Kimberly Caro, Author at Golden Seeds

How did she do it? A Q&A with Katherine Jin, Co-Founder and Chief Technology Officer of Kinnos

Posted on June 9, 2020June 9, 2020 by Kimberly Caro

Katherine Jin, Co-Founder and Chief Technology Officer of Kinnos

There’s an urgent need to stop COVID-19 from spreading and effective disinfection is the key. Studies have shown that improperly cleaned healthcare surfaces cause unnecessarily high rates of infections. To address that problem, Katherine Jin and two fellow Columbia University undergrads—Kevin Tyan and Jason Kang—founded a company called Kinnos during the 2014 Ebola epidemic.

Kinnos’s product, Highlight®, colorizes disinfectants so users can see when a surface is completely and properly cleaned, which can slash transmissions. Simply put, the company’s goal is to empower people to protect themselves and others through disinfection you can see.

Katherine recently shared her experiences and advice for other startups with Laura Davis, Managing Director of Golden Seeds, who led the due diligence team for Golden Seeds.

LD: Tell us about the origins of Kinnos.

KJ: In 2014, Jason, Kevin and I entered the Columbia Ebola Design Challenge hackathon to address the Ebola crisis in West Africa. Healthcare workers told us decontamination wasn’t being done correctly, and infections were rampant, especially among doctors, who accounted for one in 20 of those infected. Realizing there was a need for disinfection you can see, we came up with the idea to colorize disinfectants. The color shows when the entire surface has been covered and disinfected. It fades when the appropriate amount of time has passed (about 10 minutes in the case of Ebola).

We won a half-million-dollar grant from USAID, went to Africa and worked with NGOs. It was amazing and life-changing. We believed that this idea could improve lives around the world, not just during epidemics but in all healthcare settings where infections such as MRSA and C. diff are serious problems. That’s how Kinnos was born.

LD: What market need are you solving and how does your approach differ from others trying to address this need?

KJ: Our goal is to help people use disinfectants effectively to stop pathogens. Research has shown less than half of critical surfaces are properly cleaned, which contributes to hospital-acquired infections. Proper cleaning can reduce transmissions by up to 80%. Disinfectants are clear and tricky to use. You can’t see if the entire surface is wet, and if you don’t leave it on long enough, it won’t eliminate all the pathogens.

Our product, Highlight, is a patented additive color platform that comes in two forms: as a lid attachment to wipe canisters that colorizes bleach wipes as they pass through the lid and as a powder you add to liquid bleach solutions. It turns bleach blue, for example, and fades to colorless when decontamination is complete after a few minutes. It’s intuitive so it makes anyone a disinfection expert who can see when the surface is clean, regardless of language, education or training.

LD: What challenges have you encountered along the way? How have you overcome them?

KJ: As a young team, it was challenging to break into the notoriously difficult health care space. We had to put ourselves out there, which was hard for me personally; as an R&D scientist I preferred to hide in the lab. But by networking, keeping everything anchored to evidence and data, and evangelizing our product, we proved we were serious. We also gained gravitas by building an advisory board of key opinion leaders in our space, such as Bill Rutala, who helped write the CDC guidelines on hospital disinfection. The experts’ belief in us helped validate our legitimacy. We also did rigorous testing to prove Highlight didn’t reduce the potency of disinfectants or pose any risk to humans.

LD: What’s coming up next for your company? Any big milestones on the horizon?

KJ: In 2019, we soft-launched Highlight Wipes at several hospitals. We just closed a $6 million round of funding that Golden Seeds took part in, and our goal is to roll out a larger launch at hospitals in July. We’re hoping to play a more active part in reducing COVID-19 infections; some hospitals already use our powder product for that purpose.

We’ve also diverted some of our supply chain to make hand sanitizers, which we’re donating to hospitals and healthcare workers. Treatment is obviously critical, but so is prevention. At the end of the day, if you’re not cleaning properly, you won’t stop the epidemic.

