Financing the Fight with Chris Lay and James Parker of Leonid Capital Partners

Lauren Bedula 0:00 Welcome back to Building the Base. Hondo Geurts and Lauren Bedula here with today's guests, James Parker and Chris Lay who are co-founding partners of Leonid Capital Partners, which is a private credit fund supporting the US national security ecosystem so extremely timely. I know we've spoken to the Office of Strategic Capital on our show, so excited to get the take from the private sector side on how loans in the short term can be helpful in the defense tech space. Gentlemen, thank you so much for joining us today. Chris Lay 0:29 Thank you, Lauren and Hondo. We appreciate it, and we're, we're fans of the show. We're one episode back, so as long as you're not quizzing us on that one, we'll, we'll be okay. Hondo Geurts 0:38 Good to know, now we know where to hit you hardest. Hey, you know, you guys have been around now, gosh, almost five years, going on six years. I guess maybe we can talk later about starting a company in the middle of COVID. But they both come from really unique backgrounds, which I think is super interesting in this space. So maybe Chris, you can start off, and then James, kind of, what's the background? Where'd you kind of come from, and, and we'll get into the origin story of what led you to start up this really interesting financial company. Chris Lay 1:11 Sure, yeah. I mean, my roots are, I come from a Marine Corps, Navy family. I've never had the honor of serving myself. I'm sort of the black sheep in my household as a as a neuroscientist by education, rather than a Devil Dog. My PhD work was in concussive brain injury therapies, traumatic brain injury therapies, things you could do in the back of a Humvee or a Black Hawk to help buy somebody some more time that work came right at the the apex of the IED challenges we were facing overseas in Iraq. At that same time, my brother was a forward deployed infantry Marine in Fallujah so the work was really personally resonant to me. I was committed to see that out in the field, working and making a real difference. Was part of a startup company that commercialized that work. And you know, our experience with Johnson & Johnson, the corporate venture group there, just lit a fire meet under me in the same way as when I first discovered the brain, I was absolutely committed to entrepreneurship and investing. Went to business school, where I met my my friend and co founder, James Parker, and we really hit it off on sort of, I think, two levels. The first was both coming to business school, with a shared military service, family tradition and coming hot off the heels from, you know, technical backgrounds. So I'll let James speak for himself on this one. James Parker 2:55 Yeah, I like to say Chris and I are similarly different when it comes to the finance world, or at least our origin story. So I came out of Rice down in Houston with an astrophysics degree. My first job out of college was at Johnson Space Center, working on the robotic arm of the space station at Mission Control. If you asked me then if I was ever going to look for another job again, I would have told you no, like, outside of being an astronaut, that was kind of the goal. I grew up a space geek. That's my mom's Moon Landing newspaper on the wall behind us. I've had it up in every office that I was allowed to hang office stuff up in ever the entire time. But quite frankly, there's no 21 year old on earth that's quite ready for government bureaucracy to hit their dreams directly in the face. And that's kind of what happens. I ended up moving from manned satellite, from manned space flight to unmanned work. Did a stint up at Goddard Space Flight Center there, north of town, north of DC, along the way, picked up a security clearance and then transferred over to the intelligence community and did a lot of real time warfighter and operator support from space based assets, especially during the second invasion of Iraq. As Chris mentioned, I come from multi generational service family. Grandfather was a Full-Bird Colonel in the Army. Father was a Captain in the Marine Corps. And then it goes much further back beyond that as well. But very much, you know, again, never having the honor of serving myself, but very much family life came up in the ethos of service. At some point in the aerospace world, you got to decide if you're going to go hardcore engineering or if you're going to go program management. I went program management, carved out a little niche turning around trouble programs. Ended up in business school, where I caught the finance bug, primarily because the math is easy. At the end of the day, and moved from there into a much into a very traditional turnaround, restructuring private equity career, and then was lucky enough Chris and I were both looking for a new opportunity right around the same time, and we had been friends for a while. We had worked together a bit. We'd done some investments together, but nothing formally full time. And then when Chris came to me, beginning like late 2019, yeah, we had both seen this gap in the market, and the gap, fundamentally, is a very interesting