Earnest Sweat 00:03
Welcome to Swimming with Alligators,

Alexa Binns 00:04
the VC podcast from the LP perspective,

Earnest Sweat 00:07
with your hosts Alexa Binns

Alexa Binns 00:09
and Ernest. Are you ready? Let’s dive in. Thank you so much for being here, Craig.

Craig Schedler 00:16
Thank you for having me. It’s great to be here today.

Alexa Binns 00:19
Absolutely. Before we get into everything that Intuit Ventures does, we’d love to learn a little bit about you and your journey leading Northwestern’s mutual ventures program and things that led up to you being at Intuit.

Craig Schedler 00:34
Yeah. So I spent the first part of my career in investment banking and had the opportunity to work with a lot of founder-led businesses, and that sort of piqued my curiosity around venture and what founders do, and sort of being able to support them and work with them. And so, I had the opportunity to join Northwestern Mutual back in 2014, really at this, you know, the inception of what became fintech. It was just sort of becoming a word. It was the very, very early days of what I’ll call fintech 1.0. So if you think back, it was all the consumer, you know, the disruption of consumer fintech. It was disintermediating banks and insurance companies and incumbent wealth managers, and so it was this fascinating time for Northwestern Mutual to think about what the future holds for us. And so was tasked with standing up North Northwestern Mutual Future Ventures, which was our corporate venture program, helping Northwestern Mutual prepare for that future that was at the time uncertain in what was going to happen and sort of what their role was for it. And so, spent about 12 years building and running the team there. Invested in a lot of early successful kinds of fintech 1.0 companies, we were early investors in Betterment and in Chime, and some you know very successful companies that delivered great financial results and performance, as well as of strong strategic values. We built the program over the years. So from that seat, I saw how fintech evolved, how insuretech came into being, and more recently, wealth tech was the area that we were focused on pretty heavily. And so, you know, from that experience, had the opportunity to join into it, and I think it’s been a fascinating time to join into it as we look at sort of how the the technology landscape continues to evolve with AI and and how that pushes technology forward and forces incumbents to look at their businesses in a in a different way. But what really tracked meat Intuit was the breadth of the platform and the reach of it. So Intuit owns a lot of you know big consumer brands and very important companies in technology. And so looking at the breadth of that, I think from a corporate venture standpoint is very interesting. So, a lot of ways in which we can drive value across the organization, and so joined Intuit about a year ago now, and really focusing on how we can drive Intuit drive insights and you know new opportunities for partnerships into Intuit’s businesses, so around our consumer businesses, so TurboTax and Credit Karma, looking at the future of consumer finance, and then also around our SMB product, our small business, you know QuickBooks, obviously there, and then also our emerging mid market business. So looking at our Intuit Enterprise Suite and how we help mid-market businesses grow and succeed. So, like I said, it’s really just a fascinating platform and a great time to be at Intuit.

Earnest Sweat 03:32
Craig, during our prep conversation, I was really intrigued by your experience at North Western Mutual and kind of being at the ground floor of building that out, and I’m curious now that you’re into it, what were some of the lessons you learned with developing you know a corporate venture program? It can look a lot of different ways that you’ve applied to intuit

Craig Schedler 03:56
I think you know I’ve been through enough of this in you know a decade plus of being in a corporate venture, I think the number one thing I’ve learned is you need to be very clear on your north star. What does the organization need and want and value from a corporate venture program? And I don’t think there’s a right or wrong answer to that necessarily. I think there’s variations of good and maybe not quite as good, but I think overall, like every company is going to approach it differently, have different expectations, and have different aspects of the program that they want to derive value from. So it can start with you know an M and A pipeline. You know if you’re simply looking for companies to get a toe hold into, understand, and ultimately look to acquire those businesses, that’s one way that that can be effective. I think one other way can be more financially driven if you’re thinking about it strictly from a financial perspective. Although within a corporate setting, I think that can be a little bit of a challenge. But then I think that’s like everything in between. I think what I’ve seen will be successful. How can you really drive strategic insights? You know, I think the the business units and the the GMS and you know the leaders of businesses across Intuit are spending a lot of their time focused on, you know, what their business is doing, what they’re trying to build, what they’re trying to deliver in the next you know in the next quarter, the next year, the next couple years even, and I view our role as supporting them and enhancing their knowledge with outside perspective. So, how do we go about investing in companies that can deliver that value, that insight into our business? And so we can go about that in a variety of ways. But really, sort of coming back to when we meet a company, we say, “Hey, okay, that’s something that’s interesting to this part of our business, or we know this is on our strategic roadmap for next year. We need to help the business understand. Like here’s an approach, and here’s something that could be a potential partner. It could be some way that you know Intuit could potentially work with a company as part of a go-to-market strategy.

