AI for Main Street - Fireroad - Christy Johnson

Mark:00:00:15

Nobody wants to hear John Lennon give a PowerPoint on creativity and songwriting. They want to hear the story about how he and Yoko wrote. Imagine. That's why here on Impact Investing Roadshow, we believe the best way to understand and investors craftsmanship is to hear them dig deep into the story of a single investment. I am your host and tour guide Mark King. On this episode, you and I are gonna hear from Christie Johnson, a founding partner at Fire Road Ventures, based in Cincinnati Fire Road is a pre-seed venture capital fund focused on AI oriented products that address, you know, business critical problems for small and medium sized business operators. Christie co-founded, uh, fire Road in 2023. Before that, Christie spent several years at Ocean Programs, a Cincinnati based accelerator for entrepreneurs who want to quote, build great companies without losing their souls. She served as Chief operating Officer there before Ocean. Christie spent more than four years as Executive Director of Advancement and Digital Products at Athletes in Action, uh, global nonprofit. There she oversaw technology, marketing and fundraising. On the education side, Christie holds a bachelor's in science, in music, worship, and Communications from Kuer College and a master's degree in Christian Formation and Ministry from my alma mater, Wheaton College. Shout out to all the Wheaties out there. I asked Christie to begin by giving us the fire road origin story and a little bit about what led to launching the firm with this particular strategy in the venture capital space. I.

Christy:00:02:01

Fire Road launched in 2023. So we are still pretty new as a firm and we are based here in Cincinnati with a founding team of operators. Operators across a couple of different categories, but convened around a couple of different trends or hypotheses I think you could say, that are happening just in the world and in technology specifically. our hypothesis is that in the age of ai, human-centered business becomes more valuable, not less valuable, and at the same time, the trends that, that people may have heard of as the silver tsunami. So the coming wave of business ownership transition, coupled with the technological revolution that AI is bringing, creates this opportunity that we think. Exists uniquely for people with perspectives in both, in both sectors of the economy and of the market to bring the best of frontier technology and applied AI to local business. And so we have a couple different capital strategies as a firm around those hypotheses. We have a services business that does AI services and some company creation or product prototyping and testing specifically for local small business. And then our ventures practice is an early stage equity investor and we invest in early stage technology. Four. Local business, small business, the kinds of businesses on Main Street in every commercial corridor in America, that we'll see ownership transition in the next 10 years. And then in terms of our why as a team. We each have our own version of the story is, so I don't wanna speak for my partners in terms of their why. But I came into this space after having operated an accelerator in the faith-driven ecosystem called Ocean Accelerator. And we had operated for eight years at the time, working with high tech entrepreneurs. Helping them in a very kind of classic accelerator, way early product validation, early, investing introductions and positioning and team formation with a unique angle that. For founders to build healthy enduring businesses, it was essential for them also to be healthy, to have sustainable practices that connected them to meaningful relationships and to rhythms of rest to their sense of purpose. And most often when we were working with founders who were people of faith to their relationship with God. And we did worked on programs that helped founders integrate all of those parts of their life. We had a number of different capital partners, some of them small groups of local angels that formed very very specific funds to back companies out of ocean. We realized that aligned capital is a critical part of a founder journey. Particularly if a founder wants to build their team and build their product and build their business in a way that, that might look. Maybe radical to some or it might look, a little sideways to folks who are used to the only set of incentives being financial. So I came to conviction that there was space in the market for another investor alongside the likes of many of my peers who are some, very explicitly. Impact oriented in their investment thesis and some who are very, like in industry and, embody that presence in their relationships and work with founders, more subversively.

Mark:00:06:07

It's awesome that your first step was to identify the types of founders that you wanted to serve in a values aligned way. I'm assuming there was at the same time or hand in glove with that. An investment thesis, uh, from kind of an economic standpoint, but then also an impact thesis, in terms of kind of a change that you wanted to work with those founders to bring about. So, would love to hear more about the investment thesis and the impact mandate.

