Hamza Shad: Great Hamza. Thanks Jim. It's great to be here. I'm an insights manager at Carta. And that involves analyzing our rich data set on startups, venture firms, and other actors in the private market ecosystem.

So I get to work with a lot of our rich data and produce analysis and write reports about what's happening in the market.

Jim Barrood: Excellent. Okay. Mellie, tell us how you got to where you are now. Take us from high school or college, or wherever you like.

Mellie Chow: So that was a long and winding road. I don't think there's a lot of direct paths into venture or angel.

And essentially it happens serendipitously. Where started as an engineer. So graduate of mechanical engineering at the University of Waterloo is one of five women in my graduating class at the time out of 80. And so from there went into consulting, so it tech consulting for Accenture, traveled the globe.

To every telecom k media, high tech company doing it infrastructure deployments at the time. And then from there, went back to business school. And graduated from Kellogg Schulich with my executive MBA, and launched my first venture as an entrepreneur in the food tech space called The Revolving Kitchen.

And at the time it was Ghost Kitchens or Cloud Kitchens in that category. And then quickly realized that market demand is everything and the market that you compete in matters. And when you have a niche market, sometimes margins are squeeze and it's too small and so quickly pivoted back to industry and the industry that I started my career.

And joined Comcast as an operator. So led and ran their competitive product research and strategy group, which meant we looked at every category that Xfinity, so B2C competed in and everything they tangentially, we're contemplating entering the market around. And so my team sat on a mountain of data.

And provide recommendations for go-to market strategies and market entry and the like. Awesome. And most recently have been, operating as a venture capitalist, as a venture partner at Archangel Axion, which is an early-stage Canadian IP focused fund for early stage startups.

As well as a board advisor at Techstars Toronto, and that is an early accelerator, one of the most active pre-seed accelerators globally.

Jim Barrood: Great. I, and I want to come back to that to so people understand those two organizations a bit better. Hamza, tell us about your story.

Hamza Shad: Yeah, sure. So I grew up in the great state of New Jersey, as Jim.

And from there I went to my undergrad in Chicago focusing on economics and policy and master's degree abroad at Oxford in international development. So I was really into global affairs and economic growth. Economic development. After finishing my master's, I discovered Endeavor, which is a really unique organization in the startup space, sitting at the intersection of startups and economic development, their whole ideas to support founders and entrepreneurs in emerging markets and developing countries.

To help stimulate local economic growth by having those local companies scale up, hire people, reinvest capital in the ecosystem the way that like, venture ecosystems do. So I thought that was a really interesting model of moving away from aid based development and more towards self-propelling economic growth through tech and through startups.

I was there for around three and a half to four years in a research role. So I got to interview and survey like hundreds of founders in that role. That's really what my introduction to startups and tech was. Before that, I wasn't. That, aware of or into the space. But that was a really solid introduction for me, just hearing from founders around the world about their challenges day to day and scaling up their businesses.

And, in the course of that role, we were following other organizations and also produce research on startups. So obviously Carta was one of them. My boss, my now boss, Peter Walker was posting a lot of. Data based reports and content on the startup ecosystem that I was following learning a lot from.

And when I saw that he was building out his own insights team at Carta, I thought it would be a great opportunity. And a year and a half later, here I am.

Jim Barrood: Wow. That's really interesting. So let's go back to you Melly. Talk to us about Techstars. Tell us about, for those who don't know what Techstars is, give us a, an overview of.

What it is and the history there and then also Archangel.

Mellie Chow: Sure. Yeah. So Techstars is one of the most active pre-seed investors globally. They started in 2006 out of Boulder, Colorado. David Cohen Brad Fell, David Brown were the original founders, and it started as a need to mentor and support.

Early-stage founders to build a network around the founder and provide them with as much guidance and support that they'll ever need to really accelerate the growth of an early stage startup tech startup. And so they run about, a couple cohorts per geography per year. And they are now global and in, in most cities.

And they the traditional program is about 10 companies get admitted per city per year. And they graduate and they get a check at the end of it. And essentially they used to write 120 k checks for 5%. Or 6%, sorry. Pre-money equity, and now they write 220 k checks to be a little more commensurate with com competition as accelerators are becoming more in more of a crowded space.

