#155 Folio: The $1.2B Opportunity Nobody Saw

Cathy: We built this platform about a year ago, and since then, we've served over a thousand students, 500 companies. We've built a $1.2 million annual run rate. 

Paige: That's so sick. 

Cathy: This is my third company, which is fun.

Mark: Can you talk about traction, Cathy? 

Cathy: Most of our revenue today is still coming from startups. 

Mark: Okay. 

Cathy: We don't do any marketing for startups -

Jesse: Okay.

Cathy: - and we get an average of 10 new startup signups a week. 

Jesse: You'd assume roughly $100,000 a month 

Cathy: $100,000 is comfortable because we save them about five times more than they pay us. 

Paige: What were the terms of this latest round? 

Cathy: We raised $4 million on a 16 million post money valuation. 

Paige: How much allocation do you have open? 

Cathy: We actually closed the round in August of last year. 

[title screen]

Cathy: I'm Cathy, and I'm from Oakland, California I think if you asked all the people I've worked for before, they would describe me as the person you hire to build your company. I personally feel like anyone can do almost anything if they're willing to have the level of pain tolerance and commitment to make it happen. 

Sounds like the kind of thing an ultra marathoner would say

I’m Josh Muccio and this is The Pitch. Where startup founders raise millions and listeners can invest.

On the show today, Cathy Huang wants to double the number of internship opportunities in America. Because internships gave her the access she needed to launch her career. Cathy started at Google - 

Cathy: And then just from there, just started companies. I think that's probably the highest ROI you can have on your time is to build something that is uniquely, incredibly valuable for the world. this is my third startup. This one feels very personal because my family was actually raised in public housing in Detroit so I think of Folio as my life's work 

The Pitch for Folio is coming up after this. And whether you’re watching or listening on YouTube, Patreon or your favorite podcast player - thanks so much for subscribing and don’t forget to turn on notifications.

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Welcome back to The Pitch for Folio. Let’s meet the investors

Paige Finn Doherty with Behind Genius Ventures.

Paige: What gets me to that hell yes conviction, it’s a founder that deeply understands both sides of the business

Will Weisman with KittyHawk

Will: We call ourselves generalist frontier technology.

Mark Phillips with 11 Tribes Ventures

Mark: I’m a midwest investor, so we have a different definition of price.

And Jesse Middleton with Flybridge

Jesse: I don’t normally like edtech, but I really like you.

[clap] 

Jesse: You're gonna hear that sound in your sleep.

Mark: Seventh one's the charm, guys. 

[hellos]

Mark: That'd be great. 

Jesse: We like it when people say hi. Jesse. Cathy, nice to meet you. 

Paige: Paige. Nice to meet you, Cathy. 

Will: Hi, Will. Great to meet you. 

Mark: Hey Cathy, I'm Mark. 

Cathy: Hi Mark, nice to meet you.

Mark: It's nice to meet you too. 

Cathy: Thanks for having me here.

Mark: Of course. 

Cathy: Good. Situated. All right. It's great to meet you. um I'm Cathy. I'm the co-founder and CEO of folio works. We save companies 50 percent on intern wages by giving companies instant access to billions of dollars in wage subsidies from the government. I was raised in public housing in Detroit, and I was incredibly lucky to have a wonderful foster family and mentors who helped me get internships at Google and in venture capital. And those internships dramatically changed my career trajectory. But, I'm a stark anomaly. Today, about 20 percent of students get internships. And that's because internships are incredibly expensive. Each intern costs about $25,000 to source, to train, and to compensate. And only about 50 percent of them convert to full time. So that means the real cost of converting an intern to a full time employee is $50,000. That's a ton of money. Way too much for most companies. So, we built Folio. Folio saves companies 50 percent on intern wages by giving them instant access to billions of dollars in wage subsidies. We built this platform about a year ago, and since then, we've served over a thousand students, 500 companies. We've built a $1.2 million annual run rate. And we have over $600 million in subsidies from the government. 

Paige: That's awesome. 

Mark: That's great. 

Cathy: Um, I'm here today to oversubscribe our $4 million round, and to get your feedback and most importantly to ensure that every student is trained and ready to build a meaningful career.

Mark: That's great. 

