Yeah, no I completely agree. And I’m seeing lots of great questions come in. We are, we will definitely get into those and please do feel free folks as you’re listening and have things that come up to throw your questions in there.

Personally, I, one of the reasons I’m super excited about this is, on that kind of like community building and activation front because there’s so much, there’s so many cool things going on. The, some of the challenges that we have with, Streamlining government grants and other things, I think, can also be effectively just circumvented by the structure as we’re deploying money out of these daffs into early stage impact focused startups.

And that brings me to another question, which is what, what’s the sweet spot for the folks that you’re looking to deploy capital into in terms of, in terms of stage, it sounds like, very early stage. Are you, are you more beholden to the DAF kind of focus, like what the donors are trying to achieve, or do you have your own thesis around, deep tech or climate or something else?

Alex Fang: It’s a great question. I think our focus right now is supporting, is to support founders that have developed technology. That’s been publicly, it has been developed through public funding and are at that stage where it’s, they refer to it as the commercialization valley of death.

And you might have to have something that’s scientifically validated. You’ve proven that this, the science behind this technology works and you’ve gotten public funding for it. Now that public funding has run out, you published your paper, and it’s getting increasingly difficult to get grants or additional research.

of funding because you’re not really researching anymore, right? At the same time you’re looking across the other side of the valley of death and you haven’t built a prototype. You haven’t really worked out your go to market strategy yet. All you know is that the science behind this has the potential to change the world.

And that’s who we focus on right now. Our focus is on innovators. who need help getting over that valley of death to commercialize. For those of you who are familiar with the TRL level, we try to, we want to step in and help companies that are TRL 3 or technology readiness level 3 and help them get to as 7 or 8.

At that point in time, we see a fair amount of seed investment and pre seed investment activity, but there’s that gap. And that gap is where 95 percent of these companies Go by the wayside. Now, if you’re an innovator and you may and you’re not a deep tech innovator what I would suggest if you want to use a mechanism like this, or if you want to use this mechanism is that you have to have from the outset a clear understanding of how your product or service is going to change the world and have a beneficial outcome.

Environmental or social impact. And a clear reasoning for why that bridge that capital bridge is going to allow you to get through a spot and get you to a point where you’re going to be able to scale the company successfully fundraise. And step on the gas, right? So so to speak.

Sedale Turbovsky: Awesome.

Very cool. I think we’ll get into the Q and a shortly here. There’s lots of great questions. But I wanted to like, I want you, Alex, if you could paint us a picture of what, it’s early days, right? Doing the first few investments and so so forth. Getting things rolling. What does this look like in the future?

Like what is the future state where this is like functioning ideally? What does that look like for this process from the donor investor side and from the founder side?

Alex Fang: Oh yeah, I think no question. So if we break it down into three phases right now in the short term, it would be great if we could demonstrate.

An increased velocity of the philanthropic capitalist staff capital getting directly into these impact investments in a middle stage, it would be great to see Round Zero provide a clear bridge towards to the precede round, right? If there’s a clear logic around how we support. We identify, support, and deliver these startups successfully into a pre seed pipe.

Then we get to the long term, where we’re actually not using philanthropic capital. And we can say, we have created a methodology to invest super, super early. And while we have a longer time horizon, here is how we have adjusted our expectations for risk and return. And here’s why it makes sense for you.

As an LP and it would be ideal to have this Round Zero be standardized, formalized and replicated across the for profit venture ecosystem, the traditional venture ecosystem. That, that, that would be an ideal win because then we have a market based solution that’s really doing that’s doing some good.

Sedale Turbovsky: Awesome. I love that. Let’s get into some of these questions here. Let’s see. I think here’s a good one. What’s the difference between impact investing and what Round Zero is offering?

Alex Fang: So impact investing Round Zero is a form of impact investing. There’s a consensus around impact investing right now where most folks who work in this space agree that impact investing is simply an investment methodology where you place, where you prioritize income, impact before income, right?

And the reason that it’s so hard to find true impact. Investors is that almost every fund is beholden to maximizing returns for their investors. Round Zero is not. And so I would actually say it’s one of the rare instances where this is an impact focused fund and we are doing true impact investing.

Sedale Turbovsky: I love that. Another good question here. Does Round Zero keep the DAF, the donor investor, anonymous? Or can the company develop a relationship with that donor investor?

Alex Fang: Oh yeah, it’s, it certainly is not anonymous but it can be. But the default is that it is not anonymous. We encourage the debt. We, it strongly encourage a relationship to be created.

