Summary 

In this episode Ajay Gopal, Partner at FRAMEWORK, joins us for the next episode of FRAMEWORK Focus.  Ajay shares his journey from Wall Street to Venture Capital, highlighting the importance of building relationships and. This conversation includes interesting insights on the B2B SaaS and FinTech landscapes, particularly the integration of AI.

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Transcript

Rhea Nijjer (00:00)

Welcome back to the FRAMEWORK Focus podcast. Today we'll be learning more about FRAMEWORK’s general partner, Ajay Gopal, and his insights on venture. Welcome, Ajay. Can you start by telling us a little bit more about yourself, your career story, and what led you to venture? 

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Ajay Gopal (00:16)

Yeah, absolutely. I grew up in a small town in Halifax, Nova Scotia. I went to university and college outside of Toronto and then started my career in New York on Wall Street. I spent the better part of about half a decade working on the street, trying everything from financial products and structured product development to investing in distressed and different assets across the US to try to rehabilitate those assets. From there, moved into venture after a short stint at a long short hedge fund, and spent the last part of almost 10 years investing in technology startups. I've been having a lot of fun. 

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Rhea Nijjer (01:01)

That's great. And you've had a ton of diverse experiences to say the least. What would you say are one to two experiences that shaped you the most professionally? 

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Ajay Gopal (01:08)

That's a great question. The one experience that I look at and that I still reference today in almost every single situation, every single company, and every single opportunity is the fortunate experience that I had to work at the beginning, through, and after the great financial crisis on Wall Street. Why I say that is because each of those time periods had distinct characteristics around how risk was taken, born, interpreted, and also managed. And I think about that almost every single day of working with portfolio companies around thinking through what decisions to make next, how to forecast what we expect is going to happen in those market environments that we're dealing with, and how to manage risk appropriately. So if I look back at my career from a referencing standpoint, I probably learned the most in those three to four-year periods of any given point in time that I've been able to use consistently throughout my career since. 

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Rhea Nijjer (02:17)

That sounds great. And for some of our listeners who may be looking for advice or early on in their careers, I'm wondering if you could go back to the start of your career, is there any advice you would have given yourself, especially in light of your experience in VC? 

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Ajay Gopal (02:29)

Yeah, the number one thing I would say is spending time building relationships with people. It's really easy, particularly at the very onset of your career, to focus on building skills, 

and focusing on the content in which you are effectuating those skills. But if I were to retrospect, look back, I think I under-indexed on trying to build a wider swath of relationships in both different industries and also the industry that I was practicing in. And it's not to say that I didn't do that at all, but if I were to look back and give advice to anybody who's starting their career today in particular, I would spend 5x to 10x more time indexing towards building relationships with a whole swath of different people. And the reason I say that is because as time progresses and your career evolves, you end up finding ways in which you will work with people that you met much earlier on in your career, both that are mutually beneficial. And so having those relationships that you can curate and build early on in your career can carry you really well throughout. 

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Rhea Nijjer (03:39)

Nice, thank you for that advice. I think that's something that's really important to hear and hone in on. I guess looking backwards, Ajay, you've been at FRAMEWORK since the beginning. So reflecting on your time here, can you tell us a little bit more about how and why Framework's investment thesis has evolved over time? 

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Ajay Gopal (03:54) 

Yeah, absolutely. I had the fortunate benefit of being part of the founding team here at FRAMEWORK and have been here since. And the reason, I would say, if I were to step back a little bit more as to why I entered Venture Capital, is I left a really amazing career in capital markets. I have obviously done very well. I had the fortunate benefit of also leaving a career in principal investing both in private equity, helping to turn around businesses, effectuate change for businesses, and doing some general good in terms of rehabilitating businesses and assets,