LD: What advice do you have for early-stage founders about growing a team, fostering company culture or other issues you’ve had to address?

KJ: One of the coolest aspects of being a founder has been the opportunity to build a culture and team that reflect our values. If you can be proud of your company ethically, you’re more likely to succeed. Jason, Kevin and I are good friends who trust each other implicitly. We’ve built a culture that stresses respect and positivity, and discourages competitiveness and infighting. We’re all dedicated to pushing the research forward as a team.

In any startup, it’s critical for the founders to do what’s best for the company rather than their individual benefit. It’s also important to have a diverse team, with people from different backgrounds, genders and ethnicities. As a woman in a technical space, I’ve had to work extra hard to be taken seriously. Women entrepreneurs need to stand up for themselves. You have to be your own advocate, be proud of your work and project confidence.

LD: Tell us about your experience with Golden Seeds and its network.

KJ: Golden Seeds had been on my radar for a long time. When we first started raising our seed round in 2016, we tried to raise money from Golden Seeds. Although we didn’t achieve funding then, we received some great advice. For example, when I was pitching, one of the women investors pulled me aside afterward to say that I had a tendency to be self-deprecating, and that I could be more assertive and project more confidence. That kind of feedback and support from other women is invaluable.

Golden Seeds has also been really helpful in opening up their networks to us which has been incredible. It’s not easy to bring a new product into a hospital, but Golden Seeds helped legitimize us and made it easier to navigate the system.

Learn about Golden Seeds work.

How did she do it? A Q&A with Catherine Berman, CEO of CNote

Posted on June 4, 2020December 19, 2023 by Kimberly Caro

Header image credit: https://trulyoffice.com/

Many investors want to support causes close to their hearts but don’t, because conventional wisdom says you can’t make money investing with your conscience. A young company called CNote is proving the naysayers wrong. By leveraging technology, CNote is delivering competitive returns with 100% positive social impact.

The company is the brainchild of CEO and co-founder Catherine Berman, a financial professional with a passion for socially responsible investing. Catherine left a high-level corporate job to launch an investment platform that harnesses finance as an instrument for social change. Her company, CNote, provides individuals and institutions with fixed-income opportunities that support Main Street America – the movement focused on funding small business loans for female and minority entrepreneurs, affordable housing and community development in low-income areas. Catherine recently talked with Gwen Edwards, Managing Director of Golden Seeds, about CNote’s mission, the reason it’s working and the challenges it’s facing. Catherine also offered advice to other companies starting out.

GE: Tell us about the origins of your company.

CB: While I was a managing director at Charles Schwab, I was excited to see the growing interest in socially responsible investing. I noticed that almost 100% of the available products were funds and public equities. There were almost no fixed-income or cash instruments, even though fixed income represents a bigger market and is an important part of individual portfolios. After some research, I realized that it’s more complex than it first appeared. You can’t just screen out or select certain stocks or companies based on their approach, as you can in the public market. I discovered that the solution was using technology to unlock more supply and to allow for customization and value alignment. So I left Schwab and in 2017 launched CNote with a friend and fellow financial professional.

GE: What market need are you solving, and how is your approach different from how others have addressed this need?

CB: CNote provides fixed-income and cash opportunities for investors who want to align their portfolios with their values. We’re not just creating a “green” bond with a portfolio of corporations who are doing something good. We enable individuals to invest in the areas they care about. They can support small-business loans, affordable housing or community development while earning a solid return. By using technology rather than a traditional asset management approach, we can unlock billions of dollars in the fixed-income space. One way we’ve done this is by developing a network of community development financial institutions (CDFIs). These CDFIs are dedicated to providing affordable lending to disadvantaged people and communities, financing local businesses and affordable housing. Large banks have invested in CDFI for years but not without long underwriting cycles and pricing friction. In addition, despite CDFI’s strong 30-year track record, it remained challenging for any investor – be it foundations, donor advised funds, family offices or even individuals to invest in CDFIs. We dramatically simplified the process to invest in CDFIs and thus increased awareness of CDFIs and the availability of funds to these institutions. At the same time, our platform brings added value to the big banks, foundations and family offices seeking values-aligned investments alongside competitive returns. Investors bring more diversification and values alignment to their portfolios and more capital is invested in underserved communities. It’s a win-win.