And so it's really about helping founders get from zero to one. And being an early advisor or, and an early support network for the founders. And so Brad Fell recently, also published a book Give First. And that's the ethos of Techstars.

Jim Barrood: Got it. And then Archangel.

Mellie Chow: Archangel is a venture fund.

It is basically a network of funds. There are four sub funds. Axion is one of them. Axiom focuses on early-stage Canadian IP based startups. So essentially anything with a tech moat or a moat around the business. And we're really there to fill a gap in the market where. There were few and far between Czech writers in the Canadian ecosystem to really help founders cross that chasm from zero to one.

And we often are I would say first check. Type of positions with our companies, so anywhere like growth beyond the angel family and friends round to graduate towards institutional and venture capital investments. And so since then we've since 2 20 20. We've written about 35 checks, or 35 made 35 unique investments into companies and across the tech stack.

So industry agnostic. And I would say we in over index on health tech, MedTech, biotech. Just because in the Canadian landscape, there's so much non-dilutive funding or Canadian sugar as we like to call it. And so these companies get pretty far along in terms of traction for relative valuation compared to other geographies.

And so that's why we really like those type of startups.

Jim Barrood: And I'm looking forward to circling back on seeing what trends you're seeing particularly in that space and Canadian space and the US space as well. Thumbs up. What about Carta? Tell us about Carta. Particularly for those folks who have never heard of Carta.

I want to understand what it is and how it helps the ecosystem

Hamza Shad: for sure. Yeah, so Carta is a private company. It's in the software space. It started more than 10 years ago as a startup, and now it's a unicorn. And the whole mission of Carta is to build infrastructure to connect private markets. So it started more than 10 years ago with a focus on equity and specifically digitizing stock certificates that were being issued to investors and employees.

But the goal was to get them online in a digital format. From there, the company started building out the entire cap table of a company, the entire, record of its ownership. Online and in a digital format, and that then enabled additional products, additional services to come up around that initial product.

And then over the years, Carta entered others. Aspects of private markets as well, like fund administration for venture funds and private equity funds doing their accounting portfolio, monitoring capital calls, et cetera. So we've been able to support the ecosystem from both the founder side in terms of cap tables and taxes, et cetera.

And also then the fund side of things for fund administration.

Jim Barrood: Got it. And how has it grown over the years? It's got, it's one of the biggest players now, is that correct?

Hamza Shad: Yeah I would say, we estimate that at least in the cap table business, we have like more than half of the market in the US in terms of venture backed startups, and that enables us to do a lot of cool things with the data, which is the purpose of my team, the insights team at Carta.

The Carta Insights team was created around four, four to five years ago by my boss, Peter, and we're able to leverage that data set on 50,000 plus startups in the US and Anonym anonymously look at the data to share industry trends, publish reports, and increase transparency when otherwise, it was a pretty opaque ecosystem.

Jim Barrood: That's great. I'm looking forward to getting those insights. But first tell us, is it global or is it mostly us? Talk to us about sort of the footprint.

Hamza Shad: That's a great question. At this point, Carta is very much a global company. We have offices in South America, the Middle East Singapore, Australia, Europe, and we're doing a variety of things in all of these places, including the cap table business and the foot administration business in different countries around the world.

Jim Barrood: So you, but mostly it's the US so you can give a sort of insights globally, but is it's mostly US centric, is that my guess? Yeah, sure.

Hamza Shad: Exactly. Because the vast majority of our customers are in the us. The insights we provide are, mostly US focused. That's where we have the largest sample size usually.

Jim Barrood: Got it. Let's get into that. So tell us what you're seeing. Is there any, obvious trends or give us a state of sort of funding these days. I know it's a challenging time, but give us a little more color to what you've seen, just say in the past couple years, or two or three years.

Hamza Shad: For sure.

Yeah. I think the big picture since the downturn of 2022 has been a bit of a bifurcation in the market between haves and have nots. With the haves really being the sought after AI companies that are raising giant rounds at inflated valuations. And on the other hand, it has been more difficult for a lot of other.

Companies, including companies that were around from before the boom and bust cycle where capital has been more difficult to obtain and there are fewer deals, fewer investors interested. So it's been this weird kind of, dynamic where there's these two trends happening at the same time.

