SPEAKER_00: Okay, everybody, it is another edition of This Week in Climate Startups. Before that, though, we've got VC Sunday School, and today we're talking pro rata. Not going to lie, it's a little bit spicy. Just don't touch the pause button right now. Then I interview Climate Check founder Cal Inman. Basically, his company assigns real estate a score based on climate risk, whether it's fire, flood, drought, what have you. And they're kind of blowing up in the real estate space. It's going to be a great interview and a great show. Stick with us.

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David Friedberg: All right, everybody, it's time for VC Sunday School. This is everybody's new favorite segment of the week.

SPEAKER_12: Molly is, you know, in her third month now, I think, of meeting with companies and becoming a VC. And she asked me questions.

SPEAKER_14: And so I try to answer most candidly as I can. What's on your mind this week, Molly?

SPEAKER_15: Yeah, I mean, this job gets more interesting every day. I have a question about pro rata and super pro rata.

SPEAKER_00: Yeah. And why some investors might warn founders about that or even against that. So, like, help us understand what that means if people are really brand new and then why it might be a problem.

SPEAKER_20: So let's start with what pro rata is. If you own 10% of a company and then they go raise another million dollars, you get to be part of that fundraising if you have pro rata. Pro rata means you get to keep your ownership percentage in the company. So let's say you own 10% of the company. They go raise a million dollars. You get to be 100,000 of that 1 million. If they go raise 10 million later on, now you get to be 1 million of that 10 million.

SPEAKER_12: What super rata is, is super pro rata is a term that can be negotiated in a deal where somebody says, hey, I want to put $100,000 into your company and I'll be the first 100,000.

SPEAKER_21: I'll take all the risk. But when you raise your next round, I just want to be able to do 500K in it or 25% of the round or half the round because the reason I'm putting money in here and taking all this risk is I want to downstream have the ability to put more money in. So I've been doing this for a long time with our accelerator companies because we had an issue, we would accelerate a company, people would look at our reputation and say, Jason's great at finding companies, his team's awesome at running the accelerator.

SPEAKER_20: I'll sweep in, look at the seven companies graduating and I'll just pick the best one and I'll give them a million dollars and then I'll own, you know, 12% of the company and J Cal will only own 6%. That seemed profoundly unfair to me, so I said to founders, hey, if you join our accelerator, we will, if you graduate and everything's on the up and up and you're, you know, there's no fraud, let's say, or no problems, we'll do up to half your next round or 500K. This is called super parada. This gives the founder the ability to come into their fundraiser and say, yeah, J Cal's in, he's going to syndicate it. We've got a certain amount of money available. And in fact, in this last accelerator class, we went to all seven companies and said, does anybody want to raise money? These are very nascent companies and we'll put in an extra 500K or 750K, I think at an $8 million capped note. And five of the seven said, yes, two of the seven were already raising at a higher valuation and we didn't want to screw up their existing plans. So essentially a hundred percent of people who already weren't closing deals at a higher valuation took the deal. This isn't a founder's best interest. You might've noticed why Combinator did something similar six years after I came up with this concept. Now, who would be annoyed by this? You recently had somebody who was like, I don't like that. People will not like this if they want it to take the whole round. So it gets pretty sharp elbowed as things go on. What are sharp elbows in our industry? It basically means people want to take all the equity and they don't want anybody else to be able to be in the round. And some people with large funds will throw their weight around and say, I'll put 10 million in the company at a $50 million valuation. Everybody's offering you 30. We both know the company's not worth 50, but we'll pay this high price. Oh, and yeah, maybe we'll let you sell a million dollars each in your stock. Basically bribe the company as people have referred to it on this program.

SPEAKER_14: And it's pretty intellectually honest. It's a bribe in order to block other VCs.

