#92: Leopoldo Peña (Presta)

Leopoldo Peña (Presta) [00:00:00]:

Now, every single loan that exists for small businesses, or half of them, let's say, get processed through US. We're going to be able to tell you what are better factors of assessing credit Land. That's where Presta is eventually going to fix this broken system, fix the intake, sure, that's easy. But then fix the underlying factors that unequally distribute capital across the US. Particularly for small business creation and growth, which is is one of the largest drivers of wealth for people. When you think about wealth creation, yeah, okay. You think about a mortgage and having a home, which is an incredibly important problem to solve. The next thing is small businesses and the creation of those for families and communities.

Jeffrey Stern [00:00:40]:

Let's discover the Cleveland entrepreneurial ecosystem. We are telling the stories of its entrepreneurs and those supporting them. Welcome to the Lay of the Land podcast, where we are exploring what people are building in Cleveland. I am your host, Jeffrey Stern, and today not only did I get to sit down with one of my closest friends, but also someone who I have had the privilege of sharing my entire Cleveland experience with over the last half decade. None other than Leopoldo Pena. Leo is the co founder and CEO of Presta, a digital lending infrastructure that allows traditional financial institutions to better lend to small and medium sized businesses by allowing them to book loans digitally. Leo's prior professional experience, though, has been centered around the world of government and civic technology, most recently focused on expanding access to equity investment. In 2019, he cofounded and launched the Opportunity Exchange, an equity investment marketplace for economic development projects. After powering projects in the majority of the United States, the Opportunity Exchange was acquired by Blue Dot, a competitor in the industry. Prior to that, Leo and I actually worked together as part of the founding team to launch a mobile voting platform designed to securely cast votes in elections across the globe, allowing members of the US. Military to participate in general and midterm elections while serving abroad, in addition to building out other core election infrastructure like voter registration systems. Leo currently resides here in Cleveland with his dog Chamo holds a Bachelor's of Science from Cornell University. Land is an alumnus of the Venture for America Fellowship. Leo is simply one of the best people I know. So needless to say, I've been looking forward to having him on the podcast for quite a while now. I'm glad the timing finally made sense and I hope you all get to enjoy our conversation together. Well, this one is interesting because we know each other very well.

Leopoldo Peña (Presta) [00:02:47]:

Yeah.

Jeffrey Stern [00:02:48]:

And we have talked about a lot of these things before, but I think we have to introduce you to the audience. I think that's where we have to start.

Leopoldo Peña (Presta) [00:02:54]:

Fair? Yeah. What questions would you ask if you didn't know me so people know who I am?

Jeffrey Stern [00:02:58]:

Well, I would want to know you're now a third time founder, right?

Leopoldo Peña (Presta) [00:03:03]:

If we're counting voting, like I told you to count for yourself.

Jeffrey Stern [00:03:06]:

Yeah, I think we get it. I appreciated that framing of it, but I think it would be helpful for one to understand the question that I think we both get a lot, which is what are you doing in Cleveland?

Leopoldo Peña (Presta) [00:03:18]:

What brought you here?

Jeffrey Stern [00:03:20]:

And why make a run at startups, which are really hard, for a third time? Where does your interest in them come from?

Leopoldo Peña (Presta) [00:03:30]:

I guess I'll give you more background into who I am as a human land, how I eventually got to Cleveland.

Jeffrey Stern [00:03:36]:

Yes. Your motivations, your inspirations, what drives you as a person?

Leopoldo Peña (Presta) [00:03:40]:

Yeah. The sun in the morning and not the winters. Okay. So I'm originally from Caracas, Venezuela. I was born there. I lived there from ages zero to seven. And then, as many are aware of the political status of the country, my parents left or had to leave, and we decided to move to the US. Or my dad did, and we moved to Puerto Rico to start. So didn't leave the Caribbean, which is, again, similar question to Why are you in Cleveland? Lived there for another seven years, and then my parents moved to Orange County, California, where I went to high school. I went to college in upstate New York at Cornell, actually. Classmates of you.

Jeffrey Stern [00:04:22]:

But we are classmates.

Leopoldo Peña (Presta) [00:04:23]:

Yeah. We probably took classes together, but we didn't know each other until very late. I tried my hand at economics for a bit and then realized that's not what I want to do, and then moved to Cleveland after college. I think my first startup experience, so as many people at Cornell look at doing, was, oh, maybe I'll do something in the finance world. And I realized that was pretty icky. No offense to you. And any other bankers? None. Take it. I wanted to do something a little different. So actually, my first taste of Cleveland was the summer of my junior year. Going into senior year, my friend convinced me to apply for an internship here through summer on the Cuyahoga, which, if you're not familiar, it's an internship program to get people here to Cleveland. Hence Cuyahoga partners with eight different schools. Ideas? Yeah. Come live in the dorms in Cleveland State, enjoy Cleveland, understand what it's all about. Land. That was a really cool experience into it.

Jeffrey Stern [00:05:22]:

It may have worked, even.

Leopoldo Peña (Presta) [00:05:23]:

I think it might have. Well, here's the funny part. Okay, so I come. I actually stern at flash starts, which is no longer a thing, but was amazing at the time.

Jeffrey Stern [00:05:33]:

What was flash?

Leopoldo Peña (Presta) [00:05:34]:

Darts. Yeah, at Startup Accelerator. It was out of Tower City, run by Charlie Stack and Jen Nurendofer. You know, the idea is they got a ton of college interns. I think there was like, 30 of us and eight to twelve portfolio companies. And the idea is that you pair them up and you get experience working for a startup. But the these really early stage startups have access to what are now fairly large teams of minute college students. But still it's working hands that are excited about the mission. And so I realized, wow, everything I'm doing has like a very direct impact in this company. I'm building the MVP for someone and they're getting customers through us. That's really cool. And so I was like, okay, I think startups are the way to go. Before that I tried my land of research. I was looking into working in finance, but then I was like, this is probably the thing to do. And so after taking a ton of software classes in college prior to that I realized, okay, I want to do this. I'm going to apply to work at a startup as a software engineer. And so I spent the fall applying to different startup jobs, but none really that small. It's like, okay, maybe like a larger company with 100 people. Something where I can get some mentorship. Land then funny the way life works is the person who was dating at the time wanted to apply to Venture for America. Land suggested it and I was like, okay, sounds good. I pushed it off until the final deadline in March. For those of you that don't know Venture for America, that's how Jeff got here.

Jeffrey Stern [00:07:05]:

It is also how I got here.

Leopoldo Peña (Presta) [00:07:06]:

Well, they're how I also got here. It is a fellowship program from recent college grads to work at startups across the country in cities that are not New York, La, San Francisco. But until the final deadline I applied and actually as I was applying, I said to the person that I was dating at the time because they were moving to Cleveland, there is no effing way I'm moving to Cleveland, but I will apply to this Central for America program. I go through the interview process. Land I was incredibly excited. I loved it. I realized all the people that are part of this program fit who I want to be. I think the used to have a particularly stressful quote unquote onsite or final round process. They did it's similar to your banking or consulting super days as a caller where it's like 8 hours interview with a ton of people. And normally those kind of situations make people feel uncomfortable or stressful or stressed out. Sorry. I was ecstatic. I was so happy I was getting to interact with really cool people, answer really tough questions and having a blast. And so that made me realize, hey, if this interview process is intended to make you feel like you're not going to get in, only made me feel more reassured this is what I want to do, that's probably what I should do.

Jeffrey Stern [00:08:22]:

And you do thrive in those environments.