Jim Barrood: Okay, got it. So is there. Some hint of better news going forward, or what are you seeing? Is there any sort of traction for the rest of the market outside the ai? Focus.

Hamza Shad: Yeah, for sure. I am optimistic. For example, we have seen, a little bit of an uptick in liquidity and exit events.

On the fund side. This year we saw DPI or distributions to limited partners increase in the past couple quarters. So funds have been able to. Either through exits or secondaries, find liquidity for their investors, which means that capital can be recycled to other startups and other opportunities.

And then on, the company side, we've also seen an increase in acquisitions, so m and as have been going up throughout the year. And we're also optimistic, that there's a lot of IPOs that are teed up for 2026 that seem exciting and then could also help trigger that kind of virtuous cycle of reinvestment once those exits are achieved.

Jim Barrood: Got it. But there's still a focus on the AI sector. So when do you see that sort of, let's see, spreading out to the rest of the ecosystem, non-AI companies, or do you have a sense for that? Because it, it seems as though, particularly if there's struggling entrepreneurs looking at funding yeah, it seems really tough.

Hamza Shad: It's a great question. We're seeing about like half of all capital being invested into startups, going into AI specifically. And in terms of the premium, the AI premium as we call it, we're seeing around 15 to 20% higher valuations on the AI side at seed and up to 30% higher at Series A. But I do think that, eventually AI will be integrate into the entire ecosystem. Whereas every startup will have some, use of AI at some level of their operations or their product. So the way you know, everything is now tech. Basically everything will be ai. So I do see that as a future trend.

Jim Barrood: Got it. I'm going to circle back to you about the venture firm, venture firms and that industry.

But Mely, talk to us about what you're seeing is that consistent? What you're seeing from your perch.

Mellie Chow: Yeah, it's always great to hear about it from a macro perspective, but on the ground, definitely AI continues to dominate early-stage investments and, every deal is pretty much an AI deal or at least ai.

Driven company, if not AI first, native. Then it's built on, some aspects with ai, efficiencies built into operations, et cetera. So very much still seeing AI dominating most of the deals. And also I think venture capitalists are being a little more selective in terms of deployments.

We're holding back on making a lot of small bets and concentrated like larger checks, concentrated around a few deals. So there's a bit more of a capital concentration and a lot of it is being reserved for prota. So essentially the Fallon on the winners doubling down on the winners in our portfolio and not necessarily a lot of new investments.

Although at Axion, I believe we did about seven, seven deals this year which is a bit fewer than some of our peak years. But it's still, it's still net new deal, which has been great as well. Testament for really strong pipeline. Essentially. There's no shortage of amazing deals at great, Val. Reasonable, more reasonable valuation than ever. So that's, hopeful. And then as you mentioned, there's no line of sight to when this AI bubble is going to burst. Essentially like the overvaluations or the premium for some of these AI first type of companies building deep tech.

But I feel like things are. Starting to become a little more normalized in that in this sort of AI first world, it becomes table stakes somewhat in terms of investor expectations. So that's the things that we're seeing. And of course, we're.

Adjusting to valuations as well. There's a lot of down rounds previously. I think valuations are coming back up, like I said, to be a little more normalized.

Jim Barrood: Got it. And I know you do some trends, reporting. Talk to us about the last year some of those trends that highlighted and how those have played out.

And then we'll get to the outlook in a few minutes.

Mellie Chow: I write a trends report and this started in, during the pandemic and was born out of necessity during my time at Comcast where we put my team because we are of our vantage point and sat on a lot of data. Was able to provide some strategic about around, what should we build because we were an organization full of engineers for Lab week, which is equivalent of the Google 20% time while we were all sheltering in place.

And so this trends report became the de facto standard for strategic bounds of what should we build in terms of innovation across Comcast NBC. Dreamworks, universal Sky, Fandango. And since then I've leveraged the same thinking and mindset in the venture world. And have published my trends report at Axion over the last two years.

And so I love talking about, I think ai as everyone does. In 2024 I predicted Agentic ai or gen AI assistance, I called it at the time, and bring your own AI sort of a bounds in the workplace. Last year, the evolution of that was a Gentech AI and multi-agent systems, so mass start setting their own goal.