Alexa Binns 05:57
You’re overseeing both direct investments as well as some LP commits, and you’ve said you’re surprised that more corporate venture programs don’t also take this LP route.

Craig Schedler 06:10
Yes, it’s interesting to me. I think again, a lot of corporate venture funds approach things differently, and I think primarily where they start is around direct investments. It’s sort of the most obvious route. There are startups or companies. We can allocate capital. We can invest in these companies. We can gather whatever value, or we can partner with them in whatever way is important. So I think that’s sort of where most corporate venture programs start. I think the piece that does get missed is the LP element, and virtually every corporate venture fund that I know is resource. You know, they’ve got limited resources. They’re resource constrained, and in addition to doing sort of the venture aspect of it, there’s the internal stakeholder management piece of it. And so, I think corporate teams, some corporate venture teams, sometimes miss that you can supplement and complement what you’re doing with direct investments with a thoughtful, well-structured LP program, and I think that gets overlooked for a few reasons. One is you sort of understand startups maybe, but then there’s this other world of terms and jargon and funds that you don’t get there’s GPS. What is that? You know what it means to be an LP? So I think there’s sort of an additional education element that sometimes isn’t there. So I think that’s number one. I think the other thing is it can be looked at as kind of like outsourcing your role as you know I’m this was I was given this responsibility to make investments and you know develop relationships with startups and the startup ecosystem, but then I’m going to go have someone could be perceived as do it for me, and I don’t think I think that’s a very like narrow way of looking at it as saying you know I’m just going to have someone do it for me. So I think it can be very complementary, and I think it does surprise me sometimes that the more corporate venture teams don’t use LP commitments as part of a broader strategy to deliver on their strategic objectives.

Earnest Sweat 08:09
How would you advise an organization to start that process? You know, I’ve been on the show before. You know Deloitte, the Canada National Office, Deloitte Ventures. They started their approach of even getting to understand the marketplace by investing in firms. But let’s say you’ve already done kind of what you said, the first started with directions. Now, how do you incorporate this other toolkit tool in the toolkit box of investing in funds. What’s the right way and right approach?

Craig Schedler 08:47
Yeah, I think it really starts with you know if you are starting from a direct investment first or a direct investment exclusive approach, as you are out making those investments, you are inevitably going to meet venture funds. Like you’re going to run into other funds, obviously, that are looking at the same types of deals, the same opportunities, the same broad category of companies, and so I think you can develop an appreciation for who you think is a good investor and who’s maybe not quite as good, or someone that’s a little more focused on what you, the types of investments that you’re interested in, so I think that can happen very naturally through, you know, just sort of being in the venture ecosystem. You can say, hey, you know, we’ve now run across this fund. The last four opportunities we’ve looked at, they’ve also been investing in or looking at, and so you sort of see like we’re quickly developing a. There’s a pattern here that you know we’re seeing and looking at the same opportunities, and so I think that’s that’s one way. I think the other way is just you know through a little bit of cold outreach if you were just interested in getting to know funds again that you had seen or met or seen in other settings. I think that’s a really good way to do that. And if you know, I think you are astute. GPs will quickly recognize that you know we’re we’re seeing this and you know could they be a potential LP for the next fund kind of thing, but I think that’s a really great way is just through the direct investment program you’re going to start running into or you know engaging with and interacting with other funds and that’s a really great way to sort of see what how they think, how they invest, what what types of investments are you know are core to their focus and thesis.

Earnest Sweat 11:45
It’s one thing to I assume you know you bump into people, then they’re part of kind of like okay, this is a nexus of people that we could potentially invest in, but when it comes to the actual diligenceing funds, you’re already you know as an organization building out a new practice and skill set of investing in startups. What do you think about developing diligence in funds as well? Like, especially given as you mentioned earlier, each corporate venture program has a specific different north star or should have a north star. So, how do you align that with the diligence of a fund.