Christy:00:06:36

our team coalesced around this, very broad statement of entrepreneurship can be a force for good in the world. And you don't need to look long or hard to find entrepreneurship as this. Force for like selfishness and fraud and all of these toxic outcomes that are, have created great Hulu miniseries. so that's our like rallying cry broadly across our partnership So when we think about the convergence of AI and local business, oftentimes the headline reads, jobs are going away because of ai, and we believe there's a counter narrative that's available to us if we apply AI to these industries. With large frontline workforces, with skilled labor that powers their work and enables them and improves not only their quality of employment, but also their quality of life. So when we talk about good jobs, that's the impact that we are pursuing broadly as a team.

Mark:00:07:45

You mentioned the importance of aligned capital and aligned values. Can you unpack that for me a little bit?

Christy:00:07:53

When we think about alignment as a capital business, there are a couple of directions that we want to look. The first is across our partnership. The second is with our investors, and then the third is with the operators who, with we, who we partner with. For us as a team. We are aligned at a high level around that thesis that I mentioned earlier of the opportunity applying AI to local and small businesses And when we think about that impact, we think about, local business ownership preservation. We think about local job preservation and we think about, also the quality of those jobs, which is counter narrative to all the headlines around ai. That, that it's coming for our jobs, which, is not untrue in every way but is, in a lot of industries where we are active is just not the case. And there are so many opportunities to bring this new technology really help. Today and tomorrow's owners and operators of the businesses that run each and every one of our communities to help them operate their business with more profitability, to help them serve their customers more effectively, to help them employ their workers with more regularity and continue to build into the dignity of their employees. So that's what we're aligned with as a firm. And we lead with that when we fundraise, helps us stay aligned to our investors. And on the venture side, we have 89 individual LPs. And that us honest, I will say to this thesis that we have, especially because many of them are actual owner operators of small businesses themselves. And then the third layer of alignment is with the founders on the venture side where we invest. We, we wanna understand their why, which may be different from our why, but we don't want it to be in conflict. We don't want be butting heads. and I'll give you an example of when that. Was real tactically, we were looking at a company that was in the quick service restaurant and through the nature of its technology and who they were selling to, it was gonna be like, oh, we can upsell soda using AI because the soda companies are gonna pay us. 'cause all they want is to sell more syrup to these drive-throughs. we're like, okay. Not really into that as like the, that's what the business wins is when everyone drinks more high fructose corn syrup. Like I don't, I don't think so. There's probably a business there. I'm sure the founder is, as they say, crushing it and that's fine. But it was one of those where we're like, I don't think we're aligned on. On the outcome we wanna see from this business. And so we respectfully passed. And that was a good call, because it became clear from our interactions after passing on the opportunity it's yeah, we wouldn't have, that would've been very obvious very quickly in our work with this founder that we were not, that we were not values aligned.

Mark:00:11:28

And there are moms and dads in drive-throughs all across America, hoping like you that business fails.

Christy:00:11:35

Yep.

Mark:00:11:36

tell me a little bit about the financing structure you use. I mean, I kind of envision traditional early stage equity, but uh, gimme a sense of what kind of flavor of early stage equity you guys execute.

Christy:00:11:46

So we right now are investing out of our first fund, fire Road Ventures Fund one, in the world of early stage, we would call ourselves pre-seed investors. So we are mostly making, investments on vehicles like safe notes or convertible notes. Every now and then we'll get a priced round where we're actually like buying stock right away. But we do that out of our fund one. It's, a $5 million vehicle, and we're typically writing checks in the 100 to $200,000 range.

Mark:00:12:23

You mentioned you're based in Cincinnati. Tell me about sourcing lo locally Cincinnati, Midwest, anywhere in the lower 48. What's the geographic footprint?

Christy:00:12:33

Out of the 24 investments we've made to date, we stretch from California to New York. And we have a couple of different sourcing strategies, but what I will tell you is our most effective source of new deals, our founder referrals. And some of this comes from our portfolio, oftentimes the most, the ones that are the most exciting are when we say no to a founder and they still refer us to their friends. Which indicates to me a level of, a good rapport with founders. The other kind of founder network that we are a part of is just by nature of being operators ourselves. So two, the two partners I have on our fire road investment committee are serial entrepreneurs. So they know many founders coast to coast, a variety of industries.

