Founded and Funded – Meet the Founders of Sila, Delivering Banking as a Service

On this week’s Founded and Funded, we talk to the founders of Sila, Shamir Karkal and Angela Angelovska-Wilson. Managing director, Hope Cochran, talks about why she invested, and the founders share their story of how they came to unite to build Sila. Sila offers banking as a service to companies which are at their core Fintechs or need a Fintech based infrastructure. Moving money on the internet, though envisioned from the very earliest days (do you know what error 402 means?) is not easy. In the US alone there are many regulations at the federal and state levels. Sila has navigated this complex regulatory and technical world to enable their customers to launch quickly and focus on their product. The podcast is available on all platforms and below!



Hope Cochran: [00:00:54] Hello and welcome to the Madrona podcast, Founded and Funded. It is so fun to me to be today with Angela and Shamir. The cofounders of Sila. I found them in my quest to solve financial infrastructure problems as the CFO of many large international companies that had to move lots of money, I was constantly frustrated with the lack of ease in this space.

And so I went in search of someone who understood and knew the problem well, and I found Shamir and Angela. So I am thrilled to be partnering with them, in this quest to solve this very complicated problem, both from a technology perspective and a regulatory perspective. And as I got to know them, I was so taken by their backgrounds and what brought them to this place.

First of all, I’ll just say both of you came from other countries to the United States, you’ve had interesting journeys that led you down the FinTech route. I would love just to hear about those journeys first and foremost, before we get into the vision of Sila So Shamir could you kick us off?

Thank you.

Shamir Karkal: [00:02:05] My journey in financial technology actually started very early. My grandfather on my mother’s side was a banker.

My parents were bankers. And so I could say I’m a third generation banker, And I wrote my first computer program and I wrote my first check both at the age of 10, back in the 80’s. And I realize that’s a really weird upbringing, but it seemed normal at the time. Of course as.

one does, I decided in my teens that I was going to do anything except banking and went off to become a software engineer, did that for a few years, came to the U S And was working as a software engineer, went to business school and business school is really where I first learned about the broader world of business and everything that was out there.

Before business school, I was just happy writing code, like 14 hours a day. And after business school, I ended up becoming a consultant at McKinsey and Company, which is a consulting firm . The first project I got assigned to almost randomly, was in financial technology, doing strategy for a bank processor.

And I just fell into that. It was stuff that I knew and understood well, and spent three and a half years at McKinsey, both in North America, Europe, and in the Middle East, just doing more stuff around financial technology, but very broadly defined, processors , banks, insurers, even one country bail out within 2008.

And so in 2009, a classmate and good friend from business school, Josh Shreesh, started asking me all these questions about banking and the story there was, I was the only person who knew the answers, who would actually talk to him. And he was frustrated with his own personal banking experience.

He was a startup entrepreneur. Sold one business before he came to business school and went back to work in startups, straight from business school. And so he had the entrepreneurial ideas. He sent me an email saying, let’s start a retail bank. And he laid out this vision for how a bank should be tech forward consumer centric, actually helping people manage their finances and, and then building a platform to provide all the other services that people need apart from a checking account and a debit card. And there’s such a compelling vision. I was like, yes, let’s do that. Somebody should do that. And I guess it might just want to be us.

And, you see how crazy I am that in 2009 I thought it was a good idea to leave, McKinsey and go start a bank, which is what we set out to do. and that was my first startup. It was an online neobank called Simple. We started it in New York in 2009, a couple of years later in 2011,

I moved to Portland, and Josh moved over to Portland into how’s an 11 launched simple in 2012.

The story there was, it took three years. From first email to launch, and three years to launch is if you ask anybody in the startup world, it’s just unimaginably slow. and then on the flip side, if you ask anybody in the banking world, that actually seems fast. And that was the, the dichotomy that Simple hit head on is the pace difference between those two worlds.

The real reason was it took us about two and a half years to find a bank partner, find a processor, figured out how to connect them, figured out it was not working. Then redo that and then find five more processors and finally build this kind of internal API layer on top of which we could then build a web and mobile apps that customers saw.

And really at Simple and I think at probably at all, fintechs it’s out there, the consumer facing, or the business facing part of the tech stack that people see is really just like the tip of the iceberg. And we finally figured it out, and launched it. And then a couple of years later, Simple, was acquired by a big Spanish bank, BBVA was back then, and still is I think, a very forward thinking bank. They saw the FinTech revolution coming probably before anybody else. And they wanted to partner with Simple. And then the partnership discussions turned into acquisitions as does happen. A few months after the acquisition, I was in, Madrid talking to the guy who’s now the chairman of, BBA. And they, you mentioned this idea of building an API platform. And my immediate reaction was, yes, please. Do it, the world needs API platforms in banking. If such a thing had existed, Josh and I wouldn’t have spent three years launching simple. We could have launched it in six months.