SPEAKER_21: So it gets a little cutthroat for the best companies. And that's why some people are jealous of our super pro-rata rights or some people were grumbling. A lot of seed and angel funds that were, you know, feeding at the trowel of Y Combinator. You saw them all freak out when that announcement came out. Like, oh, wait, I'm putting 350, 500 K in. Now, if there's four of those slots and Y Combinator just took one, I now have a 33% less chance or a 25% less chance of getting one of those slots.

SPEAKER_14: Got it.

SPEAKER_28: So effectively, so it is good for the founder in that it's guaranteed money, right?

SPEAKER_00: Like we're saying if we're in, then we're in and you have guaranteed money. It does mean that fewer slices are available. And so you, so when other investors are like, well, that's not fair because you already locked this up. Yep.

SPEAKER_12: And I have a very simple message for them.

SPEAKER_21: Go do what I do. Create Founder University. Land Molly Wood as your co-host. Do 1,300 episodes of This Week in Startups. Do the launch festival for free for 10 years with 15,000 people coming for free. Hustle harder and get into deals earlier.

SPEAKER_12: Do your own accelerator. Oh, wait, you don't want to work that hard. Okay, so stop complaining. I earned my slot. You don't like the fact that I got better rights than you. You don't like it, then get in earlier and support founders more. The end.

SPEAKER_34: Period. And that is VC Sunday School, friends. You have been taken to church. That's it.

SPEAKER_12: I'm sorry. I'm not. Listen, I'm at the point in my life where when people complain, I just look very deeply at their complaint and I say, what can I learn from it? And you know what I learned from this complaint that some people have? Stop whining and work harder. That's it. There's a lot of people who get in a free ride. If you go to Y Combinator and they built that huge juggernaut or Techstars, they built that huge juggernaut and they're willing to make that 100K bet on the company before you are and you are drafting off of Y Combinator or Techstars or my filtering process and we get to own 10% and now you're complaining because you don't get to own more than Y Combinator, Techstars or us.

SPEAKER_20: Sorry. Start your own accelerator. Let's see you do it. It's enough. It's enough with the complaining. This is a competition to see who can support founders more. You're losing the competition. That's like somebody being like, you know what? Steph Curry hits too many threes. I can't hit threes. So can we make threes worth 2.5 points? Or can we go back to having no three-point line? No. Get in the gym. Shoot 1,000 shots. He did it. He figured out how to hit a logo shot. And this next generation has figured out how to hit logo shots. If you don't like it, then go play in the YMCA. But this is the NBA. It's enough complaining from you people. Period. I'm so tired of it. Everybody's such a crybaby.

SPEAKER_19: Do you notice that everybody's a crybaby now, Molly? Am I losing my mind and becoming a grumpy old man? I'm noticing more of it. Yeah, I am. I'm noticing more.

Jason Calacanis: Is there just for, just to play devil's advocate, is there an advantage for a founder to having the ability to have more investors in a company?

Chamath Palihapitiya: Yes.

SPEAKER_12: There's, if you have more people voting for you, as Ryan Breslau said, like that is a way to block people from investing downstream in your competitor. And you have more people rooting for you. So when you send an update to 500 investors or five, and you say, I need to meet somebody at Disney, that's the power of the syndicates. When we had a company literally wanted to meet people at Disney, they emailed their syndicate. They had 150 or 200 investors over multiple syndicate rounds. There were two or three people who worked at Disney in the syndicate or had previously worked. And there were people who knew the contact that CEO wanted to meet. So that's the power of syndicates or having multiple people on your cap table. So yes, more people equals better. That being said, you have to manage people. You have to collect signatures. So the reason syndicates have become so popular and people run SPVs like founders will run an SPV to collect their angel investors into one unit. So the one item capital, so you don't have to collect a lot of signatures. So that is one mechanical detail of why, you know, somebody might say, you know what, I'm just going to have two BCs do this. I don't want to have 10 angel investors and, you know, five syndicates and whatever, because I have to collect signatures. And so that's where the concept of major rights, a major investor comes in. Sometimes you just have to clear certain rights with your major investors. People will put in over 250. So you get less rights if you put in smaller amounts of money.