Paige: That's so sick. One of the first investments that we made out of Fund One for Behind Genius is a company called Aidaly and it operates in a similar space. So basically giving like family caregivers access to the tax benefits that are owed to them by the federal government. So really incredible to see, yeah, that you built this platform. I would love to hear more about you and your team's background. 

Cathy: Oh, yeah. Let's see. This is my third company, which is fun. The first company was converting oil barges into floating hospitals in Indonesia, a nonprofit, and the local government now run it. So that's great. The second company was a sustainable seafood company, and it's now run by a very large seafood company based in the Bay Area. And this is the third. My co-founder is fantastic. He was the eighth employee at a company called Elation, which is now worth over $2 billion, so he knows the engineering side very well. He brought over three engineers from Elation, so we feel like technically we have the chops to build the things that we need to do. We have a fantastic designer who came with me from my previous company, and then a great product manager who built and sold his last crypto company.

Will: I'd love to hear a little bit about, so you sell to enterprise and kind of what the, what the pricing model is and... 

Cathy: Yes. Well, I should explain that we went to market with a startup product. So you can imagine, smaller companies don't have the capacity to run an internship program. So we thought, let's get to market, let's get some revenue and do this as quickly as possible. So we charge startups $250 per intern per month. We save them on average about $10,000 on wages. So the math works out really well in their favor. For enterprises, we charge them about $1000 per intern per month, and we still save them about $10,000 on wages.

Paige: Where does the savings come from? 

Cathy: Around $3 billion in wage subsidies comes from the federal government and the state government. So each year there's a program called Work Study. It's about $1.2 billion. In 2020, they opened it up to for-profit companies because college campuses closed down, and those jobs that used to be primarily on campus weren't able to be completed. And so they opened it up to for-profits, and we became the first company to be the employer of record on behalf of any other company. So let's say you are Google, and you want to access these billions of dollars, instead of having to get approved by every single provost at every single university, you can come to us. 

Paige: So it would be like, you'd be the employer of record for the university and they'd work with you versus dealing with the students directly.

Cathy: Yes, that's right. There's very large companies that we're in conversation with who don't love giving away their Legos, and so we are building a tool today that allows us to streamline them getting access to all of the funding. I don't think that means they're going to cut us out. I think that it would take a lot of effort for them to do all the reporting that's required to create a Work Study approved job and then do all of the reporting that's completed by us. But we're building that and it's in progress. 

Will: Is Folio the discovery engine for the students to discover these internships? 

Cathy: Yes, it is. So we partner with every college career center. And so we have access to all of their 3 million students that are approved for work study. 

Paige: What is the infrastructure that you need to have like a Work Study approved job? 

Cathy: Yeah, so basically the stipulation is that the job has to be related to the student's career path or to their studies. If you are a liberal arts student, it might be a little bit more open ended than if you're an engineering student. So far we haven't run into any roadblocks. They've just been very happy that the students get paid and can utilize their dollars in a way that's actually productive towards their career and their education.

Jesse: Do you, do you take on any risk in the process, so in that, you know, if it's, it hasn't been not approved, but if it did, because you're the employer of record, would you wind up footing the bill? Like, if they didn't get the subsidies? 

Cathy: Yeah, so that's a good point. Um, we do take on some risk. That is -

Jesse: That's how you get paid.

Cathy: Yes, that's how we get paid, for sure. The way it works mechanically, is that, every two weeks we pay the intern in full. So we pay 100 percent of their wages. And then we invoice the university for half of their wages, and then we invoice our clients for the other half, along with a subscription fee. So we haven't gotten to a case where we weren't able to understand what the intern's complete pool of funding is So typically what happens is the intern will sign into their FAFSA account, we can see exactly how much money they have, and then we track how much money we're using. So it's relatively easy. The information is available. 

Jesse: That was my first job in college was working for the university on the FAFSA thing. So I remember that. I didn't know what they had to go through. They just paid me. Um, I guess one of the things I was curious about was just how defensible all of this is. You kind of touched on it, like the large enterprises maybe would attempt to do this. You don't think they will do all of it, but, does it continue to be as lucrative, as defensible, as the world turns, as more people realize this is great, or is there something sort of at scale that really keeps this controlled by you?