Leopoldo Peña (Presta) [00:08:24]:

In particular, I do love a stressful environment, hence why we're still doing startups. And so to cut that a little bit shorter, applied a venture for America, got in the last cycle, and then spent a lot of time finding my perfect company. And a big focus for myself was, if I'm going to be spending a lot of my energy on this, it better be the right fit. I don't care where I go. Bench for America has now, I think, upwards of 15 cities. So I could have been anywhere from Birmingham, Alabama, to Pittsburgh to Detroit. Cleveland was obviously on that list. So for me, I was pretty city agnostic. As much as all I cared about was an amazing opportunity with a great team, small sized, I wanted something in the ten to 15 range, so there was enough people, but I could contribute still. And then someone brought up this opportunity of a company working in the election space. It was like, okay, I'm immediately interested. Reasons my family left Venezuela was because of poor examples of democracy. So I'm already intrigued. And then I realized another fellow in my class was working on it, hence Jeffrey Stern and where our lives meet. And I realized, present the mission that I want to work on. And so I joined this now of being the second employee. It was you and I and our CEO at the time together. I said, okay, I guess I'm moving to Cleveland, after saying three and a half months ago, before that, there's no way I'm moving to Cleveland.

Jeffrey Stern [00:09:47]:

To save democracy.

Leopoldo Peña (Presta) [00:09:49]:

To save democracy. As we used to say in a sentence that I still love, democracy never sleeps. And that's pretty true. Yeah.

Jeffrey Stern [00:09:57]:

So voting was a pretty wild experience. Just additional context. Essentially, we were building election infrastructure at the onset for folks who historically had been physically disenfranchised from the democratic process, members of the military living abroad, people with accessibility considerations. And we worked with secretaries of states to kind of manage their voter registration systems and allow for the online delivery and return of ballots. And we hit the ground running.

Leopoldo Peña (Presta) [00:10:30]:

Yes. Picture of this, right? I still think it's so ridiculous. I was 21 at the time. You might have been. No, you were also 21 when we moved here and took that job. Your birthday is in September. So yeah. 221 year olds joined this 50 something year old man in in 2016 to work in an elections company that is actively running and has customers and are told, okay, you're now responsible for these sets of election systems. Go figure it out.

Jeffrey Stern [00:11:03]:

Real statutory elections.

Leopoldo Peña (Presta) [00:11:04]:

Yeah. There are people voting and registering to vote in these systems that we're keeping alive and maybe keep it alive. Is doing it a service supporting or sustaining or whatever other verb makes it seem like it wasn't filled with duct tape, which, spoiler alert, a lot of government and financial tech software is put together by duct tape, both literally and figuratively. But I thought that was the most I mean, a combination of outrageous, but also really empowering. I tell a lot of Venture for America fellows like what you want and a lot of recent college credits. What you want in these stages of your life is exponential career growth, right? I think you take a corporate job and it's very easy to map what your career growth looks like. Zero to two years, you're going to be stage one, and then you move on to level two and level three, land, so forth, and you can really quickly map. And sometimes you're able to hit all of those on the shorter end of the timeline and you're a really fast grower. But the end of day, it's still linear growth when you take on these, I mean, extremely risky jobs, mind you.

Jeffrey Stern [00:12:09]:

But also, we did ultimately fail.

Leopoldo Peña (Presta) [00:12:11]:

We did ultimately fail. Correct. You're still learning and doing things that you are not qualified to do. Ideally, you're giving an environment where you can fail, maybe not in the short term of things like elections, but in the long term of things like the life of the company. And you are just trusted with the fact that you can succeed in these. And that's where you grow at an exponential pace in terms of career. And also, I think, as a human, as a result of that. But anyway, that's how I got to Cleveland, to a pair of 21 year olds, join someone who, quote unquote, wanted to make this their life legacy. We can touch that if you want or not and decide, hey we're going to do is we're going to join a startup and build a team in Cleveland and make Cleveland this incredible place. Or be a part of making Cleveland this incredible place. Because you can never change a city on your own, no matter how much you try. Big contribute.

Jeffrey Stern [00:13:04]:

I think that's what we were doing. I don't know that we need to speak directly to the entirety of Odom, but I am curious. So we were there for about three years in its entirety. The company grew to over 20 people here in Cleveland. We're working with a lot more Secretaries of state offices when it ended than when we started. We were making good progress.

Leopoldo Peña (Presta) [00:13:28]:

It did fail for reasons that are.

Jeffrey Stern [00:13:31]:

Not maybe the typical business failing reasons, although often it's people problems.

Leopoldo Peña (Presta) [00:13:36]:

That's always people problems.

Jeffrey Stern [00:13:38]:

But what have you taken away from the vodham experience, specifically as you look towards what came next?

Leopoldo Peña (Presta) [00:13:46]:

Yeah, I mean, I think there's two sets of takeaways. The first is what are cool things I got to do? And I'll share a few of those. And then the second is lessons on company building and entrepreneurship that I took with me to my next ventures. So all the cool stuff and I'll say this out loud because I think it highlights the importance of taking risk at an early age in your career. And we were interviewing people to move to Cleveland that lived on the coasts, that had more years of experience than either of us had been alive. We were interviewing VPs of engineering and CTO level candidates who had been working for 25, 30 years. Land we were 21 and 22 year olds, respectively, probably at that time. Land we convinced these people we ourselves, because a lot of those early interviews were just you and me, either individually or in conjunction, before going to a quote unquote, on site with the entirety of the team. And I think on the cool side of things, plus also on skills learned is how to sell a vision. Land how to inspire people to step outside of their comfort zone for what are greater causes. And I think that's a lot of what we were doing in those early stages, both with our customers, but also our team right there's folks who move from Colorado, from New York City, from San Francisco, and spent spending considerable parts of their life working on this mission of access to democracy. And I think that really honed or both of our abilities on selling vision and dream to folks. So that was really exciting. That's the cool things that I got to do. I think you and I are both very proud of the team that we got to build. We built a good team. We built a good team. In terms of concrete takeaways, I think the one that hit me the hardest across the face as the company was ending and then I took with me forward, is that people really show you their values when things are tough. It's really easy to state values of transparency or honesty or commitment to diversity, whatever you want to call the value that you're professing at the time when it's on paper and when things are relaxed. I think during moments of stress or tough decision making is when people actually do show their true colors. And I think that was a really difficult learning, but also something that I knew that during difficult situations I had to go back and look at values that I expressed to both my team land myself, and bring those forward. And that's something that was probably one of my bigger learnings. There's a ton of other smaller business learnings. Cash is king. Make sure you have runway. At the end of the day, it's all it's just a bunch of people put together. It's not about the software. Sell the solution. There's a lot of really cool things. But I think that the ethos of building a company is treat people with a lot of respect. Make sure really smart people feel valued. You're working on a mission that's worth working on with a high performing team, and that's what we had done. Land something that I tried to do now going forward, yeah, culture gets a.

Jeffrey Stern [00:17:13]:

Lot of lip service and I think people, myself included at the onset, it's like, what is the actual value of the culture of a company because it is very easy to write down trust, transparency, whatever land say. These are our values. But you do only see what they are when people are tested against them.

Leopoldo Peña (Presta) [00:17:36]:

Yeah. And I think at the end of the day, you're just building a team. There's very few situations in which the tech is more important than the people and not even then can't really build anything without amazing people.

Jeffrey Stern [00:17:48]:

So we have this pretty incredible experience the way it, I guess, ultimately transpired. Not ideal as an outcome, but you are undeterred in your entrepreneurial proclivities.

Leopoldo Peña (Presta) [00:18:02]:

I think it was partially deterred. I mean, here we are in a comfortable space, and I mean that literally. This is a pretty comfortable couch. And as far as people to talk about this stuff, I mean, I think it's important to share this land realizing now that this is going to go in recording and share with a ton of people.

Jeffrey Stern [00:18:20]:

Yeah, there is an audience.

Leopoldo Peña (Presta) [00:18:21]:

There's an audience.