SPEAKER_14: And that's just a mechanical legal issue. But yeah, I mean, having more investors is generally better because they'll be supporting you and blocks them from investing in other people.

SPEAKER_00: So in theory, if we came along and we were like, we scooped up 500,000 and you're small enough that you're only raising one and a half million, then that would potentially impact your ability to have a lot more investors on your cap table.

SPEAKER_18: Yeah. So let's say two seed funds would have taken 250 each instead of us taking the 500. Let's say we didn't have that right.

SPEAKER_12: And we didn't keep investing. And we try to get to 10 to 20% ownership in our winners. And we now are investing in companies. We just put six and a half million dollars from our syndicate and our fund into a billion dollar company. So that was the largest investment we ever made. We protected our pro rata. We actually went even a little super pro rata. We got like maybe a quarter of a point more in the company, which seems meaningless, except if it turns out to be Google or Uber. So, yeah, I think you could then argue, well, you'd have two. But those two, then they need to fight for getting that slot. And here's the thing.

SPEAKER_14: Well, if you are in our portfolio, you might be interviewed by Molly Wood or Jason Calacanis on This Week in Startups.

SPEAKER_12: Or we might be able to introduce you to, you know, I can bring you into the room and meet David Sachs, Chamath, Friedberg, Bill Gurley. I might be able to walk you into Sequoia, which I do with my founders. Like, this is a competition. Yeah. This is not socialism. This is capitalism. It's a sport. And we at our firm want to be the best investors in the cap table. If your, you know, seed fund doesn't have enough value, that's on you.

SPEAKER_20: You need to look in the mirror and say, how can I provide more value? It doesn't have to be a podcast like I have or we have. It doesn't have to be an event series like we have. It could be you're great at hiring people. It could be you're great at marketing and growth strategies. It could be you're a great product manager. You know, Sachs is a great strategic thinker. He understands stats really well. And he also is a great operations person and product manager. You get Sachs on your cap table. You got a crazy product manager with a huge network. I mean, it's going to go well for you. If you're some new seed fund in the world, well, guess what? You're not beating David Sachs or me into an investment at this point.

SPEAKER_12: Just like I'm not beating Sequoia. I'm not sitting here crying about Sequoia. You know, like, okay, I'm some up and I'm an up and coming investor in my second decade. Do I think I deserve to be Doug Leone and Bill Gurley? No. Do I think I should be competitive with Friedberg, Chamath or, you know, whoever? Yes, I do. I should be in competition with them to get on the cap table. And then you can always collaborate, Molly. So if there's some seed fund who's like, hey, J. Cal, I really want to get into this company. Well, call me up and get me into a deal. I'll get you into a deal. If you can tell me what your value is going to be of the company, I'll go to bat for you. I do that all the time. I have funds that call me and they say, J. Cal, this is oversubscribed. You put a good word in for me with the founder. I'm trying to get a slice. And I do that for people. People do it for me. Yeah. So build your network and be, be more competitive, provide more value to founders.

SPEAKER_15: And founders, founders go founders optimized for quality over quantity. Speaking of, uh, Chamath, Friedberg and Sachs, I think they might be waiting for you. That's right.

SPEAKER_20: I got to go do the all in pockets. Let's see if we can get a podcast out this week. I, you know, I, I, it's quite awesome.

SPEAKER_62: I want, no, no, no, no, I'm like, this is me doing a Homer Simpson into the bushes.

SPEAKER_65: I have a gripe about the all in podcast. I don't want to know. You're in proximity to that. Aren't you?

SPEAKER_20: It's like, it's like me asking you, like, oh, you know, I was listening to Kai Rizdahl the other day and Kai said this. Can you talk to him about blah, blah, blah. Can you talk to Kai? Can he give a pump for Uber? I feel like Robin hood is like in the doghouse and he said something about day traders. I think, can you go to, all right, we're going to wrap everybody.

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SPEAKER_33: All right. That is it for BC Sunday School.