Cathy: Yeah, so we are today the only company that is approved to be the employer of record for these funds. So, it's possible another company will come in and try to do this. They would have to get approval from every single provost at every single university. So good luck to them. It's sort of difficult. I will say there is an opportunity for us to get more than 50 percent of funding. So, the law right now for the federal government is that if you're a nonprofit, you can get up to 90 percent of your wages covered. So we are exploring that option. We are also running a research study with Strata Education Fund and Stanford to explain how our internship program actually dramatically increases our students' success rates of graduating and their employment outcomes after. So our goal was that through this research and all the work that we're doing, we can actually open the door for ourselves and be approved as the only and the most proven Work Study employer of record.

Will: How old is the company and how much capital has gone into it? 

Cathy: The company is three years old. We've raised about four and a half million dollars. And how the money was broken down is essentially we did a, an accelerator program, about three years ago, and that's when we incepted a slightly different idea that was more B2C focused. We built that out for about a year, got to about a million dollar annual run rate, and then we got access to these federal funds as the only companies to do that. We raised the $4 million on top of that, and we've been building that business since. 

Will: Okay

Paige: So it sounds like that is - the large majority of it is like the round that you're currently closing. Is that right? 

Cathy: Yes, we actually closed the round in August of last year. 

Paige: Okay. 

Cathy: We saw this opportunity to meet you all. I think you all have like a fantastic take on the industry. So I thought, you know what? Let's see if they're interested. I think there's, a lot of knowledge and opportunity to be gained with every single VC that works with us. 

Mark: Can you talk about traction, Cathy, just maybe a couple examples of enterprises that you're working with?

Cathy: Ah, yes. Most of our revenue today is still coming from startups. 

Mark: Okay. 

Cathy: This month we'll close around $50,000 in revenue from startups that are paying us. We have a bunch of pilots, because we just sort of pivoted to building this employer of record validation tool for large companies. The hope is that we'll have around $15,000 from them this month. And then the goal is that we can expand into their summer programs. Something I like to share is that about 85 percent of the volume of internships are through these large enterprises. So companies that have 500 or more employees, and then the rest of it is through small companies. So we feel very lucky that we've been able to, you know, get to our revenue numbers really quickly through startups. But I think the real way to build this company is to partner with large companies. 

Mark: Can you talk about the pilot, some of the enterprise companies that you're getting closer with? Just, what are they excited about? What are they concerned about? 

Cathy: Yeah, yeah, yeah, happy to share. it's a public company. They’re about a thousand employees. They recently shut down their internship program because it wasn't worth the investment. They found out about us. We told them we can save you at least 70 percent on a combination of wages, sourcing, training, and vetting. And so now they're just handing off their internship program to us. So they use our platform to do all of their sourcing, to reach about 3 million students. We save them about 50 percent on wages, and then we basically run their program. 

Will: Cool. 

Paige: What were the terms of this latest round? 

Cathy: We raised $4 million on a 16 million post money valuation on a SAFE.

Paige: Cool. And then, maybe if you could talk about, like, your future financing goals? 

Cathy: Yeah, uh, future financing. [laughs] So the reason why we raised 4 million is because we knew that building for enterprise would be a very different beast. And so our goal is that by the end of this year, we have converted all of our pilots into full contracts where we're serving at least 100 interns per enterprise customer that we have pilots with. And then we also want to expand so that they're not doing internships just in the summer, they're hiring interns throughout the year. So I would love to get to a point where we're at about 3.5 million in revenue. That would be us converting about 60 percent of our pilots into full contracts. And then obviously continue to expand from there. 

Jesse: And that would be, you'd assume roughly $100,000 a month for a client with those internships. That, that number feels like it's - would hold. 

Cathy: Yeah, I think $100,000 is comfortable because we save them about five times more than they pay us. 

Jesse: Yeah. 

Cathy: And maybe this is like a side note, but we considered adjusting our business model to be, instead of charging them $1,000 per intern per month, just charging them 20 percent of their savings. That's a good option, right? It feels like no one's paying anything. But we'll see. We'll do some shifting as we learn. 

Jesse: That's good. 

