welcome everybody to know that YouTube hangout super excited to be here with my
hangout super excited to be here with my
hangout super excited to be here with my friends and CEO of sage mr. Stephen
friends and CEO of sage mr. Stephen
friends and CEO of sage mr. Stephen Kelly sages the accounting software that
Kelly sages the accounting software that
Kelly sages the accounting software that I personally use to run my YouTube
I personally use to run my YouTube
I personally use to run my YouTube channel in my business and it’s an honor
channel in my business and it’s an honor
channel in my business and it’s an honor to be here every month with him
to be here every month with him
to be here every month with him answering questions talking about
answering questions talking about
answering questions talking about entrepreneurship Stephen welcome aboard
entrepreneurship Stephen welcome aboard
entrepreneurship Stephen welcome aboard right over here Evan we always love your
right over here Evan we always love your
right over here Evan we always love your show your broadcast of the best arm and
show your broadcast of the best arm and
show your broadcast of the best arm and it’s an honor for me to be involved and
it’s an honor for me to be involved and
it’s an honor for me to be involved and I’m very humbled so I just love doing it
I’m very humbled so I just love doing it
I’m very humbled so I just love doing it because it’s great fun too and hopefully
because it’s great fun too and hopefully
because it’s great fun too and hopefully we’re letting everybody out there into
we’re letting everybody out there into
we’re letting everybody out there into kind of some secret source about how to
kind of some secret source about how to
kind of some secret source about how to be more successful as entrepreneurs and
be more successful as entrepreneurs and
be more successful as entrepreneurs and grow and expand their businesses I love
grow and expand their businesses I love
grow and expand their businesses I love it well today we’re talking about a
it well today we’re talking about a
it well today we’re talking about a really important topic how do we get
really important topic how do we get
really important topic how do we get financing as entrepreneurs but before
financing as entrepreneurs but before
financing as entrepreneurs but before jump into that I know people always look
jump into that I know people always look
jump into that I know people always look forward to seeing what are the quotes
forward to seeing what are the quotes
forward to seeing what are the quotes that Stephen Kelly is gonna lead us off
that Stephen Kelly is gonna lead us off
that Stephen Kelly is gonna lead us off with so I know you got some papers ready
with so I know you got some papers ready
with so I know you got some papers ready what do you got for us this month
what do you got for us this month
what do you got for us this month Stephen we got full quotes to kick it
Stephen we got full quotes to kick it
Stephen we got full quotes to kick it off and first one is the co-founder of
off and first one is the co-founder of
off and first one is the co-founder of blip TV Dena Kaplan and quietly you need
blip TV Dena Kaplan and quietly you need
blip TV Dena Kaplan and quietly you need to keep your head down and build a great
to keep your head down and build a great
to keep your head down and build a great product before you raise money kind of
product before you raise money kind of
product before you raise money kind of letting it’s important message then
letting it’s important message then
letting it’s important message then Arianna Huffington obviously amazing in
Arianna Huffington obviously amazing in
Arianna Huffington obviously amazing in terms of broadcast and media as well
terms of broadcast and media as well
terms of broadcast and media as well having a partner or an investor
having a partner or an investor
having a partner or an investor definitely allows you to take more risks
definitely allows you to take more risks
definitely allows you to take more risks and go faster and then a couple of
and go faster and then a couple of
and go faster and then a couple of quotes actually kind of visa Evan
quotes actually kind of visa Evan
quotes actually kind of visa Evan Stephen quotes when raising money you
Stephen quotes when raising money you
Stephen quotes when raising money you look through the lens of what happens
look through the lens of what happens
look through the lens of what happens when things go wrong and the final quote
when things go wrong and the final quote
when things go wrong and the final quote this is kind of cool business isn’t a
this is kind of cool business isn’t a
this is kind of cool business isn’t a religion if it was we’d have a much
religion if it was we’d have a much
religion if it was we’d have a much easier time raising money now Evan and I
easier time raising money now Evan and I
easier time raising money now Evan and I believe business is a noble course it is
believe business is a noble course it is
believe business is a noble course it is it is a religion it’s your religion it’s
it is a religion it’s your religion it’s
it is a religion it’s your religion it’s your idea and that’s what you’ve got to
your idea and that’s what you’ve got to
your idea and that’s what you’ve got to make sure you inspire in everybody who’s
make sure you inspire in everybody who’s
make sure you inspire in everybody who’s back in you so there you go kick it off
back in you so there you go kick it off
back in you so there you go kick it off with a quote seven back to you I love it
with a quote seven back to you I love it
with a quote seven back to you I love it so so this is something that talking
so so this is something that talking
so so this is something that talking about finance saying it’s one of the
about finance saying it’s one of the
about finance saying it’s one of the most common questions about returns
most common questions about returns
most common questions about returns I know that you have gone through the
I know that you have gone through the
I know that you have gone through the ropes of being you know running a
ropes of being you know running a
ropes of being you know running a startup organization and and now being
startup organization and and now being
startup organization and and now being part of a much bigger company you’ve
part of a much bigger company you’ve
part of a much bigger company you’ve done some angel investing yourself as
done some angel investing yourself as
done some angel investing yourself as well before dive into kind of the
well before dive into kind of the
well before dive into kind of the questions that are coming through from
questions that are coming through from
questions that are coming through from the audience and guys watching live
the audience and guys watching live
the audience and guys watching live leave it in the chat and we’ll pick
leave it in the chat and we’ll pick
leave it in the chat and we’ll pick through and starting some questions what
through and starting some questions what
through and starting some questions what is your kind of overall thoughts summary
is your kind of overall thoughts summary
is your kind of overall thoughts summary advice that you want to kick off with in
advice that you want to kick off with in
advice that you want to kick off with in terms of best financing options for
terms of best financing options for
terms of best financing options for entrepreneurs yeah I think I think
entrepreneurs yeah I think I think
entrepreneurs yeah I think I think overall there’s got to be a philosophy
overall there’s got to be a philosophy
overall there’s got to be a philosophy and I’m a really great believer we’ll
and I’m a really great believer we’ll
and I’m a really great believer we’ll get into this I’m sure with the
get into this I’m sure with the
get into this I’m sure with the questions of making money before you
questions of making money before you
questions of making money before you raise money so you know I just think a