Craig Schedler 12:23
It’s a very different approach to direct investment. I think what becomes important, what you focus on, how you approach diligence is different from a direct investment. I think for a whole host of reasons, and I think from the GP’s perspective, they need to understand that the diligence a corporate or potential corporate LP is going to want to do is probably going to look different from what I’ll call a traditional institutional LP.

Alexa Binns 12:48
Yeah.

Craig Schedler 12:48
But I think when a corporation starts to evaluate a first fund, I think there’s a few important things to look at. Number one is does their investment thesis align to areas we care about. Number one, obviously, like this needs to be a fund that is investing in areas that we’re interested in. I think similarly, you can’t expect any fund to invest in 100% of things that you care about. Like a fund is going to have a mandate. Let’s just even see they’re investing in fintech, right? That’s a pretty broad category, you know. And if I’m an insurance company, I can’t expect every investment they do to align perfectly to insurance or to wealth management or whatever. Like, they’re building a portfolio. They’re trying to select the best companies that they believe have, you know, potential for outsized returns. And so, not every investment is going to fit perfectly. So, I think you need to be realistic on how much of the portfolio, how much of the focus is going to align to your specific areas of interest? I think the other thing is to have a very candid conversation around how they approach engagement with LPs. You know, there are lots of funds that say we’ll send you a quarterly capital account statement. We might send you a semiannual letter, and that’s all we do, and that’s fine. Like if that’s a fund’s approach, then I think you need to know that. Know that probably if you’re a corporate LP, that’s probably not a fund that you’re going to want to invest in. So I think under being very upfront with you know we’re going to have certain expectations that are reasonable around you know maybe it’s a quarterly call, it’s a semiannual in-person meeting, it’s you know whatever is the appropriate cadence for you to that that you want as the LP and for the GP to sort of manage their their workload. I don’t think it’s reasonable to ask for like a seat on the investment committee or you know a right of refusal on investments or things that you know are going to alter the the fund’s investment approach, I think it’s it’s being realistic around what you can expect from a GP and similarly what the GP can expect in return. But I think then the other thing that I think is extremely helpful that sometimes gets overlooked is. If you are a corporate L, potential corporate LP, talk to other LPs. Ask for intros to other corporates, ideally that have invested with them. And I think, in my experience, corporate LPs are fairly transparent and will be somewhat frank around this fund does an excellent job. This one maybe not quite as well. And you know it’s a little bit of during fundraising, GPs will promise a lot of things as they’re as they’re out there. But you know, and what’s realistic or what have they done previously? You know, ask for the materials they send to their LPs. You know, is it a simple two-page letter that talks about financial performance and that’s it? Which is an approach. If you know if that works for their LPs, great. But again, it comes back to you as the corporate LP. You know, what are you looking for, and understanding what’s possible again, what’s realistic, and then having sort of that very open conversation up front to make sure and understand if it’s a potential fit on both sides.

Alexa Binns 15:59
I’ve had strategic LPs say, can we just have a download of your CRM? And you’re like, well, we. I mean, how much do you plan to get? Yeah,

Craig Schedler 16:10
and I think similarly, like again on the corporate side, you can’t be asking for a right or for like if a company enters, if a portfolio company enters an M&A process, you can’t require any type of exclusivity or first look, last look. Like that’s not that’s not the market. You might want that, and if you know a good GP would want to include you in a process, obviously, but you can’t ask for anything that’s off market. Again, understanding what market terms are, because I think when you get into it, if you do decide yes, this is a fund we want to invest in. The terms of an LP agreement are going to look very different from the terms on a direct investment. Obviously, there’s waterfalls, there’s tax implications, there’s you know all these things that that need to be considered and evaluated, and it’s developing that skill set which is very different from making a direct investment,

Alexa Binns 17:02
I’m fascinated, Craig, by sort of how these some areas get hot for a bit and then cool, and Northwestern into it. You these are these companies that are massive entities that are not that sort of proof there’s plenty of value in fintech, but now you maybe have founders who don’t want to identify as fintech, or even GPs who say, “Well, we do fintech plus. We’re also looking at these other things. Where do you see the opportunity right now? Let’s call it fintech. Like, why pretend it’s something different? There’s probably lots of great investments to be made in this area, and I’m curious where you’re looking.