And then who knows what we could have done any sort of payment and LGV spent building our own, internal infrastructure. And, but please do it right. Don’t screw it up. Quickly realized that it was really just an idea at BBVA. Nobody had even put together a document of any sort. So I did and circulated it internally.

They create an internal venture steam. Fast forward a year later and I was running that business. So built and shipped to API forms at BBVA. Did that for a couple of years, one in Europe, one in, one in the U S but got frustrated by the parts of the organization that I could not control was the back.

So we could build that ship, that deck. And I think the BBB open platform is still a great platform, but we could never onboard customers. And at the speed that I wanted to because of risk compliance, legal and all the internal bank processes. So I left in 2017. Thought about what to do with the rest of my life.

And then, ended up co-founding Cilla with Angela, Alex, and Isaac.

Hope Cochran: [00:07:34] Yeah. And Angela, you have such a tremendous journey and unique background. I really look forward to hearing about it in your words.

Angela Angelovska-Wilson: [00:07:41] thanks. Hope and I, again, thank you for having us on the podcast today. I am a little bit of an unusual, cofounder of a FinTech company, due to the fact that I come from my legal, regulatory background. I started my journey. actually also as an immigrant, I came to the U S when I was 17 as an exchange student and never thought that I would actually stay here and, have my life in the United States.

And definitely did not think that was going to go into, banking or law. Unlike Shamir I come from a family that is everybody is a doctor. I was on the path of becoming a doctor, but that was definitely , not where my heart was. Due to the fact that I’m the year I came to the U S very, bloody civil war developed.

in former Yugoslavia, I actually got stuck in the United States , as I like to say


I was all packed. I was ready to go back. A life for a teenager in the U S when you’re 17 or 18 is not as fun as one in Europe, I have to say. So I was definitely missing my family, my friends, and everybody else. But, It was actually a very interesting time, which kind of set me off on my legal journey because I found myself without a country.

So the country I came to in the United States was the Socialist Federal Republic of Yugoslavia. During my time here that country no longer existed, it had become several different countries. The one country I did have. The right to citizenship, was Serbia, through my mother, but Serbia was the antagonist in the war, and, was under very strict, international sanctions.

So maybe, you’re going to compare it to like Iran, at this time. So , nothing was going in and out. I couldn’t go. And my other country, that I have a right to citizenship where I actually grew up, Macedonia, was not yet to country. So I had to figure out a way to stay legally in the United States, which was quite a challenge because I fit none of the categories.

I was not a refugee because I had not escaped from the war. I was not that nice side lead because I wasn’t afraid to go back. I just couldn’t. So it was the beginning of my legal journey, trying to figure out creative ways of how to make what is in the box and the principles of the laws, fit the unique situations that I was facing.

So the one way to do this was, actually for me to go to university, which was challenging because I never took any entrance exams because I was, not interested in going to university in the U S but through help from my American host family, and many others, I was able to enroll at a university.

Taylor University. And that’s really where my interest and love of technology. And seeing how you can use technology in everyday life and how transformative it’s, what it is in all aspects of life really began. I was a public relations major and, I saw and had an opportunity to really work on, AOL and CompuServe.

And saw that potential. Absolutely loved it. and then moved to, the very beginnings of the internet. I coded in HTML waited until midnight to download the first version of that scape. And, I guess that was the beginning of my entrepreneurial streak in the United States, as well as banking.

I had my own web development company and one of the first projects I did was help a small, very forward looking credit union actually, and offer their services of what is now common place, online banking. And so that was kinda my first thing that I did. And instead of heading to Silicon Valley, at the height of the internet boom, I decided to go to law school. In law school I focused on electronic commerce and the fledging law of the internet.

And then, In my private practice at very prominent law firms, I specialized in financial regulation and technology, and my background and love of tech have really come through, because I have been able to combine the two in order to understand, the principles of regulation, and how they can be really applied to some of the, technological solutions that are being presented.

In 2018, I heard Shamir’s vision about Sila and I said, Oh my gosh. Yes, because for about 20 years of my career, I watched and helped FinTech startups navigate all of the different legal, regulatory problems that they had in order to launch, as, Shamir said, the tech was the easy part.It was, navigating the alphabet soup of regulators and regulations that applied to their innovative services, that were no longer siloed out as they are typically in traditional banks. That really was, the biggest challenge. And plus I passed Shamir’s test, he asked me if I knew what internet code 402 stood for and I

Hope Cochran: [00:13:39] did.


Okay, you’re going to have to tell us, Angela, what does 402 stand for?