SPEAKER_00: And you have been taken to church. Next up, I have an awesome interview with Climate Check founder Cal Inman for This Week in Climate Startups, an actual startup. Climate Check checks, this is so interesting, rates real estate based on expected changes to climate. Basically, your climate risk as you shop for a house, for example. They're showing up on Redfin, all these real estate listing sites. It's an awesome interview with Cal. Please enjoy. Cal Inman, thanks so much for coming on.

SPEAKER_76: Hey, thanks for having me.

SPEAKER_00: We're going to, this is going to be really easy. We're going to start with the basics. What, you're the founder of Climate Check. What is Climate Check?

SPEAKER_78: Climate Check is a climate risk data company.

SPEAKER_80: So we help folks understand what their risk is to climate change.

SPEAKER_81: How?

SPEAKER_78: It's a deep question.

SPEAKER_82: I know. Is it just feelings? I know there's data.

SPEAKER_78: Yeah, I think maybe just start really high level because what is climate risk? We look at natural hazards that are affected by climate change. So specifically, flood, fire, high wind, extreme heat, extreme precipitation and drought. How are each of these things changing due to climate change over the next 10, 20, 30, 40 years?

Jason Calacanis: And then how did you come to it? Because you have built a solution that's specifically focused on real estate and homeowners trying to figure out this risk.

SPEAKER_89: Yeah, I think a little bit about my background and how I came to it, I'm in real estate development in the Bay Area doing small urban infill projects.

SPEAKER_78: I've been doing this development shop for the last 10 years, and I've been doing some lecturing at UC Berkeley. And I kind of came across all these scientists that are working on these amazing climate projects and realized that there's all this data there. They've been working on this stuff for decades. What really sparked my interest was the realization that a lot of folks on Wall Street, investors in the real estate space, were using this data, the same data that academia and the government was producing. To invest the real estate decision making, so where to invest, trying to identify risks, and it just felt like this data that's produced by our smart minds and academia should be accessible to kind of everyone, right? From the homeowner to the small investor like me, up to big private equity companies. So that really just felt like an opportunity, where there's asymmetry of information, and that maybe we could bridge that and communicate the science to folks in a really easy to understand way.

SPEAKER_91: That was our original mission three years ago.

SPEAKER_00: Three years ago. Yeah. Where, how are people accessing that data before? Is it data that they pay for? Is it like, why was it unavailable, I wonder?

SPEAKER_78: Yeah, I'd say, I wouldn't say it's unavailable. When we first started, we called all these climatologists and said, what's the best data?

SPEAKER_91: What should we use? Well, it's accessible, right? You just download these big data sets, terabytes of data.

SPEAKER_78: And then, one, you have to know how to do that. Two, you have to know how to code Python R. Then you're able to search it, and you get some information that is really hard to understand unless you're a climatologist.

SPEAKER_91: So I think that's kind of the core value proposition of what we're doing.

SPEAKER_78: We're bringing all these different data sets for all these different perils into one place, making it searchable for your individual property, and probably most importantly, communicating it in a way that's really easy to understand for someone that doesn't have a PhD in climatology.

SPEAKER_86: And so, yeah, I think it was technically accessible, but really hard to decipher and really hard to access. Yep.

SPEAKER_00: And so, now, you do this through a website, but also as a widget, right? A score that is embedded in real estate properties, not literal properties, websites and apps.

SPEAKER_78: Yeah, totally. Yeah. So, in that mission of trying to get the data to everyone, we thought the easiest way would be get the information in front of people where they're already accessing all their other data, which is the listing portals. It's the first place people go when they're thinking about real estate on the consumer level and the commercial level, too, right? We go to these portals, we search a property, and so we've just been on a mission to integrate within each real estate listing, and our goal is to get on every real estate listing alongside all the other really important information you get when you're looking at real estate, starting with the price of the asset, the price of the home, what school district it's in, how many bedrooms, how many bathrooms there are, property history, what did it sell for the last time, market conditions, walkability, and just felt like climate should fit right in there. What's the climate risk of this home?