And we believe that’s critical for the creation of a pipeline to go into a for profit. Like investment ecosystem. And so if we want, what we want are people to take these risks with philanthropic dollars, but we want these startups to mature, to develop, and then have that same LP or donor investors say, Hey, these folks are on the way up there at a pre seed level, and I’m going to make a traditional pre seed investment now.

Sedale Turbovsky: Can you talk a bit about the due diligence you imagine with this DAF investment process? What does that look like?

Alex Fang: Yeah. And so it’s a great question. I think the due diligence this is where it gets really exciting because the due diligence has got to be focused around impact first.

Our position is that we want the investments to We want the investments to be at a standard where a private foundation would consider them program related investments. It’s a gold standard, but essentially the impact diligent should be strong enough so that investment could be considered a grant by a foundation.

So that just means making sure that the work is done to quantify the impact. and the means by which that startup is going to accomplish that impact. It’s quite robust but I think that’s what’s so great about being an impact focused venture is that You get to focus on making sure that it’s right that it’s well measured and that it’s scalable.

Sedale Turbovsky: Love that. There’s a question here. About non dilutive funding. This is not non dilutive funding. So I’ll just I can just answer that 1 real quick. Grants, however, are and I do think. This pairs nicely with them. And it’s a great, it’s, it can be a great ramp into grants or maybe you’re ramping out of a big grant research program and you’re looking for that commercialization.

You can be on either side of that process or you could use it at the same time potentially. But these are not non dilutive. Let’s see what, oh, this is a really good one. What are the typical investment amounts for like DAFs investing in startup companies?

Alex Fang: So first, I just want to let everyone know who’s not getting selected that your questions are not bad questions because today I’ll say this one’s a good one.

I just don’t know. I’m not seeing them. I’m not seeing them. I’m sure they’re great. But it’s running. It’s running the gamut. It’s all over the place right now. We’re seeing people who have used these mechanisms to invest in companies that have IPO’d. Beyond Meat, most of it was the non meat push that resulted in the IPOs a few years ago of some of the larger companies like Impossible and Beyond Meat.

But what we’re starting to see is All of these standards coalescing and the minimum investments that most administrators are looking for nowadays used to be, they used to say, if you give us a million bucks, you can do whatever you want. Just welcome to America, give us a million bucks, you can do whatever you want.

Now we’re starting to see minimums go lower. So they encourage minimum, the encouraged minimum investment has gone down from 250K. To 100 K down to 50 K, and that’s good that what does administrative costs are going down capacity to assess these investments is going up. And the investments are becoming more normal.

I think right now point in time, 50 to 250 K. Is a sweet spot where you’re going to be able to where you’re going to be able to make an investment or get an administrator to work with you.

Sedale Turbovsky: Awesome do you take transfers of daffs from other daff fiduciaries like fidelity or vanguard?

Alex Fang: Oh, absolutely And that’s the whole idea.

That’s that’s the whole idea is that you we want Folks, we want those DAF account holders who have their money in an index fund that is an socially conscious index fund, where what they did was they took out some SIN stocks, made an index and that’s the extent that you get right at a Vanguard of fidelity.

We want that investor and that donor advisor to say, I want to do more with my investment while it’s in the deaf. And we want those funds to be transferred.

Sedale Turbovsky: Awesome. Very cool. And I do want to do you want to say to y’all I appreciate all of your questions as well. I am trying to pick the ones that have the broadest kind of impact.

We will answer your questions though, and we will provide contact information afterwards. Not trying to not trying to gatekeep here. Just just want to hopefully make it as interesting as possible for the largest amount of people. Why did you choose to focus on the pre commercialization value of death and not other gaps in the capital stack?

Do you see DAFs providing funding for first of a kind projects, family and friends, or other catalytic

Alex Fang: funding? yEah. sO I, I think

I think the answer the second part. Yes. Yes. To all of those. I think we would leave it to the founders and entrepreneurs to come up with to pitch us all of the crazy first of a kind ideas, right? I think that the reason that we pick the commercialization valley of death is because like any good entrepreneur, we knew that if we said we wanted to own impact investing with DAFs and the TAM is Billion, a billion dollars that we’re still not, we haven’t identified our beachhead, right?

And you should have two tams, you should have your beachhead tam and then you should have your tam, which is, your huge, big giant tam. But your beachhead tam has gotta make sense. You’ve gotta have strategic advantages. The value proposition of what you’re offering and the needs of the ultimate buyer have got to be hyper aligned, and that’s what we found with this tech transfer value of death group, right?