Angela Angelovska-Wilson: [00:13:44] It’s a reserved, error code on the internet and it was built at the very beginning of the internet protocols. And it stands for payment not found. So the internet was always meant to have a payment protocol built into it it’s just they never got around to it.

Hope Cochran: [00:14:03] Both of you have such interesting and deep journeys that really brought you together to solve this very complex problem that involves both deep technology understanding, deep banking understanding and deep regulatory world to develop Sila. Shamir, I’d love to hear your description of Stila and the vision you have for it.

Shamir Karkal: [00:14:27] I think really the way I like to talk about Sila is really to start with the problem. And the way we define the problem is that it’s just too hard to program with money. There’s been an explosion over the last 30 years since the internet of people building programmed solutions, startups, applications, and all other sorts of things, Alexa skills, to do things right.

But at the end of it, it comes down to writing code and writing code to do different things. So if you’re a developer and you wake up tomorrow, whether it’s in San Francisco or in Shanghai, and you decide that you want to build any type of online application or you already have a large existing app and you want to embed the email capability into it, for example, that’s you know, that’s easy to do. It’s open protocols, there’s APIs. There’s SDKs. There’s developer tooling There’s whole ecosystems of industries, which will help you manage email on whatever it is.

As soon as you want to program with money, and that might involve building an online FinTech startup or an online bank, like Simple, or you might just want to embed a simple payment or money storage or money movement capability into an existing app.

Suddenly, it really does matter whether you’re in San Francisco or Shanghai and you’ll realize that the internet is not one place when it comes to money. There are no open protocols. There’s almost no APIs or SDKs, at least until silver came along. It really is impossible to do across the internet and that’s what we want to change. We want to make it as easy to program with money as it is to program with email or with any other internet mechanism. Money actually is just a type of messaging network.

The problem is all about the complexity of the existing payment systems and the existing

regulatory structures and figuring out how to build a layer on top of it, which is really useful for programmers. We started with that vision of really, making money programmable, easily programmable and, launched Sila in October of last year.

Our core product is an API platform. It’s really, a developer platform , which allow people to easily plug in and build the applications they want and it’s the modern way of doing that. We offer a few services, in the U S currently, we do, online identity verification.

So if you, if you give us, an individual or a business and give us that information, we can verify that using our APIs and our backend technologies We allow you to securely link a bank account. If you have an account at Chase or Bank of America or Wells or whatever, we can connect to it and securely get the data that we need, which is mainly the routing and account number.

and then we can debit those bank accounts via ACH or credit then via ACH, and do in and out of those bank accounts. One of the unique features of Sila is that we make it as easy to hold money on our platform as it is to move money. And we make it easy to do all combinations of that and program with that, wherever you want to program the it.

Hope Cochran: [00:17:45] Shamir, I think you hit on a really important point there, the ability to not only move money, but to hold money. And it’s a simple statement, but it’s actually really difficult to accomplish that. And that’s where you get into needing the regulatory requirements and whatnot to, allow your business to grow if you’re holding the money. When I think of what Sila is doing, would it be fair to say that you’re really providing banking as a service to companies who just want to get on with their business, but somehow involve moving and holding money?

Shamir Karkal: [00:18:20] That’s exactly the right description. This nuance to distinction between banking and payments. When people think about payment, they think about transferring money between, two bank accounts or from one card to another. And when they think of banking, they think about holding money.

The core of Sila is that those are both flip sides of the same coin, right? If you’re going to transfer money from A to B, then there’s many times where you might want to transfer it from A to X and then transfer some of it to B, and some of it to C and then some of it to D based on some set of rules and that’s what business is all about.

That, we focus on making both of those things as easy as they can be, and then making it seamless, across them. So we automatically create a wallet for every, individual and business on the platform. We automatically hold funds in those wallets and you can hold it for a second and just transfer it in and transfer it out.

And it’s just a payment, or you can hold it for days or weeks or years and do other things with it. It really comes down to what the business logic and the use case is. We focus on making that very easy for developers, but the back end complexity that comes with it, especially on the regulatory side is far from trivial is probably the best way to put it.

Depending on kind of what the funds flow is. It that can be additional regulations, the top of that, and understanding those, supporting our customers who are doing those, making sure that we do all of that client fashion and manage risk well, and in fact, building management into the API, that’s the whole secret sauce of the business.

In the FinTech world that, everybody starts off by focusing on kind of building out a payment flow for an end user, and then eventually realizes that really half the company is doing risk management. The famous quote that I always remember,

it was somebody I think might have been Reid Hoffman who said that in the early days of PayPal, he did some math and then told Peter Thiel that it would be cheaper for them to go to the roof of the office and throw sacks of cash off the roof as quickly as possible, rather than operate the business because they were losing money so quickly to fraud.