Will: So I'd be curious as to kind of what your kind of burn rate, you know, expense rate is and get a sense as to how much runway you have and kind of when you're thinking about your next major round. 

Cathy: Our burn rate is about 120k per month. And we have about 20 months of runway, so we're pretty comfortable today. We really need to use those dollars to close these enterprise customers, right? Like that's, that's a success. 

Jesse: What moves the needle on that? 

Cathy: What gets them to convert? So, I have this hypothesis that - A lot of companies are nervous about handing over their brand to us. And so -

Will: Is that the, the HR people are concerned about that? Like it might be a job stability issue for them or? 

Cathy: Um, I think it's just changing their workflow.

Will: Okay.

Cathy: So I think that that's potentially the concern. Their goal, though, is to not create a weird experience for the student, right? So let's say you've hired these students and, now they need to not only join your company, but they joined Folio and that seems strange. So I, I understand that totally. So what we're building right now is the ability for us to not be the employer of record, which means that we create a very easy way for each company to get the same approvals that we have. I think the lucky part about that is it's just tech, right? So we just need to ingest a good amount of information, fill out a bunch of forms and get them approved. So it's sort of either/or. Can we convince them to allow us to be the employer of record? If so, we can convert everyone really fast. If they're not into it, then we have to build this tool. And then I think we'd be able to convert them. 

Jesse: Yeah. 

Paige: It seems like a lot of things are going really well. What is keeping you up at night? 

Cathy: Ooh, this employer of record thing. It's really like, oh geez.

The pitch for Folio will be right back!

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Paige: It seems like a lot of things are going really well. What is keeping you up at night? 

Cathy: Ooh, this employer of record thing. It's really like, oh geez. We were like all the way to the end of, you know, a pilot where people said, oh, great. We're so excited to do this. And obviously we're trying to upsell. And so, you know, if we're going to take over all thousand plus interns at a Fortune 50 company, then it has to work with their systems. So we have to fully integrate with their ATS, their HRAS, their payroll system. And if they don't want us to be the employer of record, then we do need to figure out a way of giving them access to all of the wage subsidies that we have access to. So I think it's a big decision. Obviously I'm like a little bit worried that if we give away the Legos, then maybe they'll cut us out, but I think the likelihood is also really low because the amount of administrative burden that they'd have to go through to report their interns' hours and wages every single, like every two weeks to every single university is very high.

Jesse: It's also not their core business. 

Cathy: Yeah.

Paige: Super interesting. Um, how much allocation do you have open? 

Cathy: I think we're open to about $500,000 at the same valuation.

Jesse: I thought she was going to be like, negative 500,000. 

[laughter]

Mark: For rev - Can you just talk through, Cathy, revenue for 24 and then how that's going to shift. I'm curious what the ratio between startups and enterprises, what's your desired - what did it look like in 24 and what do you hope it looks like in 25?

Cathy: Yeah. So we got up to about a 100k in recurring revenue in July of last year. Very exciting. And then we got access to all this work study funding and scrapped it. Which is crazy. So we like rebuilt for the last, gosh, like three or so months and now we're at about 50k per month. So we like hit this peak, we got funding, we shifted our business model aggressively. 

Mark: Oh, interesting. 

Cathy: So being very transparent there. Let's see, for this coming year, the goal is that we convert that 40k in small pilots and startups into enterprise customers. So that means going from an average contract value of about $5000, because they're small companies, to an average contract value of $100,000. So it's a big leap, but I think we're making the right investments right now with these pilots, with Fortune 50s. 

Jesse: Are you pushing on go to market startups still, or are you really leaning on the enterprise this year? So have we thought about the - there's 40,000 startups, let's say, today and the next few hundred thousand is all enterprise. 

Cathy: Yeah. So we don't do any marketing for startups -

Jesse: Okay.

Cathy: - and we get an average of 10 new startup signups a week. 

Jesse: Okay.

Cathy: There's like this obvious question in my head, which is like, well, if so many startups clearly want this, what if you just like own the startup market first and like build revenue? Like internally, our team thinks about all the time. However, it's operationally a bit more hectic to do that. Matching is, you know, it's like a, a one to one ratio of like company to student. Whereas at a large enterprise, it's a recurring contract. It's really large. It's predictable. They have programming. We don't have to do the programming. So, I think we're making the right bet to focus on enterprise. 