Jeffrey Stern [00:18:22]:

Someone else is in the room.

Leopoldo Peña (Presta) [00:18:24]:

Yeah. And the tend to be very casual with my wording. So I'll put it this way. I was pretty wrecked. As we wrap up this end of voting part of the conversation. I remember the day after we got the news that the company was no longer I was brushing my teeth. Land one of our early hires texted me and said, thank you so much for for this opportunity. It was amazing to work together. Thank you for convincing me to move to Cleveland. I had a great time. Land I broke out in tears. This person who again, similar thought that we convinced so many people to move their lives to Cleveland, which I'm still honestly very proud of, but also felt very responsible. We had no ownership in that company, both literally and figuratively, which goes back to valuing people quick side note. But yet I still felt so much ownership because of how much I had poured into it. That when this man texted me that, I just started crying because all I could think about was, wow, we changed so many people's life trajectory, even by the smallest bit. I mean, some of these people worked almost those three years with us. Ultimately, it didn't work out, but I put so much into it. So on being deterred, I mean, crying after a breakup, which is what essentially that was a force breakup did deter me for even if it was a short period of time. And I think it's normal to mourn losses in the professional context. I think we spend so much of our waking hours working on these things and put so much soul and heart into building amazing things that it's pretty common to feel that heartbroken when things don't work. And I think you and I made a point of celebrating failure within the company. And I think, tequila shots aside, we did celebrate the failure of Fodm in a way, but I did also mourn it, and it was pretty difficult to get out of bed the next morning. Again, tequila shots aside, a few mornings later, just of regular living, it was still difficult to keep moving forward.

Jeffrey Stern [00:20:37]:

I appreciate you sharing that. And it's undeterred on the long time scale, right? Because for us both, it takes time to process something like that. Land we did both take some time to process.

Leopoldo Peña (Presta) [00:20:50]:

Yeah, I mean, I spent several months just sitting in a coffee shop reading. Like that's all I could do. I went to the gym. I went to the West Side Market, which we all love, on this podcast, would pick up vegetables. This is not an everyday because unfortunately it's not open every day at the same hours, but the weekdays that it was open, I would go pick up vegetables and then just cook lunch and then go sit for an afternoon cup of coffee at Poor, which is no longer there on East Fourth. But I would sit there because they had unlimited refills and just read. And that's how I got over the breakup. That was vodham, was thinking about difficult problems. So I actually, to that point, spent a lot of time reading City Lab, which was a great publication before they were acquired on the problems in cities and the difficulties of cities in the 21st century, listening to podcasts specifically around those problems. Because my entire career up to that point was spent solving difficult problems of access to government services. In our previous case, elections. But I knew I wanted to continue in something of that. Elk and you also started seeing people.

Jeffrey Stern [00:22:02]:

Peter, at Saucy BrewWorks.

Leopoldo Peña (Presta) [00:22:04]:

I wasn't sure if you were talking about a romantic life. I did start looking into what I wanted to do next. Land to the point of Cleveland being small, but also well connected and happy to support you, which I think is a theme that was prevalent after the death of Odom. And truth to our career so far in Cleveland is people want to support you here, which I love. One of our mutual connections reached out, Peter Trudgue and said, hey, sorry guys, about what happened. Do you two want to grab pizza? So we went to Sassy BrewWorks. We sat down. Jeff was there. I was there. Actually, Jeff was the one that extended the invite, so props to him. He said, Leo, I'm going to go catch up with Peter, because normally I did not want to check any email or anything. I was just trying to relax. He was working on something new. But really it was about supporting us at the time, which again, props to the Cleveland community and to Peter for that. And as we navigated through what had happened, he said, hey, I'm working on something new. If you guys are interested, we can catch up. And then we started, quote unquote, co founder dating and very unintentionally too. I think at the beginning, I was just very curious on what he was building because I had spent the last few weeks and months reading on issues of cities. Land he was working in something in that space. And so combination of a lot of pizza, a lot of coffee, a few beers land over a few weeks, we realized, hey, might make a lot of sense to work together.

Jeffrey Stern [00:23:32]:

What was the nature of the work? Peter was thinking about that time for.

Leopoldo Peña (Presta) [00:23:37]:

A lot of you that probably don't know him, I don't give some background to him. He's an amazing guy. He used to work in management consultant in Boston, realized, hey, I don't want to spend the entirety of my days on the road, plus I want to work on something in the community as opposed to have an apartment in a community and then not live in it. And so he decides, hey, I'm I'm going to take on this nonprofit program that my managed consulting firm has to try it out. Becomes an interns essentially at the Fund for Our Economic Future in Cleveland, and realizes, hey, I want to work in this space of increasing access to economic opportunity and tackling economic inequality. So he leaves his management consulting job in Boston and moves to Cleveland, where he knew no one. He knew one guy, actually, and that was it. And said, I'm going to do it. I'm going to go work at the Fund for our Economic feature. And after working there for several years, he realized, hey, I want to build something as a product, which is different from the work that nonprofits do most of the time. And so he left that to begin working on this idea of increasing access to capital, but from a software perspective. And to me, I think if you draw a theme and we can talk about this, what I'm doing, now in a bit. But my entire career has been devoted to increasing access. Particularly in difficult systems and regulated systems or complex systems, but it's always been distilled to increasing access. And so I was really interested in what he was working on, which was essentially a marketplace, an investment marketplace to connect economic development projects in cities to both funders, but also folks seeking to join these projects. It was, hey, let's replace the organic yet unscalable connections that happen in city development. And so he was working on what was then called the Opportunity Exchange. Land I decided, hey, this makes a ton of sense for us to work together from an interest perspective. Let's figure out if us as individuals really align. And that came from I think our learnings at Vodham was, I am no longer working with people who I don't align with from a base value level. Yeah. And so we just went on dates. And I recommend this than a strategy for folks that are looking for someone to start something with. Is just go and have a ton of conversations about how you would handle a million different scenarios. Land what you really want, what you really want to create at that time.

Jeffrey Stern [00:26:11]:

In retrospect, did you have an idea for what you wanted to do with Toe or the Opportunity Exchange or was it more of I like what Peter is doing. I think there is a chemistry in our co founder relationship and it aligns with this thread that I'm interested in about access.

Leopoldo Peña (Presta) [00:26:33]:

Yeah, I was ready to blindly dive in and the truth is I think people say this a lot and it goes back to that theme that it's all about the people. But I knew that after the many dates that we went on that Peter was the right match for what I wanted to build and it still was along those same lines of increasing access, particularly in capital this time around. And so I was convinced that this was something I wanted to work on. And I'll pull once more on the dating thread and the reason I say this is it's similar to when you talk about life with a partner and say like, do you want to have kids? Do you want to ever live abroad? I don't know. Do you care about if I put my shoes on while walking around the house? Anything from very large things to small quirks and pet peeves, these are conversations that we had. We asked everything from hey, what are financial outcomes that you want of this? How big do you want to grow this? How do you want to engage with people? Do you want to hire in Cleveland? Do you want to have an office? Should we go remote? We just iron all of these questions out and realize, hey, we align on all of these. And similar with a partner, I think if you find the right partner in life, you're like, well, I don't care if we live in Mexico City or we are like in Cleveland, Ohio, I want to share life with you. It was very similar to I care about the mission of what we're building and we're going to build it together. Land so, no, I didn't have a preconceived idea. It's just like we're going to build something really cool. Let's go do this.

Jeffrey Stern [00:28:06]:

And the spoiler alert is that you build a company and it gets acquired. And a lot of those questions I imagine you are asking, right, like do we want to raise capital? Where do we want to build this? How do we want to grow it? Maybe you could just pull on some of those and speak to right. Because ultimately you didn't raise capital. You bootstrapped the whole business the whole way. But just about overview of the whole trajectory of the opportunity exchange.