So we try to make it as easy for developers as possible.

Hope Cochran: [00:20:40] When I really think of what you are enabling is you’re enabling builders to get their product out there faster. And you’ve got some great examples of that in your customer base today, these startups or young, innovative entrepreneurs who want to get to market and don’t even think about the fact that money is actually an important part, and that really could slow them down for years in terms of trying to solve that problem. For instance, I think of Sloan one of your current customers, that is doing student loans and helping people address their student loans.

Or Dinero, which is addressing the Latin community and trying to help them with rewards from day to day shopping. They have purposes that weren’t really to be in FinTech, they need to move money. And so Sila has been a great solution for them.

Shamir Karkal: [00:21:32] There’s a journey that companies typically go through where they start off and they’re focused around solving a problem for a customer. And what we try to do is to help them stay focused on that problem, right? So for Sloan, what we try to do is to say, Listen, you need to understand your customers’ problems around their student loan payments, how to manage their money, how to most effectively make those student loan payments.

We’d like to remove as many barriers as possible, at least on the programming with money side so that you can get to product market fit as efficiently and quickly as possible, and then scale from there. and this is a journey that, I think a lot of the large, all the large and tech companies, right?

Like Simple or Chime, of course, PayPal, and all of them have gone through. But I also think that a lot of the tech companies have gone through it as well. And I think it’s not always clear. Sometimes you don’t realize whether it’s a large tech company or even a large traditional international company, how much complexity is tied up in large teams of controllers and back end finance people and product managers, just building systems to manage money.

Hope Cochran: [00:22:42] Absolutely. One of the pieces of magic here there that we talked about earlier was the regulatory aspect. Shamir, you addressed a lot of the technical challenges and providing tools to the developers to be able to address those. But really one of the largest hurdles in this world is the regulatory hurdles that you have to go through.

And Angela, this is where you are navigating this. So definitely it’s very impressive. What I appreciate about you, Angela, is that you seem to have this ability to understand the why of what regulatory is meant to do and then navigate within it. So maybe you can talk to us a little bit about the regulatory environment.

It’s one of these environments that’s always changing and adjusting, and I feel like there’s even more change on the horizon. So we’d love to hear your thoughts on that.

Angela Angelovska-Wilson: [00:23:34] One of the things that is very difficult for, especially technology entrepreneurs to understand is that barrier to entry the regulatory moat that exists around financial institutions and even for FinTech providers that have made it, big, And that is, their compliance with the patchwork of regulatory requirements, licenses, compliance obligations, and the rest.

And, around the world, there is a very clear understand. Standing now that the business of banking is really the business of financial technology. Many years ago I had the opportunity to actually work on the Visa IPO. And, if you look at the filings for the Visa IPO, Visa was a financial company.

Financial payments companies is how they describe their business model. Today, they describe themselves as a technology company. And I think the regulation of FinTech is, I would call it the, yeah, the number one priority for regulators around the world. There are two, I would call it, very distinct areas that regulators around the world are being focused on with respect to FinTechs.

And the first one is understanding the various technologies that all these new entrants, all the new fintechs are using in order to provide different types of products and services into the marketplace. They’re trying to understand, how people are using biometrics, how people are using AI. Finance is being run by algorithms, after all these days, how new technologies like distributed ledger, blockchain technologies are impacting some of the thinking and the way that we regulate things.

And then the ability of FinTechs technology is borderless. It is global, at the very beginning, that’s the point of the internet. So the use of all these underlying networks that are global in nature, when we have very local stringent regulations, really provides a very difficult environment for fintechs to operate. Even PayPal after so many years in business is not available as an option in every country of the world. They operate in 50 plus jurisdictions last time I checked. So financial regulators are playing catch up. like every other regulation, typically, regulation is catching up to the marketplace and trying to understand how to prevent disasters.

At the same time, providing innovation and encouraging competition. One of my mentors, I’m based in Washington DC, and one of my mentors here once told me that congress does two things, nothing or overreacts. And I think financial regulators around the world are making sure that they are balancing those two acts of doing nothing versus overreacting and really stifling innovation.

So in the US it’s really difficult. I would say that from a global perspective, the U S is probably one of the most difficult jurisdictions to navigate for FinTechs to offer their services. I have helped many companies, that, made their name and are well known internationally, or they started out in Europe or other parts of the world.

And when they come to the United States, they really have a hard time understanding the regulatory regimes because we have a dual system. We have the federal regulators that have their own regulations and principles and then the state regulators. At the end of the day, like we said at the beginning and you did Hope, regulators are looking for those principles of the regulation, so understanding why certain regulations were inactive. Why the legislature reacted. Best example of this is Dod Frank, right? The 2008 crisis, we got 10,000 pages of regulation that turned into couple hundred thousand pages once it was all written and done.