Craig Schedler 17:52
Yeah, it’s interesting. I think if you look at it from a GP perspective, we’ve seen some evolution. I’ll call it how firms position themselves, what they look at. Fintech is by no means dead or anything like that, but I think what it has, like many things, it’s evolved. You know where the opportunities are around what I’ll describe as AI native fintech. So how are you building vertical specific AI for financial services? And that can take a lot of different forms. So it can be everything from like an AI native accounts accounts receivable management or revenue management product. It can be AI native payroll, which has fintech elements to it. Like all these different areas are, I would say very much like a fintech core, but then it’s like how is AI enabling this to be better than incumbent solutions or even you know previous startups that have you know been around a little while? Like what is you know how have you know how is this AI native you know Series A company different from something that’s more mature, and so I think that’s obviously the biggest opportunity we’ve seen is around like vertical-specific AI for financial services, and then like breaking that down into a whole host of sub verticals within within financial services.

Earnest Sweat 19:14
I think one of the advantages of having kind of these these relationships as as an LP as a corporate LP, is you know informing the rest of the mothership on how to approach all the changes that are happening in the in the world, frankly, but in specifically in your industry, do you have anecdotes or stories around how these types of relationships, or you know, something that was outside of your sourcing channels, you got from one of your relationships that helped inform the company on on some insight.

Craig Schedler 19:56
Yeah, I think going back to an earlier point, you know. Corporate venture teams are generally lean, and so we can’t see everything. We can’t necessarily always see like the very very nascent emerging spaces. We’re not going to invest in it. I’ll use an example. Agentic commerce is, you know, very kind of within the fintech realm, the AI world is very much in the nascent stage, and we’re just from a corporate venture on the direct side. We’re not going to invest in a seed stage company doing agentic commerce. It’s just it’s too early for us, and it’s not necessarily something where we have direct line of sight to an intuitive product or an intuitive strategic initiative specifically focused on that, but we can see the opportunity and the potential for that, and so that’s where we’re going to leverage our LP network to say what are you seeing, what have you invested in at the seed stage, or maybe that was even you know too early for you, but you thought was a really awesome founder that you’re going to stay in touch with. Could you make that intro for us? And so we recently did a session for a leadership team here around agentic commerce with that idea in mind. That we had met a couple on our own. We wanted to you know supplement that and complement that with what our our our GPs had seen and put together a really great session for our leadership team to have insight and perspective into an area that is you know around the corner so to speak, but something that is get has has big ramifications and implications for us. And so wanting to do that like that was a most recent example of that.

Earnest Sweat 22:08
Now we’re going to take a quick break to speak with our sponsor.

Alexa Binns 22:12
On the show today, we have our stellar partner and industry expert Shane Goudie, leader of Sidley’s Venture Funds practice, and now host of the podcast Talk BC, we highly recommend you listen. Shifting topics a little bit, I know you started out your career in DC, and we’re always intrigued to hear from our from our legal counsel what we should be paying attention to on the on the more government front, the Invest Act is one I would love to get sort of an update from you on, and and how the shift shifting definition of accredited investors might affect our business.