Leopoldo Peña (Presta) [00:28:35]:

Yeah, I think it's really interesting. After leaving Vodham, I was mad at venture capital, I think, partially and thought, hey, this is unsustainable type. Of growth. I don't think I want to do that at all. And that resonated with Peter out of wanting to retain ownership and wanting to be the ultimate driving force and direction at the Opportunity Exchange us together. And so we're very aligned on that. To your point of spoilers, that's not the route we took for our new company. But at that time, that made a lot of sense to me, and so that's something I really cared about, was, hey, I don't want to have to succumb to someone else's idea what this company should be. I'm going to build this in essentially a vacuum with Peter, which allowed us to build in Cleveland and hire people in Cleveland. We hired several folks. We brought people from out of town. Again, similar thread, just, like, convinced people to move here, which I'm still surprised, like, I was able to do that, but I think to the point of having people come here and become part of the ecosystem, which is what happened to us. At Vodham, one of the folks that worked with me, she then ran for city council in our ward, which is actually really cool that she moved to Cleveland to take on she moved to Cleveland from California to take on this job at the Opportunity Exchange. It was her first exposure to economic development, to engagement in communities, and she loved it so much, she realized, oh, I should be doing something similar in Cleveland, Ohio. And so then she ran for city council in our ward and did well, too. I mean, I think a tough ward to run it. I live in Ohio City, and so does she. But she loved the community so much from that kind of work that she wanted to remain in the fabric of it. And to me, that was particularly impactful, I think, when Peter and I look back at the Opportunity Exchange and say, what do we want out of this? We wanted a company that had positive outcomes, mostly from a social perspective, but also a financial outcomes to your point of the exit and treated people well. And I want to say that we did. If you worked with me and don't feel like that, please text me. You all have my number. But I was so happy to work with these folks in a way that impacted both locally and a lot of the other communities that we worked in. Yeah.

Jeffrey Stern [00:30:44]:

So there's a pendulum that kind of swings on the importance of raising capital to ownership retention and how you captain the ship of that is your company and kind of having it swung on both directions. Now, exiting the Opportunity Exchange, maybe you could just actually tell us a little bit about that whole process, but I want to kind of follow the pendulum back the other way.

Leopoldo Peña (Presta) [00:31:11]:

Yeah, I think it's really interesting. It takes longer than you realize. I thought it would be okay for how much do you want to buy it, and are you in? All right, sounds good. Let's sign this paper. No, it takes lawyers a while. It took us over six months to do that, which was a surprise. I didn't realize it took that long. But a little bit of how we got to that point, which I think context is important for that. We realized we're in a really good place. We have revenue. We have great profit margins. Like, we are a tech company. We don't want to raise outside capital. Let's look into how to continue to grow the mission that we're working on. And so this is the benefit of being self driven in that sense, is that your decisions are towards the mission that you have, which for us was increasing access to capital. So we're looking at ways of expanding that. One of those was product partnerships. So I'm sure you're all familiar with that. If not the idea of, okay, let's either co sell our product, or we'll develop direct API integrations into the products so we can have a wider reach. And so we start having conversations with what I would call, like, indirect competitors about those things. So, hey, how do you feel if your listings go into our platform or we push people towards yours after a certain threshold? And in one of those conversations, we spoke with a company called Blue Dot and realized their mission was really aligned with ours. Their product was really complementary, and so start to explore the idea of a partnership. And I really like their CEO, Sophia. She's really incredible. She really cares about the communities in a similar way that we did. And so it's okay, let's explore this partnership. Except at the end of the day, we want to continue to grow our product. And then after several hard conversations about how to continue advance the mission, realized that maybe the best way to do it was joining forces with another company in a deeper way rather than just a product integration land. So I remember in one of the conversations with Sophia, after discussing overlapping customers, I said, Why don't you just buy us? And I'll give credit to our friend Alex Hillary, who've had a previous podcast. He was the one that suggested that idea. We were sitting over a fire in a backyard, a very Ohio City conversation, and he's like, why don't you just sell them the company? And that are never like, I think.

Jeffrey Stern [00:33:36]:

For us, we want a normal transaction.

Leopoldo Peña (Presta) [00:33:38]:

No, it's not it's not something that.

Jeffrey Stern [00:33:39]:

Every day the day to day sales process.

Leopoldo Peña (Presta) [00:33:44]:

And Peter will laugh at this, because the morning after Alex mentioned that to me, I walk in the door, I set my backpack down and said, peter, we're going for a walk. Which is how we do a lot of our hard decisions, is going on walks. And 30 seconds into the walk, I said, Peter, we're selling the company. He's like, wait, what? I was like, yeah, this is the right move. We're selling the company because at the end of the day, there was no importance of a specific financial outcome. It was, how do we continue to further what we're working on? Land I think that's the to your point of the pendulum that was the benefit of being bootstrapped and self owned is that what we had to care about was our people, our customers, which we didn't even call customers, we called community partners. Land then our mission. And so after realizing that Blue Dot was so aligned in what they wanted to achieve, our community partners could end up transferring over to their platform in a way that would have the same outcomes, if not better than we did. Since Blue Dot was a little bit farther along, they had a more developed product. They are VC backed, so they have more funding. The just made sense. We knew our people were going to be taken care of. So everyone either had different aspirations that we had been talking about with them for months at that point in time. So either run for city council like we mentioned prior, or wanting to take another chance in a different industry, things like that. And so for us, it was just an ego less transaction. Right. This expands what we want to work on. Our people feel happy about it. Let's do it. That was really amazing. Land I feel very fortunate to have been in that scenario, both Peter and I, and being able to work with someone who said, yeah, this makes sense for our mission, this makes sense for our people and I guess it made sense for ourselves. But I didn't really care as much about me. I was like, I'm young, I'm 26 at the time. 25, 26 at the time. Actually I was 27. Whatever.

Jeffrey Stern [00:35:43]:

Point being is like, I got more.

Leopoldo Peña (Presta) [00:35:45]:

Time, got more time, I got more time in life.

Jeffrey Stern [00:35:48]:

And the it creates the space. And I'm curious, I'm going to pose this, I don't know how you'll take.

Leopoldo Peña (Presta) [00:35:54]:

It, but do you think of increasing.

Jeffrey Stern [00:35:57]:

Access as what you would like your.

Leopoldo Peña (Presta) [00:35:59]:

Life'S work to be? I think so. I'd never present it to myself as life's work, but it will transcend the.

Jeffrey Stern [00:36:08]:

Companies that you're working at.

Leopoldo Peña (Presta) [00:36:10]:

It has so far three tries now and it's still that same problem. I think we live in a world where opportunities are not equally distributed and we can talk about that, any facet of it. Right. It's been my own lived experience, I think. Here's an example of it. When I first moved here, or when I first moved here, as you might have gathered. Audience, I was not a US citizen when I first moved to Cleveland, which has some implications in the ways you can access public services. So when folks post the Vodham death were looking into unemployment, that was not something that was available to me because, spoiler alert, it has very poor reflections when you apply to citizenship if you've ever been on public assistance. And so I was lucky enough that I had built a personal runway that was very important to me when I first joined Vodham as someone who had $0 in his bank account, had to borrow my security deposit from my roommates at the time and pay them back was, I need a financial cushion if I'm going to take this risk. And that's something that I continue to maintain in life, is it's really important to have that at least base cushion. But my point being, it's my own lived experience that opportunities are not equally distributed, and so you can apply that to any area, unfortunately, in both the country and world we live in. And so, yeah, that sounds like it's presented to be that now in the future. That being said, though, if you ask a lot of my friends, what you want to do is, I want to be a stay at home dad. But that's a different thread we can talk about.

