From Non-Dilutive Capital to Blended Finance, Driscoll Shares Hard-Earned Insights on Startups, Investment Strategy, and Market Shifts
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Show Notes:
In this episode of Mission Matters, host Adam Torres interviews Patrick Driscoll, Startup & Venture Capital Advisor, during the Milken Global Conference in Beverly Hills. They discuss the evolving challenges of raising venture capital, especially for emerging fund managers and underestimated founders. Patrick offers practical guidance on non-dilutive funding, AI in due diligence, and how to build a more sustainable startup model in today’s economic climate.
About Patrick Driscoll
Patrick Driscoll is an accomplished, mission-focused, innovative, and energetic leader with an entrepreneurial spirit and a genuine passion for supporting investors. With diverse experience in the global impact-driven startup ecosystem, Patrick thrives in spaces that connect startups with investors, accelerators, incubators, and potential hires.
Patrick brings a strong track record of cultivating, growing, and sustaining meaningful relationships with global strategic partners and industry thought leaders. Career experience spans roles in venture capital strategy, startup ecosystem development, project management, partnership management, financial analysis and modeling, due diligence, and other key areas.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on Be Our Guest to Apply. All right, so today my guest is Patrick Driscoll, and he is a startup and venture capital advisor.
Patrick, welcome to the show. Thank you. It’s my pleasure to be here. Alright, so for those of you that have been listening to this series for a long time this interview with Patrick is part of our, Milken Global Conference Coverage series, where we highlight and, showcase some of the participants and the attendees of the Milken Global Conference in Beverly Hills, California.
So, Patrick you attended was this your first time there? have you been to the conference in the past? give us a little bit of a background on your connection to the conference. For sure. Yeah. It was my first time attending Milken. I Congrats. Congrats. that’s a big deal.
There’s always a first. Go ahead. Absolutely. Yeah. I’ve been a fan of Milken for quite some time. I actually partnered with them while I used to work at the US Small Business Administration on a report the Los Angeles lending ecosystem, which was far, many years ago. So it seemed like it was full circle to come to this conference.
Ah, that’s awesome. So, for me, it’s one of my favorite things of the year. Like, talk to me about your impression and, how it went for you. Yeah. The conference was great. I actually helped out to plan aside lgbtq plus leadership event for the conference. So the, those that attend Milken are familiar with all these amazing side events that occur in addition to the conference.
So I helped put that together. A lot of lgbtq plus leaders who happen to be attending the conference attended at the conference itself. I personally am interested in kind of the venture capital and. Startup space. So try to attend panels relevant to those topics. And there was a plethora of that. And I got to engage with a lot of great leaders in both tech BC startup founders, et cetera.
There was a great panel on LGBTQ plus corporate philanthropy. The barriers to raising funds for LGBT LGBTQ plus advocacy specifically was of interest to me. And then Intersection of kind of artificial intelligence, AI and investing, and how there’s a lot of interesting things happening in how due diligence processes are improving or they’re adding AI to the process, to, speed things along, which was a really great conversation I got to participate in.
how did you get involved or originally get introduced to the VC space? Like how did your story begin there? Venture capital. I actually worked in international economic development. I was abroad for many years and then I served, as I mentioned, with the US Small Business Administration served.
I should say, I worked at the US Small Business Administration, so I had a panel there with the venture capital fund and an accelerator. At the mayor Garcetti’s office in LA at the time and heard what they had to talk about in regards to the innovation economy. Decided that’s where I wanted to be, and ended up applying for a job with the BC fund.
I literally knew nothing about it outside of the show, Silicon Valley, which still the show. And next thing I knew, I was on a plane moving to Mexico City to start working with a firm called 500 Startups, not 500 Global. And. The rest is kind of history. I’ve, run VC programs. I have my own VC fund. I’ve run accelerator programs for early stage startups and growth stage startups.
So I’ve done a ton of things and I’ve been an advisor for both VC fund managers and for early stage founders for many years. I. What do you enjoy about working in that space so much? And the reason I ask this, by the way, is ’cause you know, like you said, you didn’t know anything about until you got into it.