And, we put it in and now we are, putting it away slowly because we have realized that it has really impeded the ability of some of the financial institutions that it regulates to actually do business. Again, I started from the point of there very few entrepreneurs that start on this journey that are intent on violating law. Being outside the law is never a good business model.

And so when they are trying to navigate all this regulation, it’s difficult for them to understand now I have to really have a calculation on my loan in every single state differently? I can’t do it with just one interest rate? I can’t export that interest rate? Or, if you’re a payments related company, I have to get the license from 49 different states?

And every state is asking me a little bit of a different type of information for my submission? And I’m subject to their oversight and control over the my business every year and I have 49 of them. That seems really unattainable to operate a profitable, forward-moving innovative business, especially when you compare it to the regulations that we have in other jurisdictions like the European Union, with their ability to passport and their ability to have a very streamlined regulation. Even in the Asian countries it’s much easier to comply with things than in the United States.

Hope Cochran: [00:29:58] That’s right. Angela and Shamir, you both articulated so well some of the real practical challenges with the regulatory environment in the US with the federal and then by each state and just how overwhelming that is for an entrepreneur to navigate. And so when I think about Sila, you’re providing that for them so that they can get going on the business that they’re wanting to run which is such a great service to them. Now, one of the things I want to hit on a little bit is the regulatory environment is important as Angela pointed out because you’re moving money and fraud can happen and all of these things.

So there is a reason for it. And so one of the things that I’ve been so impressed with you all is that you vet your customers, and make sure that they have the right purpose, integrity, and intent before you allow them to use your system.

Angela Angelovska-Wilson: [00:30:49] Our customers are subjected to, I would call it best practices in the large financial institutions. Again, our backgrounds allow us to have been able to view the kind of industry best practices and to understand why some of those best practices were put in place to begin with. Also, we’ve been burned once or twice in our careers.

So we’ve learned from some of those experiences and we have tried to make the process, that our customers go through as streamlined as possible. But that does not mean that we are lax in any way, shape or form. We are very stringent about making sure that our customers understand and are compliant with the applicable laws and regulations. That is a key to their success. If they are not, their business will suffer, at the end of the day. And so we want everyone to succeed and in order to be able to succeed, compliance is key.

Hope Cochran: [00:32:02] I’m going to switch gears a little bit as we can’t ignore the current environment that we’re all operating with quarantine and COVID in our midst. You both have been entrepreneurs multiple times running your own businesses. You’ve led people in companies through difficult times. This is not your first difficult period.

What are some suggestions you have for other leaders on how to continue to move forward, bring growth to your company, but also be a great leader during this environment.

Shamir Karkal: [00:32:36] Anytime you start your own business and go on the entrepreneurial journey, it is always hard and the default outcome is failure. And so it requires a certain mindset and a certain sort of willpower to just keep powering through.


And at least if I can look back and I’m like, how was I, how would we be able to make Simple into a success? And even the BVBA open platform and everything else, a lot of luck for sure and probably some skill involved, but I think like just persistence is massively important. Things will get better. You have to be there when they get better. If there’s one thing I’ve realized is, and I realize it more and more every day is how important communication is. When I was able to sit in the office and of course, we always had at least some team members who were remote, most of the team was in the office in Portland, just being able to like sit around and just lean over and have a chat with product, or engineering.

There was a lot of knowledge that got disseminated through kind of osmosis. It’s hard to tell nobody announced it, but within a few hours, everybody in the office knew sort of thing That doesn’t happen anymore and communication is always super important to leadership, but it’s, I think it’s even more important now because unless you make it happen, there’s no default communication happening.

And so you can have just people in the company who just don’t know things because nobody told them and they wouldn’t have found out because nobody is sitting next to them to tell them stuff anymore. There’s no water cooler conversation. I have tried and we have tried to be much more mindful about communications and it reminds me a little bit of Simple went from two to about 300 people by the time I left, and.

When you’re at the 200 person stage, you realize that a large part of an executive’s life is all about communication, and doing that well. And then making sure that not just you telling people stuff, but the right people are talking to each other about the right things and managing that.

Angela Angelovska-Wilson: [00:34:41] .

Yeah, I would agree with all of that. And I think one of the other unique opportunities that COVID and this situation has given us is to assure that we are looking at our coworkers and our team as a window to their everyday life. And being able to see Shamir as our leader in the closet and being interrupted by his children shows everyone that we are all, facing, different, yet the same challenges on working from home.

Getting our work done, getting our families together and dealing with the new normal, whatever that is these days. So I have really cherished the ability to have established a deeper bond with some of our teammates on a personal level during this time, and really understand about who they are as a person and how they want to grow as a person, not just as a team player, not just this part of the company.