Jesse: Yep. I think you're making the right bet to pick one or the other. So you could choose either maybe, but I agree with that. 

Mark: Can you talk a little bit about what you've learned in the other two companies you've started and how that's informing the way that you're building Folio? 

Cathy: Yeah, that's a good question. Um, hmm. Something that we're thinking about for this year is, it's people, right? Especially in the early stages, really all you have is good people. There's something about nurturing at this stage of the company that we honestly decided we don't have time for. So at the turn of the year, we let go of a third of our team because they didn't have the same advantage that they had when we were a B2C business as we needed for being a B2B business. That was painful, but it's also, I think, the right decision to make. So, yeah, I think the main takeaway was, if you're going to try to do something really hard, that's really new, you don't have time to train. Even though we are literally an internship training company. So it felt like misaligned. It was sort of painful to realize, but we did it.

Mark: Yeah. Thanks for sharing that. You've been making some hard decisions the last six months. 

Cathy: Oh, yeah. Fun. I mean that's like you know the job.

Will: Big bold moves, though. Yeah. Yeah.

Cathy: Yeah.

Will: Awesome. 

Paige: I guess like, what does success look like for you and the company? 

Cathy: Yeah. Something that's funny that like, I think Josh really wants to make sure I say, was, um, I genuinely think that the future of education looks very different than it does today. So today, if you think about it, it's like a family spends $200,000 on academics, right? And then you get this, you know, pamphlet that says, great, you are approved to do no job, a job, you know, like TBD? And so the stat is basically like around 50 percent of students actually use their college degree. Like they do a job that's related to their college degree. I think the future of education looks very different. I think it's a third academic, which is what we do today. I think it's a third practical, where you're in an internship, you're trying different jobs, you're figuring out what you can do professionally, and then it's a third professional where you actually figure out who you are and what place you want to have in the world. So in order for that to happen, we have to dramatically lower the cost of internships. If it costs $50,000 to host each intern with the idea of them becoming a full time employee, like, it's impossible for us to create the 20 million internships that we need to serve 20 million students. So it's like, of course, today, there's only 4 million internships. That's like even high. So yeah, that's, that's my vision for the future.

Paige: Cool. Sweet.

Will: Big impact. 

Paige: Yeah. I've been, like, very impressed by your story. It's clear you have, like, the ability to make really challenging decisions and keep in mind the long term vision of the company even as it shifts. Our thesis at Behind Genius is focusing on the future of work and the future of play. So it's like very much aligned with how I think about the future of work. I, like, did a bunch of internships in school and they were incredibly helpful in understanding what I wanted to do after. And this is like a future vision that I deeply believe in. I would say our check size is usually between, 150 to 250k and I, like, I wrote down on the piece of paper like, 15 mil post, question marks. So I was, like, happy that you said 16, which was in the close range. I would love to continue the conversation for diligence. If that sounds good to you and happy to answer any questions that you might have as well. 

Cathy: Thank you so much, Paige. 

Paige: Yeah. 

Cathy: I'll follow up with you after.

Paige: Awesome. 

Will: I love the impact that you're having here. Obviously internships change the course of your life and really cool to kind of bring that life story to focusing on how to impact a lot of other people. It feels like you're you've unlocked something really interesting and going to build an interesting company. So, congratulations on that. It's not a fit or KittyHawk and kind of our, our particular focus around deeper technology. So I'm going to pass, but really excited. And if I can be helpful in any way, kind of let me know. 

Cathy: Thank you so much. I appreciate it. 

Jesse: So the round that you're sort of raising or oversubscribing is probably not a great fit for us because I'd want to be writing a larger check if we were to get to yes. So if you're open to it, I'd like to spend a bit more time. Dig in a little. Maybe there's a deal we wind up getting to where you would take a little more, maybe it's a little bit higher posts or something, but so if you're open to the conversation, that's what I would do as next step. I started my career because of a co-op at Drexel. I did the FAFSA stuff for my internships at the schools that I lived at and finding those roles is not easy. So I'm glad you're making it better and easier. 

Cathy: Thank you. I would very happily put you on our investor updates and give you all the information you need to follow us. 