and then had again sort of the fortunate benefit of working at a hedge fund. And all of those experiences distinctly carry through unique skill sets that I apply sort of every single day, even today. But why venture? And why FRAMEWORK in particular? Venture because I have a deep desire to try to create impact. And technology, historically, and even today, has been one of the strongest catalysts to be able to provide impact over a longer period of time. And venture in particular has the ability to have a front-row seat, but also the first sort of entry point in which you are going to effectuate that change. And for me, that greater impact is greater than myself, than our partners, and even greater than our firm. And to be part of something like that is just the most exciting thing you could probably go into versus everything else, which, you know, pales in comparison - and FRAMEWORK, for us - I think I distinctly wanted to be part of the start was because we feel we do venture very differently. Leveraging data, we use data to inform, to help guide decision-making, to help provide insights into really the reality of situations. But then the second part of that is that it's the people. And we are really, really focused on making sure that we're building really strong relationships with entrepreneurs. We're never here to tell entrepreneurs what to do, but we do want to be a voice and a sounding board. And our hope is that we can provide unique insights that we wouldn't otherwise be able to effectuate. And so the combination of those two things is what makes FRAMEWORK really unique and different is that we have the best data that I think from an insight perspective, I think we build really, really strong and authentic and unique relationships with founders. And we do everything in anything we can to try to create success, either from a business development perspective, a talent-gathering perspective, or other ancillary relationships that we think cannot be valued. 

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Rhea Nijjer (06:57)

Jumping a little bit deeper into FRAMEWORK and the companies that we look at, a lot of the companies that we do look at operate in that sort of B2B SaaS space. How would you describe some of the key shifts in the market landscape in B2B SaaS over the, say, past five years? 

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Ajay Gopal (07:12)

Yeah, great question. I mean, the biggest thing that's been changing in B2B SaaS in particular is the incorporation of AI into technology development. So SaaS in and of itself is a delivery solution that allows users and businesses to be able to access software via cloud delivery and on a single instance platform which was a massive revolution from what existed before which was downloadable, executable, and install-based applications. And so now what we're seeing is that there is a much greater propensity to incorporate artificial intelligence solutions inside the software to really supercharge and enhance the utility of the software. And so that's been the biggest migration over the last five years, that almost every single SaaS solution in any vertical is now incorporating the use of AI to help better decision making, faster iteration, more automation, and it's really that next-level of what you would expect in terms of technology development as a revolution. 

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Rhea Nijjer (08:21)

It's really exciting to hear about just how dynamic the market is and I'm wondering more about what kind of trends and opportunities and trends you're seeing in vertical SaaS today? 

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Ajay Gopal (08:29)

Yeah, it's a great question. So the vertical SaaS market, again, I would sort of repeat a lot of what I said, which is to some extent the biggest change is that there are workflows that are being mapped. More and more so there's more domain experts who understand business processes and workflows that are joining startups that are then going to use AI to develop more automation. So that's where we see the biggest opportunity is that you see domain experts who understand the domain that they're in really, really well. They understand the workflows. They understand the user journey and the experience that those users want to feel. And they're partnering with technologists to really create the best-in-class solutions that create a lot more automation than ever existed before, a lot more insights, being able to pass data automatically. More and more of SaaS and specific verticals are becoming co-pilots alongside individuals and humans. And that's been the biggest change of success. So it's less of the technologist that's building a solution for a vertical. It's more folks from the vertical that are partnering with technologists to build co-pilots that aid, operate, and create automation for users. 

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Rhea Nijjer (09:54)

That's really exciting stuff. I think within FRAMEWORK, we take a look at a lot of FinTechs, and it's kind of a core focus in our thesis. Broadly, how has the FinTech landscape specifically changed and evolved over the last five years, and what kinds of opportunities and trends do we see in that space?