But really understand their challenges and then also give them, sometimes leadership can, seem, separated out, but give them a view of we get frustrated. We have to deal with the kids too. These are all things that are okay.

Hope Cochran: [00:36:03] I love it. Persistence is one of my themes as well. There’s been many times when you have to find that grit, so I appreciate that. And intentional communication has been something that I think we’ve all had to embrace and address. And Angela, I love your points about just getting to know each other on a deeper level.

And, I’ll just say I’ve loved working with the two of you and getting to know you on a deeper level as well. And I’m proud to be a part of Sila. So thank you all for this time. And, I appreciate you all listening to Founded and Funded.

Shamir Karkal: [00:36:36] Thank you thank you for having us Hope.

Thanks for joining us at Madrona venture group for founded and funded. We really appreciate you listening. Please subscribe, send any comments you have to me. I’m at [email protected] and it’s E R I K a. At Till next time.




Tesorio, Applying AI to the Office of the CFO

Today, we are thrilled to announce leading Tesorio’s $10m Series A funding round. As a career CFO, I am always looking for ways to automate the back office and to apply modern technologies, such as ML/AI and RPA to the office of the CFO. When you are managing a company that is growing quickly, it is imperative that processes scale and do not break as the organization changes. That is why I was excited when I met Tesorio and saw a practical application of new algorithms and technology in a space that I have been involved in my entire professional life.

Throughout my career at both private and public companies I was constantly frustrated by how many important analyses happen in a bespoke excel spreadsheet. In today’s modern era, it is amazing how many crucial decisions are made, key conclusions are formed and key metrics are created with spreadsheets that are on the brink of breaking – too many links, formulas, dependencies and worksheets!

The ultimate financial metric for a company is Cash. Not just the current balance, but the trajectory of the balance. In the vast majority of companies this analysis is performed on a spreadsheet. One containing many links, often circular references, and pulling in data from multiple sources. The risk of an error, a break, is high. Equally importantly, a spreadsheet is not exactly a living, breathing thing even though we might pretend otherwise. Changes to data sitting in different silos do not flow easily into spreadsheets without complex processes and significant human involvement.

When I met the Tesorio team, it was exciting to be able to quickly dive into a product that was replacing the spreadsheet and adding an intelligent layer to the cash flow forecasting process. By pulling actual transactions from back-office systems, adding ML/AI to that history and allowing the user to add in unique transactions, the system uses a 3-part process to generate a cash flow.

In addition, Tesorio enables their clients to impact and improve their cash flow. The building blocks of cash flow – the inputs and outputs–are addressed in the Tesorio offering. Their AR Automation offers the ability to streamline the collection of AR (Accounts Receivables) by understanding when customers typically pay, automating customer contact to speed payment, and delivering a dashboard for finance teams to manage the workflow and communication that is core to successful collections. The same is true with the management of AP (Accounts Payable) and the forecasting and planning of hedging strategies. The result of all these areas is that much of the Finance and Accounting teams spend their day in the Tesorio application – all ultimately feeding the cash flow forecast.

The founding team, Carlos Vega and Fabio Fleitas together bring a unique combination of technical and financial expertise. They partnered together at UPenn, where Carlos was studying analytics at Wharton after spending nearly a decade in finance, and Fabio was studying computer science in the School of Engineering where he founded PennApps Fellows. Together they have brought to market a product that has already been adopted and used by an impressive list of companies including Veeva Systems, Box, WP Engine, Instructure, and Couchbase.

Finally, Tesorio squarely fits our Intelligent Applications thesis that we at Madrona have been focused on for several years. As we have discussed here, we expect intelligent applications to disrupt every business process by collecting data across different silos and applying ML/AI to that data to extract unique insights, automate workflows and even obliterate obsolete processes in some instances. In Tesorio, we believe we have finally found a product that provides the CFO and her team unique insights into the business and optimizes its finances like never possible before.

My Next Role – Managing Director at Madrona

Hope Cochran and Amy Nelson, Founder and CEO of The Riveter. March 2018.

I am so honored and excited to be expanding my role with the Madrona team. I have long admired Madrona, not only for their sustained excellence in investing in local NW companies, but for their well-earned reputation for doing so with intellectual rigor, hard-work and integrity. And when I joined the firm as a Venture Partner two years ago, I found that the Madrona reputation is built through careful attention to the needs of entrepreneurs. That is why I am proud to be deepening my relationship with Madrona as a Managing Director. It marks the beginning of a new professional adventure, one in which I plan to lean heavily upon my own experiences as an entrepreneur and CFO as I work directly with our companies.