SPEAKER_00: So, what does that, we might have to just, I was just saying to my producers, maybe we should do a little like a demo after we're done talking, but how does that show up? So, you see WOC score and you see a climate score?

SPEAKER_78: Yeah, yeah. So, we have a climate rating for each of those six hazards, and we give a 1 through 100 rating, 1 being the lowest risk, 100 being the highest risk for that individual property. And then alongside that, we bring in what we call narrative, like explaining why your heat risk is 80. Why is your heat risk high? It's because a hot day in your location in Phoenix is 105 degrees, and in the future, and this happens eight times a year. So, this is what we consider a hot day in your location. But in the future, due to climate change, and I'm making these numbers up, maybe it's going to be 50 days by 2050, 50 days of 105 degrees. So, it kind of gives some context that everyone understands.

SPEAKER_86: And I think that's kind of that communication piece I was talking about.

Jason Calacanis: Do you think?

SPEAKER_00: Like, well, before I get to the philosophical part of it, talk to me about how the business works. Like, who is paying you to do, you know, how do you get paid? Do you get paid if people come to your website? I assume these real estate listing sites are paying you. Like, what's the business model here?

SPEAKER_107: Yeah, totally.

SPEAKER_78: I mean, fundamentally, it's data licensing. So, yeah, we license data to real estate portals, and probably a bigger chunk of kind of our business is enterprise data licensing. So, to all sorts of different use cases for people doing analytics, due diligence, and within commercial real estate, and really everyone in the capital stack within real estate. So, equity investors, private equity REITs, lenders, and these are all different people that need to understand what the risk to climate change is. And so, that's another way we're licensing data out and monetizing the product. But our fundamental, like, mission as a company is always to have a component free and visible for the consumers. So, we get a lot of traffic directly to our website, climatecheck.com, and we'll always have something free there for the home buyer, the home owner, the home seller.

SPEAKER_00: Where you can just literally go, and I'm pulling it up right now, and put in your address and freak out. Just kidding. I'm putting in my address right now. I'm typing while we talk. I am a 66, 1 to 66, very high risk for drought, high for storm risk, relatively low for fire risk, interestingly, for the Oakland Hills, relatively low for heat risk, almost none for flood. So, that's like the kind of dashboard that you would see as a consumer, either ideally before you purchase the property or after. Is it, do you have any data to suggest that people are ingesting this information and then changing their buying decisions accordingly?

SPEAKER_78: Yeah, that kind of, you might not have meant it as a philosophical question, but it's kind of a deep question. We did a study last year with the Redfin, so we're doing a bunch of, overlaying our climate risk data with other folks' data sets, and really interesting stories come out of it. And they found that using climate data, specifically around fires in California, that folks are, they will have these big devastating events, and depending on the area, people move back. And specifically the Sonoma, Napa areas, we saw a higher appreciation of assets after these fires than the rest of the market in similar level markets. So, I don't think, this data is not necessarily transparent to everyone, there's not a lot of decisions making about it. So, I don't think we're seeing like strong climate migration trends, at least in the research we've done so far. But I do think that'll change as consumers are more aware of the risks, there's a higher frequency intensity of these events, and probably most importantly, as lenders start to ingest the data, I think it's going to trickle down to the end consumer, and it's going to be priced in, ultimately, to their decision.

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SPEAKER_00: I mean, that's where I wonder how the kind of normalizing of the availability of this data and also the ability to make database decisions as a result. Like, how do you see that impacting the industry? Do you think there are lenders who might just say, sorry, no, we won't finance this location?

SPEAKER_119: Yeah, no, I mean, we kind of internally have been calling it climate lining. You know, I think there's all these kind of horrible places your brain can go.

SPEAKER_122: I feel like you should trademark that. Like, that's a big, it's a bad. It's a derivative of a.

Jason Calacanis: Of redlining, right. It's like, it's got a really bad association.