Shane Goudey 22:55
Yeah, you know one of the aspects which is already a thing is the retailization of venture, right? Just the broader access to more people to kind of traditional opportunities, which have been kind of foreclosed to them, just given investment accreditation standards and, frankly, just level of sophistication to be able to invest in these kinds of deals, so you know there’s that opportunity now where you know if the Invest Act kind of goes, it’s a bi you know widely bipartisan support, and you know there’s some very good things for venture in the act in the way of you know allowing much more opportunity to invest in secondaries without having to become registered advisors, you know this 20% bucket rule, you know, and so there’s some other you know kind of sweeteners in there to allow. It’s just about access. It’s about access and opportunity, and that’s always a good thing. But what if you know it’s a little caveat emptor. It’s kind of buyer beware because you know a lot of as as you’ll find in particular with emerging managers and working with the LPs when it’s primarily high net worth or family office money, you know the the word sophistication is always in quotes, and so you know by opening markets up to people who have never really had an opportunity that brings with it a lot of risk as well, and you just never know. Kind of this is a wonderful environment if I’m a litigator, you know, particularly a plaintiff’s counsel, you know, with the kinds of opportunities that, you know, could come with a lot of you know potential cases. Because like, looks, you know, one of these investors invests in a venture fund for the first time, and then it goes belly up. And you know, some of that is you know this is they just expected some kind of venture guarantee to it all, and it was just certainly you might be a smart person and you have a great net worth, but that doesn’t always equate to a really great investor and what you’re and how to align those expectations. So. VCs just need to be super careful. You know, be careful what you wish for, because look, you know, having more capital in the market is always a good thing. So I think that is a wonderful opportunity that the Invest Act allows the market to have. But I think it it comes with it some dangers, and from my perspective, I just know working with emerging managers or like side funds to big funds, where you can just think of the proverbial calls that we get about even filling out a subscription agreement, and it becomes a 45 minute exercise of walking somebody through that. You can very clearly see sophistication is in quotes, and you know I worry about it as the lawyer for these funds. I just worry about you know from a risk mitigation standpoint, what does that mean? So I just think it while the capital is available, I think VCs just need to be as smart about being purposeful about who you’re onboarding. Not every investor has to be a strategically advantaged investor, but you know sometimes taking the dumb money doesn’t always you know result in great you know while you might be have an interim source of capital, they also don’t tend to be just great repeat customers, and you know as you’re building an institution and a franchise, trying to rely on a high net worth family office kind of oriented space, unless you keep your funds at 20 million or 30 million or 50 million, you know, and you’re trying to build really an enterprise, you know, you’re you’re looking to cycle in new institutional commitments that will be around fund after fund after fund. So I think it’s also managing expectations about you know one’s appetite and what really makes a great investor. And I think you know it’s harder to do in a world where there’s just a shotgun approach as opposed to a Riffel approach.

Alexa Binns 26:53
Yeah, no. In terms of managing relationships, I I really hear you that if you are the first founder that a newly accredited investor is backing, or the first VC manager that they’re backing, that VC manager is taking on the responsibility of also being your basically your educator on the industry, and so you’ve added one more job title. You’re now sort of like a wealth manager with an educator. Yeah, that’s right. On their behalf to say, yeah, these there’s capital calls and maybe no distributions for a very long time, if ever.

Shane Goudey 27:34
Yeah, yeah. Welcome to venture. Yeah, welcome to venture. Yeah, welcome to venture. You know, and then they start to finally learn what TVPI and DPI and what are all these fancy acronyms out in the world where you know that you know success is always measured by and oh oh crap you know that’s the kind of thing that now I may need to start to how to analyze these investments and that’s you know it’s just not first nature to a lot of people and you know I so again, that maybe that’s the you know old cranky guy on the lawn telling the kids to get off approach to the world, but I’ve just seen it be the case in practice that you know that that you know VCs when it comes to kind of this retailization just need to be careful, and you know, and that comes with like things like access funds and you know much larger organizations just raising capital for huge client bases. You know those are the kinds of things that you know as a lawyer for the fund that you’re just super protective about and you’re trying to be proactive in one’s approach to not only how to do a fund raising and just look at kind of the capital that’s at the table, but what does it mean from you know kind of a business operational standpoint in the future, and how can how can you risk mitigate some of it, or at least be aware of it as you take the capital off?

Alexa Binns 28:50
And now back to our LP interview.

Earnest Sweat 28:54
To that point, where do you see corporate venture programs evolving, given there’s so much change compared to where we were even five six years ago.

Craig Schedler 29:03
Yeah, I think corporate venture has been through several phases, and I think the phase that we’re entering now is, you know, when you start a corporate venture program, you know whether you know how you’re leveraging you know GP relationships. I think there’s a little bit of a honeymoon phase where it’s you know we can do investments, we can develop relationships, we can start to you know deliver value. But it’s like what are you doing now that you’ve been around year six, year seven, year eight to show like there’s real value being delivered here? And so I think it’s the the the programs that are the corporate mentor team that are thriving are really delivering on that you know on that narrative of you know here’s how there’s real actionable insights being delivered and so I think that’s where again the the complement of you know of of having an LP program becomes important to show in addition to what we’re doing on the. Direct side, you know, we do have these additional relationships that drive value back to our mothership, so to speak, through our program.