raise money so you know I just think a
raise money so you know I just think a lot of people raise money too early and
lot of people raise money too early and
lot of people raise money too early and I think generally you know the companies
I think generally you know the companies
I think generally you know the companies I’ve seen who are like from one to
I’ve seen who are like from one to
I’ve seen who are like from one to twenty people who go and raise money
twenty people who go and raise money
twenty people who go and raise money typically waste money and and it’s
typically waste money and and it’s
typically waste money and and it’s actually connected to the culture you
actually connected to the culture you
actually connected to the culture you want to build I’d say from day one when
want to build I’d say from day one when
want to build I’d say from day one when you build your company build your
you build your company build your
you build your company build your culture so I use phrases all the time in
culture so I use phrases all the time in
culture so I use phrases all the time in here like you know treat the company’s
here like you know treat the company’s
here like you know treat the company’s money as if it’s your own because it is
money as if it’s your own because it is
money as if it’s your own because it is and as I’ve found there is a leader
and as I’ve found there is a leader
and as I’ve found there is a leader that’s what you want to do now when you
that’s what you want to do now when you
that’s what you want to do now when you come on to the point where you want to
come on to the point where you want to
come on to the point where you want to grow faster and you want to expand
grow faster and you want to expand
grow faster and you want to expand quicker and you need capital there’s
quicker and you need capital there’s
quicker and you need capital there’s loads of different options that
loads of different options that
loads of different options that obviously simplistically you either
obviously simplistically you either
obviously simplistically you either borrow money through death or you raised
borrow money through death or you raised
borrow money through death or you raised money for equity by giving people a
money for equity by giving people a
money for equity by giving people a slice of the company and there’s loads
slice of the company and there’s loads
slice of the company and there’s loads of pros and conversation with those but
of pros and conversation with those but
of pros and conversation with those but you know when you’re starting off you
you know when you’re starting off you
you know when you’re starting off you know I’m known great entrepreneurs who
know I’m known great entrepreneurs who
know I’m known great entrepreneurs who kind of actually have funded their
kind of actually have funded their
kind of actually have funded their business on the back of credit cards so
business on the back of credit cards so
business on the back of credit cards so I you know I think this is where it’s an
I you know I think this is where it’s an
I you know I think this is where it’s an area where you’ve got a hustle and and
area where you’ve got a hustle and and
area where you’ve got a hustle and and only kind of run your business in some
only kind of run your business in some
only kind of run your business in some respects on fumes because if you throw
respects on fumes because if you throw
respects on fumes because if you throw too much money at it too quickly you
too much money at it too quickly you
too much money at it too quickly you just tend to find you’d kind of destroy
just tend to find you’d kind of destroy
just tend to find you’d kind of destroy the culture and it’s nice to have that
the culture and it’s nice to have that
the culture and it’s nice to have that kind of hunger in your business so III
kind of hunger in your business so III
kind of hunger in your business so III wouldn’t we’ll get on to the specific
wouldn’t we’ll get on to the specific
wouldn’t we’ll get on to the specific means and the the pros and cons of
means and the the pros and cons of
means and the the pros and cons of equity and you know maybe preference
equity and you know maybe preference
equity and you know maybe preference shares all these sort of things but I
shares all these sort of things but I
shares all these sort of things but I really do believe my experience tells me
really do believe my experience tells me
really do believe my experience tells me Evan
Evan
Evan so actually if you can defer as long as
so actually if you can defer as long as
so actually if you can defer as long as possible
possible
possible raising significant amounts of money and
raising significant amounts of money and
raising significant amounts of money and keep the ownership of the company in
keep the ownership of the company in
keep the ownership of the company in people like yourself and people you
people like yourself and people you
people like yourself and people you really trust then that’s probably the
really trust then that’s probably the
really trust then that’s probably the best thing you can do but if you can
best thing you can do but if you can
best thing you can do but if you can scale up really quickly obviously you
scale up really quickly obviously you
scale up really quickly obviously you need to go and raise capital a lot of it
need to go and raise capital a lot of it
need to go and raise capital a lot of it well let’s get to your questions guys
well let’s get to your questions guys
well let’s get to your questions guys leave it in the comment box that’s
leave it in the comment box that’s
leave it in the comment box that’s already starting to fill up and come in
already starting to fill up and come in
already starting to fill up and come in so get them in early first up is J rise
so get them in early first up is J rise
so get them in early first up is J rise longtime fan and friend of the channel
longtime fan and friend of the channel
longtime fan and friend of the channel do you believe that any business can be
do you believe that any business can be
do you believe that any business can be started with no money and bootstrap can
started with no money and bootstrap can
started with no money and bootstrap can any business be bootstrapped yeah and I
any business be bootstrapped yeah and I
any business be bootstrapped yeah and I think it’s great when you do that
think it’s great when you do that
think it’s great when you do that typically a lot of it depends on the
typically a lot of it depends on the
typically a lot of it depends on the type of business so if you’ve got like
type of business so if you’ve got like
type of business so if you’ve got like personal creations like art crafts
personal creations like art crafts
personal creations like art crafts products that are a relatively low cost
products that are a relatively low cost
products that are a relatively low cost and products that are dependent on your
and products that are dependent on your
and products that are dependent on your brilliance your genius your intellectual
brilliance your genius your intellectual
brilliance your genius your intellectual property then there’s loads of platforms
property then there’s loads of platforms
property then there’s loads of platforms in place obviously Amazon eBay or all
in place obviously Amazon eBay or all
in place obviously Amazon eBay or all these sort of Etsy all these sort of
these sort of Etsy all these sort of
these sort of Etsy all these sort of thing platforms that allow you to get
thing platforms that allow you to get
thing platforms that allow you to get your product to market really quickly
your product to market really quickly
your product to market really quickly and obviously you might pay a 20% turn
and obviously you might pay a 20% turn
and obviously you might pay a 20% turn or something but it allows you to get
or something but it allows you to get
or something but it allows you to get your products in the market and you can
your products in the market and you can