disconnect, which is, banks won't loan money to government contractors based on the future cash flows of their government contracts, which, up until about four months ago, was confusing to people, but now it's, you know, primarily it's based on the risk that these contracts can get canceled at any time, with 30 days notice, with no penalty. So it's not unreasonable for a bank to see that sort of binary risk as something that would preclude them from extending credit. So what we just decided to do was ask the question, ultimately, which is recognizing like the government has the right to cancel these contracts, how often do they actually cancel them, and if so, how often do they cancel them with a frequency that actually makes it statistically significant? We can go into that a little bit deeper, but that's sort of the genesis of of where we came from and how we got to this kind of wonky side of the market that we're in. Lauren Bedula 6:22 And you know, as listeners, we've featured private equity or venture capitalists on our show to represent the importance of private capital in the defense tech ecosystem, and frankly, in the needs we have for the future industrial base. Can you talk a little bit about how what you're doing differs from private equity and venture capital and even traditional banks. Like, are you a bank? Or give me the 101? Chris Lay 6:47 No, that's a great question. No, we're not a bank. So we make what we would refer to as credit investments. So really, simply put, you know, someone is working on a contract or portfolio of contracts with the federal government. We view those as a highly lendable asset in the same way that someone has a car loan or a home loan, and we can structure up a credit facility. So dollars that are going to go to that borrower representing call it upwards of 50, 60% of the that total contract, or the entire stack of contracts value, and they're typically engaging with us to use those dollars for growth capital, similar to a venture capital or private equity team. The key difference from our perspective is that in exchange, in lieu of taking equity ownership in that business, we're asking for a set interest rate across time during the life of that loan. And so you know the the importance and the complimentary nature of our offering, I think, is really, really critical, particularly at this time in national security, as we're seeing this huge, you know, support and and surge in the innovation space, right there's a reason why the angels, the Palantirs of the world also leverage credit facilities alongside the equity dollars they've raised. We view it as a really critical innovation and evolution in the whole capital formation landscape within national security. Lauren Bedula 8:36 And it's something we hear quite often, even if you look at an In-Q-Tel model, which is the CIA's investment arm, like some companies, aren't in a position where they can or want to give equity. So there's not a great alternative that is well known so very exciting. What you're doing is there a specific stage of company you look for, or are you flexible and agnostic? In that sense, could be 50 year old, family owned, versus series A? Chris Lay 9:02 It's a great question. I'm going to steal a line from my buddy James here. But we are big believers in digging a well before, before we're thirsty, which is to say, you know, our average transaction size right now, you know we're making a credit investment. It's probably in the $10 million dollar range, though equally happily, we love to start relationships early. Have recently closed on a $600,000 revolving line of credit, and on the opposite side, very happily closed on a $50 million opportunity. So the shorter answer to your question, Lauren is, no, we're not particularly stage centric. We love to work with teams that are doing excellent work with the government, and our mandate is really broad from a from a check size standpoint. James Parker 9:54 I will say that the use cases for our capital do generally, you know target in the innovation side of things naturally tend towards the earlier stage companies. I think the last, the last number we have is 60 to 70% of our portfolio has taken some sort of venture dollars down. That being said, we're happily working with, you know, people that have been running steady Eddie, you know, munitions, contracts with the DOD for the last 20 years, right? It just becomes, obviously, we all know, you guys know better than anybody, the market changes over time. Needs move around. So you have a company that is doing a nice $2-3 million a year of business every year for the last 15 years, all of a sudden they're sitting on $70 million $70 million of order from the DLA, right? And they need some, they need some way of being able to execute on it. And depending on what they do, a bank might not touch them because it's a government customer, or might not touch them because it's kinetic in some way. So we like to come to the table with, you know, again, if, if we're stealing lines from each other. You know, we like to say, like, we are extremely solutions oriented. Yeah, if you come to us, we will give you, we will give you the structure