Jeffrey Stern [00:37:50]:

Yeah, well, maybe. I mean, both kind of converge at Presta, right, in some ways in terms of amazing transition. Thank you. I've been working for years on just that one. All right, so we'll pull on those, right? We have access to opportunity and stay at home debt. So paint the van diagram of why Presta is at the center of those two.

Leopoldo Peña (Presta) [00:38:16]:

Sure. For those of you that don't know, which is probably all of you, I'm working on a new company called Presta. We're building digital lending infrastructure so we make it easier for traditional financial institutions like banks, credit unions, revolving loan funds to lend to small and medium sized businesses. We help them with application information, collection, assessing credit worthiness, and then repayment of those loans. The idea is that a lot of small and medium sized businesses don't really have fair access to capital. Again, on that thread, particularly debt capital, which is how the majority of these businesses grow. I think if your entire experience or a large bulk of your experience is in this VC backed equity investment space, you often forget that majority of folks don't want to give up ownership of their company. I didn't at the Opportunity Exchange, but do you want access to capitalism to grow a little bit more? Anything from I need a new espresso machine to I want to open a second location. And these are things that folks shouldn't have to give up ownership of their company for but should have access to capital that's not predatory to be able to do so, land timely as well. And so we started to gain exposure to some of those problems. While at the Opportunity Exchange, we worked in the community building space, in the city creation space or the city augmentation space, rather. And we saw the problems that anyone that had a small business was facing on that front. And so with that in mind and with some free time post the opportunity exchange, peter and I decided to work on this, which still aligns very much what we care about, which is access to capital, access to fair and timely capital in the communities that need it. But it blends to your point of stay at home dad. The size of the problem and the financial outcomes associated with that problem are fairly large. I think. You and I, when working at Vodham, we're exposed to the idea if you solve a problem large enough, financial outcomes will come. I think at the end of the day, what we care about here is solving a really large problem. And so it makes sense that when you have a really large problem solved, there are some financial outcomes. But more importantly for the people that are involved in using our products.

Jeffrey Stern [00:40:43]:

What does the process today look like if you were to try and get one of these traditional business loans?

Leopoldo Peña (Presta) [00:40:49]:

Man, it's terrible. Okay. It's just so funny because I had to do this in a pitch recently and I say this all the time, but okay, so let's say you want to open a second location to your coffee shop. As you can tell, I'm wired on coffee right now, hence the example. But you Google bank business loan near me. You click on a bank that resonates with you, that's local, you may remember their name and then go to the business tab. From the business tab, go down to loans. And then what pops up is the phase of six to eight loan officers. So their headshots and their phone numbers and that's the direction says get in touch. So you have to look whoever looks the friendliest, give them a call. You most likely end up in their voicemail. You give them your information like, I am Jeffrey Stern, I would like to expand my podcast business because want to hire more people you're like, okay, sounds great, Jeff. Leave this voicemail and hope someone calls you back. So then on the other side, let's say Ken. Ken gives you a call back, land, says, hey, Jeff, got your application or your interest rather I'm going to send you over an application. It's a fillable PDF. Can you spell out your email? So then you spell out your email in detail over the phone. Jeffrey at layoftheland fm.com.

Jeffrey Stern [00:41:59]:

FM, yeah.

Leopoldo Peña (Presta) [00:42:00]:

FM, yeah. And the Ken will email you that you're going to fill that out whenever you have free time, which is not a lot, and then send that back over. Ken reads it whenever he has time and then based on your answer, says to send you more PDFs your way and then ask you to put together your cash flow statement for lay of the land, preferably last 18 months minimum, maybe more, which luckily Jeff is, if you all don't know, has a prior experience with banking. So he's amazing in Excel, but in the case that he doesn't, that is a large pain point for whoever that is. So you close up your coffee shop at 06:00 P.m., you're done, you go home. Now you have to go work on Excel spreadsheet to open a second location. That sucks. And so that's the current process. A lot of back and forth, it takes upwards of two months, sometimes as long as three months. And when you think about maybe it's expansion, so it's a really nice outcome. But in the case that it's a loan to continue to keep cash flow or people employed, it's terrible. These businesses on average are median, whatever similar enough have like 27 days of runway land. So in the thought process that it takes me upwards of two months, maybe three months to get a loan, if I needed it for cash flow, I'm screwed. And we saw a lot of that during during COVID And we saw that with PPP lending where folks were on the brink of closing down, a lot of businesses did because capital, despite it being plentiful, it's really hard to distribute it land.

Jeffrey Stern [00:43:33]:

I'm just thinking the payday loan equivalent side of the spectrum for businesses is there kind of an equivalent, very easy, but a little bit more predatory route that is available for folks.

Leopoldo Peña (Presta) [00:43:44]:

There is, and it's pretty scary. And the reason I say scary is because it's embedded in the systems that these folks use. So to keep on the coffee thread, you go, you pay, you most likely are paying via Square. I think all of us are familiar. What that means is Square knows how much you're selling, when you're selling it and for how much that lottie goes for. And so they can go in and say, hey, do you want a loan when you're selling less? So let's say you sold 50% less this February because of COVID I'm going to go and offer you a loan because I know your financials, but I'm going to offer it one percentage point below what's predatory land going to charge you, a really high origination fee. The same goes for QuickBooks, even worse, actually, because they know all of your numbers, so they're going to offer you a loan. It's going to be a really high interest rate. They can do all of the underwriting for you because they have access to all of your data. But again, that rate is going to be really unfavorable. And so there's a really large and Jeff, you love this word, a symmetry of information there between the folks that have affordable capital, so banks and credit unions, land community development, finance institutions, and the systems that manage the financials of these small businesses. And we're trying to bridge that gap of a symmetry of information for folks. And there's also a really large knowledge gap for folks that are running these businesses on how to present that data. And I'm not saying these are unskilled people. I think complete opposite. They're amazing at what they do. They run an incredible restaurant or they run an incredible construction business. They don't need to figure out how to speak a banker's language to be able to be amazing at what they do. That's it. There's a lot of that that we're bridging for folks.

Jeffrey Stern [00:45:30]:

And so it's this asymmetry of information. It's this back land forth process that is paper based.

Leopoldo Peña (Presta) [00:45:37]:

Enter presta, enter us. And so I think one really clear example that we use is Square has an API. So when you go apply for that loan, you can log in via your Square account on Presta and we pull all of that data for you. And so now when that banker goes or that underwriting team goes to look at that loan, they have access to all the same information that Square has and can offer a rate that's like a fifth of that rate for you. And so we're bridging that process. So now instead of that coffee shop owner having to download the Square information, figuring out how to put it in Excel spreadsheet, modifying it to the bank standards or the credit union standards, presenting it to them, justifying their calculations, we can take all of that raw information, process it through the calculations that the underwriting team needs. So for those of you that know, underwriting is assessing the ability to pay back that loan, essentially and doing so in a much faster manner. So we're saving the borrower time and we're saving the lender a ton of time as well.

Jeffrey Stern [00:46:44]:

What's been the reception from community banks who maybe haven't had this kind of power before that you are offering them?

Leopoldo Peña (Presta) [00:46:51]:

I think it's a mix of excitement and fear, which is a great place to be in when presented with something new. Looking at tech that can potentially, quote, unquote, get rid of your job is scary. But the truth is there's not enough people for them to hire so can't really replace their teams, but rather we're augmenting the ability that the have. A lot of folks are sitting on cash to disperse or rather capital to lend. And so being able to augment their ability to do it is really important. And so folks do this is really incredible. I think there's always slow uptake in industries that are slightly more regulated or slightly slower. But the fact that people open their eyes and say, wow, I had no idea you could do this, means we've landed on something pretty great. I know.