Mark:00:13:29

Now that we've got a good overview of your thesis around AI and Main Street businesses, let's dive down into the transaction, that you did recently with Ando. Maybe start by just giving us the, the basic background on what they do and then how you got involved with them, in the first place.

Christy:00:13:49

And O is a platform that works. In industries with hourly W2 employees. these are sectors like food service, hospitality, transportation, where a lot of their employees are what would be known as chronically over employed. They're shift based. They're out paid hourly, and they typically work two to three jobs to be able to, make a living. And what, and O is doing is bringing a solution recognizes that reality in these industries. Works with employers who have W2 employees, so it's not like it's not gig economy. And helps the employers have predictive scheduling that's like wildly accurate to the hour, then also puts the employees in the front seat of their scheduling across multiple employers. Because what happens in a lot of cases, because these jobs are just like un. Everywhere. When an employee faces a conflict between jobs or perhaps between one job and a household obligation, it today is a viable solution to say, I'll just quit this job and get another one next week. Leaving the employer, back on indeed trying to make all these hourly hires, which is they, spend thousands of dollars per employee in these industries where there's over a hundred per 150% turnover annually. And it doesn't have to be that way. Employees can manage their schedule across different employers in a way that acknowledges like, yes, not only do you have another job, you also have a life. So the employee obviously has a much better quality of life, right? They have predictable scheduling, they have input into their scheduling. They can go to their kids like softball games or say, you know what, will work. shift so that I can be home at three and then a couple days a week, I need to go and pick up like the closing shift from seven to eight, but I want those three hours at home with my kids, and they can make that happen in this, in this platform. so that's like the big idea. That's, I would say that's the medium idea. The big idea is. That by having access to this cloud workforce that and O is building for, they will have the biggest graph on labor in the United States. There are 82 million hourly workers in the US alone. And by having, visibility into these workers and their schedules and their preferences, and also the demand on the employers, they'll have a sense of I. Basically supply and demand of labor on an hourly basis, in theory, across the country or perhaps, across the metro and the industry to start. So when we looked at that, we actually got that from, network and email kind of list of founders who share deals with each other. And it piqued our interest right away. Huge frontline workforce is. So we were like, oh, high impact opportunity here. And we took a call with Paul. Paul Wellens is the CEO. And I actually, I wrote down our timeline here. Our first call with Paul was on April seven. And the way we start our process is one of our partners will typically. Take a 30 minute introductory call just to get a sense of the founder, get a sense of their journey in the industry and kind of their sense of the problems that they're trying to solve and just where things are at generally. And, it's a true like venture scale opportunity. And that happened on April seven. My partner, Tim was the first person who talked to Paul. And from there, that kicked off and it was really about three weeks of diligence for us when we, were digging into Ando and right away. What was neat was that there was very obvious founder domain fit. Paul had scaled and been an executive at brands like KFC and Einstein Bagel and so like these employers were. He was dealing with the problems that the workforce faced and that ops and HR had to deal with because of this like mis mismatch of labor supply and demand. So very obvious founder market fit right away. And thing that stood out to us was that as soon as he talked to us, he sent us like. I think it's like a 40 page white paper that they had done, like first party research on this and really I think spoke to the gravitas. That, that the team is bringing to this space and the seriousness with which they are tackling it versus just coming in and being like, and I love lean methodology, but it wasn't like we built a prototype and a landing page and got some people on a wait list. It was like, no, we this deeply and professionally, and have the lived experience to, to back that up. So that's how we started.

Mark:00:19:22

Tell me about the three week process then. What goes into the diligence?