and the and the the ways we can say yes. And if that doesn't, if that works for you, outstanding. Like, let's get a deal done. If it doesn't, no harm, no foul. Like, we understand everybody's at a different stage, and they have different priorities. So you know, what we want to do is make sure we're good partners, so that everyone's having an outstanding outcome at the end of the day for their journey around here. Hondo Geurts 11:34 So it's not lost on me, we have a brain surgeon and a rocket scientist talking finance here. So that's pretty good. I think one of the things was interesting, you were really early in the trusted capital game, yes, I think the first, the first time the DoD even talked about it, you know, taking a step above Leonid. What did you see wrong in the capital market, particularly as it pertains to national security and why do you think trusted capital, or known capital is such an important component, you know, one level above the niche that you guys are focused on? Chris Lay 12:18 I think it's particularly when there's a national security context, it's critical to work with teams Leonid or no, that are equally mindful of not only where they are investing their dollars, but where they have accepted those dollars from just to make sure that there's no potential chance of any sort of look through threat or undue influence as you're working to build your company within the government ecosystem, like we've all seen, headline after headline about just how critical this issue is and how capital can be an offensive weapon to block US national security missions and objectives. So we've always been of the belief that building both awareness and trust, not only at the one off borrower level, but up to the highest levels of government, is critical, that obviously, as you well know, takes time to build those relationships and trust they're in. But, yeah, I mean, my viewpoint is very much trusted capital was a both important and a real difference maker. James Parker 13:31 It mattered to certainly, like on a grain level, it mattered to our client base, very distinctly, because they obviously didn't want to step in an unintended pothole, right, and all of a sudden have maybe their first or second contract somehow come under review because it's been financed by the wrong group. But stepping up to your point, go like a level above. I think people misunderstand the risk in a number of ways, because it's sort of like, well, nobody's got access to the technology. None of my investors have access to the technology. And the truth of the matter is that, you know, money is the biggest motivator. At the end of the day, if you have investors, if you're an investment shop, and you have investors, and you have a certain stakeholder that starts asking you for stuff, and that as an individual, as a person, you've put yourself in a position where, like your choice is the existence of your business or keeping your investor happy. It's really easy to fall into that trap, which is why I think it's super important to have sort of a doctrine and a mindset set ahead of time going into these things. Well, that was always our thing from the beginning, as you mentioned, we got, we applied for trusted capital before we were even a thing. Quite frankly, it may probably before we technically had any capital. But at the end of the day, it was a conscious decision on our part. We knew we wanted to be able to truthfully market ourselves as a clean source of capital, as an aligned source of capital where none of like doing business with us was already going to be a unique concept. We wanted to remove any friction we could from that, from that process, to make sure that people knew that, like, not only was our money clean, but the government has looked at us, they understand how we work, and they approve of it was really, really critical for us at the end of the day. Hondo Geurts 15:23 And do you sense the government in the time since you had the idea, maybe to now has, have they changed under view of capital, or they become more aware of the need to ensure there's clean capital in national security? Or was your awareness, or was it just didn't have the mechanisms at the time to really understand it? Chris Lay 15:47 My take is that at the time, like everyone, sort of sensed it was an issue. But again, there wasn't as significant a push for private capital into this space and then, but once you start introducing the private capital risk, then all of a sudden you realize that, look, the predominant sources of investment capital in this world are outside like, well, maybe not. Most of the money's in the United States, but the big targets, the chunky targets, are all sovereign wealth funds in sometimes problematic parts of the world, right? So, and it's very easy to see, when you see these numbers, that people go after closing two $10-20 billion funds, you can't do that. You know, it's almost impossible to close a $20 billion fund without taking some sort of sovereign wealth money. But then, even if you're talking about allies, it's like, do you really want Norway's sovereign wealth fund telling you what we should do in our defense tech you know, you