SPEAKER_78: Yeah. I don't know if we coined it. One of our advisors, Jesse Keenan, is a kind of a thought leader in the space. It's been talking about blue lining for a while, around flood. But I do, you know, there's all these other perils, right? Like highway and from hurricane events, fires, even extreme heat. And so I think, yeah, I do think, you know, that is a risk. And our view is transparency of data and information is the most important. Like, everyone should be on the same level playing field and have the same amount of information. It shouldn't just be, you know, big data analytic driven financial institutions understanding this data and making decisions around like the consumer deserves to know it too. But I think after that, you know, we need to be thoughtful about where policy goes. I know that there's a lot of policy movement on the federal level around this stuff. And I know they are thinking about, you know, what are the consequences of these policies and make sure they avoid unintended consequences like climate life.

SPEAKER_00: How much do you think you could start to become a ground truth for some of those decisions? Like, how hard is it for you to, I mean, do you cover the whole country? Like, how much data do you have about locations?

SPEAKER_78: Yeah, right now our coverage is of those six hazards, we cover the lower 48 states and then we're also kind of rolling out into Canada. There's a lot of interest in the kind of Canadian real estate market around climate data. Wow. And I think, you know, there's a lot of folks doing a lot of good work in this space, climate risk. And, you know, our view is rising tide lifts all boats. And I think we all just need more people ingesting the data, more transparency around it. And I think then better decisions will come.

SPEAKER_00: Have you seen the demand for it increase all through that capital stack that you mentioned?

SPEAKER_78: Yeah, I, man, like we were talking the other day, we've really seen a flexion point. Maybe in the last three months, I think the original kind of wave of folks we've been talking to and getting data to are equity investors in the commercial real estate space. And now that's become best practices, but there's been a big influx of all these other use cases, particularly in the lending community. I think a lot of that's pushed by government, like incoming government regulation around climate risk disclosures. And it's kind of been a long time coming, but I think folks are realizing, hey, we need to be looking at this because it's going to, yeah, the equity is at the highest risk of loss. But some of these events are so impactful that we need to be looking as a lender. So it's cool to, it's cool to meet all these people and, uh, and get them data and try to help them figure out how to use it, how to ingest it. Uh, but it's, uh, yeah, it's all materializing.

SPEAKER_00: Well, it's interesting too, because, you know, we talked before this interview and you are one of, this is where I should say, you are one of the rare startups I talked to who was like, I don't think we really need to raise money. Like, it's a, this is, this is a real business with a product that is in increasing demands.

SPEAKER_78: Yeah. Yeah. I think that's, uh, it's more luck than being smart, uh, kind of put ourselves out there. We self-funded. We've been pretty scrappy when paid ourselves, but it's, uh, I think that it's a good moment, right? We built a good product and now we're able to feed a lot of folks data that are looking for it. Um, yeah, but never say never, maybe, maybe one day, I mean, you know, we'll be here.

SPEAKER_00: We'll be here, but, but it's, it's, it is testament to the fact that. That it's a moment in time when this data is incredibly valuable and there's a lot of conversations about data as it relates to climate solutions, how to use it. Like this really feels like an adaptation and resilience technology. Um, that's going to be increasingly important as there might be parts of the United States that we have to abandon in 50 or a hundred years. Right. Like not immediately, but.

SPEAKER_78: Yeah. Yeah. And that, those are tricky questions. Right. And there's a lot wrapped up in there, uh, you know, from policy, you know, how are municipalities adapting to this stuff? Uh, and it's complex. We try to shy away from the complete, like disaster capitalism, scaring people like move now. Uh, and so really, yeah, our view to that is let's inform folks what their risks are and then let's try to help them understand how they can mitigate those risks on their property level. How can you engage your, uh, your mayor, uh, your council people, your local municipality to help put together adaptation, uh, you know, plans, uh, to protect your community. Um, and so I think it's really about that, that local level flagging of risk, which is our job and then helping people help give folks resources, resources to, to, to protect themselves.

SPEAKER_144: Right.