Alexa Binns 30:09
Roy Swan, who just recorded, was talking about how kudos to anybody doing mission focused investing because it’s actually twice as hard. You have strategic as well as financial goals, and corporate ventures are very similar. That you are picking from a smaller universe of deals, and there are sort of qualifiers that make it a relevant deal for you apart from the financial returns, what’s that process look like when you and your team are looking at either you know an LP commit or a direct commit?

Craig Schedler 30:53
Yeah, I think from that perspective, it’s pretty interchangeable between direct and LP. The way we approach it, and the way that I think is important to approach it is, you need to be able to invest ahead of where the business is. So you’ll see some corporate venture teams, and again, whether it’s direct or LP, saying things like I need to have a business sponsor. I need to have someone that says they are going to work with this company or directly work with this fund and help support it. You know, so I need to have a business unit sponsor. That’s an approach which I think makes it much more strategic. And I think to your point, Alexa, you take a relatively you take already a framed set of or a framed opportunity set, and you make it that much smaller. So I think that one from an opportunity set perspective makes it challenging, and two from a decision time timeline perspective is challenging. You need to get buy, and if you need to sort of build that internal stakeholder, that can take you weeks or however long, much longer. And if companies raising a Series A or a fund is closing, like you may need to make a decision in a much more you know accelerated time frame, so I think that that that’s that’s that’s a key element of it is you know what you know how do you sort of balance that that strategic with the need to move move more quickly so and into it and the way we did this at Northwestern Mutual as well was you need to be able to invest ahead of that so you need to have from leadership, and again, this sort of goes back to the north star of we are going to look at areas aligned to key business priorities, the big bets of the organization, and say, okay, you know, we’re going to ensure alignment to that, but then within that, we’re going to have some freedom within fences to to make an investment, and as long as you know my team and my leadership is clear on what that is, then we then we’re going to make the investment. And yeah, we’re going to want to as part of diligence. I always say the best part of being a corporate venture is I can tap into an expert network of 10,000 plus associates and into it, and say we’re looking at this company. Tell me what you think. What would you do, how would you integrate it? What would you pay for it if it were trying to sell? Like that, that’s an amazing leg up. I think it is to have that expert network, but I need to be able to use it as an expert network and not as a mechanism that you know has to have approval rights on an investment, so being able to have that again, that freedom with fences and the ability to invest ahead of that.

Earnest Sweat 34:30
I always felt like starting my venture career in corporate venture gave me such a leg up on a skill set that’s really important, which is being able to cultivate relationships quickly in places that you might be a little bit outside, and so whether that’s going into a new market of different different startups that you’re that might be strategic to your your company, or sometimes even more difficult is going. Internal and being able to gain trust and relationships and insights from those who work in the company and being able to judge both sides and like what is the actual truth. How have you dealt with that tension of managing translation?

Craig Schedler 35:19
Yeah, the translation questions are really great. One, the very unique part of my role is we spend probably more time external than internal, and we need to balance that obviously. But it is very much a translation game when a startup that we’re that we’ve invested in or one that we’re thinking about investing in, you know, wants to work within it. We need to sort of help them understand. Like, there’s going to be a process. There’s going to be the stakeholders here. This is not like an immediate. You know, every large organization has that sort of their own hierarchy and mechanism for you know, for doing things like that, and so helping that helps that start understanding. So we have to be able to, to your point, like be able to translate that to say, okay, yes, you want to do this, but you’re going to need to do these things before that, or to get ready for the conversation, or even if I think what happens most frequently is a company that we’ve either recently invested in or are close to investing, and says, “Well, you know, put me in touch with this executive like next week, and it’s like you’re not ready. Like, there’s only one. You only get one chance to make a first impression, and so I guarantee you, you’re not ready. You might think you are, but I’m telling you, you’re not. And so I’d rather wait six months. And like I think you have to trust. If you’re a founder, you have to trust that you know the person on the corporate VC corporate VC team just that they know their organization better than you do, and so if they say you’re not ready, like let’s wait because this and this is happening internally, trust them. It’s not just because they’re trying to, you know, give you the cold shoulder or anything. It’s because they probably know better than you do when you’re ready. So I think that’s really important. Is just to to be able to to know when to make that connection. I think similarly. Then on the other side, we need to help our large organizations. You know, I love their technology. They love to build things. We have a lot of really smart engineers and product teams building a lot of really awesome stuff. And so, I think what you need to do is not come in and be confrontational and say, “Well, you’re building this, but we found something better here. Like, you can’t take that approach. That’s not going to get you very far. But I think if you do it in the right way and say, “Hey, you know, we invested in this company. You’re doing this. This is complementary to it. There’s, you know, there’s a partnership here. There’s some relationship to be developed here. And look at it that way. And so I think it also is over time. If you build that credibility internally, it makes those conversations so much easier, but I think there’s broadly speaking within organizations there can be sort of rejective antibodies to you know we didn’t build it. This is something that’s new and different. It’s not something we are going to focus on or something that’s going to be a priority for us. But I think if you bring enough really good ideas and smart founders and those founders show up well at the right time, you know you can develop really important relationships. And I think both at Northwestern Mutual and here at Intuit, you know my teams have been able to do those things is to have like the key people to go to, knowing who is maybe just more open generally, whether that’s parts of the organization or individuals, and have those relationships that you can help facilitate.