your products in the market and you can effectively get the revenues from your
effectively get the revenues from your
effectively get the revenues from your customers almost immediately and I as I
customers almost immediately and I as I
customers almost immediately and I as I said I you know J rise I’ve known quite
said I you know J rise I’ve known quite
said I you know J rise I’ve known quite a lot of entrepreneurs who have started
a lot of entrepreneurs who have started
a lot of entrepreneurs who have started their business I’ve had personal credit
their business I’ve had personal credit
their business I’ve had personal credit cards and use that as just time stamps
cards and use that as just time stamps
cards and use that as just time stamps really debt to kick off and invest in my
really debt to kick off and invest in my
really debt to kick off and invest in my products and start you know taking
products and start you know taking
products and start you know taking leases on properties and stuff like that
leases on properties and stuff like that
leases on properties and stuff like that in in advance of it secondly on the
in in advance of it secondly on the
in in advance of it secondly on the other type of products or rather
other type of products or rather
other type of products or rather services that allow you to bootstrap
services that allow you to bootstrap
services that allow you to bootstrap your business is anything like in-home
your business is anything like in-home
your business is anything like in-home services I don’t it might be landscape
services I don’t it might be landscape
services I don’t it might be landscape gardening you know it could be child
gardening you know it could be child
gardening you know it could be child minding it could be nursery and if you
minding it could be nursery and if you
minding it could be nursery and if you don’t need a physical headquarters then
don’t need a physical headquarters then
don’t need a physical headquarters then and this you know Toronto this great
and this you know Toronto this great
and this you know Toronto this great city where evidence there’s amazing kind
city where evidence there’s amazing kind
city where evidence there’s amazing kind of service offices there’s facilities
of service offices there’s facilities
of service offices there’s facilities and and you can actually simply find
and and you can actually simply find
and and you can actually simply find even companies like us who have got
even companies like us who have got
even companies like us who have got either redundant properties around that
either redundant properties around that
either redundant properties around that they’re pretty happy to let out a
they’re pretty happy to let out a
they’re pretty happy to let out a peppercorn rent
peppercorn rent
peppercorn rent so if you’ve got in-home services that’s
so if you’ve got in-home services that’s
so if you’ve got in-home services that’s a great place where you can go and leave
a great place where you can go and leave
a great place where you can go and leave the other thing obviously I’ve been I’ve
the other thing obviously I’ve been I’ve
the other thing obviously I’ve been I’ve actually invested in a number of
actually invested in a number of
actually invested in a number of services based consulting companies
services based consulting companies
services based consulting companies where you’re charged in your own time
where you’re charged in your own time
where you’re charged in your own time out that’s the place where you
out that’s the place where you
out that’s the place where you absolutely can bootstrap it and actually
absolutely can bootstrap it and actually
absolutely can bootstrap it and actually one of this companies I started back in
one of this companies I started back in
one of this companies I started back in 1997 as chief who they ended up chief
1997 as chief who they ended up chief
1997 as chief who they ended up chief executive fair we had a philosophy the
executive fair we had a philosophy the
executive fair we had a philosophy the first day we started the business we
first day we started the business we
first day we started the business we actually build ourselves out to
actually build ourselves out to
actually build ourselves out to customers and actually always covered
customers and actually always covered
customers and actually always covered our cost we set out the whole operation
our cost we set out the whole operation
our cost we set out the whole operation from day one always cashflow positive
from day one always cashflow positive
from day one always cashflow positive and actually from day one profitable and
and actually from day one profitable and
and actually from day one profitable and what we do actually the beauty of that
what we do actually the beauty of that
what we do actually the beauty of that business this is kind of interesting if
business this is kind of interesting if
business this is kind of interesting if you have an idea and like intellectual
you have an idea and like intellectual
you have an idea and like intellectual capital that will be like particularly
capital that will be like particularly
capital that will be like particularly in this case I’m giving you as a
in this case I’m giving you as a
in this case I’m giving you as a software product we bill we started by
software product we bill we started by
software product we bill we started by the consultancy company bill in our time
the consultancy company bill in our time
the consultancy company bill in our time out you know building a nice business
out you know building a nice business
out you know building a nice business but it’s kind of not I’m gonna skyrocket
but it’s kind of not I’m gonna skyrocket
but it’s kind of not I’m gonna skyrocket but it’s a people business so you can do
but it’s a people business so you can do
but it’s a people business so you can do that you can build yourself you’d be
that you can build yourself you’d be
that you can build yourself you’d be cashflow positive from day one which is
cashflow positive from day one which is
cashflow positive from day one which is important and we shouldn’t confuse
important and we shouldn’t confuse
important and we shouldn’t confuse profitability from cash flow cash is the
profitability from cash flow cash is the
profitability from cash flow cash is the fuel of your business but what we did is
fuel of your business but what we did is
fuel of your business but what we did is used a consulting experience and we had
used a consulting experience and we had
used a consulting experience and we had to make sure the contracts allowed us to
to make sure the contracts allowed us to
to make sure the contracts allowed us to do that with the customers which they
do that with the customers which they
do that with the customers which they did that we owned all the IP all the
did that we owned all the IP all the
did that we owned all the IP all the intellectual property and we built
intellectual property and we built
intellectual property and we built products on the back of consulting
products on the back of consulting
products on the back of consulting engagements and then we became a product
engagements and then we became a product
engagements and then we became a product company and then actually we scaled up
company and then actually we scaled up
company and then actually we scaled up and well four years later we put
and well four years later we put
and well four years later we put ourselves on the Nasdaq with revenues of
ourselves on the Nasdaq with revenues of
ourselves on the Nasdaq with revenues of one hundred million dollars and we were
one hundred million dollars and we were
one hundred million dollars and we were one of the fastest growing Deloitte 50
one of the fastest growing Deloitte 50
one of the fastest growing Deloitte 50 top 50 growth companies in the world so
top 50 growth companies in the world so
top 50 growth companies in the world so and that all started from a consultant
and that all started from a consultant