GE: How has the pandemic impacted CNote?

CB: We have been a lot busier. It is clear to me that our work is more important than ever. CNote’s mission is to create impactful, compelling investments that drive more capital into underserved communities. Based on the early data we’re seeing, those kind of communities are being disproportionately impacted as it relates to bad health outcomes along with being largely cut off from financial resources. Our partners are on the front line of the economic response to this crisis and we are working tirelessly to get more capital into these communities. We saw the massive step back so many people took after the 2009 financial crisis. The need to help save local small businesses and the economies they support has never been greater.

GE: What challenges have you encountered along the way? How have you overcome them?

CB: One of the biggest challenges has been debunking the myth that you can’t invest according to your values and earn a competitive rate of return. Many institutions and individuals still think they can either do something positive or get a good return — but not both. That’s not true. Every product we create has competitive returns. Our goal isn’t to match the product you’re now using; we want to beat it. To gain visibility and build credibility, we’re publishing white papers, case studies and real-life stories documenting what we’re doing. If we report that Sierra Club trusts CNote to invest their money in line with their mission, that’s compelling. Socially responsible investing isn’t just a nice philosophy — it works in real life. We’re out there doing it, and our track record of returns speaks volumes: zero losses and zero defaults in four years.

GE: What’s coming up next for your company? Any big milestones on the horizon?

CB: Our focus right now is to bring on more foundations and socially responsible asset managers. We need to be able to move dollars to have an impact. We’ve brought on some marquee clients in addition to the Sierra Club, such as the Tides Foundation and the San Francisco Foundation. Additionally, we are adding more and more partners on the community side that allow us to build customized investments around themes like gender equality, homelessness and immigration. Impact investing is deeply personal and the ability to match your investment to the causes you care most about has a ton of potential to be a key differentiator for CNote.

GE: What advice do you have for early-stage founders about raising money, growing a team, fostering company culture or other issues you’ve had to address?

CB: A strong team is critical. Every member has to be an A-list player—not just functionally but emotionally. With startups, the ride can be so unpredictable that you need people who are resilient and emotionally healthy. You also need a strong advisory network. We have fantastic formal and informal networks that make us smarter. Whenever I encounter a question or a bump in the road, I don’t spend a month ruminating on it. I try to learn about it quickly, figure out who’s done it before and see who has the right answer. With an advisory board, that’s easy.

GE: Tell us about your experience with Golden Seeds. How has the Golden Seeds network been helpful to you?

CB: You’ve been an incredible champion and friend for years, Gwen, and I have tremendous respect for you. Your leadership skills were one of the things that drew me to Golden Seeds. Your organization’s strong presence in finance was another key factor. Having investors who understand a financial technology company like CNote is essential. Everyone who has been working with us has been very strong. Both our organizations focus heavily on investing in women, so our collaboration seems like a natural tie-in we’d love to continue and expand.

Learn about Golden Seeds work.

I was ready to launch my startup pre-COVID-19: Now what?

Posted on May 28, 2020May 28, 2020 by Kimberly Caro

Susan Nethero and David Nethero

For many eager founders who were gearing up to launch their businesses this year, many are left wondering if now is still a good time. Like many questions in entrepreneurship, there’s not a one-size-fits-all answer; instead it’s important to evaluate your business and the market before deciding whether now is still the time to launch.