Jesse: Awesome. Yeah, let's do that. 

Cathy: Thanks. 

Mark: Cathy, I actually think we've met before as well and we didn't, uh, which is great. And I didn't want to, and you haven't even shared some of the coolest stuff in your story, which is you're an ultra runner, if I'm not mistaken.

Cathy: And so are you? 

Mark: Uh, not an ultra. No, no, no, no, no, no, no

Cathy: Marathon.

Mark: Yes. But, uh, man, I just, I remember when we first met, I was just so impressed with, just the authenticity and the willingness to make those hard decisions. I just don't think that can be overstated in these moments how those crucial conversations are going to shape what Folio does. I think two things that really make this probably not a fit for 11 Tribes, the round dynamics are challenging. I think being able to put a check in at that valuation that allows us to hit our ownership targets is going to be challenging but excited to see and would want to see more traction along the enterprise side of things so I don't know if I'm already on the investor updates, but hopefully we can be added or included because I'm excited to see what you're up to and just encourage the success, so. 

Cathy: Yep. 

Mark: Thanks for being here.

Cathy: Thanks so much Mark. I appreciate it. 

Mark: That's great. 

Josh: Cathy, The Pitch Fund would like to invest in this round. 

Mark: Nice. 

Paige: Whoa! 

Jesse: He ate his Wheaties. 

Josh: I did eat my Wheaties. We'd target a 1 percent ownership. So if you have 160k, and this is probably a really good deal for our syndicate too, so there's a chance we could take that whole, if you're serious about raising that 500k and you think The Pitch Show and fund -

Paige: Are you squeezing me out right now?

[crosstalk]

Josh: In collaboration with Paige.

Will: Unbelievable.

Josh: Oh well, yeah. I mean, it depends on what your check size is.

[laughter]

Josh: Wherever you - like, we'd love to like help fill out if there's any extra, through the syndicate, but, at least sneaking a check out of the fund, and yeah, we're excited.

Cathy: Thank you so much, Josh. Thanks for having me here. Thanks, everyone, for being here. I really appreciate it. 

[applause]

Mark: I think you can exit. 

Cathy: Okay, cool. 

Mark: No one ever really tells him what to do. 

Cathy: Right. See you in a little bit. 

Mark: Yes. 

[goodbyes]

Paige: Josh, very nicely saying he's going to take my allocation. 

Will: Wow. 

Mark: He just squeezed you right out. 

Josh: Um, no, I did not. That was not what I meant to say. I would love to work with you on the diligence process.

Paige: All right. 

Josh: This is like right at the ceiling of the price we usually do, unless we're investing in a baller company like Will's, geCKo Materials, we make exceptions so, we'd love to collaborate with you on diligence. 

Paige: Yeah. 

Josh: Um, yeah, go from there. 

Paige: Sweet. 

Will: Awesome. 

Josh: What do you guys think about a deal like that, that's like not even a deal? It closed last year and they're reopening for -

Mark: It's a power move.

Jesse: It is a power move.

Mark: You guys didn't hear how - I mean, the things she has done, the distances she has run, she is a force of nature. 

Jesse: Wow. 

Mark: I think that's the only way I could describe her. I remember her very vividly. 

Jesse: Wow. 

Mark: We met her right as they were closing the rounds last August.

Josh: Oh, you should have wrote the check. 

Jesse: That's awesome. 

Mark: We missed it. 

Mark: Uh, but yeah, she's really impressive. I'm excited for you guys to work with her. That's really cool.

Josh: Awesome. That's day one. It's a wrap. Will, thank you for joining us. 

Will: So great to join. Yeah, to be here. Thank you. 

[applause]

Will: Yeah, amazing companies. Amazing entrepreneurs.

Josh: Hopefully we'll fill out a whole deep tech day next time.

Mark: Yeah. There you go.

Will: Amazing.

Josh: Cut.

Cathy left the pitch room with $500,000 fully spoken for by Paige and The Pitch Fund. But as it turns out, Paige didn’t need to worry about me squeezing her out of this deal… 

Trump: The department of education is a big con job….I’d like it to be closed immediately. 

We talk to Cathy after this.

BREAK

Lisa: Hi Cathy. 