SPEAKER_00: Right. Do you imagine ever maybe a version two or three down the road where you do connect to some of those resiliency resources? Because yes, obviously we don't want to say that you're out here advising people not to buy property in a certain place, but that there can be things that you do to harden your home, uh, or your business or your town. Like you said.

SPEAKER_78: Yeah, definitely. Um, within, so when you go to our website and you can type in the address as a consumer and get a, get a, get a full report. So 40 page kind of deep dive into each of these, uh, risks with heat maps, uh, kind of data over time, how, how, how, how these different perils are changing over time. And part of that is, uh, and we've got one or two pages for each pair of like, what can you do as a homeowner? Um, how can you harden your home against fire, you know? And it's simple stuff that honestly, we, we put these guides together and then we have a house in Sonoma, which is, you know, high fire risk in the middle of the redwoods. And, uh, and the first thing I did that week was to move all of the firewood that I'd stacked right alongside my house, you know, move it away from the house. I mean, it's very simple stuff that you can do to really reduce your risk.

SPEAKER_00: Hmm. Um, where can, I think we sort of alluded to this earlier, but you're on Redfin.

SPEAKER_04: What are some other big consumer outlets where people might encounter climate check?

SPEAKER_78: Yeah. I mean, we've kind of offered our data up to every level from the real tour, uh, up to the national association of realtors, uh, working with some MLSs, uh, individual brokerages, pull data to our site. Uh, and then, yeah, list, uh, kind of listing portals, uh, red fins of the world, um, a photo, a stately, and then working, we're kind of in progress with a lot of others. So I think we're, we're, we're getting close to reaching our goal of getting on every real estate listing. And then the same in the commercial space, there's a lot of great, uh, commercial, uh, real estate portals.

SPEAKER_91: And, uh, we'd like to, we'd like to shove on every one of those as well.

SPEAKER_00: Where does the data come from? I know that, uh, that over time you have evolved into having to create and aggregate some of your own data, right? Was that sort of an accidental differentiator?

SPEAKER_78: Yeah. I mean, we start, yeah, exactly. We started with kind of pulling in all the best climate data out there. And internally we're a company of just data scientists. Everyone codes except me. Uh, and we bring in all the data, but where do we get the data from? We rely on this network of scientific advisors that we built that study each of these perils, you know, it's their full-time job. They're researching it, they're writing papers on it, they're reading and up on all the current research. Uh, so bring in all the data into one place, but yeah, there are some gaps in there, right? Of what's publicly available, you know, particularly flood data. Uh, so we built some kind of internal flood models, uh, or it's called polivial flooding or surface flooding or rainfalls and accumulates in the ground. So we're there, cause that was something that people wanted to know. Uh, so we get a lot of consumer feedback too, which is cool. Um, hey, we need more information on flood. This doesn't seem right for my area. And so it helps us figure out what's next in a roadmap, but also kind of refine the data and, and, and present it kind of a way that people understand.

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SPEAKER_156: What do you think is next for you guys? Just keep growing.

SPEAKER_78: Yeah, I think it's tempting to get like, you know, drawn into all these things. It's like a very broad space, different use cases. So I think stay focused, continue to do what we're good at and make sure we're constantly bringing the best data. Make sure we're making it easy to understand and making sure it's accessible. So I think keep doing what we're doing is the goal. And then just be there when people need data for their decision making.

SPEAKER_00: How do you imagine that this kind of data, you know, I'm always thinking about like, I think about climate solutions in terms of sort of systems, gigatons and behavior. You know, clearly this could be something that impacts and even changes consumer behavior and behavior at a systems level when it comes to allocating capital toward real estate. I wonder, like, how big do you think when you think about the impact this could have over time?