This period of uncertainty requires entrepreneurs to hyper-focus on every aspect of their businesses to fully consider if now is still the right time to launch. One of the most important things to consider is to evaluate how COVID-19 has impacted your specific industry. As we all know by now, some industries have been affected far more than others. No matter how passionate an entrepreneur is about her idea, it is essential to evaluate what the demand will be when you go live. Is your industry open for business? And if so, will customers be willing to listen to your great idea? Focus on the potential demand for your product or services in the near- and medium-term, which means while the economy and the industry recover.

Some industries aren’t only surviving the pandemic – they’re thriving, which could be a good sign if that’s your industry. Telemedicine and telehealth companies are showing incredible promise and value during this time, as is any service that can be provided virtually or remotely. We’re also seeing an increase in wellness classes or services being offered virtually – from nutrition counseling to workouts.

Food delivery and delivery services in general are also doing quite well at the moment. Our daughter’s company, Garnish and Gather, is a hyper-local food delivery service in Atlanta that works exclusively with farmers in north Georgia to deliver groceries and meal kits. For those farmers who had been selling to restaurants, now they have a place to sell their crops and local families have farm-fresh meals and produce delivered directly to their homes.

At Golden Seeds, we’re also seeing educational companies thrive during this time. Golden Seeds-funded startup Little Passports creates award-winning subscription kits to help encourage kids’ passions for learning about the world. These are companies focused on providing learning opportunities for children that are instructional, or entertaining products, crafts, hobbies and language tools.

Even if you’re in an industry that’s doing well, consider if your potential customers will be willing to purchase your products or services. Now might not be the time to launch in certain industries, such as travel, that are down as much as 90% right now. It may also be prudent to delay an equity raise in certain industries until that industry turns the corner. By waiting, you could likely have more investor options and possibly better terms.

Are you ready to launch? COVID or no COVID?

It’s critical to evaluate your company’s viability through the lens of COVID-19, but it’s equally important to first evaluate the viability of your product or service even if there were no COVID. While many of us are hopeful for a swift recovery, certain perceptions may not go back to the way things were pre-COVID.

For all other businesses – not the ones who are either directly benefitting or directly impacted – which is likely most businesses, you have to take a hard look at your fundamentals. Every assumption of your business model should be reviewed and challenged. Be prepared to honestly answer the following questions:

How unique is your product or service? How do you differentiate versus the competition? Do you have proof of its efficacy? What about the landscape – has it changed since COVID?
Do you have a minimum viable product? You may have been ready to launch on all fronts before COVID, but now is the time to examine how the current situation may have altered near- and medium-term opportunities.
Does the pricing you anticipated for your product or service still hold up in the new world? You may have previously carefully researched pricing, assessing the demand and the competition to arrive at your pricing, but you must now assume those assumptions have shifted.
How long do you expect it will take to complete a sale? Has this changed since COVID? Under the best – and the worst – circumstances, how long will it take to generate traction? This is especially important if your industry has been hit hard by COVID; you must be realistic about revenue expectations.
Are your assumptions about your supply chain still relevant? If you were going to rely on supply chain partners for delivering certain products for services, assess the health and viability of those companies in the reality of COVID.

Still ready to launch? Learn your options

Knowing the headwinds ahead of you, if you’re still determined to launch, you have options. It’s important to think outside the box and be creative in ways that you fundraise, and, if you have a product or service ready to launch, distribute.

When it comes to fundraising, first examine how much money you really need. If you pursue raising outside capital, determine if you could make progress with a smaller round than you initially planned. Perhaps you can stage the launch or bootstrap the launch, or consider raising debt rather than equity. Have you tapped into your personal networks? Friends or family could be a way to gain capital to allow you to make some progress before you go for outside capital.

Research available grants or loans for which you may be eligible, including what’s available through the CARES Loan Program. There is more money available today through low-interest, government-backed loans than ever before.