and that all started from a consultant operation all cashflow positive from the
operation all cashflow positive from the
operation all cashflow positive from the get-go and you know obviously a lot of
get-go and you know obviously a lot of
get-go and you know obviously a lot of hard work but the really good thing out
hard work but the really good thing out
hard work but the really good thing out of that is we then built a product
of that is we then built a product
of that is we then built a product business and then once obviously with a
business and then once obviously with a
business and then once obviously with a product business then you can scale
product business then you can scale
product business then you can scale pretty much infinitely and you can have
pretty much infinitely and you can have
pretty much infinitely and you can have global reach and you know it isn’t
global reach and you know it isn’t
global reach and you know it isn’t dependent on a few key people and you
dependent on a few key people and you
dependent on a few key people and you tend to find with consulting businesses
tend to find with consulting businesses
tend to find with consulting businesses you know hugely dependent on on the
you know hugely dependent on on the
you know hugely dependent on on the people like Evans yeah I’m sure use
people like Evans yeah I’m sure use
people like Evans yeah I’m sure use concerns I’ve used concerns it doesn’t
concerns I’ve used concerns it doesn’t
concerns I’ve used concerns it doesn’t matter whether they come from a big
matter whether they come from a big
matter whether they come from a big branded consult
branded consult
branded consult it’s the people that you get and it’s
it’s the people that you get and it’s
it’s the people that you get and it’s not just their intellectual property
not just their intellectual property
not just their intellectual property their experience but it’s also their
their experience but it’s also their
their experience but it’s also their attitude and stuff like that so it
attitude and stuff like that so it
attitude and stuff like that so it depends on what business you in
depends on what business you in
depends on what business you in obviously if you’re gonna set up a
obviously if you’re gonna set up a
obviously if you’re gonna set up a manufacturing plan then you’ll probably
manufacturing plan then you’ll probably
manufacturing plan then you’ll probably you’ll need to raise capital to do that
you’ll need to raise capital to do that
you’ll need to raise capital to do that but you can be very smart about things
but you can be very smart about things
but you can be very smart about things like partnerships to get other people to
like partnerships to get other people to
like partnerships to get other people to invest on your behalf so I think the
invest on your behalf so I think the
invest on your behalf so I think the answer to your question is absolutely
answer to your question is absolutely
answer to your question is absolutely Jay Rhys you should think about how I
Jay Rhys you should think about how I
Jay Rhys you should think about how I design my business to bootstrap it and
design my business to bootstrap it and
design my business to bootstrap it and really reduce the capital one potential
really reduce the capital one potential
really reduce the capital one potential dilution that you have in the early days
dilution that you have in the early days
dilution that you have in the early days Evan what’s your thoughts yeah I think
Evan what’s your thoughts yeah I think
Evan what’s your thoughts yeah I think it’s a great example I think some
it’s a great example I think some
it’s a great example I think some businesses lend themselves more easily
businesses lend themselves more easily
businesses lend themselves more easily to be bootstrapped and others and so
to be bootstrapped and others and so
to be bootstrapped and others and so what I would encourage people to do is
what I would encourage people to do is
what I would encourage people to do is have this big picture have this big
have this big picture have this big
have this big picture have this big dream for where you want to take your
dream for where you want to take your
dream for where you want to take your business have this long-term game plan
business have this long-term game plan
business have this long-term game plan for where you want to go but that may
for where you want to go but that may
for where you want to go but that may require a lot of money that you don’t
require a lot of money that you don’t
require a lot of money that you don’t have right now so then how can you scale
have right now so then how can you scale
have right now so then how can you scale that down so it’s like thinking big and
that down so it’s like thinking big and
that down so it’s like thinking big and acting small and so Stephens example was
acting small and so Stephens example was
acting small and so Stephens example was great where he wanted to build this
great where he wanted to build this
great where he wanted to build this product company out but they started by
product company out but they started by
product company out but they started by doing services to get money coming in to
doing services to get money coming in to
doing services to get money coming in to get cash flow coming in and then that
get cash flow coming in and then that
get cash flow coming in and then that could fund the product to then go and
could fund the product to then go and
could fund the product to then go and build the business and so whatever big
build the business and so whatever big
build the business and so whatever big idea you have I’d be looking at how can
idea you have I’d be looking at how can
idea you have I’d be looking at how can I start this thing smaller because that
I start this thing smaller because that
I start this thing smaller because that happens is a lot of people they feel
happens is a lot of people they feel
happens is a lot of people they feel like they need investment and they feel
like they need investment and they feel
like they need investment and they feel like hey they can’t get started until
like hey they can’t get started until
like hey they can’t get started until they get investment and so you’re just
they get investment and so you’re just
they get investment and so you’re just sitting on this idea constantly sitting
sitting on this idea constantly sitting
sitting on this idea constantly sitting sitting sitting sitting doing nothing
sitting sitting sitting doing nothing
sitting sitting sitting doing nothing waiting for some magical investor to
waiting for some magical investor to
waiting for some magical investor to come and give you the money to get going
come and give you the money to get going
come and give you the money to get going where really is it entre part you got to
where really is it entre part you got to
where really is it entre part you got to do something every single day to build
do something every single day to build
do something every single day to build your business forward even if it’s not
your business forward even if it’s not
your business forward even if it’s not at the scale that you want yet because
at the scale that you want yet because
at the scale that you want yet because we’re dreamers and have this huge vision
we’re dreamers and have this huge vision
we’re dreamers and have this huge vision where we want to go and so thinking
where we want to go and so thinking
where we want to go and so thinking about how can I get started with what I
about how can I get started with what I
about how can I get started with what I have while also looking at funding
have while also looking at funding
have while also looking at funding sources and options so I love that you
sources and options so I love that you
sources and options so I love that you shared that example of starting service
shared that example of starting service
shared that example of starting service and going product next up Tim Braun is
and going product next up Tim Braun is