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Ajay Gopal (10:09)

Yeah, when we look at the FinTech market a little bit differently, historically, we spent a significant amount of our time focused on investing in exciting opportunities that incorporated traditional financial products inside software. And why is that a distinction is that it allows users and businesses to be able to adopt financial products through software that they use every single given day. If we corroborate what we talked about with vertical SaaS, you're seeing more and more vertical SaaS solutions that are co-pilots, that are working alongside users and businesses to automate more and more processes. One of the biggest areas around the potential for automation is data and workflow optimization in financial systems and records - and so one of the big thesis points that we're looking at almost every single day around FinTech is where can you create more automation of data, reconciliation, financial product settlement, and also then the incorporation of automated financial tools and products inside that workflow. So as an example, if you have a user as a business that perhaps is very, very dependent on a high degree of accounts receivable, has time delays in which they receive those receivables that turn into cash, are there automated ways in which a system could conceptualize that a timing issue will happen in terms of working capital and then provide and go out and acquire an automated facility that solves that problem in the background. So that's the next generation of where we think that there's going to be the introduction of usage of AI to optimize everything around financial flows. 

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Rhea Nijjer (12:01)

Nice. And I guess zooming back out, throughout your career, you've encountered a diverse array of industries and companies. And we talked a little bit more about what kinds of companies and verticals we look at at FRAMEWORK. What excites you specifically about the companies that you interact with here at FRAMEWORK? 

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Ajay Gopal (12:17)

Honestly, I will say the number one thing that excites me the most is the people who are running these companies. They are often the difference maker, the make or break around the success or failure of these companies. And the privilege that I have is to be able to work with people who are so innovative, who are willing to bend the curve, who are willing to test the limits of what technology can do, where it can go, and also test the limits of their own teams to be able to deliver against those things. That is probably the number one most exciting thing that I love about my job. And so it's less about being attracted to very specific verticals or just trying to make money for the sake of making money. It's more about trying to work with the people who understand their scope, and their spaces really intimately well to the point where they feel so compelled to do something that really changes the world. There could be nothing more exciting. 

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Rhea Nijjer (13:23)

Yeah, that sounds great. And I guess it's so exciting to be able to dive into tech at such an early stage and work with all these people who are on the cusp of innovation there. Can you share a little bit more on FRAMEWORK’s value proposition for companies within this thesis?

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Ajay Gopal (13:36)

Absolutely. So I think I alluded to it earlier in our session here today. But the number one thing that we focus on is a really strong grasp and understanding around data. Because we've been around for so many years, we've been able to see just the vast swath of opportunities in the market. We've been able to see technology that's been developed. We've been able to see how technology sunsets. We've been able to see both the successes, mistakes, and failures that technology companies have made over time. So that experience really brings a breadth of clarity to managing different situations when entrepreneurs are going to face them. That's probably number one, both in terms of data and also experience. And then the last part is that we bring and roll up our sleeves when entrepreneurs ask us to. So if there's anything around business development, pipeline opportunities, around being able to engage with corporations to be able to effectuate unique mutually beneficial opportunities, we're there to help. It's what we love to do, love to roll up our sleeves and try to solve problems. And if I were to say, know, us as VCs, we're problem solvers. And that's what we really like to do. So not here to criticize, we're not here to pass judgment. But what we are here to do is when we invest and commit, we're in, and we want to go and move into a phase in which we can actually help to solve problems. 

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Rhea Nijjer (15:08)

That's really exciting stuff. And then I guess my last question for you Ajay, if it weren't for VC or if it weren't for the career that you had, what is the career that you might have found yourself in?

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Ajay Gopal (15:20)

My goodness, that's a big question. I would have to take a pause there and reflect a little bit more about what that might be. Because for me, when I came into VC, it was sort of full circle of everything that I've ever done. Studying engineering and undergrad to investing as a principal investor in multiple different areas, having looked at so many different types of businesses, business models, assets, to then finally getting into technology investing is sort of the right thing for the way that I am and who I am. And so I just don't have a great answer for what the alternative would be because I don't feel like I come to work every day. It's more about making an impact and having fun. And every single day is amazing, and you learn such new things. So I'm grateful for and thankful for the career that I have. 

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Rhea Nijjer (16:22)

Thank you so much for all of your insight today Ajay. That's all the time we have for today and thank you everyone for tuning in. If you're interested in learning more about FRAMEWORK, visit framework.vc. Until next time. Thanks so much. 

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