CrossStack

Crossbeam already has a reputation for backing novel asset classes (more of our previous thoughts can be found in Ali Hamed’s podcasts (example here) or our previous work (here).

If you’re building anything that’s truly novel we want to see it. There’s a ton of inefficiencies in the current financial system, and sometimes you need to think differently to solve them. Good examples of things that get us excited include:

Captive insurance groups (“captives”) - especially for new use cases (we’re seeing some interesting ones related to climate). We think these could be a really interesting way for companies (and people) to reduce risks - especially risks that insurance companies are either not insuring or are pulling out of.
Tontines - annuities that pay out to survivors of a group. These started in France in the 1600s, and were popular in the US until the 1800s. There are some regulatory issues with tontines in the US today, but we think there could be ways to make it work (TIAA-CREF found a getaround).
721 exchanges - these are 1031 exchanges into a REIT or a partnership. These are rare (Flock Homes is actually a good example of a company using this structure). We’re currently exploring whether these can be used for non-property assets as well
New ownership structures: We’re already investors in Common Trust, an innovative startup which helps owners transition their businesses to their employees, largely via employee ownership trusts and we think there are a bunch of other ideas out there we’d love to see (company collectives, etc).
Share swaps / collectives: Related to the 721 exchange idea above, we think there are a lot of interesting things that can be done via collectives. Being a smaller or independent company is becoming increasingly hard, and finding a way to join forces with others - while still maintaining some autonomy / control / upside - makes sense. The hard part here is aligning incentives, but we are already invested in one company (in stealth) that has created a company collective that is showing great promise.

Fighting Senior Fraud

Get in touch with

Elder financial fraud has become an epidemic in the U.S — last year alone older Americans (60 and above) lost a staggering $1.7 billion to various forms of financial fraud, from tech-support scams exploiting non-existent tech issues to the grandparent scam and identity theft. While these ‘grandparents’ have come more digitally literate and are thus spending more time online, their vulnerability to cybercrimes and fraud have increased. We’re looking for:

Early detection solutions that flag when elders are beginning to need help with their day-to-day finances and provide a path for their children / caregivers to assume responsibility gradually
Elder-friendly software that protects elder Americans from the elaborate financial scams through a trusted line that loops their caregivers / children in

New Age Software Reseller / GPO / MSP

Get in touch with

Buying the right software is hard - with larger providers you need to fight for a fair price, and for lesser known solutions it’s often hard to find a provider that’s solid and that you can trust. On the flip side, startups and software providers are facing an incredibly hard environment in terms of selling their software. There needs to be a better way for people to find, vet, price and buy software.

Gartner ($36B market cap) does a bit of this, G2 ($1B valuation) does a bit of this also, and CDW ($33B market cap) also does a bit of this. But despite several giants working on this, many are still left feeling that their need isn’t solved.

We think there are a few big things a company could do here - admittedly the legacy solutions do some of this but not well enough. First, a company could aggregate software demand from many startups / companies, and use this demand to fight for better pricing. They could also use this aggregated demand to push for better customer service when issues do arise. If a smaller startup alone buys say Netsuite, they’re going to get a higher price and worse service than if a third party with a ton of demand fought on their behalf.

Secondly, a new company in this space could help companies discover new software and be a true neutral party on what’s working for others. The way they could be more of a fair source of truth is by disclosing their fee publicly - say 7% of the spend. Finally, a company in this space could be hugely helpful to smaller SaaS providers that offer great products but struggle at finding new customers. Some developers are great marketers, but some others aren’t. A business in this category has a rare chance for a win/win/win.

Aging-in-Place

Get in touch with

We think that the combination of home care labor costs increasing dramatically, boomers holding greater than half of all wealth in America (10x richer than millennials by the way), horror stories coming nursing homes during the pandemic, and boomers being willing to spend their nest egg on aging comfortably in their homes (or on their terms), will create massive opportunities for at-home care.

The continued private equity interest in consolidating home health (skilled care provided by licensed nurses and therapists) and home care (nonclinical services from professional aides) will unfortunately probably lead to a decrease in quality of care but will also open these previously legacy / analog players to software solutions that are much needed.