know innovation ecosystem. You know friendlies now, like, you know, there's a reason why Iran's flying F4s right now. It's because we gave it to them. So, like, you don't know what the future holds. So it's just been very, very important for us to establish that ahead of time. It's made our fundraising journey more difficult our our placement agents and cap intro guys are constantly harassing us. Are we sure we're not willing to talk to certain parties. And the answer has always been, yeah, we're 100% sure, like we can't build this here. We're not going to build it at all. Lauren Bedula 17:17 We noted that you launched this in December 2019 which was obviously a very interesting time given COVID and just some of the fits and starts. But even when we started our show, a question we often asked guests was, you know, what's your take on private capital and defense tech given the economic outlook, which was, you know, when we were just starting, it was in COVID as well. So curious for your take, and you know on both experiences, one starting a business during an uncertain time like that, and your take from where we sit right now, in potential economic uncertainty. Do you see any change in appetite for defense tech or very bullish appetite still? Chris Lay 17:58 I was just speaking at a JP Morgan event on this very topic. And the line that I think really sort of audibly resonated with the crowd was, you know, from my perspective, if innovators in our space, if their investors are anything like our own, at Leonid, we are seeing a notable amount of people sitting on their hands right now, right? They're sitting there with their checkbook going, I'm excited to invest I see the value in the defense space. There's a lot of uncertainty right now. I'm just going to wait and sit this one out which, which is perhaps not an irrational decision to make, but it's certainly not a mission oriented one. And so our view from day one, establishing the way we structure our financing, the way we run our process is candidly, to be very much on the balls of our feet, right? We, as I said at that event, we're expert in this space, and we're certainly not sitting these innings out. James Parker 19:07 It's one of the benefits of having a credit approach. Quite frankly, we sell a different return profile at a different expectation to our investor set. I think it makes it easy for us to transact in this sort of environment, than making like, 10 year equity or venture investments, just because the, you know, there is sort of a much shorter duration on it, and there's, I mean, look, the risk reward paradigm is undefeated, right? We charge a lower like our cost of capital is lower than cost of capital from taking money from an equity group. Therefore we view it as a lower risk investment, which is why we structure the things the way we do, going back to starting something during COVID. And this is not specific to our space. I've often, like, sat back and realized that, yes, it was kind of a zoo. Starting a company in the heat of COVID and working out of like backyard sheds and not being able to see each other. There was a luxury to it, in the sense that, I think a lot of times when people start new things, there's almost that requirement that there's this sort of, you know, this need and a hunger for immediate success, and if you don't get it, it's really easy to give up. Well, it didn't pay off right away. I've got bills to pay, like I've got, you know, I've got a family take care of. Maybe this wasn't the right thing. Maybe it wasn't the right time. I better go. I better go do something else, or go find a job, or something along those lines. Well, during COVID, nothing was working, right? So you had the almost the permission to not necessarily fail, but you had permission to not make as much progress as you probably wouldn't have like giving yourself, and it allows us to to build, you know, kind of on our strategy. It's how we got into the data set that actually drove us, ultimately, to our full model, because we had nothing to do for a while. And so what do you give a, you know, a neuroscientist and a guy with a physics background like, when you got nothing to do in the backyard. You dump four terabytes of public spending data, and you throw into an Azure database, and you start playing with the mother of all pivot tables. And that's how we got to that. That's how we put it together. So there's a little bit of a rant like, I mean, I wouldn't say kismet, but, you know, there's a lot of, there are a lot of things that had to go, you know, that had to get put together to get us into the Venn diagram of where we're at right now. Lauren Bedula 21:46 That's a good message. We have a lot of listeners that are entrepreneurs or founders, so just the message on sort of grit and persistence, I think, is a fantastic one. And to that end, you mentioned you're not sitting on your hands. So what do you look for in an entrepreneur like what do you have any advice to those listeners that are maybe fundraising right now or coming to see folks like you? What stands out? Chris Lay 22:08 Yeah, I would give sort of two messages on this point. But venture groups, growth