Crowdsourcing through networks like Kickstarter or Indiegogo can be a great way to fundraise while generating sales and getting valuable feedback from customers. Generally, crowdfunding is a good option for those launching a product rather than a B2B service or SaaS product. If you have a customer-oriented, tangible product, crowdfunding could be an excellent avenue for you.

Think about how you can work with suppliers/partners to support your cash flow. When we were running Intimacy (a bra-fitting company founded by Susan), we realized in 2001 that we had much of our cash tied up in inventory. We found ourselves in the post 9/11 recession. We had to consider inventive ways to grow our top-line and produce higher sales while owning less inventory. To reduce inventory, we developed innovative models where we purchased smaller quantities more frequently netting an increase in cashflow. We found that a great option for this increased cashflow was to work with our suppliers on payment terms, figuring that it was in their best interests if we succeeded. In our case, we offered to make earlier-than-usual payments for inventory, for a hefty discount. We continued this even after the recovery as an inventive way to free up cash and increase margins. Is there something similar you could offer your suppliers to help free up cash today?

Lastly, but perhaps most importantly, seek out people or organizations who can give you valuable advice and insights. As angel investors, we have often met entrepreneurs who weren’t a right fit for us to invest in their companies, but we were still happy to connect them with the right people who might be a better fit for them.

At Golden Seeds, we also host Office Hours, now completely virtually, that gives entrepreneurs access to valuable tools and resources for raising capital, as well as free, 15-minute one-on-one break-out sessions with investors. We host them for Atlanta-area entrepreneurs, but Golden Seeds chapters across the country host Office Hours in Arizona, Boston, Dallas, Houston, Miami, New Jersey, New York, San Francisco and Silicon Valley.

If now is still the time to launch, know there are going to be some seriously strong headwinds with which to contend. Entrepreneurs, in general, need to be able to articulate their startups’ value, and this has never been more important than it is now.

Learn more about Golden Seeds. Read more of our Golden Seeds blogs.

A call to action: What boards must do to help companies and CEOs cope with the Covid-19 crisis

Posted on May 26, 2020May 26, 2020 by Kimberly Caro

Kathryn Swintek

Editor’s note: As businesses grapple with massive change, two of the Managing Partners of our Funds – experienced investors and board members of both public and private companies – shared their advice on the new and expanded role that boards must play.

Anyone serving on a board today knows it’s anything but “business as usual” in a world transformed by the pandemic. Companies of all types and sizes must adapt to survive and function effectively. In this environment, the role of the board of directors has become even more critical as they’re called upon to help companies and CEOs deal with extreme challenges.

Many CEOs may find themselves struggling to manage unprecedented and stressful situations, and they need a sounding board to help them absorb news, assess needs and assign priorities — and it’s often up to board members to step in and help during this critical time. Board members often serve as trusted advisors and coaches who can brainstorm with CEOs about problems and solutions, enabling them to project an air of calm leadership.

This partnership is vital at a time when rapid change is the norm, feedback loops are accelerated and urgent decisions must be made quickly. Many boards are holding meetings much more frequently – and sometimes less formally – to review pressing matters such as financial forecasts, funding needs and succession planning for business continuity.

Here’s a look at how four essential board responsibilities have expanded or changed during the current crisis.

Risk management

Risk management is always important, but it’s become a top priority not only for a business but for its board. Members need to be alert to any new and increased risks and ensure that a company is addressing them adequately. Here are five key areas to consider.

Employee risks: Health concerns loom large, with the risk that employees will fall ill. In addition, with schools and daycare centers closed, parents are called on to home-school their kids and care for preschoolers at the same time they’re trying to work remotely. That’s taking a toll on employees both personally and professionally. Reduced headcount because of layoffs or furloughs is also hurting productivity.