We are interested in companies building —

Solutions to the ‘supply’ problem — we think the frankly difficult nature of the care worker job, rising demand for home care, and increasing cost of labor means the caregiver shortage will continue to exacerbate. These could be AI assistants to automate caretaker admin, robots to help with incontinence, or creative burnout / retention tools
Embedded software and hardware solutions connecting home health with home care. There is a tremendous leakage of valuable data containing social interactions with the elders — this data could be leveraged to 1) expand operating margins at these increasingly PE-owned enterprises and more importantly 2) increase the quality of care / ensure a continuity of care from one caregiver to the next which would alleviate some of the frustration and caretaker burnout the industry is experiencing
Home modifications to help aging Americans stay in their communities for as long as possible – deeper dive here from Mili

Redeveloping Workforce for the Energy Transition

Get in touch with

Moonlan Zhang

Despite unprecedented growth of the renewables industry, bolstered by the IRA, there is a well-documented shortage of qualified labor needed. This includes and is not limited to electricians, mechanics, engineers, and other skilled tradesmen. In some cases, there is a mismatch of supply and demand. For example, a 2022 study showed that 83% of the potential wind energy workforce had difficulty finding job opportunities while 68% of wind energy employers had difficulty finding qualified applicants. In other cases, the particular category of labor is in short supply. Around 25% of existing skilled construction workers are over the age of 55 and expected to phase out of the workforce. The EV industry is similarly impacted, facing staffing problems at the factory, charger, and the post-purchase repair level.

We are excited to see any companies looking to tackle this in novel ways, such as:

Increasing labor supply by developing upskilling and vocational programs
Leveraging AI to increase labor productivity
Improving staffing models.

Medical Tourism Marketplace

Get in touch with

Moonlan Zhang

Each year, millions of tourists travel to other countries for medical care. They are often driven by a mix of factors, including but not limited to: 1) get treatments at a lower cost, 2) desire to receive care from medical professionals of a shared culture / language, and 3) undergo procedures that may not be approved in their home country.

We’re excited by any solutions that make this kind of tourism more accessible and legitimate, including but not limited to:

Marketplaces or platforms to facilitate the medical tourism process across the world
White label solutions that help businesses better reach potential customers worldwide

Labor marketplaces enhanced by AI

Get in touch with

Technology has answered the call to address labor shortages in a variety of different ways. After ATS and other SaaS, we have seen the following in recent times:

Vertical labor marketplaces, solving for the optimization/matching problem
Co-pilots - thanks to consumer education brought about by the likes of ChatGPT, we are seeing an explosion of these tools, mainly in two ways:
- Generate recordkeeping outputs (often to reduce ‘check the box’ admin work)
- Sift through large databases/manuals (think reducing reliance on memory or having to sift through large manuals)

We think the next big opportunity will come from the former that embraces the latter. For example, marketplaces that play a role in (i) increasing supply e.g. better training with AI, licensing/certification within the platform or (ii) reducing friction or risk in certain jobs e.g. providing new forms of insurance due to AI’s ability to sift through data, or better compliance observability in real-time will often be

The education, compliance or insurance components could even be loss leaders, but ensuring a superior supply dynamic, with better retention / lower disintermediation, can be a durable competitive advantage in certain verticals.

Addressing the housing affordability crisis

Get in touch with

How will advances in software and robotics affect one of the crucial problems of this generation? We are interested in all sorts of solutions, the ones we’ve seen and most excited about are:

Capital-light solutions that tackle the housing problem (streamlining building processes)
Fintech that allows for better savings for homes (tax advantaged, rewards, etc.)
Various structuring forms such as tenants-in-common
Tackling regulatory hurdles (permitting software, compliance platforms)
Increasing supply via novel forms of modular / build technology

Underutilized areas for ads

Get in touch with

Can we monetize certain real estate on the internet that historically has been underutilized e.g. can you create a marketplace for people to bid on links that can be added to someone’s email signature? Should corporate workers or business owners be sponsored by other businesses? Can you pay a software engineer to sport a certain sticker on their laptop?

Some of these are not viable because they’re low value but expensive to monitor/track, but is there ad inventory in plain sight we are just not looking at because of cultural norms or technological barriers?

Solutions for spare capacity

Get in touch with

Say you’re hired by a company to do task X that is non-recurring and therefore results in plenty of downtime for you – can you and your firm get paid for doing a task assigned by a different company? If your current firm can’t find a high ROI task for you to do, can they outsource your skills elsewhere and get paid for providing you with the lead for that job and the infrastructure / support to do that? And can you earn extra compensation for agreeing to switch context and perform different tasks?

Finding a way to engage Seniors

Get in touch with

It’s no secret that the US population is aging - which implies a smaller labor force. But can we utilize the knowledge, wisdom or otherwise, that seniors bring? Here are a few ideas I’ve thought about:

Childcare shortage: is the solution to engage and connect the elderly to spend time with children?
Advisory: will people be willing to pay advisors who are post-retirement age but not ready to retire?
Therapy: can we train the elderly in providing therapy for certain populations? Or to each other (tackling loneliness)?

Insurance for AI

Get in touch with

Ali Hamed

A lot of people would use AI for things like filing taxes if they were 100% sure they were accurate. But the 5% risk isn’t worth being sued by the IRS. What if you offered an insurance product to pay a premium and make a claim if it gets the taxes wrong. It’s hard to predict when something will be wrong, but it’s easy to predict how often.

A guest post by