Christy:00:19:26

So from a first partner call. Which is usually with the CEO, we then have a second partner take a similar call if that first partner is green light. And this is because our investment committee is unanimous. There's, so there's only three of us. And before we dig into a lot of diligence or start looking at data rooms and financial models and tech stacks and stuff like that, want the majority of our investment committee to be at least aligned and on interest. And also we do gut checks on just like chemistry and character between our team and the founders. 'cause it's a really long relationship. And if one of us gets off the call and says I wouldn't be sad if I never talked to that person again. It's probably a no. So we do two partner calls and then we'll take something into diligence, which usually is not, we don't do anything like wildly unique, we're researching the market. We to three of our LPs who operate businesses with these types of workforces and get their perspective on the problem space. We don't typically have our LPs like, get into a product that we're thinking about investing in because we invest so early and it's yeah, it's not gonna be good. It's not supposed to be good, but tell us how you solve this problem today. so we can validate. With our LPs that way. So that's part of what went into those three weeks. I read the white paper, which surprising to me how few investors actually read the materials founders send them. So we read that. We. Had a call with one of their angel investors who also was serving as a fractional CTO. And then from there we went just into memo writing, and that's usually couple of emails back and forth with the founder if they have a data room. I'm looking at financial models, that the call with the technical advisor, the angel, was really important for us because. It's a substantial product that will be demanded if this works out. so we wanted to make sure that there's good, good technical leadership and vision, which was part of it. So then, from there we had. A final call before we take an investment to committee, and that's the three of us on the investment committee. So me, my partners, Tim and Ry. And then we also invite the, basically anyone who's on the cap table of this team. Usually it's the C, any co-founders. And then if they have like key. Leaders in Go to Market or A CTO who might not be a founder and title, but is building the product. We do that last call with a pretty large group. And what was fun about this one the technical angel who was serving as CTO at the time got on the call. Our partner Ry got on the call and they looked at each other and they were like, you. And they had known each other just like maybe even a decade ago. In a kind of developer world and had no idea that they were the ones on the other side of this. And that ended up being positive signal, which, it could have been negative signal, but it was pretty positive signal. And validated kind of our confidence in the ability to build a good product. So that was on the 25th. So we went from April seven, first call to a final investment committee meeting on April 25. Which is pretty quick for us, I'll tell you that.

Mark:00:23:11

I was gonna say sounds, sounds quick, but not, for pre-seed, not crazy. There's limited ability to diligence things.

Christy:00:23:18

Yep. And in so three weeks. Included at least five conversations between our team and their team. So we're,

Mark:00:23:28

in person. Did you? In person or all Zoom?

Christy:00:23:30

no. I'll zoom.

Mark:00:23:31

Where's the team located?

Christy:00:23:34

is distributed. They, have a presence in San Francisco, in New Orleans, and in Atlanta.

Mark:00:23:45

Interesting.

Christy:00:23:45

Their initial design partners on the commercial side were New Orleans based, so that's where they're spending a lot of time.

Mark:00:23:54

Now the thing with Prese is. There's not a whole lot other than maybe the founder's background that's rock solid. At that stage, when you think about all the different things, what was top of the list in terms of concerns? Did you guys identify a key risk.