People, first and foremost, will continue to be my overriding focus. Having been a founder and executive in both small and large companies, I understand what it’s like to create business plans, navigate tricky financings and launch new products and services; but as I reflect upon my own successes and failures in business, what is most impactful is the quality of the people within each venture. I understand the importance of surrounding yourself with talented and driven personalities who are comfortable in periods of tumultuous change, who keep calm and focused in times of crisis or extreme growth. The stresses and strains of being an entrepreneur can be very challenging day-to-day, but the rewards are worth the challenges. The most important of which has been the life-long relationships I have with the people from my previous companies, relationships that have been forged from periods of intense joy, frustration, success and failure. I’m looking forward to investing in NW entrepreneurs who are eager and ready for a similar ride. So as I develop my investment thesis while at Madrona, it will always start, and stop, with identifying great people and teams regardless of industry or technology. In my opinion, successful teams and leaders are the most important factor in any venture.

So what am I looking for in new ventures besides great entrepreneurs? I will obviously rely heavily on my past experiences. I have worked in several technology-based industries during my career as an entrepreneur and executive—ERP, B2B software (PeopleSoft/Oracle), telecom and wireless (Clearwire/Sprint) and most recently, video games (King Digital/Activision). In addition, I am on the Board and Audit committees for a diverse set of public companies – MongoDB, Hasbro and New Relic. All these experiences and roles will inform my analysis as I add to the Madrona portfolio with new investments. As I have led companies through period of rapid change, there have been several areas that always seem to need attention and improvement.

When a company grows quickly, processes often break under the strain. Having been an executive at companies that experience very rapid growth, I understand and appreciate that the systems and processes required to build a sustainable company must be flexible, scalable and easy to roll-out. Therefore, I am interested in cloud-based B2B systems and software that enable companies to be more nimble as they manage their internal and external processes. Legacy solutions that are inflexible and hard-to-upgrade just don’t work anymore. Furthermore, there is a great need for ML/AI and robotic automation processing to improve various internal processes within organizations. Every department within an organization, from tasks as varied as financial forecasting to determining efficient locations for holding inventory, can be improved with thoughtful application of technology.

In the role of CFO, you often realize that your best forecast, or most consistently produced dashboard is only as good as the data that sits below it (customer, inventory, financial, sales, etc.). How many times was I proud of my finance team’s ability to produce metrics, only to realize that the data behind it wasn’t being stored or sorted accurately?! Today, a company needs to be able to make instant decisions, based on trends and patterns they read in real time. The ease and speed of access, the cleanliness, consistency, analysis and protection of underlying corporate data is crucial.

Finally, CFOs ultimately deal with the money, so this is an area where I have my own bumps and bruises from first-hand experience. Banks come to you with promises of ease of use, the ability to quickly move money, invest it wisely, low fees, etc. But all CFOs know, this is an area of great frustration. It often comes with multiple fees, low yields and difficulty in managing across multiple institutions and regions. On a consumer level the problem is only magnified and often misunderstood by the individual user. There are a lot of burgeoning Fintech companies out there tackling many of these problems, but there is much to be done. As you watch the flow of funds from the point of a consumer or a business, it is astonishing how much margin is taken at each juncture – whether it be fees, the days lost in the movement, currency exchanges, credit card processing, etc. I love the innovation that is happening in this space – both at the level of large scale corporate clients to the individual consumer and look forward to finding and supporting companies that are diving into this challenge

It can’t be ignored that I am a woman executive and investor in a largely male world. I have loved my career but at times I have had to fight for it. It is a joy and passion of mine to support women to thrive in all ranks of a corporation. It is not an issue of not enough female talent in the workforce. I hear that counter-argument all the time and I am amazed that some believe this to be true – have they met the women I know?!

Businesses today can and are starting the journey to recognize the untapped talent they have in their diverse workforce. It needs intentionality. In my experience, it is not going to happen by being passive. I applaud companies and other organizations that are taking intentional steps to address equality in all areas of a company. And, I am a staunch believer that businesses today should be active in addressing equality of opportunity throughout their organizations, from boardroom and C suite and at every level and department.

Madrona has been a leader in working for greater equality at our companies. Over the past two years, I have led Madrona’s participation and support of OnBoarding Women, with our partners at Deloitte, Perkins Coie and Spencer Stuart. OnBoarding Women is focused on creating more opportunities for women to serve on corporate boards in the Pacific Northwest. At Madrona, we recognize that the disparity in the public company boardroom often starts when the company is private and the board is primarily investors – often not a very diverse group. By opening up independent seats early in a company’s journey, the company has the opportunity to diversify the perspective at a crucial point in the company lifecycle, ideally with a woman or otherwise diverse candidate. One of my fellow managing directors has had 5 of the last 6 independent director appointments on his portfolio company boards be women.