Jeffrey Stern [00:47:38]:

One of the lessons that we took with us from Vodham is that selling to government or any of these regulated businesses is very hard. There's a very high bar for what is the minimum required functionality security, and that requires some capital most of the time. So, third swing at bat. How are you thinking about the capital side of the business and getting pressed to a place where you could even meet that minimum bar.

Leopoldo Peña (Presta) [00:48:08]:

Yeah, that's one of the interesting reflections that Peter and I had was hey, I think this is a business we want to have venture backed. We understand the implications of giving up ownership of the company now but also recognize the size, land, magnitude of impact associated with fixing a problem like access to debt capital. We need to go this route. And so I think that for us that set off a really long process of finding the right partner. I still hold a lot of VCs to very high levels of scrutiny and I don't think that opinion will ever change or that process will ever change. But now I hold them in really high regard as well. We'll share more details of this in a more formal announcement later on. But half brought on VC partners that are I think quite incredible to back us here. Closing what's a fairly sizable early round of funding for us and being associated with people that really care about your mission is the tailwind that we didn't realize we could have. And so thinking about VCs as partners in building is very different I think from what the exposure I've had in the past or seen from other folks. I talked to the people on our cap table if you will, and they're out there doing work for us, they're making introductions, they're thinking about these problems, they're suggesting different areas for us to go in land. That's something that we didn't know you could have always associated with people seeking a financial return that's very large land sometimes does not work or compete with the industries that you're working in. And then after a lot of similar dating process with hundreds of venture capitalists that we talked to realize some of them I cannot stand for ten minutes and some of them I wanted to continue talking to.

Jeffrey Stern [00:50:10]:

And so you test the values in the same way and work towards the.

Leopoldo Peña (Presta) [00:50:15]:

Alignment there you did. Here's a ridiculous example. So for folks that are going to venture out into this world, no pun intended, there's some terrible people out there. So I was leading this process and really excited about doing it. So like reaching out to mutual connections, getting introduced and so I set up this meeting through mutual connection of mine and this investor and jump onto a meeting. So they had only had an exchange with me. To give you context, I was the one that set up the meeting and then I invited Peter, it's my co founder, to be a part of the meeting. Peter doesn't break this up ever. He's a very humble person, just like a regular dude. But Peter went to Harvard for undergrad land. Sometimes people bring it up, whatever he's like, okay, yeah, sure. This man sitting across the virtual room from did not acknowledge me, only acknowledged Peter who had never had an interaction with, whether in person or via email, and only wanted to talk about how they both went to Harvard. Land that was the first ten minutes of that conversation. And to me, I mean, that left a terrible taste of mouth. I was like, I could imagine I'm the one greeting you and you just bypass me. Talk to Peter about your Harvard Connection. Why? What are you trying to prove here? Land so when I say there's some people that are terrible, here's one example. And there are some folks who are amazing, who after that first meeting I had with them, they made introductions to a ton of other venture capitalists, to folks in the space, to potential customers. They just resonated with them. This is really large problem and one worth solving.

Jeffrey Stern [00:51:47]:

Is the challenge in front of you now, is it more one of combating the way things have been done, or are there other folks who are thinking innovatively about the space? Who would be your competitors?

Leopoldo Peña (Presta) [00:52:01]:

We have competitors in this space. I think any problem that's worth solving, multiple people are going to attempt working on. We had that at Vodham and I still wish them well. I think when you're working on something that you care so much about, you want it solved. It doesn't matter if you solve it or if someone else solves it. Someone should. Right. And I think it's similar in here. I think we're really good at it. I think we're better than a lot of our competitors in our backgrounds to solve this. Our tech is significantly there's a lot of reasons why I think I'm better to solve it doesn't mean it should exclusively be solved by me. Land to the point of lessons learned from modem that was one of them, is at the end of the day, take your ego out of the situation. It's not about you as a human. It's about this larger mission that you're working on. Land solving that. Right. I don't think it doesn't really matter if you're the first person to walk on the moon. We just want her to walk on the moon. That's really freaking cool. And if you got to walk on the moon too, that's pretty amazing. I don't need my name to be the first person who walked on it. Right. And so it's a similar concept here where I want someone to succeed, preferably me. I also think I'm significantly more poised to solve it. But you wouldn't be doing it otherwise. I wouldn't be doing it, yeah. My investors wouldn't be backing me otherwise. A lot of things. I also think that we are thinking really creatively about this compared to other folks. I talk about presto's. Infrastructure is a very important word that I use for it. So we have ACH wires and that's how we pass money or like credit cards and how we transact payments. There's a lot of things that work in the background of what we do that, we don't necessarily associate with those specific companies. Right? When you send a wire, you don't really think about that wire or even when you pay with a card, you don't always think, is it a Visa or is a Mastercard? You sometimes associate it with the bank that you have. And that's the infrastructure piece that we're trying to set up for debt. And so when folks go and apply for debt capital, they shouldn't know that we exist. The bank should just be able to provide that to folks in a much faster manner. Land one piece of it is reshaping the way that information is collected and transferred. And at its base, it sounds pretty simple, right. Don't scan a PDF, just fill out a form online. But it goes a lot deeper than that and the system is really broken. Our debt system is really broken. And it's broken beyond its ability to collect information. It's broken on how it operates at its core, which is that folks are three digits. Right? And when you go and apply for something, oftentimes it just look at what's your credit score and to the point of opportunities being distributed imperfectly across our planet, or more specifically in the US. If we're going to go in the micro of it, most black or brown Americans don't have credit scores over 720, which is considered good credit. I think in both those categories, it's in the 20% of that population. Land a lot of it is systemic inequalities that exist in the US.

Jeffrey Stern [00:55:18]:

And we only made up credit scores like 25 years ago.

Leopoldo Peña (Presta) [00:55:21]:

Yeah, people forget that a lot of things are just made up. Right.

Jeffrey Stern [00:55:24]:

Very recent development.

Leopoldo Peña (Presta) [00:55:25]:

Yeah. Don't get me started about how money is made up, but point being is credit scores are very recently made up. To fix that, you need to be a part of the underlying infrastructure. So, yeah, now every single loan that exists for small businesses, or half of them, let's say, get processed through US. We're going to be able to tell you what are better factors of assessing credit. Land that's where Presta is eventually going to fix this broken system. Fix the intake, sure, that's easy. But then fix the underlying factors that unequally distribute capital across the US. Particularly for small business creation and growth, which is one of the largest drivers of wealth for people. When you think about wealth creation, you think about a mortgage and having a home, which is an incredibly important problem to solve. The next thing is small businesses and the creation of those for families and communities. Right. And so it goes beyond quickly collecting cash flow statements. It goes on to say, how do we look at other factors that enable repayment that we can smartly put into this process? That's also where I think a lot of folks in our space don't look at. I think a lot of people think about how do. I make an industry go faster? Well, I want to break it. I want to break it and put it back together in a way that increases access for everyone involved. I think my favorite example is, okay, you go land apply for a taco shop loan, and if you apply and they look at your credit score, you're like, oh, it's 650. I don't think I can give you this. Let's look at other factors. You go and press that. You pull the geographic location via Google Maps API land you see the hours that it's going to be open. Oh, it's open till 330 in the morning. Great. Oh, the bars next door close at 02:00 a.m.. It's also on a busy bar street. Do you think they're going to be able to sell a ton of tacos from two to 03:30 A.m. And pay back their loan?

Jeffrey Stern [00:57:14]:

Yeah, 100%, for sure.

Leopoldo Peña (Presta) [00:57:16]:

Everyone's been on that. Everyone's been on that scenario. Barrion Ease fourth, their kitchen closed an hour after the bars close, and that place is packed at 215 in the morning. And so, thing is, these are not factors that people really look at when assessing credit, because we boil people down to three digits.

Jeffrey Stern [00:57:35]:

What keeps you up at night, if anything?