Christy:00:24:10

I think you said it well. Everything is a risk at preseason. What we were in the middle of learning when we did this deal was actually the capital risk of pre-seed, specifically being, comfortable going very early and also being small checks. So we had learned the hard way that there are some of these rounds that come together and it's in quotes, a million dollars. But it's raised over the course of a year and it's like money in, money out and that is an uncomfortable place to be as a fiduciary of other people's money. So we had actually started making our investments said we will close when. Like when the round is together, not that we don't wanna be like last check-in, but we can't be the only check-in. So that for us, with a lot of these very early stage things is actually the biggest risk is just like this first round of capital and getting that together in a timely way so that the founder can get out there and build the product, build the team. Take it to market, and then we'll learn what those risks are the road. So we actually made our investment decision at the beginning of May, on May 6th, said, we've allocated this amount of money. We hang on to this money for 90 days. And we're ready to go when, it was probably something like K is in the bank. Ideally you'd love to see a founder with 1824 months of runway with this capital environment. And just acknowledging like world we live in and the types of founders we actually wanna invest in is like we, you just need to have some runway. It can't be like you're gonna take our money and then you're gonna spend it and you're gonna be outta money in two months. That was very top of mind when we allocated to Ando. And, what happened over the course of kind of the following three or four weeks really gave us even more conviction the important parts of the business. And I'll give you a couple of. Highlights. I was in San Francisco for another trip and was able to meet Paul, which was great. So ticked that box of we've sat down across the table with each other. And then he is a great communicator and so through regular updates brought on another engineer. They shipped a version of the product and they closed a, like a large multi-location commercial partner. So those are like the three things that we wanna see in a founder, right? Can you build a team? Can you ship product with your team, and can your team sell the thing? And so over the course of really three or four weeks after that initial allocation. And because he was communicating, we could see those parts of the business not being fully de-risked because, it's a prese deal, but see the competency and the skill and the progress of the team. And after one of his updates with that kind of multi-location partner close, we were like, all right, let's go, let's do this. So then we closing on like June 1st week of June.

Mark:00:27:49

You mentioned earlier, the commitment to founder wellbeing During the diligence process. Do you start identifying areas where you think you can help with that particular aspect of. Founder development or founder support.

Christy:00:28:04

what we do is when we decide to take something into diligence, so after that initial call. We share with founders a couple of key documents about us, and we say, Hey, like this is a mutual relationship. We want you to know that if we continue to work with each other and partner with each other, like here's who we are and we send 'em our values, we send them our operating principles, we send them our diligence process so they know what to expect, we send them our framework on founder wellbeing and that yields some great conversations and also differentiates us, I would say, in a pretty stark way. Not even with the contents of those materials, but to say we're gonna set the power dynamics aside here and say we're mutually. Deciding if we wanna do business with each other for a decade. let's do that in a mutual way. And that has been really to some really important conversations with founders where they feel like, okay, now they know what they're getting with us on their cap table, and they can identify if we're aligned or not. And there's been some cases where it's like just like in one ear out the other, not, doesn't resonate with founders at all. And it's okay, that's fine. and then others will be like, oh my gosh, like this line is this line from your values is like this line from our kind of like memo or our deck, and it's cool, yeah, let's go. Or at least let's keep going and see if we can go, further. That's how we work it into the process.

Mark:00:29:50

Shifting from the decision process, 'cause it sounds like I, I don't wanna skip over the investment committee, but with the three of you being deeply involved in the process, Suspect the committee meeting or decision is a bit of a formality at that point.

Christy:00:30:04

I work really hard to make it that. And that being said, over the life of our funds, so we've been investing for about two and a half years. We've done 24 investments. We have number 25 allocated, it's either three or four times we have taken something all the way to committee and said, no.

Mark:00:30:30

Interesting.

Christy:00:30:32

It's not in the same way that a lot of firms where it's like every partner's bringing a deal and you're all pitching each other, but you can only do one deal and it's like and persuasion and it's like we, we try really hard to get two consensus on our investment committee ahead of that.

Mark:00:30:50

Yeah. Gimme a bit of postmortem on that. Is there a lesson learned from those three or four?

Christy:00:30:56

I think we are still figuring out how deferential we want to be to each other. For example, if there's, one of us is saying we gotta do this deal, we're pounding the table. the others of us are like, if it's gotten this far process, there's not like an absolute like deal killer in there. It's more just greater enthusiasm on the part of one partner than the others. We have gotten sharper on what we look for in a founding team. I would say when we started, we were open to some gaps in a founding team that today we wouldn't, we wouldn't take it to committee we took it to committee and it killed a deal and it's oh, is this a thing that kills deals for us? Interesting. Okay, we won't do that anymore. And think it's completely avoidable to get in those situations. And the best thing that I try to do is be open with founders when we do move to, I'm wrapping up a memo and say this is our process. This is where we're at. This is just so you know. A possibility and has happened. That's been tough in the moment, but falling back on, just having open communication and hopefully that, hopefully that is respectable and respectful of founders along the way.