and going product next up Tim Braun is asking do you believe in not taking any
asking do you believe in not taking any
asking do you believe in not taking any loans like Mark Cuban believes yet if
loans like Mark Cuban believes yet if
loans like Mark Cuban believes yet if you can do and again you know obviously
you can do and again you know obviously
you can do and again you know obviously if you can borrow money it makes you
if you can borrow money it makes you
if you can borrow money it makes you cents but typically you’re gonna pay you
cents but typically you’re gonna pay you
cents but typically you’re gonna pay you know interest on that and and and
know interest on that and and and
know interest on that and and and sometimes there’s things like collateral
sometimes there’s things like collateral
sometimes there’s things like collateral you have to put up so there’s all these
you have to put up so there’s all these
you have to put up so there’s all these things come with strings attached and
things come with strings attached and
things come with strings attached and actually just just a thought as well you
actually just just a thought as well you
actually just just a thought as well you know I think it’s the case once you
know I think it’s the case once you
know I think it’s the case once you start raising money it’s a full-time job
start raising money it’s a full-time job
start raising money it’s a full-time job and it’s a distraction from running the
and it’s a distraction from running the
and it’s a distraction from running the business and do not underestimate how
business and do not underestimate how
business and do not underestimate how much time it takes to go pitching but I
much time it takes to go pitching but I
much time it takes to go pitching but I think Tim yet if you can avoid if you
think Tim yet if you can avoid if you
think Tim yet if you can avoid if you just as a general rule I would suggest a
just as a general rule I would suggest a
just as a general rule I would suggest a good rule in life if you can avoid
good rule in life if you can avoid
good rule in life if you can avoid raising money and really focused on
raising money and really focused on
raising money and really focused on making money that’s absolutely what you
making money that’s absolutely what you
making money that’s absolutely what you should do obviously there are points in
should do obviously there are points in
should do obviously there are points in a business cycle as you grow and expand
a business cycle as you grow and expand
a business cycle as you grow and expand where you will need to probably raise
where you will need to probably raise
where you will need to probably raise money and then you know we can get on to
money and then you know we can get on to
money and then you know we can get on to how best to do that but if you borrow
how best to do that but if you borrow
how best to do that but if you borrow money then I would one actually one
money then I would one actually one
money then I would one actually one thing I’ve I’ve done successfully in the
thing I’ve I’ve done successfully in the
thing I’ve I’ve done successfully in the past ironically which was brilliant when
past ironically which was brilliant when
past ironically which was brilliant when I look back on it and it all sort of
I look back on it and it all sort of
I look back on it and it all sort of happened by accident we were in with the
happened by accident we were in with the
happened by accident we were in with the customer actually a great Canadian
customer actually a great Canadian
customer actually a great Canadian company back at the time everyone called
company back at the time everyone called
company back at the time everyone called MCI yeah MCI and they’re a customer of
MCI yeah MCI and they’re a customer of
MCI yeah MCI and they’re a customer of ours and I was in there and we knew we
ours and I was in there and we knew we
ours and I was in there and we knew we were gonna cash we didn’t share that
were gonna cash we didn’t share that
were gonna cash we didn’t share that with them but we said we’re looking for
with them but we said we’re looking for
with them but we said we’re looking for investment looking at and we got the
investment looking at and we got the
investment looking at and we got the customer to invest in us and the reason
customer to invest in us and the reason
customer to invest in us and the reason why i love that is it gave them so much
why i love that is it gave them so much
why i love that is it gave them so much skin in the game to make us successful
skin in the game to make us successful
skin in the game to make us successful and to be a great reference and tell
and to be a great reference and tell
and to be a great reference and tell everybody else that we’re you know
everybody else that we’re you know
everybody else that we’re you know they’re an awesome telecoms company at
they’re an awesome telecoms company at
they’re an awesome telecoms company at the time so I think once you get into
the time so I think once you get into
the time so I think once you get into the reality Tim is if you can avoid debt
the reality Tim is if you can avoid debt
the reality Tim is if you can avoid debt absolutely avoid it there comes a time
absolutely avoid it there comes a time
absolutely avoid it there comes a time where you can’t say you need to be
where you can’t say you need to be
where you can’t say you need to be really smart and if you borrow money
really smart and if you borrow money
really smart and if you borrow money then obviously look at low interest rate
then obviously look at low interest rate
then obviously look at low interest rate you know ideally low collateral but also
you know ideally low collateral but also
you know ideally low collateral but also get the capability where you probably
get the capability where you probably
get the capability where you probably have short term capability but you have
have short term capability but you have
have short term capability but you have rollovers like revolving credit that’s
rollovers like revolving credit that’s
rollovers like revolving credit that’s that’s pretty good and and then if you
that’s pretty good and and then if you
that’s pretty good and and then if you can do not dip into it but you tend to
can do not dip into it but you tend to
can do not dip into it but you tend to find what you don’t want to do is almost
find what you don’t want to do is almost
find what you don’t want to do is almost like have a stop stop
like have a stop stop
like have a stop stop so you raise some money you maybe get a
so you raise some money you maybe get a
so you raise some money you maybe get a year’s term we don’t want to do like in
year’s term we don’t want to do like in
year’s term we don’t want to do like in month 1011 have to go out there again to
month 1011 have to go out there again to
month 1011 have to go out there again to raise money you want to have the
raise money you want to have the
raise money you want to have the facility where it kind of rolls over
facility where it kind of rolls over
facility where it kind of rolls over because again once you get into raising
because again once you get into raising
because again once you get into raising money it is it is a full-time job it
money it is it is a full-time job it
money it is it is a full-time job it really is a big distraction from the
really is a big distraction from the
really is a big distraction from the business did did MCI own a piece of your
business did did MCI own a piece of your
business did did MCI own a piece of your business or that it just pre-order and
business or that it just pre-order and
business or that it just pre-order and give you funding that way well they did
give you funding that way well they did
give you funding that way well they did actually both they they did they did
actually both they they did they did
actually both they they did they did some associated with basically debt but
some associated with basically debt but