We have advantages because we’re linked in to these tech transfer ecosystems. From the perspective of deal flow, there are advantages there. The capital is uniquely risk aligned for this particular use case. However, the capital is not taking on the entire risk because most of the time the companies that we look at will have done an SBIR, right?

They’ll have been assessed scientifically by their peers. And our research just indicated it was an ideal beachhead at TAM.

Sedale Turbovsky: Beautiful. Great answer. I think this is a really relevant and interesting question. Especially for folks who might be exploring obviously Round Zero and then might be just exploring DAF investing in general.

How do you find and source DAF owners that are aligned with impact investing? I Can share some thoughts on this as well, but would love to get your thoughts.

Alex Fang: Okay, I’ll give you mine, I’ll give you mine and then you can go. I think that, as a nascent early stage initiative that’s something we think about every day.

Right now, we’re at the phase where we’re aggressively, now that we’ve proven this out we’re at a phase where we are aggressively Trying to do user research to answer that very simple question. My call out would be that if you know anyone that would be interested or engage in this user research, feel free to send them my way.

And if you think they could be a potential investor in your enterprise. There’s no better way to tee up and educate a potential investor than through some user research interviews where there’s not a real ask. So we’ll just put that out there. But Sadal, I’d love to get your

Sedale Turbovsky: thoughts. Yeah, I think that this is one of those gaps in the ecosystem that Over time, solutions like this or others might address because from our experience.

A lot of this is just network, right? You meet people, you talk to people and just build on that network. And that’s the approach. I haven’t found a great, like. New nifty website or anything else or app that like helps you find tap owners there’s certainly some opportunities there so Yeah, that’s and that’s I think the reality.

It’s one of the reasons we built OpenGrants the way that we did there’s a whole network of strategic advisors and consultants in there who can help you do that kind of navigation. But apart from apart from those kinds of resources I don’t know of anything, unfortunately.

The, what’s the difference between Round Zero and other initiatives, such as impact assets among other DAF initiatives? Would love to get your feedback on that

Alex Fang: thoughts. Yeah, so it’s a great question. So I think impact assets, most of the companies that have that are active in the space are administrator, donor advice fund administrators or donor advice fund sponsors, where they enable folks to open a donor advice fund.

There’s a menu of options. Their business models often cater to flexibility. But what we wanted to do with the gRound Zero is to have a DAF, but have it function like a venture fund with an investment thesis with at the very least from the get go. We wanted it to have an investment thesis.

We wanted to manage it that way because we want to create this new phase and normalize this new phase to deploy capital, right? It’s like that pre seed round. So we’re very focused on that. And we think of ourselves very much like a fund as opposed to the infrastructures. So hopefully that makes sense.

Sedale Turbovsky: Great. Another question here, do cause I think this speaks to some of the concept as well is someone like aRound Zero looking at some kind of ROI, like expectations, investment returns, like what is the expectation? Of the of aRound Zero as they look at these deals.

Alex Fang: Yeah so I think in alignment with what one ultimate goal of our mission, which would be, if we look at our vision statement.

We want, we know that every huge, major technological innovation that, that will benefit society or the environment has been in a state where they’re not fundable like conventionally fundable and over time through often, like a lot of friends and family or credit cards, Or second mortgages and a whole bunch of very bad decisions, they were able to get that company to a pre-seed investment level or something or a level where angels are more comfortable.

So we, what we absolutely do following our impact as a secondary as a secondary KPI, we are looking for returns, but we’re looking to create a methodology. So that we can help more of the companies that didn’t make it to that angel level who have the potential to go and have an exit. We want more of them to survive.

We don’t know exactly what those returns are, but our hypothesis has got to be that we can do a good job of identifying more of those companies. Helping more of those companies survive and then advance them to the next round, just like every other venture. So they have. When we look at these companies, our hope is that we can identify as more winners more winners than we would if we were just randomly investing and then in doing so we can generate returns that would line up to the expectations of traditional venture investors.

Awesome. That’s a huge we want to do.

Sedale Turbovsky: I love that. Let’s we’re going to try for two more questions here. As we get close to wrapping up and thank you so much, Alex. And for those of you on the line who have not had your questions answered. We were getting a ton of questions. So we will we’ll do our best to respond back via email and we will send out contact information and so forth after this as well.

So thank you all for being here. A couple of questions here. One more tactical and one more existential. So on the tactical side, how do you manage the requirements for deaths of making a grant to a nonprofit? Are you a nonprofit in this equation?

Alex Fang: Yeah. Yeah. That actually ties into a huge aspect of Round Zero that we didn’t talk about when individuals want to make a grant, we facilitate that.