Mark:00:32:40

Maybe one last question about the decision process the majority of the decision is a people decision. It's a concept market, kind of thesis decisions certainly, but a huge piece of it at this stage is the people decision. How much kind of, qualitative work to do that in terms of reference checking, off list, checking, that kinda stuff.

Christy:00:33:01

Are a couple of ways we try to get at that when we engage in LP in a diligence process, if they interface with a founder, what we hope they help us understand. Is that this founder understands my market. They're using the right words. They, are referencing the right competitors or problems or things like that, which is not necessarily a character reference, is something that an LP in that industry would know much more natively than. Our team in most cases. We use a platform called Wendell, which is a founder screening tool that's built on, a couple of different psychographic markers. And helps us identify things like grit, their decision making communication style, their energy And like how they relate to information and action and things like that. And that's developed by another firm here in the Cincinnati area. Really fine tuned for early stage venture building. And then where we know other investors or competitors or. Customers in the market, we do go ahead and give them a call. Like I mentioned for Ando, we talked to the angel investor who was already on the cap table, who was operating with them from a tech perspective for a couple of months. And that's helpful. We also will before, before we allocate check in with other VCs we know who have similar theses or who may have talked to the founder, maybe diligencing the same deal at the same time, and get a sense of kind of their read on the team. Which is helpful in more than one case. One of our portfolio companies, had a lead investor who was on the board, unusual for a preceded company to have a board. And so I talked to the board member and he said about the founder, I, we've, I've known him for about two years and. He kept on telling us what he was gonna do, and then he kept on doing it. So we decided to invest. And I thought what a great reference.

Mark:00:35:24

Yeah.

Christy:00:35:25

and so wherever those connections are available to us, we do go ahead and try to initiate that feedback back.

Mark:00:35:32

Tell me about the closing process in gimme a sense of kind of the nuts and bolts of how you actually close one of these to keep it, from becoming a, a major legal project.

Christy:00:35:41

Yeah, we, I would say it varies deal by deal. And in most cases, we are executing a standard. Safe note that we use like very broadly across our portfolio. And we also have like a template side letter that includes like information rights, pro ratta rights, things like that aren't in a standard YC safe. There's also like a standard Carta has a standard safe and it's like we're comfortable with either, and sometimes. The founder has council that manages the closing. And in that case, it's we're not leading rounds, so we're not setting closing dates. We're not dictating pace or. Anything really beyond standard terms for this stage. So sometimes the founder's council will manage the closing process. Other times it's the founder, when once the round's together, they'll put everyone on a thread and be like, all right, we're executing on this day. And they'll distribute. All the safes out to everyone, and then you all wire within, like 24 hours. Sometimes when we're doing something very early alone, I'll just initiate the paperwork and it's those same templates that we've used, probably a dozen times by now, which it's like our council worked on 'em the first time and they're very transferable.

Mark:00:37:04

How did it go with the endo specifically? It sounded like there were, first of all, it sounds maybe a little more sophisticated than your typical founder.

Christy:00:37:11

Yeah. Yeah. He, his counsel managed it.

Mark:00:37:15

When did you actually close and fund.

Christy:00:37:16

We closed that the first week of June.

Mark:00:37:19

June and

Christy:00:37:21

Okay

Mark:00:37:21

they off to the races. You have the closing dinner and everything is wonderfully, magically awesome. Or

Christy:00:37:26

they, so yeah, so we are in touch mo a handful of our portfolio companies. We talk mostly quarterly. he does a pretty faithful update, and post-investment, what that's looked like for them. So they were in early kind of pilots. With a handful of commercial partners. they spent the summer and the early fall really fine tuning their predictive model this predictive scheduling. And got it to a place where they do feel very confident in the platform's ability to accurately predict workforce, demand, and, had done that through a couple of key partners, which each were multi-location brands, so like a 15 location, quick service salad brand, and then they added a new city in Denver, over the early fall. I think that was, yeah, September when that happened. And along the way. We have been sending our, we do like an outbound founder check-in on some of that founder wellness work. Paul's been participating in that with the rest of our portfolio founders, and then they rebranded. Kind of once they knew it was gonna work, the original name was Methodic. So once they were ready to scale commercially, did some professional branding work to Ando and are, working on raising a seed round this quarter in which, which case, like we, when our portfolio is fundraising, we spend a decent amount of time them with investors in our network who are Potentially interested.