But now on the other side, obviously you’ve been doing it for a long time and you enjoy it. Phil, for those that are listening, that are looking at different things and maybe hadn’t considered that, what do you enjoy? What do you find so rewarding about working with startups and being an advisor? You meet truly the most interesting people that you’ll ever meet in your life, in my opinion.
Folks that are solving problems relating to climate change, relating to health. Yeah. they’re making businesses run smoother. They’re improving technology, aerospace all of these different sectors, and you’re constantly chatting with these folks that have created something to address a problem that is massively impactful and ideally scalable in the venture capital.
Mm-hmm. Space, even the investors themselves, oftentimes VCs have a fascinating background and are super dynamic and are eager to learn about new sectors. So it’s always mentally stimulating to be around these types of folks. Yeah. And it’s, it’s never, never a dull moment. Y Yeah, I, I have to agree with you on that, and at least from the entrepreneur side of things, I’ve seen that.
But let’s take it from the other side, which I don’t have that conversation quite as often from the emerging fund managers point of view, let’s say for, let’s say F1 what do you see on them? Like what do you see in that space right now? Like , what does it look like to be an emerging fund manager right now?
Yeah, it’s tough. I’ll tell you, it’s quite tough to be an emerging fund manager. There’s been a huge correction in market as, folks I’m sure are aware of since the 2021 heyday of everybody gets funding. You get a VC fund, you get a VC fund kind of thing, and there needed to be a correction, which.
In my opinion, and of course it’s happened, and now for first time fund managers or even those looking to raise fund two or even fund three, there’s a ton of conservatism from the LP perspective in market. they’re trying to de-risk in any way, shape or form. We have a lot of. External factors, like what’s happening with trade right now.
So it’s adding political risk to the equation, which is in addition to market risk, which I think we’ve seen a lack of liquidity in terms of IPO and M and a mergers and acquisitions for any sort of distribution to LPs. So LPs are kind of closing the accounts, so to speak which has been tough in a lot of emerging managers that were able to raise a fund, one for example.
Have entered into a death Valley kind of scenario where they can’t raise a fund two. And even those raising fund one, they’re closing on 10%, 20% of what their initial target was if they’re able, able to raise any money at all. So it’s, pretty tough. Hmm. And how does this affect the founder side of things, like in on their end?
’cause it’s hitting both sides. How does that affect them, like the earliest stage founder? Lack of money from LPs is top of funnel, so that’s gonna affect the distribution down the downstream to founders. And emerging managers are oftentimes the ones that have access to new markets that invest in different communities outside of the, quote unquote traditional founder persona.
Yeah. So if you’re not a graduate from Stanford Business School or MIT or one of these major universities, for example, mm-hmm. Spinning out of a massive IPO and starting your own company after working at like Google for 15 years, it’s really tough for these founders to, get anything off the ground because the emerging funds that we’re going to invest into them no longer are able to do so.
Mm. So it’s, it’s a whole kind of trickle down. Problems that if you can call it that. Yeah. So what, should, I founders do? what is your advice in terms of, I mean, no understanding with your answer that you just mentioned, it’s, not gonna be easy and it never is, but there’s times when it’s easier maybe than other times, but what should founders be thinking about?
Yeah, I’ll take it from two angles. Even fund managers, I think fund managers and founders, so differentiation. Is for fund managers going to be the make or break scenario? A unique thesis is no longer enough. To make you an interesting investment opportunity, you need to have something like proprietary access to the best, most kick ass deals.
That exists in market and there are many ways you can do that through network building your connectivity from prior jobs. And that if you worked at a, big tech firm and just know a bunch of founders that have launched really competitive deals, you could bring them into the fold. If you’re able to convince LPs that you’re gonna make them a ton of money through competitive deals, that’s the way to raise funds.
Right now, you also need to be able to add a ton of value post investment. So whether it’s introductions to talent, helping with their go-to-market strategy helping them with introductions to their follow on investors. And if you measure that impact that you’ve already done, then that’s a great way for you to unlock that LP capital as well.