And this year I'm really excited about talking about AI native, essentially agentic embedded and ambient. Where it's moved from agen being experiments to being part of core infrastructure at most organizations. And people are moving beyond just like process improvements and workflows and really embedding it into core decision making of departmental functions.

And having AI be. Your copilot co work partner, right? Helping you with guidance and advisory and all of that to get to faster decision making and process output. Awesome.

Jim Barrood: Hamza, what about you? Talk to us about what you're seeing as far as the next year or two trends in sort of the marketplace.

Hamza Shad: For sure. I guess I'll speak about it a little more from the macro perspective. I think I am cautiously optimistic about the next year. I think there will be a return to greater deal flow, more deals being made. Even though this year we did see more of a concentration of capital compared to last year.

In 2025 we're, seeing that the year will probably end five to 10% higher in terms of total cash invested than 2024. But on. Much fewer deals in total. So there was a concentration in fewer companies. I think next year that will ease up a little bit with a lot of the exits and liquidity that are expected to occur next year.

And then I also think this policy initiative, that Invest Act, which has gone through the house and is now sitting in the Senate, could really influence things in a positive direction for the venture ecosystem. Because it's going to expand who can be an investor through expanding the accredited investor requirements and also a few other changes in regulation around venture capital funds that will allow more investment and more people to participate in the ecosystem.

Jim Barrood: Can you sketch out what the new requirements will be? Or do you, do we not know those yet?

Hamza Shad: Yeah one of the biggest hurdles has been the accredited investor requirement, which requires an individual to have over $200,000 in income, or over a hundred or over 1 million in terms of net worth to just invest in private companies.

But what they're going to do through this act is allow people to qualify through an exam. So if they're, knowledgeable enough about the ecosystem, hopefully they'll have access to invest, which I think really helps expand and democratize entry into becoming an investor.

Jim Barrood: Oh wow. That's interesting.

Okay. And so regarding venture firms, venture capital firms, yeah. What are you seeing? I know there was, big sort of decrease because of the slowdown and as they say, a lot of tourists in the industry during the pandemic. What are you seeing as far as that dynamic?

Hamza Shad: Yeah, for sure. I think, interestingly, it mirrors a lot of what's happening with startups, which obviously makes sense.

But we also saw the boom in 2021 there, in terms of funds raising money and closing funds and new funds forming peaking in 2021. Falling off significantly since then, and it's been more difficult the past couple years, especially for emerging fund managers to recruit LPs and raise a fund.

There's been a concentration of capital on that side as well, where some of the biggest funds have found it easier to get LPs. But LP count across funds has been going down in terms of the median and. The anchor lp, as we call it, the one who writes the biggest check, is now representing a larger percentage of the overall fund maybe 20, 25% of the whole fund across the funds that we're looking at on Carta.

Jim Barrood: So the industry, there's calls that say the industry are in trouble. So is it in trouble or is it just going through a change?

Hamza Shad: It's definitely been in trouble for the past few years. It's been a tough time, no doubt. But like I mentioned, I am a little optimistic with some of the uptick in distributions that we've seen.

A lot of the expected liquidity and some of these regulatory changes in the coming months that I think 2026 is pretty promising.

Jim Barrood: Great.

Mellie Chow: And how do

Jim Barrood: you see it?

Mellie Chow: Yeah. I think generally the industry's evolving to become more mature, right? The, there's higher expectations of GPS and funds. Yeah. To be more sophisticated and discerning investors and have domain expertise and have go to market experience as an exited founder, that sort of thing.

Not only just empathy. For the founder lived experience, but also like domain expertise in the areas that founders are creating. And we're no longer like passive. Investors have a great idea, right? Like those days are gone, right? The expectation, the bar is just so much higher than ever before. I think mostly because of the democratization of the industry and all the tourists, like you said.

Out of the pandemic, during COVID where people were dabbling in this and valuations were frothy and at its peak and, there was lots of liquidity at that time. But I always say during a downturn and when markets shift. And become more mature is where, that froth just disappears.