Alexa Binns 39:04
And for those VCs listening who have been trained, don’t do a deal when that CVC is on the cap table too. What’s so many other GPs listening to? What’s your take on to make room for Intuit?

Craig Schedler 39:22
I think why we should be why you’d want to include us is that we have a demonstrated history of being able to deliver value to our portfolio companies. So I think if you talk to any one of the founders within the Intuit Ventures portfolio, they would say that Intuit has been additive to our business and been helpful, I think that certain GPs take a negative view to corporates because, admittedly, there are some that maybe aren’t the most-they’re not necessarily the best actors. But I think overall, corporate VC as in as a call it an asset class or as. The investor class has definitely professionalized over the last decade. I think you have a lot of you have a lot of teams now that are really really strong and have done enough both internally within their organizations as well as in terms of direct investments they’ve made that they know they know how to act. You know they quickly develop good reputations, and I would say overall, GPs that look at corporations as undesirable, I think that’s a very outdated view. And yes, there are you know there are outliers to that, but I think overall corporates on a cap table I think should be viewed positively. I think there’s some signal in it. I think it’s an investor that you know, as the old saying goes, brings more than capital. And so, I think from a GP perspective, it should be looked at as much more of a positive than something that they should not want to do a deal or encourage a founder to exclude from around or anything like that.

Earnest Sweat 41:00
Taking back to our kind of core audience, the emerging managers, GPs, is there any kind of like pet peeves or things you wish that GPs knew when they’re approaching and pitching a corporate LP.

Craig Schedler 41:22
Spend some time understanding the company from the outside, and your knowledge is not going to be perfect. But you can’t look at a pitch to a corpse. If you’re a GP and you’re pitching a corporation, you can’t look at that meeting as the same as maybe the five others you had this week with family offices or endowments or like traditional institutional investors, the line of questioning is probably going to be different. I think you need to tailor your pitch to it. It’s almost like you need a separate deck or you know a modified deck because the points of diligence and the points of interest are going to be different. And so take a little bit of time and understand that company more than just their website. You know, look at if it’s a public company. Look at their last couple of quarterly releases. Look at their investor day. Really try to understand it. And I think similarly, don’t look at a corporation as someone who’s going to instantly just turn on a whole bunch of revenue for your portfolio companies as an LP. What I don’t want is a GP that’s just like, oh, okay. Well, I would just invest it in a new DevOps tool. Introduce me to your engineering team.

Alexa Binns 42:34
Yes.

Craig Schedler 42:34
Like, yeah, I’m happy to. Obviously, I have a vested interest in the success of your fund, and I want you to get into it as a customer. But don’t expect that you know that’s all I’m going to do is just make intros and that’s going to solve like your portfolio companies you know go to market or whatever. So I think it’s really for them to have a more nuanced understanding, and I think it varies from corporate to corporate. The things that I might be focused on are going to be different from another corporation, and understand that they’re going to want a different type of engagement than a traditional institutional LP.

Alexa Binns 43:09
What is your relationship with Corp Dev, and how do you all work together?

Craig Schedler 43:15
I sit immediately adjacent to our Corp Dev team. We both report into the same individual, so you know we obviously work closely together with very different focus areas and objectives, but it is what we do that we do work together. You know the question I get asked a lot is how many portfolio companies has Intuit acquired, and we don’t think about our mandate in any way as a pipe, but the M & A team does an awesome job.