Josh: Cathy, how are you? 

Cathy: Uh, I am net good. But I definitely have not been sleeping that much lately. 

Josh: Net good. So, last we heard, Paige was interested in investing, and we at The Pitch Fund were also interested in investing. And then we got an email from you, you said, basically, we have the data room, but we're not going to send it because we're mindful of the Trump administration's intentions to abolish the department of education. Given this, our team is focused on future proofing the business and prefer to hold off on fundraising. Bring me back to that moment? Like what were you thinking when you sent that email? 

Cathy: I thought about the perspective of an investor and I thought, okay. If I were an investor and I just saw three days ago that half of this company's like main strategy might just be turned off. I don't know if I would invest. And so my perspective was like, you know, why don't I spend some time and think about a, about a future proof strategy and then come back. And regardless of if the money is gone, or it's still there, there's a really clear strategy that we can all get behind. 

Josh: When did you like first realize like politics were going to potentially play such a life and death role for your company? 

Cathy: I was one of those holdouts who was like, you know, I really don't know if Trump is going to win. And then when he won, I was like, okay, let's really start planning. But they actually carved out work study. And financial aid and FAFSA. So actually, we're okay.

Josh: You're good. 

Cathy: Yeah, we're, we're good. Yeah. And there's, I don't think there's a plan to remove it, which is great. It's actually very aligned with what the administration cares about, because they want students to be able to work and build experience and practical skills and be employable after graduation, which is truly what work study is made for. So now we're in a good place. So honestly, our goal right now is just to maybe pitch to DOGE and say, Hey, this is one of the most efficient things you can do is employ students and help them make the most of their college experience, build practical skills, and get a job after graduation. 

Josh: Yeah. So how does one pitch to DOGE? 

Cathy: So before VC was so ingrained with the government, it might have been much harder. But now, I live in the Bay Area and a lot of those VCs used to live in the Bay Area, or still do, I think. So it's not too difficult to ask someone for an intro to someone and move on.

Josh: These VCs that are now working at DOGE.

Cathy: Yes, yeah, VC is now working at Doge and also one of our investors was offered a job at DOGE. 

Josh: You're kidding, like someone on your cap table right now. 

Cathy: Yeah. 

Josh: Okay.

Cathy: Yeah, he decided not to take it because he started his own company, yeah, that's somewhat of an easy, easy “in” we'll say.

Josh: Wow. Like, is that the plan to try to reach out to them soon and say, Hey, here's why, whatever you do, our budget. Don't mess with it. 

Cathy: I mean, yeah, that's one of the plans. and I’m hopeful we’ll have that in place in the next couple of weeks so that’s one The next one is that we are actually starting to build a platform that facilitates all work study funding for both states and the government. 

Josh: So for all of work study, like not just the work study that's allocated for internships. 

Cathy: Correct. For all of work study. Every university has different software to facilitate work study or they have no software and they do it in a spreadsheet. That means that we become sort of like, not necessarily the bank, but sort of like the stripe in a lot of ways for government funding from government to universities, to us, to companies and back around. It's really somewhat easy software to build, which is great. So we're going to try to build it in the next three months and then just give it away for free at first in the summer. There's only like 6,000 universities, so like it doesn't really make sense to try to build a business off of it. I think it's just more of an acquisition strategy so that every single company and every university and every student that uses Work Study goes through us. 

Lisa: Why are you so smart? 

Josh: Stop it. 

Cathy: Thanks, Lisa. 

Lisa: It's such a good plan. 

Josh: Are you tired of pivoting all the time? 

Cathy: Uh, am I tired of it? Gosh. Uh, I don't love it, but I think it's like just par for the course. I don't think my team loves it. And so I just have to like remind people like, yes. We are affected by these behemoths that we can't really change, but that doesn't change the fact that like every year, billions of students are still hired and paid. So like, until AI like totally eats up that market, which we have our own plans for that. There will still be a bunch of students that need to prepare for the workforce. 

Josh: So. When are you going to take our money? 

Cathy: [laughter] I think soon, which is good. So we just closed our first three, very, very large companies. So like companies that have revenue of a billion plus, so that's great. I don't want to like over promise. So give us a little bit of time and we should be ready. Just want to make sure these customers we closed are happy and the volume of interns they plan to hire is that volume and then we'll get you back on track. 