Mark:00:39:10

Tell me a little more about the founder wellness survey. Kinda what's covered and how people reacted to it and What's, what's kinda been the experience with that.

Christy:00:39:19

So every, it's about every eight weeks we send a quick SMS check-in to founders that pulses them on six dimensions of life. And these dimensions are based on a longitudinal study out of Harvard Center for qualitative social science called the, it's seminal like paper is called like. On the promotion of human flourishing the, for any like kind of impact oriented inve, like it's pretty well known. So when we thought about like, how can we be founder friendly investors and what does it mean for founders to be well in other areas of their life as a former nonprofit operator, the question I always come back to is like, how will you know you're having your impact? The impact that you wanna have. it's we need to measure it. And in my mind I'm like, why would I make up a way to measure this? Let's just do something that's like accepted social science on what are the dimensions of a flourishing life? So those areas are, like financial material stability, physical and mental health, close social relationships. and purpose, character and virtue, and life satisfaction and happiness. So within each of those six dimensions, we have a bank of probably five or six questions. The founders get served a random question for each dimension and then over. So we've been doing this for almost two years now. So I have almost, I have a lot of, in the world of research, it's not that much data, but. It's a significant amount of, of data on our portfolio. So I can see trends, on how they're doing. And see, like we had a season last summer where it was like financial material stability, like nose dived and sure enough people were short on runway. It is can be a stressful season for households with increased childcare and child activity kind of costs and stuff like that. And for a lot of those founders, it was like, they're kinda like six months in where it starts to get real of oh, I still haven't taken a paycheck. And that starts to be, a louder pressure. So that's what we do. And then based on what we see each month, just try to offer. Really, lightweight, I will say, responses to what we see. Sometimes it's oh, here's a practice that one of us or somebody we know has found to meaningfully make a difference in this area of life. a partner resource. Here's a service provider that's willing to offer some, in kind services, things like that. And it's really I cannot stress how. Lightweight and nons institutionalized. It is. But it's our effort. And we, I've heard from more than one founder, and my husband who's a in ministry was like, oh, that's actually proven to be true is simply the act of somebody checking in. Has a small, effect in the positive on things like mental health, and sense of relational connection. So just that act, we hope, gives founders a moment for reflection on other areas of their life, and gives them a sense of, care from one of their investors. The other thing I'll say about that is, so we do that, the data and then it closes with a, of course, like an NPS score and then like an open-ended, like how can we support you? Or if you could activate the fire road network towards one thing, like what would it be? And when I respond to founders after that, it's Hey, I saw you are thinking about hiring a growth marketer or whatever. like, oh, I didn't think you read that. And I'm like, who do you think is out here? Like it's just me. It's we're here, we're doing what we said we were gonna do. And it continues to catch our founders off guard of oh, I didn't think you actually like. up on the thing that you said mattered to you?

Mark:00:43:42

I was gonna say, it's a sad commentary on a number of things, but

Christy:00:43:46

Like I continue to just be shocked and dismayed at how low the bar is behavior on the part of investors.

Mark:00:43:53

As you're looking at Ando raising a seed round, Much kind of fresh analysis do you do? How do you think about those follow ons as a process?