So if you’ve done that through SPVs, if you’ve done that as an angel investor, these are great ways for you to kind of build that credibility in the space. And similarly down to founders, founders. The days of pre traction, pre-revenue investing, like, let me give you money and then you can build something and prove to me that what you have is viable.
Those days are no longer in effect. You need to have been able to either to bootstrap something if you’re not on multi exited founder who can easily raise, you’re gonna have to prove to investors that you’re able to build something without. Capital, whether it’s gonna be through bootstrapping, through non-dilutive funding, which I talk a lot about with founders these days.
Whether it be grants or, debt or even getting certified as an LG BT LGBTQ plus business, a women owned business, any, there are a bunch of different ways. Mm-hmm. We unlock other capital sources and then if you’re able to. Strategically through what that might look like to get you to a, spot where you are post revenue, you do a significant traction.
Your, your MRR is increasing month over month, you have great growth, then you could consider going to get VC funding. That’s the only way that you’re gonna be able to do it, unless, you know, I hate to say you’re like an AI company that can attract investment and then build afterwards, but every other sectors.
Than negatively affected by this kind of freezing of markets. Hmm. Go. Just maybe a step further into the non-dilutive funding side, because you did mention it, but I don’t want, I don’t wanna assume that everybody even understands, like those are options. Yep. Yeah, for sure. You know, I, I talk a lot about essentially grants debt.
Government and foundation programs, certifications and tax credits, and then some other kind of external non-equity funding opportunities. And obviously if you do non-diluted funding, you’re maintaining ownership over the company. You’re not giving up any equity. There are some warrants and things that come up, come into play in venture debt and some other some other as or some other components.
But for the most part, you’re maintaining ownership over everything. It’s a great way to compliment VC or bootstrap strategies because it adds validation in many ways. If you. Beat out 300 other folks for this grant application. That’s validation for you in market. And VCs want to see anything that validates you.
So if you’re able to get a ton of grant funding in many, in many ways, that could be thrown onto your deck when you’re raising VC funds later down the line. Oftentimes they’re mission aligned. If, if your company’s focused in something like sustainability or women’s health or even aerospace, there are grant opportunities and non other non-dilutive options for you to consider.
But that’s kind of what I, I like to talk about. And the blended thinking about not even just one or the other. Often folks think that if they don’t do VC, then they have to do grants. They don’t really want to do debt because they don’t wanna be in debt, quote unquote. But if you do a blended finance models and thinking about how you can.
use or leverage grants and debt or grants to get to VC funding or if you are even able to do it all without any sort of VC funding. So you maintain ownership over the company. People don’t even think about these on dilutive options ’cause the VC world is so quote unquote sexy and they, everybody wants that top line VC that’s gonna validate them and market and, and they can brag to all their friends and fellow co-founders about, but if, you can do it through blended finance and grants and stuff, then.
That’s like the dream because then you have the entire ownership of the company. Hmm, man, Patrick, this has been a lot of fun having you on the show and learning more about what you’re doing as a startup and venture capital advisor. That being said, a lot of startups, VCs, a lot of individuals that listen to this show.
If somebody wants to connect or to learn more about what you do or follow your journey, how do they do that? Follow me on LinkedIn. It’s Patrick Driscoll. I’m a venture partner at Gains as well, so I source deals over to them. So happy to discuss what that might look like. If you google Patrick Driscoll lgbtq plus venture capital, you can find me pretty easily.
Feel free to reach out. I’m always constantly meeting with founders and providing advice and go to market fundraising just blended finance models as well, so happy to, share. The wealth of knowledge. Perfect. And for everybody listening, just so you know, we’ll definitely put the, the links in the show notes, so you can just click on it.
Head right on over and connect with Patrick. And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show. Each and every day we’re bringing you new content, new ideas, and hopefully new inspiration to help you along the way in your journey as well.
So again, hit that subscribe or follow button. And Patrick, thanks again for coming on the show. Thank you.