Leopoldo Peña (Presta) [00:57:40]:

Being too amped up from this energy?

Jeffrey Stern [00:57:42]:

Well, because I've gotten the privilege of working with you, and you do have this endless well of energy. How do you manage yourself throughout this whole process?

Leopoldo Peña (Presta) [00:57:56]:

My dog forces me to walk a lot on the way to you saw him on the way this morning here. I get a lot of energy from for solving problems, obviously, but talking to people, I think you land I, are complete opposites in this regard, that I'm a huge extrovert. And so now I'm lucky that my job allows me to talk to a lot of people about how to solve these things. And with it, I get very large pools of energy. So if I ever need to wind down it being alone, which I don't necessarily love, does deplete a little bit of energy to allow me to sleep, I think, in terms of what keeps me up at night, it's like thinking about new ways to solve these problems. Right? Thinking about the geo integration to see where the taco shop is, is like one random example. It's like, oh, my God, that makes a ton of sense. Why aren't we doing this? Or like, sources of alternative underwriting data or ways to distribute our products. Like, oh, we should have a partnership with the trade association. That's a great way to do it. It's those things which is, I think, the blessing and a curse of being a founder is your mind is never off. And so I was having this conversation over dinner with a founder in very much similar industry working on this, but in mortgage. Land he's like, yeah, sometimes I'm like playing with my kids, but my body is there, but my mind isn't. And so I think two words that I really like are like intentionality and presence. And particularly on the intentionality front, I try to be really intentional when I'm spending time doing something else that's not working on presta, whether it is walking my dog or spending time with friends. I think it takes a little bit of a hurdle to get over that baseline mental processing. That is what's my business doing. But then after that, it's just being intentional about being present.

Jeffrey Stern [00:59:44]:

I love that it comes from a place of creativeness and inspiration rather than of risk or fears. But how do you think about and try and manage the risks of the business?

Leopoldo Peña (Presta) [00:59:59]:

I mean, don't get me wrong, this is now because we closed a funding round. But prior to that, I was like, oh my god, my business is going to shut down. I'm depleting my personal savings on this because I'm not paying myself a salary. I'm paying people that work with me a salary, but I'm not paying. I think you're catching me in a really good point right now where we're like, hey, we're really fortunate to be in this position, and half customers and half funding and half traction. I think if you talked to me three months ago, I don't know what's going on. Three months ago, we weren't part of the techstars accelerator. We hadn't gotten term sheets or funding. It was just Peter and I and the people that work with us working towards this. And Peter and I kind of lightly freaking out. And I think life goes into the point of the pendulum. Life is just like one massive pendulum. And that was the point that we're at three months ago. And there when I was going to sleep, I wasn't thinking about integrations. I was thinking about how many more conversations do I need to have to close this funding round? And that's really scary. And I think in in six to twelve months of ground, people probably think about something really scary as well. It's like, oh, how do I scale our sales land? It's costing us too much to do this. I think having big sigh, big sigh. For me, having peers has been really helpful. Having community wherever you are, is really important, be it for enjoying food like you and I do, land other folks, or talking about difficult business problems and being able to see beyond where you are. The concrete example is Alex Hillary saying, why don't you sell the opportunity exchange? That's something, that an idea I would have never gotten if I wasn't in a community of peers that have been working through similar problems. They were thinking about selling a company that they hadn't shared that with me when Alex suggested it, but it came from their own thinking. And so I think it's really hard and lonely to build in a vacuum. I think having peers that either have seen similar problems, or it can help you think about those problems is the level of support that you need when taking this large risk that is building something new.

Jeffrey Stern [01:02:13]:

What are other things that we haven't touched on yet as part of this whole entrepreneurial process that you think are important?

Leopoldo Peña (Presta) [01:02:22]:

We haven't really talked about Cleveland that much.

Jeffrey Stern [01:02:23]:

We haven't talked so much about Cleveland. No, we can.

Leopoldo Peña (Presta) [01:02:26]:

Where you want to go with that? I mean, I think Cleveland has been an amazing place to be. I've intentionally stayed here. My partner lives in New York, and I miss her dearly. And I don't necessarily love flying until LaGuardia. And then getting to her place. Flying into New York is terrible.

Jeffrey Stern [01:02:43]:

No offense, but none taken. Yeah, it's got a little better.

Leopoldo Peña (Presta) [01:02:47]:

It's kind of a little better. But my point being is I'm very intentionally here because I really appreciate, appreciate the ecosystem, what it's provided me, and what I would love to give back to it. I think from that perspective, we were really keen on having at least some local investors in our company, and we have them, and that was a really important thing for us to say, like, hey, we're going to be building things in a fashion that's relatively different. Land we want you to be a part of it because you should be part of cool things happening in this town, and I should be partnering with people that are from here and want to continue to see success here. And I think the reason I say that is I've been here for six years, and so people have seen that I care and are willing to back us because of that. But I think it's for us, it's important to invest back in a city in that manner of saying, like, I want some local representation here. Land the way we're doing this yeah.

Jeffrey Stern [01:03:44]:

How have you because it has changed in just six years. It could be a long time, it could be a short time, depending on your frame of reference, but for me, it's felt like both of those things, but it's changed a lot. And I'm curious, having really just kind of navigated this whole process of working to put together around, but also really just having started a company here, where do we need to do a better job? Land just starting there, yeah.

Leopoldo Peña (Presta) [01:04:15]:

I could rant about this forever, and I always go back to your solo episode from what is now tens of episodes ago, but I think you did a really good job of highlighting some of the problems, or rather highlighting some of the potential solutions.

Jeffrey Stern [01:04:30]:

Opportunities.

Leopoldo Peña (Presta) [01:04:31]:

Opportunities. I think you could have been both meaner and kinder at the same time. You hit a pretty happy medium there. I think my biggest problem as an entrepreneur when being here was raising capital. Right. And I think there needs to be more capital, particularly slightly riskier capital. It's really hard to raise a preceder seed round in Cleveland. I'll say it. There's a lot of folks that fund rounds here, and we can talk about them at length, and I think organizations here are changing. I'm really excited in that direction, like Jumpstart is taking now. And Bethany George recently joined Jumpstart. I think she's amazing. And the folks over there do a good job, and I think they're turning a new leaf in an exciting way. But there needs to be riskier capital regardless. It's difficult to find a lead investor in the city land as folks that have raised rounds of funding prior can can attest that's. One of the hardest parts is finding someone who's going to say, yeah, I believe so fully in your mission that here's the majority of your funding round. That took us a really long time, and I don't think that exists in the volume that it needs to exist in this region.

Jeffrey Stern [01:05:52]:

One of the things also that you and I have talked about before and even just recently you've experienced is the nature of the founder communities within a city. Because one of the things that I am convinced of, if this podcast is a testament to anything, is that there is not a dearth of people trying to build really cool stuff here. But I think the ways in which people are building, perhaps in somewhat siloed situations, there's an opportunity for us as founders to do a better job as a community. And I'd love to get your perspective on that.

Leopoldo Peña (Presta) [01:06:27]:

I was thinking about that on the plane ride back here on Sunday or yesterday, rather just the same thing. But I've always thought of like, oh, it's sometimes hard to meet other founders in Cleveland. I think people in other cities meet more casually. Also founders don't have that much time, but in other cities they still meet land. I think part of it has to do with density in Cleveland. I think also, like, density of founders within Cleveland proper land, density of founders within similar situations land. The reason I say that is I don't know that many founders under 30, for example. I can name like five off the top of my head maybe, but that's it. I think there's a lot of founders later in their career, like evidenced by your podcast, if you do a demographic breakdown of who's on it skews older. It skews older. And I think a big part of that is the risk averse nature of capital in Cleveland tends to fund people later in their careers or with enough, quote unquote, like career validation to fund those entrepreneurs. And I think what happens then is you have folks who are in different stages of life and live farther from a central meeting place. And this is a theory from last night that I was thinking about. I like this, but if you're driving from a 45 minutes suburb to meet in a co working space, in Ohio City. That's like a big ask, right? Like, people work from home now, so you probably worked from your house as a founder asking you drive an hour and a half to go meet some people. You don't know where you're going to get out of that meeting, and so it makes a lot more effort. But I think that's one of the harder parts of a city like ours, where you favor older entrepreneurs and folks that now live farther away from a.