Christy:00:44:03

We. To be honest, don't spend a lot of time thinking about follow on because our fund is so small. So we're investing, like I mentioned, out of a $5 million fund. we have less than 10% of our investible capital reserved for follow on, we have tended to do with very early stuff. Where even our follow on check is priced a $5 million valuation cap. So it's less expensive equity. So that's a little bit of a cop out. And that's just because by nature of being a small fund and being so early, like I, I very strongly believe in a diversified portfolio and, if we were. In fund two, God willing, we will be investing out of a larger fund, so we will be able to do some follow on capital. And it really goes back to those three things, right? Are we seeing momentum in building a team and shipping product and in selling the product? And so Ando is raising a pretty large seed. I think it will be in the three to $4 million range, which is a significant step up from the million dollar pre-seed that we participated in. and that. Is an indicator of what I think is just the market size and some of the location. So being a Silicon Valley based startup, there is a different pricing structure, I would say those of us who are, centered more off the coasts. so I think that speaks a little bit to the size of the round. And then I think like, when, some of the investments we make, they're very vertical. They're very niche and as far as we can tell, no one else is working on it. so it's the founders can take, not necessarily take their time, but it's less competitive to get in market and win the market. And then there are opportunities and we think of Ando as one of these where it is potentially a land grab you do need to get out there and. Really saturate the market with your brand and get large commercial agreements going, build the team at, with velocity. That, requires a substantial amount of capital.

Mark:00:46:30

You thought about potential exits for 'em? Are there logical acquirers or does it feel a little bit more like maybe a PE buyout if there's that many people playing around in the space?

Christy:00:46:39

it's a strong PE buyout candidate, given the sectors that it serves. And PE shops have like multiple, fast food brands. That's a potential path. I think there's a potential path to A-A-P-E-O acquisition of another tech forward PEO, or. I don't say this about many of our investments, like it could have IPO potential if it goes where we think the opportunity

Mark:00:47:06

Yeah.

Christy:00:47:07

that big.

Mark:00:47:09

And speaking of capital raising, you mentioned fund two. What's timing or thoughts or plans, for fund two? For, for fire road?

Christy:00:47:17

We are working on fund two right now and are still designing portfolio strategy, but we have more conviction than ever in our thesis and in the opportunities around our thesis. And also in the quality of founders who are out there building right now is just like inspiring. So we will be in market with fund two in 2026. For accredited investor Asterisk.

Mark:00:47:43

Yeah, all the normal disclaimers.

Christy:00:47:46

yep. But, that's our plan, and that'll be a three year gap and we'll be wrapping up our investing out of fund one in the first half of 2026. So we're trying to a nice cross fade where we're never not investing.

Mark:00:48:01

And if, investors or founders wanna reach out to you, what's, what's the best way to get ahold of you? Christie? I.

Christy:00:48:09

If, in the words of can possible, you might not appreciate this reference, call me, beat me if you wanna reach me, my email is just my first name@fireo.io or LinkedIn. We also have an intake form on our website and I personally the one who looks at all those. We're pretty

Mark:00:48:27

Perfect. And it is fire road.io. Hats off for the unique URL, so

Christy:00:48:33

We also have the redirect to Fire Road vc.

Mark:00:48:37

Ah, there you go. Domains, dime a dozen. They will sell you lots of them if you give them the chance,

Christy:00:48:43

Indeed.

Mark:00:48:45

Christy, thank you so much for taking the time. It's been fun to learn about Fire Road and take a little bit of a deep dive on Ando. Good luck to the Ando team and good luck to you guys.

Christy:00:48:53

Thanks, mark.

undefined:00:48:55

I hope you've enjoyed hearing the story of Fire Road and Ando as much as I have. Thanks again so much to Christy for taking time outta her busy schedule to join us and, share their story. One, uh, particular point of clarification I realized is, uh, Christy's email is actually Christie with a c. Y-C-H-R-I-S-T y@fireroad.io. You can also get more information and all the show notes, et cetera@impactinvestingroadshow.com slash fire road. There you'll have, her email correctly spelled as well as links to, other things that we mentioned in this episode. Lastly, if you could do me a personal favor, I would really appreciate it. If you've enjoyed the show, could you forward this episode to some friends and colleagues? They will think you're an awesome friend and you will have my eternal gratitude. Would appreciate that if you could share this with folks that might be interested. So, until next time, I'm your host, Mark King, reminding you that if you want to remove the impact needle, you gotta step on the gas.