capital, credit teams like ourselves are very, very attentive in even sort of first pass calls to people's tone and responsiveness right even before the value proposition, even before diving into somebody's data room. Is this team clearly outlining what they're trying to achieve? Here's their value proposition are they responding to emails and phone calls in a timely fashion, like some of these basic nuts and bolts things really matter in signaling to the other team who's ultimately going to be a partner with you. So like some of that basic blocking and tackling is absolutely critical, I would say, the other challenge that we certainly faced in building up an investor base, and I'm sure a lot of your audience contends with is just the the the the prolonged development cycles in the government space, versus, say, Silicon Valley tech industry, right? And so being equally choosy of who you are spending your time with as an entrepreneur and making sure you're building relationships with the right Capital Partners, people that are exceedingly mission aligned with you and understand the nature and specificities of the national security space. It's its own beast, as you all well know, and so having people that understand that have a comfort and expertise, I think, is critical. So ask them questions back. Don't be afraid to punch back a little bit upfront that I think will really set up people for long term success. James Parker 23:56 I would bookend that with, don't assume, don't assume any raise is guaranteed, and don't assume it's going to happen anywhere nearly on the timeframe that you think it's going to happen. And you know, on top of that, if, if you've got a deal on the table, take capital while it's being offered, because you don't know what happens the next week, like the world changes, people have a tendency to think the minute somebody says they're in, that means they're in forever. But as you can see, the market can go up, can whipsaw around and change people's investment mindset at a drop of a hat. So if you have the right aligned partner, and they've got capital they want to invest in your business, and the terms are acceptable to you, I'd hit the bid and get back to executing. Chris Lay 24:45 Yeah, which again, I think speaks to just how critical it is to make sure that that vetting process is a two way street from the jump. Hondo Geurts 24:56 So you both mentioned, you know, mission focus. Legacy of service in the families. Leonid's a little bit interesting, I think, in terms of your view of giving back, and your view of how to not only run a good business, but be a good community partner and help those that need help. Can you kind of tell the listeners your thoughts on that and how you came about this as part of the mission of the company, and how that's going for you? James Parker 25:28 This ties a lot back to the not just the origin story, but the actual first conversation around this, which I remember, Chris called me up and said, like, I got an idea. I want to talk to you about it. And so we got together, grabbed a beer, and in between conversations, like, shortly after the have you heard about this thing in Wuhan? I think it's going to end up a big deal, which was the first part of the conversation. The second part was we were talking about what, what ultimately became Leonid and and he actually ended it with, like, look, I have a thing though, like, I want to, I want to use this as an opportunity to make an impact while we're building something I want to do. I want to do a big corporate give back, and I think, and I was game. It was interesting, you know, my like, you know, I, you know, I'm, I'm not, I'm not ungenerous. And I would, but I was sort of of the mind of, like, you know, kind of the normal number, you hear five, 10% something along those lines. And I was like, Sure, I'm in like, what are you thinking is, what do you what do you think is big? And he said half. And I think I literally almost spit my beer directly in his face. But then we were started talking about it, and, like, Chris can go on to it a little bit deeper, but fundamentally it came down to, like, why wait? Everyone sort of talks about, I think everybody, when they when they start a business and they start something new, the idea is largely like, let's start and build something significant. Let's take care of our families, and then let's go do and then have, you know, have the wherewithal and time and resources do something good for, you know, for causes that you care about. But the issue with the you know, the real world is that goal posts move. You have more kids, you have your lifestyle creeps up the number that you would have thought would be enough to make a difference at one point 10 years later is not enough, and it constantly sort of moves. And Chris's whole thing was, well, why are we waiting to do something good with it? Why wouldn't we just do it all at the same time? And then when I broke that down, sort of on a mathematical standpoint, like we're starting, talking about starting something from zero. So the idea of, now, my challenge is going building something from zero and going to 100 I've got to go from zero to 200 