Jeffrey Stern [01:08:16]:

Central meeting location, a density component.

Leopoldo Peña (Presta) [01:08:20]:

If there was more founders, there'd be more encounters. Right. That's a big part of it. If you had an accelerator back here, you'd have that as a cohort source or two or three accelerators here, then you could have commingling of those. Right? Yeah, it's something I think we're missing.

Jeffrey Stern [01:08:40]:

Is density, because it goes back to your origins here at Flash Starts. At one point, there was more of that.

Leopoldo Peña (Presta) [01:08:48]:

Yeah. Their office was in Tower City, and there were like 30 something college interns. Twelve portfolio companies, multiple founders, each in just one space. You'd have speakers come in, or you'd have a happy hour, and like, a ton of people would come in, so you'd have a little bit more commingling. I think some of the difficulties they had was that an accelerator at that stage is really risky, and funding something like that takes a lot of work, and people don't necessarily want to take that risk.

Jeffrey Stern [01:09:15]:

Fascinating. I like that plain thought.

Leopoldo Peña (Presta) [01:09:17]:

It's a good one. Yeah. Well, we can keep it here in.

Jeffrey Stern [01:09:22]:

Cleveland, and I can prompt you with the closing question that we ask everyone, which is for your favorite hidden gems in Cleveland. But then I also want to ask you a brief detour to talk about ARPUs.

Leopoldo Peña (Presta) [01:09:37]:

Sure. Okay. I'll talk about my hidden gem in Cleveland that I know hasn't been set on this. Oh, fun. It's actually city dogs. That is my hidden gem of Cleveland.

Jeffrey Stern [01:09:49]:

And what is City Dogs?

Leopoldo Peña (Presta) [01:09:50]:

City Dogs is so it doesn't sound like it, right? But it's the city's kennel. It's the city's animal care and control, but they've done such a good job of branding it that it feels like the separate entity. They're like the friends of city dogs. They have their own booster. It's really well branded. They have a logo, so it doesn't feel like you're working with a city entity, which oftentimes people view as a negative. When you think of animal care and control, it's just like a bunch of rabbit dogs. They have a really friendly logo. It's called city dogs. They do a ton of events. The also have incredible volunteers. So to the point of, like, walking my dog, I have a 65 pound pit mix whose name is Chamo, which means dude in Spanish land slang, Venezuelan slang. And I love him very dearly. And I got him from City Dogs, and I had amazing experience adopting the counselor or like, adoption counselor who's a volunteer, walked me through and asked me a ton of questions, like, I was on a speed dating and then brought a ton of dogs. And that's how I was able to find him. But it usually doesn't feel this way in a kennel of a city. You associated with kind of dirty cages walking around. It's like, it's beautiful inside. Really friendly people. So that's my hidden gem. So if you're looking for a new best friend, go over there.

Jeffrey Stern [01:11:03]:

That's an awesome one. Yeah, Choma is pretty special, too.

Leopoldo Peña (Presta) [01:11:05]:

He is.

Jeffrey Stern [01:11:07]:

Land then I wanted to let you do a plug because I think it's also really cool. Part of just, I don't know, our Cleveland experiences isn't the support and the accessibility of people here. But you've done a food pop up now.

Leopoldo Peña (Presta) [01:11:22]:

Yeah, I appreciate that, Plug. I'm not one to plug that. I just really enjoy doing it, I think. Quick Cleveland reflection. Sometimes the things that you want out of this city don't exist, but you can build the which is not the same thing as other cities. We're an amazing podcast studio right now. Recording studio right now. Probably someone was like, oh, we should have this. And then they were like, oh, there's no place to record it. Let's build it. And then you build it, and people support me, and they're like, come and record their shows out of here. And it was the same for me. There's.

Jeffrey Stern [01:11:53]:

Baroque shout out to Evergreen shout out.

Leopoldo Peña (Presta) [01:11:55]:

To Evergreen thank you for having us. It was the same case for Aripas, which are both Colombian and Venezuelan, and both those are very different. Baroka does great Colombian ones out in Lakewood, but there's no Venezuelan adepas in Cleveland. So I was like, I want those, and I make those for myself. And then I was talking to my friends, like, we should explore some more people to these. And so in Cleveland fashion, we were going to hoopls down in the flats, and the owner, Norm, we were like, hey, we're thinking about doing this. Do you still not have a chef? And they're like, no, we're having a hard time. It's like all right, cool. Do you mind if we just cook out of your kitchen and bring a bunch of our friends? What do I have to do? It's like, nothing. Just change out the frying oil before we show up. It's like, okay, I can do that. And so then we just cooked out of there and sold out our first swap up. A ton of people showed up, people we didn't even know, which is amazing. And they were ordering our food. Land I think it's an example of Cleveland, where people will support you for trying and want you to succeed because you are doing something new, which I think in a lot of cities, people are kind of skeptical of new things or people building stuff. Oh, it's for a profit. It's for this. It's whatever in Cleveland they're like, heck yeah, that's amazing. Hence probably why we have so many things called the Cleveland something.

Jeffrey Stern [01:13:11]:

Yeah, there is a pride around the city and its support for what you're.

Leopoldo Peña (Presta) [01:13:17]:

Doing, but I appreciate you having me, sir. I think it's been a long time coming. It's also been amazing to listen to all of your podcasts and have such a shared journey here in Cleveland. I think my closing thoughts are that Cleveland is amazing. Entrepreneurship is really hard, finding community is really, really important and Cleveland is good at providing you with support, but you also have to go out of your way to build it. I miss a lot of the early community builders that we had here in the startup ecosystem at Buckles comes to mind and Anna come to mind. When I think about people who built a really strong community here and while not actively working on it anymore, I think they brought a lot to the system and so I hope someone out there too is really excited to continue to build community. And if you hear me land, you're like, oh man, I wish I could have more founders meeting, set something up. I'll show up and I'll bully a ton of my friends into showing up too.

Jeffrey Stern [01:14:10]:

Well, I appreciate as much you coming on. It has been a long time coming. I think you've shared a lot of Sage wisdom today. If anything Leo has said has resonated with you today and you would like to be able to follow up with him about it. How can they do that?

Leopoldo Peña (Presta) [01:14:24]:

You can find me on LinkedIn by my full name, Leopolopena. You can find me on Twitter by a similar name.

Jeffrey Stern [01:14:31]:

Everyone should do Twitter because Leo is an aspiring Twitter user now.

Leopoldo Peña (Presta) [01:14:34]:

I've had one tweet in the last few years and I'm getting back into it. Or you can email me. My email is Leo leo at let's press stuff. So letspresta.com that's all for this week.

Jeffrey Stern [01:14:50]:

Thank you for listening. We'd love to hear your thoughts on today's show. So if you have any feedback, please send over an email to Jeffrey at layoftheland FM or find us on Twitter at pod layoftheland or at sternfe. J-E-F-E. If you or someone you know would make a good guest for our show, please reach out as well and let us know. And if you enjoy the podcast, please subscribe and leave a review on itunes or on your preferred podcast player. Your support goes a long way to help us spread the word and continue to bring the Cleveland founders and builders we love having on the show. We'll be back here next week at the same time to map more of the land.