SPEAKER_78: Yeah, I think, I mean, just generally climate risk awareness and climate decision making, like it's going to push capital into certain markets that are safer. As more and more investors ingest the data and more and more lenders ingest the data, there's going to be longer term bets on safer areas. And so I think there's going to be a huge amount of movement of capital. And it'll happen over time, but I think there'll be spikes when we see big like climate migration events, right? Like Katrina, where a bunch of folks are moving from one area to maybe another adjacent city. And these are kind of impactful events. So I think we're going to see a lot of movement of capital as more people do it. And this is me guessing the future. I don't know.

SPEAKER_162: Yeah, yeah.

SPEAKER_78: But I think another side benefit kind of in behavior is we've done a lot of like qualitative and quantitative research on the consumer level. And there's awareness, right? People read the New York Times or listen to NPR and they're like, okay, well, you know, we're aware of climate change. The icebergs are melting, but like they're curious like what it means for them and they want that data, but they don't have it. And it's not readily accessible to everyone. That's kind of the problem we're trying to fix. But I think with that, now you have these right stakeholders, right? It's not some abstract thing. It's not a polar bear dying. It's like, hey, your home, your life savings might be at risk due to this climate change. And I think all of a sudden you build all these champions that are starting to now engage in this like climate conversation, right? You're deep into it, but a lot of people frankly don't care. Or maybe they read about it. They care a little bit for a moment. But like if I said, hey, your home's at risk or, you know, it's the extreme unlivable heat.

SPEAKER_00: Or your insurance is going to be canceled, right? There might be some externality that those people aren't necessarily thinking about either. Like it's not just the weather, it's the financial pressures that will occur as a result of the changing climate.

SPEAKER_78: Yeah, totally. Yeah, the capital expenditures you make in your home to insulate it, get a bigger HVAC system, your utility costs going up, insurance. And these all kind of affect, in commercial real estate, we call it your operating expenses. As a homeowner, it's just like, what's your monthly net? And there's all these different factors that we look at are kind of stressors to that monthly cost of home ownership.

SPEAKER_00: Now, I know you're not in the business of disaster capitalism, and I really appreciate and respect that. However, where should people go? I mean, are you in the process of identifying places that look good long term?

SPEAKER_78: We do, the one kind of consumer kind of request that we get a lot is like, give me the answer. Like, you like make me search each address, like, can you just tell me the right answer? And I don't think that's one thing that's not really in our roadmap right now to do. Because I don't know if there is one right answer. I'd say, like, from a climate perspective, within the United States, and it's a big country, and we're looking at six different perils. And really, there's trade-offs, right? Like, you can trade a high fire risk or maybe an extreme heat risk in another location. And we see people, like in the COVID kind of migratory patterns, people are making these trade-offs maybe without even thinking about it. And so, it really depends on the individual kind of risk tolerance or what risk do you want to deal with? Because this is something that's going to affect all of us on some level. So, we, again, getting away from disaster causals, we really want to help people be prepared. But I think one kind of interesting thing to that is there's a lot of folks, I wouldn't say a lot, but there's some really smart people in the financial sector that are making kind of big bets on where people are going to go. So, I'm creating investment thesis is around location, and I think we'll probably see more and more capital go kind of into these kind of climate-safe funds.

SPEAKER_123: Interesting. But you have an identity, they have, they're not, you're not, but you're still not saying?

SPEAKER_78: They all have different kind of theses too. Got it. Really interesting. Like, some people are making big bets on water scarcity. Like, this is this existential threat. Like, you know, water, we can't live, and they're making big bets on that. You know, some are, some is heat, some is coastal flooding is kind of an obvious one.

SPEAKER_144: And so, really within each of the groups is different theses.

SPEAKER_00: Huh. Fascinating. All right. Well, Cal Inman, founder and CEO, yes, of Climate Check?

SPEAKER_144: Yeah, I'll take that. Yeah.

SPEAKER_00: All right. Where can people find you?

SPEAKER_86: So, climatecheck.com, yeah, reach out. Love to talk to anyone.

SPEAKER_00: Go put it in, go put in your address. Make it personal, people. That's how we get it fixed. Cal, thanks so much. I appreciate it.

SPEAKER_180: Hey, thanks for the time.

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