But what we are looking for in donor investors are donor investors that want to support innovation adjacent or impact innovation adjacent activity. An example of that would be. We’re going to find these compelling companies to invest in. That should be your first priority if you want to come over to Round Zero.

But when those exits occur. And you want to make a grant, we would encourage you to invest in or donate a grant to Cradle to Commerce or Greentown Labs. So we can absolutely facilitate grants. We are we act as the non profit in that capacity and we are a non profit, but we encourage people long term from day one.

That when you do want to write a grant, if you want to write a grant to family members, philanthropic initiative, and there are five on C3. Great. That’s easy. But we encourage people to think of the mindset of let’s create this kind of flywheel where we reinvest some of these proceeds in programs that support.

The innovators that we can then invest in again.

Sedale Turbovsky: Beautifully explained. Thank you. You’ve highlighted shareholder focus on profits, tax code risk assessment and other challenges and opportunities in this area. What are the additional significant challenges or opportunities in your view that will advance this space?

Alex Fang: I Think the fact that. I think the fact that it is it’s a nonprofit initiative. The challenges are likely going to be, if you’re being honest, it’s funding. It’s always funding, no matter what you do getting anything started small companies, big companies it’s always funding.

And Round Zero will be competing with a whole slew of compelling impact nonprofits. That will probably be 80 to 90 percent of the challenge of. Making sure that it succeeds.

Sedale Turbovsky: Awesome. Great. How are you currently tracking early pre seed investment data of entrepreneurs? Like how is that getting tracked and

Alex Fang: reported on?

Yeah. We’re, we are not doing that. However, our, we are benefiting from the investments that are being made by the inflation reduction act and the chips plus act. Where we know that all of these regional engines, you have NSF engines you have tech hub, EDA tech hubs, they’re all creating these technology transfer and impacts innovation ecosystems.

And we we track and measure the methodology by which those. Innovation ecosystems bring people into their accelerators, right? So an example of that is do you have a techno economic development plan? Like we know that you do because you went through any number of these different accelerators. Do you have a credo like a collaborative research and agreement and development?

Collaborative research and development agreement. Yes, you do. Tell it like, so all of these things exist. Did you go through a CBER application? Whether you won or not, did that panel recommend that this idea get funded? There’s a difference between the two. So all of those things we pull off the shelf.

We’re not trying to manage every single one of these folks in mass as they come through our hype and we review them. We will track them. And then when we see compelling patterns and opportunities, we will coalesce around the set of metrics. But right now, we’re just trying to be smart and tactical about what we measure and how we do it.

Sedale Turbovsky: Awesome. Thank you so much. I know we’re up on time here. I know there’s a lot of questions we didn’t answer. But Alex, I’m just going to turn it over to you to give one last kind of closing call to action, something for folks to take away and do after this. And and then we will we’ll have this recording follow up and we’ll also include plenty of contact information.

Yeah what should people take away? Like a lot of closing thoughts.

Alex Fang: Yeah I think, so I think the biggest takeaways are think deeply about whether or not this makes sense as a way for you to finance the impact that you hope to create with your startup or enterprise. If you’re running an accelerator or an incubator and you you want to talk to us about potentially looking your startups or supporting your innovation activities.

Reach out to us. I think last but not least it for everyone on this call. Thank you for attending. Obviously, you’ve asked incredible questions today. And if you have any crazy world changing ideas that you think you’d like to advance and scale, but are having challenges like the ones we discussed today.

Feel free to reach out. We would love to talk to you.

Sedale Turbovsky: Awesome. Thank you so much. And I guess last real quick question. Is there a is there a website or place folks can go to read up on Round Zero, should they just wait for the email?

Alex Fang: There is not there will be and we anticipate that will be within probably four weeks.

But we’re not making any public announcements until probably the beginning of February. Awesome. Great. For sensitive reasons. Nothing super top secret, but it’s, we’re very, the timing here, we, I think we would have hoped. That we would have been there already. But we’ve got three years of work we’re waiting to, we’re reading, we’re waiting to really go live with this.

We want to do it right. With our announcement, so stand by and stay tuned.

Sedale Turbovsky: Awesome. And we will include a variety of contact information for both Alex and myself. So you can reach out directly, but unfortunately there is no place to go. Just read about Round Zero online at the moment, but thank you all very much for coming.

It has been a pleasure. Thank you, Alex. We will reach out and follow up with your questions and we’ll see you all next

Alex Fang: time. Thanks everyone. Bye.