And it really is for the resilient, for the grittiest and for the real players to endure. And those are the ones that will be left standing. And this is not an industry where, you, there are quick returns, like it is a long-term hold type of market, and you're betting on innovation over the long run and change.

And so it's patient capital and patient capital is not a quick return. Yeah,

Hamza Shad: That's for sure. I can just jump in. That's a great point that I would emphasize. Like venture really is a long-term game and it's getting longer from what we're seeing in the data. The typical fund, life cycle used to be 10 years, now it's closer to 12 to 15 years with all the, delays in distributions and exits that we've seen in the data.

Jim Barrood: That's right.

Hamza Shad: Yeah. That's.

Jim Barrood: Yeah, that's, and that's that puts pressure on LPs too, right? When you lengthen those time cycles, it's harder to get LPs who are that patient, right? So that's a challenge as well, but a reality, right? Just a reality of the market.

Mellie Chow: And also why the secondaries market is booming, right?

It's born out of necessity in terms of the need for liquidity. And, people aren't willing to wait 12 to 15 years for a liquidation event or an exit. They want to be able to move on to their next bet. And people tend to be very shortsighted in terms of what their conviction really is around certain technologies and innovation.

And so if that's the case, like you've got this really healthy and growing secondaries market. Where folks are, looking for quicker returns and liquidity events.

Jim Barrood: Got it. This has been a great conversation. We usually have just one thing, so I want to ask you, just give us one tip for entrepreneurs who are looking to raise money in this current environment.

Mely.

Mellie Chow: I always say when you ask for money, you get advice, and when you ask for advice, you get money. And so I think with entrepreneurs you really need to go into these conversations with the lens of building long-term relationships. And be patient in building advisory and a mentorship and ask for advice.

Ask for help, and be humbled and willing to listen actively and be co and be coached. And that's how you know fundraising ultimately becomes successful.

Jim Barrood: Got it. Hamza.

Hamza Shad: Yeah, I would say that knowledge is power. So my advice would be to equip yourself with the latest data from Carta, from other sources about the market so that when you go into those conversations with investors, you know what to expect, especially for your stage, your geography, and your industry, and that'll help you get a better picture, not only on the economic side in terms of.

Ground size, valuations, et cetera. But other more nuanced terms as well, like liquidation preferences and preferred participation.

Jim Barrood: That's a good point. As far as education about the, your investors that you're going after, it should be easier than ever now, right? To find the investors that will invest in your field or your area.

Are there any tools that you recommend or any resources that you recommend so people can entrepreneurs can find the right folks most efficiently and reach out to them?

Mellie Chow: I would say just do your homework, right? There's a ton of tools out there that you can research your investor prior and know who you’re talking to and ensure that I say the Stars, moon and Sunline it's not a real No. A, a qualified no unless you know they are somebody that's interested in your industry sector, in your stage. And geography as well as have dry powder. And if those four things don't align, then it's not a qualified no.

And like it was a no from the start and you just didn't do your homework. So definitely make sure you do your homework on who you're talking to and there's lots of tools out there like Crunchbase and PitchBook and Carta, et cetera. Yeah. Got it.

Jim Barrood: Hunter, did you want to

Mellie Chow: add

Jim Barrood: anything?

Hamza Shad: I think Melly said it very well.

I think there's, those tools out there for every industry. And founders can find, investors that are very aligned with their own focus by just searching online.

Jim Barrood: Got it. Okay. We usually end these conversations with a poem or a quote or a saying, Mely, what do you have to share with us?

Mellie Chow: Yeah, I love this quote because in a world where venture is a top quartile, overcoming the power curve game and I'm a strategist at heart and I love data. I always like to say it isn't how much you know that matters. It's what matters is how much access you have to what others know.

And so building that network and bridges. To get that asymmetric data or information to build moats differentiation and competitive, long competitive advantage over the long run is the key to success.

Jim Barrood: Wonderful. Thank you, Hamza.

Hamza Shad: I think my quote will compliment Mely pretty well. It's from Henry David Thoreau, who I read a lot of his work in high school and it's always stayed with me.

And the quote is, the question is not what you look at, but what and so I think that really highlights how individual perception and mindset influences your experience of the world.

Jim Barrood: Wonderful. Folks, thank you so much.

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