Josh: Uh huh. So you want to de risk the business for us further before you take our money. Which is just, I mean, awesome, but also like … 

Lisa: This is backwards

Josh: So backwards. Like normally VCs, they're dragging their feet. I'm like, Cathy, take my money yesterday. And you're like, no, no, no. Give me more time to de risk this for you. I 

Cathy: I know. It's sort of funny. I don't know why I work this way. All of our advisors are like, Kathy, you do realize that like when people invest in you. They've calculated in their head, like, 90 percent chance you will fail. And I'm like, yeah, but, like, I want them to feel 90 percent that we will succeed. And I realize that's, like, sort of silly. Anyway. 

Josh: But I have to tell you, Cathy, I love your business. 

Cathy: Oh, thanks. 

Josh: Like, like genuinely, like this is one of the companies I am most excited to invest in. Like we've met a lot of founders and obviously like your background is impressive. What you've done, like we really like you, but also, like I think about my kids and my daughter, who's going to be going into college in a few years. Like I want this for her. And then I think about it from the business side and obviously where you make your money, you're saving them money. Like I don't, I don't have a hard time figuring out who loses if you win. 

Cathy: Thanks. That makes me feel really confident that. This will work. I just want to make sure it works. 

Josh: So, whenever you want to kick back up conversations with Paige and us, let us know. But we definitely want to be part of this.

Cathy: We definitely will. Thank you so much. Knowing that I've, I've met your daughter now, I know how genuine that feels, right? Like, seeing you both and how much you love her and seeing her be a part of the pitch and you two helping her figure out, like, is this the type of future you want? Like, I genuinely understand that this is something that you really care about. So, we will be writing very soon. 

Lisa: Awww.

Josh: Okay. 

Cathy: Sorry for, thanks for being patient. 

Donald J Trump, you will not squeeze me out of this. I will get my allocation. It’s the art of the deal!

We’ll catch up with Cathy on the season 13 finale to see how the pitch to DOGE goes and if she finally takes our money!

No offer to invest in Folio is being made to the listening audience on today’s show. If we end up doing a syndicate, investors in our private Substack community will be the first and the only ones to know.

So if you’re an accredited investor, apply to join at thepitch.fund

Speaking of accredited investors… Next week on The Pitch… 

Michele: Those men drive Ferrari, they wear Armani and they live in penthouses, but they don't have a place where to go to take care about themselves. 

Kate: So I think what you're doing is wonderful, not least of all because I would like the men in America to look better. 

Charles: I would wear that. 

Kate: Do you wear cologne? 

Charles: I don't - 

Jesse: I do.

Charles: But cologne’s coming back big time

Kate: It's got to smell good. He's Italian! 

Ben: I'm not seeing anything else , super revolutionary here.

Michele: We already scale this thing in Italy. 

Ben: And how many locations in Italy? 

Michele: 16 locations. 

Michele: We want to own New York. 

Ben: Own New York. 

Michele: Yes. 

Michele: We want our brand to be the number one in the world. 

Ben: And investors today are getting a piece of everything? Or just the US? 

Michele: I'm making a new business in the US. So fund raising in the US.

Ben: So no, it doesn't include the business in Italy?

Michele: No. 

Kate: How do the Italian investors feel about that? 

That’s next week! Season 13 is available to watch on YouTube and Patreon, OR listen on your favorite podcast player.

Subscribe to The Pitch right now, and turn on notifications so you don’t miss it. If you enjoyed today’s episode, be sure to hit that like button. We’ll see you next Wednesday, in the PITCH ROOM.

This episode was made by me, Josh Muccio, Lisa Muccio, Anna Ladd, Enoch Kim, and Jackie Papanier. With deal sourcing by Peter Liu, John Alvarez, and Phoebe Sun.

Thank you to pitch alumni Dhaval Patel at Lotus from Season 10 for introducing us to Folio.

Music in this episode is by The Muse Maker, Breakmaster Cylinder, Strange Knight, Memory Palace, Our Many Stars, Amico Mio, Peter Jean and The Runaway Queen.

The Pitch is made in partnership with the Vox Media Podcast Network.