As I embark on the next phase of my career, I am so honored to be part of the Madrona team. My most important asset as a professional is my reputation. A reputation is shaped by the people with whom you surround yourself. I couldn’t ask to be surrounded by a more fantastic group than the entire Madrona team.

Madrona Appoints Hope Cochran Managing Director

Madrona Managing Directors, from left to right: Tom Alberg, S. Somasegar, Scott Jacobson, Matt McIlwain, Tim Porter, Hope Cochran, Len Jordan (missing from photo: Paul Goodrich). January 2019.

We are excited to announce today that Hope Cochran is our newest Managing Director. We have worked with Hope in her role as a venture partner at Madrona over the last two years and have known her for many more. In the time she has been a Venture Partner at Madrona, Hope has worked with dozens of our companies on business strategies, financial planning and operational effectiveness. Hope has built her extensive experience over twenty-five years as a founder of her own successful company, as a CFO at both Clearwire and King Digital, as an executive taking companies public and then selling them for billions to strategic buyers, and as a senior leader who brought teams together to achieve a goal. Her clarity of approach and expertise in not only how to financially organize a company, but in how to lead one, has been invaluable to our entrepreneurs and founders.

As a Managing Director, Hope shares the responsibility of investing Madrona’s newest $300 million Fund VII in early stage companies that we believe will change the future of Seattle and the global technology industry. When we shared the news of Hope’s new role with our mutual, long-time friend John Stanton, he commented that “I worked closely with Hope for five years at Clearwire. In a very challenging environment, Hope was a consistent and calm leader with clear vision. Hope managed the complexity of Clearwire’s financial position and was vital in every strategic decision. Hope’s experience in managing people and leading a business will make her an extremely valuable Managing Director at Madrona.”

Hope brings both a bold and practical approach to working with companies. She has already been of invaluable help to the whole innovation ecosystem by leading our annual CFO Summit to address everything from broad themes of leadership and to details of audit rules. In fact, before Hope worked at Madrona, she shared her experience of taking King Digital from 0-60 and onto the public markets at one of our CFO conferences. She has helped portfolio companies of all sizes including later stage Madrona’s portfolio companies like Smartsheet and Rover on their growth and IPO planning, and some of our youngest companies like Gawkbox and Integris through the building and scaling of teams and processes. Her ability to scale up or down and understand the operational challenges of the entrepreneur, is what they value. She is a trusted member of our team and a sought-after voice of counsel.

Hope helped source and led Madrona’s seed investment in the Riveter, the female forward work space and community with five locations thatwill be expanding to more locations this year. Since our initial seed investment, the Riveter has already raised a substantial follow-on upround financing bringing its total capital raised to $20 million. She has also led our involvement in the OnBoarding Women program, which focuses on bringing executive women onto public and private company boards through business-oriented education. For several years now, Madrona companies have been more intentional about recruiting female candidates as independent board members and our work with OBW is invaluable to these candidates and these companies.

To Madrona she has brought her deep operational experience and also her depth of experience serving on public company boards, including New Relic, MongoDB and Hasbro. It is clear that she is a leader in our region, and we are thrilled to have her focused on uncovering the next great companies being built in Seattle.

We also want to celebrate that Hope is Madrona’s first woman Managing Director. As investors, we seek to attract the best entrepreneurs and the best company-building team that are eager to roll up their sleeves to help companies when they need us. Having an investment team that is diverse in terms of experience, expertise, company background, gender, age, culture, and points of view enables us to build better companies faster. We are excited to have Hope on board and look forward to years of investing and working with companies from day one for the long run including all the key decision moments along the journey.

For Hope’s take click here.

Finance and Technology Leader, Hope Cochran, Joins Madrona Venture Group as Venture Partner

Former CFO of King Digital and ClearWire Brings Management, Operating Experience to Venture and Startup World

SEATTLE, WA – January 12, 2017 – Madrona Venture Group, an early-stage venture capital firm, announced today that Hope Cochran has joined the firm as Venture Partner. Cochran brings a deep wealth of knowledge based on her experience as an entrepreneur, board member and CFO of public and private companies. As Venture Partner, Cochran will help identify new investments, provide strategic and operational advice to Madrona portfolio companies, and foster corporate and strategic business development relationships with larger companies and investors.

“I’m excited to jump back into the startup world and work directly with exec teams at some of the most innovative companies in the technology industry,” said Cochran. “Madrona is a leader in the community and I’m looking forward to being part of the team that helps their portfolio companies realize their full potential.” Continue reading “Finance and Technology Leader, Hope Cochran, Joins Madrona Venture Group as Venture Partner”