some associated with basically debt but also then they became a shareholder in
also then they became a shareholder in
also then they became a shareholder in the company which is really cool
the company which is really cool
the company which is really cool which was you know then we had so much a
which was you know then we had so much a
which was you know then we had so much a lot you know it’s just beautiful if you
lot you know it’s just beautiful if you
lot you know it’s just beautiful if you can get your customers to fund your
can get your customers to fund your
can get your customers to fund your business because actually it doesn’t
business because actually it doesn’t
business because actually it doesn’t sound crazy because if you think about
sound crazy because if you think about
sound crazy because if you think about it if a customer buys your product or
it if a customer buys your product or
it if a customer buys your product or your services they obviously believe
your services they obviously believe
your services they obviously believe like you believe they bought your idea
like you believe they bought your idea
like you believe they bought your idea and therefore the next logical step is
and therefore the next logical step is
and therefore the next logical step is if they really love it that much would
if they really love it that much would
if they really love it that much would they like to kind of co-invest with you
they like to kind of co-invest with you
they like to kind of co-invest with you and a really nice neat way actually with
and a really nice neat way actually with
and a really nice neat way actually with MCI is they bought equity in the company
MCI is they bought equity in the company
MCI is they bought equity in the company and you know so that I’ll be really
and you know so that I’ll be really
and you know so that I’ll be really honest at the time it gave us huge
honest at the time it gave us huge
honest at the time it gave us huge credibility because we you know we’re
credibility because we you know we’re
credibility because we you know we’re pretty early startup and having them as
pretty early startup and having them as
pretty early startup and having them as investors you know on the website at the
investors you know on the website at the
investors you know on the website at the time and when we went out to customers
time and when we went out to customers
time and when we went out to customers and say well you know I’m sure I know
and say well you know I’m sure I know
and say well you know I’m sure I know India they buy the product they’ve
India they buy the product they’ve
India they buy the product they’ve invested in the company massive
invested in the company massive
invested in the company massive credibility massive credibility so I
credibility massive credibility so I
credibility massive credibility so I think um if you can get those customers
think um if you can get those customers
think um if you can get those customers the big corporates or whatever most of
the big corporates or whatever most of
the big corporates or whatever most of these corporates typically have a small
these corporates typically have a small
these corporates typically have a small sort of biz dev team and if you get
sort of biz dev team and if you get
sort of biz dev team and if you get access through them through as we did
access through them through as we did
access through them through as we did with our customer sponsored the
with our customer sponsored the
with our customer sponsored the executive sponsor and it was a beautiful
executive sponsor and it was a beautiful
executive sponsor and it was a beautiful relationship and it got great alignment
relationship and it got great alignment
relationship and it got great alignment it got them having shoe skin in the game
it got them having shoe skin in the game
it got them having shoe skin in the game and it allowed us to grow much faster
and it allowed us to grow much faster
and it allowed us to grow much faster also with a very supportive investor
also with a very supportive investor
also with a very supportive investor that actually was completely
that actually was completely
that actually was completely non-invasive they didn’t want board
non-invasive they didn’t want board
non-invasive they didn’t want board seats and all those sort of things that
seats and all those sort of things that
seats and all those sort of things that can get in the way cool that’s a cool
can get in the way cool that’s a cool
can get in the way cool that’s a cool story um Tim my quick thoughts for you I
story um Tim my quick thoughts for you I
story um Tim my quick thoughts for you I don’t think it’s a great idea to start a
don’t think it’s a great idea to start a
don’t think it’s a great idea to start a business on a loan I think too many
business on a loan I think too many
business on a loan I think too many people do that they mortgage their home
people do that they mortgage their home
people do that they mortgage their home especially the start so like you’re not
especially the start so like you’re not
especially the start so like you’re not gonna get a business loan at the start
gonna get a business loan at the start
gonna get a business loan at the start banks want to see that you’ve been
banks want to see that you’ve been
banks want to see that you’ve been around for a couple
around for a couple
around for a couple before they’ll give you a loan and so
before they’ll give you a loan and so
before they’ll give you a loan and so any loan that you get at the beginning
any loan that you get at the beginning
any loan that you get at the beginning is gonna be personally guaranteed so
is gonna be personally guaranteed so
is gonna be personally guaranteed so they’re gonna come after your personal
they’re gonna come after your personal
they’re gonna come after your personal finances your house your car something
finances your house your car something
finances your house your car something that you own and it’s not a great way to
that you own and it’s not a great way to
that you own and it’s not a great way to start a business because you haven’t
start a business because you haven’t
start a business because you haven’t proved anything yet and so I’d much
proved anything yet and so I’d much
proved anything yet and so I’d much rather you find a way to start making a
rather you find a way to start making a
rather you find a way to start making a little bit of money improved yourself
little bit of money improved yourself
little bit of money improved yourself that this works when you can afford to
that this works when you can afford to
that this works when you can afford to get a business loan it’s way cheaper
get a business loan it’s way cheaper
get a business loan it’s way cheaper than going out and getting investors if
than going out and getting investors if
than going out and getting investors if you’re paying an interest rate and you
you’re paying an interest rate and you
you’re paying an interest rate and you can afford it like you have some cash
can afford it like you have some cash
can afford it like you have some cash flow coming in and you know you can pay
flow coming in and you know you can pay
flow coming in and you know you can pay those interest payments off and it’s not
those interest payments off and it’s not
those interest payments off and it’s not coming against you in your house then
coming against you in your house then
coming against you in your house then it’s actually one of the cheapest ways
it’s actually one of the cheapest ways
it’s actually one of the cheapest ways to be able to build and continue to grow
to be able to build and continue to grow
to be able to build and continue to grow business but I just wouldn’t do it to
business but I just wouldn’t do it to
business but I just wouldn’t do it to start my company I’d be looking at a
start my company I’d be looking at a
start my company I’d be looking at a loan for expansion capital not startup
loan for expansion capital not startup
loan for expansion capital not startup yeah I think the other vo they own this