that's about the same challenge at the end of the day. So you know that once I sort of wrapped my head around that, I jumped on board with it. Chris Lay 27:57 My inspiration for a lot of this, quite honestly, is, is again, my brother Spencer. So I, you know, when I, when I'm sitting there in my research lab at the University of California, it's nice cozy, right? I can go home. I can order a pizza, very simple, right? But, you know, he was very much downrange and making real sacrifices. And there are people like that every day, all day long, and their families are making real sacrifices as well. So if we're going to create a business model where, you know, we're going to grow and thrive and make our living in this space, we certainly need to reflect in our core philosophy some level of meaningful sacrifice as well. Lauren Bedula 28:42 I love that. We often talk about how you can serve your country or mission on the private sector side, but you all take that one step further. And I love this idea too, of not kicking the can down the road, like really integrating it into a business model like you have. So I think that's great advice to our industrial base players. But James, it looks like you're gonna say something. James Parker 29:04 It's funny. Like, as much as it seemed like just a nice thing to do. And like, I like the alliteration of it. I don't like calling it charity, but like, ultimately, it came down to like charity as a competitive advantage. Like, we this business probably grew three times faster than it had any business growing because we had that core mission. It helped us connect with initial borrowers upfront, because often we're working with service disabled veteran owned small businesses, or at the very least people that are mission aligned. And you know, at the end of the day, dollars are dollars. And, you know, pricing moves the need. Pricing is the main thing that moves the needle, but this sure as shit breaks its high, like with a lot of people, we piled up advisors, prominent people, as you know Hondo, that we had no business really talking to at that time because of this mission, because it is so resonant, and that, in and of itself, opens up doors with places like, you know, Catalyst Accelerator, for the Space Force and AFWERX and FedTech, all these things where you sort of are, you're really, you're not just saying your mission aligned. You're actually got something meaningful on the line that kind of proves it. It's all of that social proof that kind of creates that, that relationship web that we all kind of know. You know, Chris likes to say again, like, it's this enormous market that operates like a bad junior high school cafeteria, right? So like making sure that people know that you know, you actually believe that you know, you actually believe what you're saying, and you're actually putting your money behind it, I think it's a meaningful difference maker. So, yeah, it was sort of, at the start, a nice thing to do. But, you know, I really counted as kind of core to our business success today, more than, almost more than anything. Hondo Geurts 31:02 Yeah, again, a great lesson for listeners about, you know, have an idea and be bold about it. Don't kind of operate on the margins. And I can tell you personally, you guys have lived it from day one and having, you know, sometimes you have the bumper sticker, and then some excuse comes and you kick it down the line. You guys haven't done that. As the country, as the DoD thinks about capital on how to better integrate our enormous strength in the capital markets. You know, we've stood up the Office of Strategic Capital. I know you guys have done some work with them. Are we doing enough? Is there, are there areas where we could be doing more, or should be doing more? You know, it's a thing that's talked about a lot, but not always acted upon. What would your advice be in the area for the DoD is, as we look towards the future? James Parker 31:57 I think we can, we can split this one up and I'll give you mine, and then Chris can give you his. Because, like, we talk for each other a lot, but we're actually independent people, believe it or not. Um, my thing is, is that ultimately, patriotism only goes so far. Like at the end of the day, again, it breaks a tie most certainly. But the thing that investors care about is returns. You know, fundamentally so if you really want to in it, to get more commitment into the space, you have to, you have to do something to address the return profile of the investment. This is fundamentally why venture capital pushes in our space, pushes the dual use angle so hard it's you have to have that commercial hook in order to drive the ultimate returns. I think there's something that the government is very simply missing on that, which is preferential tax treatment. I can tell you right now, with what we do, we have an awkward tax treatment because it's it's known as weights, known as current income, because we have interest payments that come in, and so it gets taxed at the ordinary income level for our investors. And we'll have some people, if they're in some jurisdictions, we had a potential investor in Massachusetts