Alexa Binns 43:43
I was perfectly happy that they were acquired by somebody totally different. Yeah, they put great on my numbers.

Craig Schedler 43:49
Yeah, right. And you know if that happens, great. And if a company, if we have a portfolio company that’s running a process, like we would honestly love to have Intuit included in that if we think it’s something that makes sense, but it’s not a mandate. It’s not an expectation that we show them everything. And similarly, like they we collaborate, but we don’t with sort of separate objectives and and goals. But that is a question we get a lot. So I think you know how many portfolio companies has Intuit acquired? The answer is one. Is that intentional? Is it because we wouldn’t acquire a portfolio company? No, it’s just not happening. So I don’t think just because from a founder perspective, or you know, it’s not like you should think about okay, you know, Intuit’s now on my cap table. They’re going to buy me like that. That as a general rule, you know, corporate VCs don’t think that way, so it’s not a path to it. But again, it’s I guess a happy coincidence is what I’d describe it

Earnest Sweat 44:48
as. My last question is kind of hopefully we can crowdsource and get you some some answers or insights, but two parter one. What’s one type of or category of company that you haven’t seen that you want to see out there? And then two, what’s one GP strategy firm strategy that you haven’t seen much of that you think needs to be out there?

Craig Schedler 45:18
Wow, the first one may be a little easier than the second. I think the first one I would say is what I’ll describe as vertical specific wealth management. I think I’m a personal finance junkie. I’ve tried every tool out there. I’ve invested in a number from Northwestern Mutual and at Intuit. Personal finance fascinates me. It’s this never-ending problem in many ways, and I think there’s been so many attempts and great products built in certain ways. But I think you know there’s still a large untapped market there, and I think where there’s a real opportunity is if you think about your you know if you think about yourself as a business, you know the largest largest line item is your salary, you know your income, and so I think if you if you look at various career paths, those career paths are going to have different impacts on your ability to achieve your financial objectives. And so I think financial planning for a doctor or an engineer or a teacher or someone working in tech is different. And so I think if you show up at an app or at a at a you know a wealth management tool, they’re going to treat you the same. I don’t think all those different categories of careers are going to have different income profiles, different volatility to income, all that. And I think financial planning largely misses that. And so I think anybody building in that, I would love to talk to them because I think it’s incredible. I think it’s a missed opportunity, and I think on the GP side, there’s a lot. That one’s a little bit more challenging, but I think where I still believe, and we’ve invested in a fund recently focused on well described AI for the Main Street economy. So if you think about Intuit’s business, a large piece of that is powering prosperity for small business owners, and I think we deliver a lot of really great solutions at Intuit. But there’s a whole host of emerging companies focused on vertical AI for various lines of business or various types of businesses on well again the main street economy small businesses, and so I think those are the types of of GPs that are really interesting and I think are are sort of going into a really interesting area of of investing.

Alexa Binns 48:35
In your crystal ball, can you kind of give us guidance of how the big companies are going to work with the little companies. I’m curious. It’s an age.

Craig Schedler 48:52
It’s an age-old question, and I think any organization that tells you they’ve solved that is probably not being 100% accurate. It’s always going to be a challenge for one reason or another. No organization is perfect, and there’s going to be fits and starts, and you know people move into different roles. And I think what founders get frustrated by, and I understand it is large organizations have you know large organizations have internal mobility. People take new opportunities, and the person that was your internal champion just went from this business unit to a totally great opportunity, but it is no longer in any way relevant to what the startup’s trying to build. And so, I know that frustrates founders immensely. And I think you just need to build a bigger coalition. And so, I think just because you found one internal champion doesn’t mean that the work is done, because that person can move on, and then you’re like, now who do I go to? So I think you sort of need to build a coalition beyond that one person. So I think your question is, do you know how large organizations and startups work together? I think it’s evolving. I think large organizations have generally gotten better at it, and I think founders have gotten better. As well over the years of navigating it, but I don’t think there’s any silver bullet to it. I think it’s always going to be, you know, it’s about relationships and it’s about building, you know, a coalition of supporters within an organization. And conversely, I think organizations need to have an understanding of how we’re going to partner with this company, more than one person has to have that relationship and understanding that you know you need to get sort of broader buy-in than from any one individual.