yeah I think the other vo they own this
yeah I think the other vo they own this I think now a gym there’s many more
I think now a gym there’s many more
I think now a gym there’s many more options that are probably more
options that are probably more
options that are probably more attractive that you might consider Tim
attractive that you might consider Tim
attractive that you might consider Tim so obviously crowdfunding’s been popular
so obviously crowdfunding’s been popular
so obviously crowdfunding’s been popular for three or four years we’ll put a
for three or four years we’ll put a
for three or four years we’ll put a couple of links up actually around some
couple of links up actually around some
couple of links up actually around some good articles around crowdfunding for
good articles around crowdfunding for
good articles around crowdfunding for both early stages business hanging and
both early stages business hanging and
both early stages business hanging and growth businesses and actually one of
growth businesses and actually one of
growth businesses and actually one of our customers over in the UK a really
our customers over in the UK a really
our customers over in the UK a really fantastic company called canny and they
fantastic company called canny and they
fantastic company called canny and they make awesome milk products
make awesome milk products
make awesome milk products Liam who’s the chief executive there you
Liam who’s the chief executive there you
Liam who’s the chief executive there you know again he’s just a street fighter
know again he’s just a street fighter
know again he’s just a street fighter he’s an amazing operator he had a
he’s an amazing operator he had a
he’s an amazing operator he had a hundred thousand pound target and he
hundred thousand pound target and he
hundred thousand pound target and he made that I think a week before the
made that I think a week before the
made that I think a week before the deadline so we’ll we’ll post those links
deadline so we’ll we’ll post those links
deadline so we’ll we’ll post those links up and even have a look at that but
up and even have a look at that but
up and even have a look at that but again crowdfunding a great if you’ve got
again crowdfunding a great if you’ve got
again crowdfunding a great if you’ve got a great idea and you pitch your idea and
a great idea and you pitch your idea and
a great idea and you pitch your idea and you can really picture on social media
you can really picture on social media
you can really picture on social media as well crowdfunding is a really time
as well crowdfunding is a really time
as well crowdfunding is a really time efficient way to get the funds I’ll get
efficient way to get the funds I’ll get
efficient way to get the funds I’ll get a lot of support but also it’s kind of
a lot of support but also it’s kind of
a lot of support but also it’s kind of non-invasive again so you don’t have to
non-invasive again so you don’t have to
non-invasive again so you don’t have to stop the business when you turn these
stop the business when you turn these
stop the business when you turn these pictures you know when I was in the
pictures you know when I was in the
pictures you know when I was in the valley having those kind of Sandhill
valley having those kind of Sandhill
valley having those kind of Sandhill wrote in just south of San Francisco and
wrote in just south of San Francisco and
wrote in just south of San Francisco and in Palo Alto and literally when we were
in Palo Alto and literally when we were
in Palo Alto and literally when we were raising money we raised one time about
raising money we raised one time about
raising money we raised one time about 20 million dollars with VCS it almost
20 million dollars with VCS it almost
20 million dollars with VCS it almost stopped us running the business for
stopped us running the business for
stopped us running the business for about three months and we’re just seeing
about three months and we’re just seeing
about three months and we’re just seeing all these theses and again I’ll be
all these theses and again I’ll be
all these theses and again I’ll be honest guys the
honest guys the
honest guys the species probably invest in either the
species probably invest in either the
species probably invest in either the statistics like 1% of the people they
statistics like 1% of the people they
statistics like 1% of the people they see so you just you just think you’re in
see so you just you just think you’re in
see so you just you just think you’re in a beauty parade and it’s hard graft
a beauty parade and it’s hard graft
a beauty parade and it’s hard graft you’re burning through your shoe lever
you’re burning through your shoe lever
you’re burning through your shoe lever and you could be out there selling to
and you could be out there selling to
and you could be out there selling to customers or attending to customers so I
customers or attending to customers so I
customers or attending to customers so I really think that there are time we took
really think that there are time we took
really think that there are time we took Evans advice actually because we wanted
Evans advice actually because we wanted
Evans advice actually because we wanted to go
to go
to go really for the next stage of exponential
really for the next stage of exponential
really for the next stage of exponential growth and therefore we went to the
growth and therefore we went to the
growth and therefore we went to the venture market at that time but it just
venture market at that time but it just
venture market at that time but it just never underestimate how much time it
never underestimate how much time it
never underestimate how much time it takes yeah and the great thing about
takes yeah and the great thing about
takes yeah and the great thing about crowdfunding is you’re not giving up a
crowdfunding is you’re not giving up a
crowdfunding is you’re not giving up a piece of your business yeah so you don’t
piece of your business yeah so you don’t
piece of your business yeah so you don’t lose any equity in your company and
lose any equity in your company and
lose any equity in your company and you’re in is you’re effectively pre
you’re in is you’re effectively pre
you’re in is you’re effectively pre selling your product or your idea so
selling your product or your idea so
selling your product or your idea so it’s a good test to see I have this
it’s a good test to see I have this
it’s a good test to see I have this product for this new technology or this
product for this new technology or this
product for this new technology or this new t-shirt of this new book or whatever
new t-shirt of this new book or whatever
new t-shirt of this new book or whatever this new thing is you’re trying to
this new thing is you’re trying to
this new thing is you’re trying to launch and you get to see this is work
launch and you get to see this is work
launch and you get to see this is work and you’re not actually spending any
and you’re not actually spending any
and you’re not actually spending any money to make it until you’ve shown that
money to make it until you’ve shown that
money to make it until you’ve shown that you actually have some demand for it and
you actually have some demand for it and
you actually have some demand for it and so it’s great there are a couple of
so it’s great there are a couple of
so it’s great there are a couple of equity crowdfunding websites but but
equity crowdfunding websites but but
equity crowdfunding websites but but most of the big crowdfunding websites
most of the big crowdfunding websites
most of the big crowdfunding websites like Kickstarter the ones that we think
like Kickstarter the ones that we think
like Kickstarter the ones that we think about is fantastic because you’re not
about is fantastic because you’re not
about is fantastic because you’re not giving up anything in your business and
giving up anything in your business and
giving up anything in your business and if it doesn’t work out you know if you