actually say to us, Look, you make great returns. But after I pay my federal taxes, and after I pay my Massachusetts taxes, I'm barely above the risk free rate. So as much as I love it, I can't invest in you, which means, fundamentally, they're not investing anything like us. But at the end of the day, you start realizing how much that drives it and how easy it would be to provide preferential tax treatment to people who are making investments in critical national security or critical national initiatives, you either change the tax treatment or eliminate capital gains tax or do something and you know that will make a meaningful difference for LPs commitment like willingness to commit to investment strategies like this meaningful because so much of the returns get sucked up into, at least, you know, at least, obviously, for the taxable investors get sucked up into covering for the for the tax impact. So that's something that's almost a simple policy switch that would, that would drive a significant amount of dollars, I'd argue. Also, on the flip side, we probably shouldn't be giving preferential tax treatment to people investing in our adversaries economies, or maybe even investing our, you know, our adversaries capital as a management like, why are we? Why are we using the strength of the American taxpayer to support the Chinese economy? Like, for lack of better term, even in a small way. I'm not saying you eliminate it or prohibit it. I'm too much of a free market capitalist to say that, but I don't see why we should be making it easier or making it more attractive than investing here. Lauren Bedula 34:55 I've got one more question, and it's around talent, speaking to you both with your incredible backgrounds. How do we drive more neuroscientists and, I can't even say it, astrophysicists to care about this issue, care about mission and have more cross pollination in these diverse parts of our economy, too, like any ideas on driving more talent towards these issues? Chris Lay 35:26 I would point out actually, I think DARPA is a pretty good model for something from an ideal standpoint, in that, you know, those appointments are fairly discreet and limited in their time and engagement. So people are coming in, they're doing good work, they're working like mad, and then they are getting out and taking those connections, they're taking that experience with them, and then they're able to tell that story and propagate out further. So I'm speaking a little bit off the cuff here, Lauren, I think, but more venues where people can come in, provide service right, leverage their experience, perhaps in the private capital markets or another part of industry, in neuroscience, come in for a discrete period of time as part of a program work, serve, and then come back out into the private space. I think would be an amazing opportunity in a venue that would engage an ever greater group of Americans. James Parker 36:26 I'd also say, fortunately, we do have a we do have a recent spate of high profile wins in the earlier stage set, the Palantir, the Andurils, et cetera. That has made it exciting. And you see that play out not just on the investing side, but on the just sort of the wave of early stage companies that are being built, and like hopefully, those companies are being built with a mindset of understanding they have to live within that framework. So again, you've got to, you can't have expectations that differ from your reality as far as your market. But, I mean, there was a, you know, there was an old saying, which is, you know, which is, you know, back in the back in the, you know, the space race days, the greatest minds in our country were busy trying to figure out how to put a man on the moon. And then somewhere around the, you know, late 90s, early 2000s the greatest minds in our country trying to figure out better ways to push ads on people, right? Like, it was kind of a sad, you know, that fundamentally had to do with the shift between national imperative and then economic windfall. On a personal level, we have to find a way to push harder that the fact that you can, you know, potentially do both, if you could find a way again, patriotism will break a tie all day long. We got to find a way. You have to find ways to make sure that, you know, there is a way. And this probably goes back to to reforming acquisition, like the ways we do business between private sector and the government. We have to find a way to give people a chance to make, to make that fundamental difference for themselves and their families and their employees, but at the same time serving the national interest. Now we can crack that nut. I think, I don't think we have any problems, given the strengths we have in this country. Lauren Bedula 38:09 Wow, here, here. James, Chris, thank you so much for taking time out of your busy schedules to join us and tell this story. I think it's a unique gap in our conversations to date on the show, so we appreciate you educating us and our viewers on what you're doing, and look forward to seeing where it goes from here. Thank you both. Chris Lay 38:27 Thank you. Thank you, Lauren, thank you, Hondo. Transcribed by https://otter.ai