Cyber-risks: With most employees forced to work from home, data is traveling back and forth over home networks that lack the firewalls and tight security of the workplace. Cyber-criminals have been quick to take advantage, with more hacking and phishing attempts that could compromise security.
Credit risks: Many businesses are closed or curtailed, increasing the likelihood that some customers may be paying more slowly or not at all. In addition, suppliers may be unable to deliver goods or services critical to a business, disrupting operations.
Business continuity risk: If the CEO or other key leader becomes ill, companies—especially early-stage businesses and those with lean staffing — might find it difficult to manage. Succession planning to address this possibility is imperative.
Supply-chain risk: Do your companies have a plan if suppliers they rely on for products or services suffer disruptions, affecting their ability to meet production standards?

It’s incumbent on the board to help CEOs constantly “scan the horizon” to monitor for these risks and to make sure they’re regularly addressed at meetings and in informal discussions. The next step is helping to develop a plan to mitigate these and other issues as much as possible.

Strategic planning

Deb Kemper

Planning is exponentially more difficult when dealing with a huge unknown: when and how the economy will re-open. Boards must acknowledge that uncertainty and help the CEO think through multiple scenarios — ranging from best case to worst — and appropriate responses.

This isn’t a one-and-done situation. Constantly changing conditions demand frequent updates, reviews of prior assumptions to see if they remain valid, and regular assessments of the impact on revenues and expenses.

It’s important to maintain an ongoing dialog between the board and the CEO and to keep it constructive. Boards can play an invaluable role in providing CEOs with more assistance, sharing some of their burdens and bolstering their position as a capable leader. A calm, confident CEO can better manage the anxieties of teams facing constant and rapid change.

Financial planning (fiduciary responsibility)

There are more unknowns than usual, so boards will have to be more involved than ever in assessing revenue and expenses and helping the CEO decide on appropriate expense levels.

Boards must be prepared to step in if a company is not meeting its revenue and cash goals, recommending any actions needed to prevent mounting debt. Adjustments might include cutting expenses, determining whether any commitments can be cancelled or deferred, and developing more realistic plans for revenue outlook.

It’s also necessary for the board to keep an eye on the risks outlined previously. This includes credit risks and problems with receivables if clients are delaying payment, as well as potential disruptions to the supply chain, so they don’t negatively impact revenue streams.

In normal times, budgets are typically reviewed quarterly and forecasts are updated as needed. But now, with the deluge of new, meaningful information coming daily, boards may be reviewing new forecasts monthly or even more frequently.

Fundraising strategy

It’s possible a company will need to raise capital to get through this difficult period, so helping develop a funding strategy is a critical part of the board’s role. Ensuring adequate liquidity might mean raising capital, and it may be necessary to consider new terms for doing so and/or financing structures. Board input and brainstorming on these matters can be very helpful.

Once the work on revenue outlook and expenses has been done and there is some clarity on the worst-case scenario for cash runway, the board can help the CEO plan a fundraising strategy. Points to evaluate include: amount of capital needed, what funds will be used for, how much time it will take to raise the capital, how long it will last and the capacity of existing investors. The board needs to assist in evaluating the terms of that round of fundraising, including an appropriate valuation to arrive at a price the market will accept.

In addition to raising capital, it’s important for the board to make sure the CEO is aware of other funding sources, such as government grants and SBA loans. The board can ensure the company applies for all applicable funding and explores government resources that can help.

Stakeholder communications

Now, more than ever, it’s critical for a company to communicate with all its stakeholders, adapting communications for each group in terms of frequency, content and tone. It’s become essential for boards to make sure this is done well. Boards can guide CEOs on best practices for communicating with employees, shareholders, clients, suppliers and the board itself.

At a minimum, the board should have confidence the company has identified all stakeholders and has a plan for communicating appropriately with each. That includes determining the appropriate level of information shared, the right tone and the best timing. Given that the staff is one of the most important stakeholders for any business, the board will want to know how the company is managing its employees remotely and provide guidance as needed.

Times have changed, and the challenges are new and many. In response, boards need to rethink their evolving roles, take on new responsibilities and adapt to current conditions to ensure the survival and health of the companies they serve.