if it doesn’t work out you know if you
if it doesn’t work out you know if you don’t hit your threshold you don’t
don’t hit your threshold you don’t
don’t hit your threshold you don’t actually have to grow it and make the
actually have to grow it and make the
actually have to grow it and make the products you don’t owe anybody anything
products you don’t owe anybody anything
products you don’t owe anybody anything nobody’s gonna come and take your car or
nobody’s gonna come and take your car or
nobody’s gonna come and take your car or take your house if you don’t hit your
take your house if you don’t hit your
take your house if you don’t hit your mark next up is Nikki moving to angel
mark next up is Nikki moving to angel
mark next up is Nikki moving to angel investing so Nikki is asking what is
investing so Nikki is asking what is
investing so Nikki is asking what is angel investing and how do I ask
angel investing and how do I ask
angel investing and how do I ask somebody to be an angel investor for my
somebody to be an angel investor for my
somebody to be an angel investor for my business I’ve described question a key I
business I’ve described question a key I
business I’ve described question a key I think um an Avenger invested in a lot of
think um an Avenger invested in a lot of
think um an Avenger invested in a lot of business and actually one of the
business and actually one of the
business and actually one of the startups I was involved in I I got into
startups I was involved in I I got into
startups I was involved in I I got into investors in the early days you know
investors in the early days you know
investors in the early days you know friends of family essentially what it is
friends of family essentially what it is
friends of family essentially what it is is going to people either in your
is going to people either in your
is going to people either in your network or could be customers or could
network or could be customers or could
network or could be customers or could be there’s tons of angel investors in
be there’s tons of angel investors in
be there’s tons of angel investors in places like Toronto Massachusetts in the
places like Toronto Massachusetts in the
places like Toronto Massachusetts in the butt Valley and what they do all day is
butt Valley and what they do all day is
butt Valley and what they do all day is invest in early stage businesses and
invest in early stage businesses and
invest in early stage businesses and effectively what they do an effectively
effectively what they do an effectively
effectively what they do an effectively an equity investment so they buy you
an equity investment so they buy you
an equity investment so they buy you give them some shares in the company you
give them some shares in the company you
give them some shares in the company you give them a
give them a
give them a or should the company for a return based
or should the company for a return based
or should the company for a return based on a valuation at that point in time and
on a valuation at that point in time and
on a valuation at that point in time and it’s pretty easy easy model now the
it’s pretty easy easy model now the
it’s pretty easy easy model now the traditional model is it’s good I think
traditional model is it’s good I think
traditional model is it’s good I think it works I would commend angel message
it works I would commend angel message
it works I would commend angel message but I’d ask a bit more so I would love
but I’d ask a bit more so I would love
but I’d ask a bit more so I would love angel investors to be able to do
angel investors to be able to do
angel investors to be able to do something where it really accelerates
something where it really accelerates
something where it really accelerates the growth of your business so they
the growth of your business so they
the growth of your business so they could be an amazing mentor they could be
could be an amazing mentor they could be
could be an amazing mentor they could be someone who’s been on the journey in
someone who’s been on the journey in
someone who’s been on the journey in your adventure so I don’t know if you’ve
your adventure so I don’t know if you’ve
your adventure so I don’t know if you’ve got a products in t-shirts or shoes it
got a products in t-shirts or shoes it
got a products in t-shirts or shoes it could be a performer entrepreneur of a
could be a performer entrepreneur of a
could be a performer entrepreneur of a clothing company who’s really made it
clothing company who’s really made it
clothing company who’s really made it who knows everything and can be not only
who knows everything and can be not only
who knows everything and can be not only an investor almost like a silent
an investor almost like a silent
an investor almost like a silent investor but can be a really active
investor but can be a really active
investor but can be a really active coach and mentor for you to learn and
coach and mentor for you to learn and
coach and mentor for you to learn and gain the experience are the other thing
gain the experience are the other thing
gain the experience are the other thing you tend to find with angel investors
you tend to find with angel investors
you tend to find with angel investors you might kind of at some stage as you
you might kind of at some stage as you
you might kind of at some stage as you grow your company want them to join your
grow your company want them to join your
grow your company want them to join your board you know small companies you can
board you know small companies you can
board you know small companies you can have again someone with industry domain
have again someone with industry domain
have again someone with industry domain experience as the chairman or chairwoman
experience as the chairman or chairwoman
experience as the chairman or chairwoman in your company and I think you know the
in your company and I think you know the
in your company and I think you know the key thing about angel investors is don’t
key thing about angel investors is don’t
key thing about angel investors is don’t just look at them for money look at them
just look at them for money look at them
just look at them for money look at them for advice experience can they introduce
for advice experience can they introduce
for advice experience can they introduce you the new customers can they make you
you the new customers can they make you
you the new customers can they make you go faster what are the gaps that you
go faster what are the gaps that you
go faster what are the gaps that you have in your business and how do you
have in your business and how do you
have in your business and how do you surround yourself not only with
surround yourself not only with
surround yourself not only with colleagues that you recruit to actually
colleagues that you recruit to actually
colleagues that you recruit to actually compensate for those gaps but also angel
compensate for those gaps but also angel
compensate for those gaps but also angel investors who kind of fill out the rich
investors who kind of fill out the rich
investors who kind of fill out the rich canvass to make sure your business is
canvass to make sure your business is
canvass to make sure your business is the best chance of success Nikki yeah a
the best chance of success Nikki yeah a
the best chance of success Nikki yeah a great point I think a lot of people are
great point I think a lot of people are
great point I think a lot of people are in such a rush to get money that they’re
in such a rush to get money that they’re
in such a rush to get money that they’re willing to work with anybody it’s like
willing to work with anybody it’s like
willing to work with anybody it’s like being in such a rush to have kids that
being in such a rush to have kids that
being in such a rush to have kids that you marry anybody just to have kids
you marry anybody just to have kids
you marry anybody just to have kids not realizing no this is a lifelong
not realizing no this is a lifelong
not realizing no this is a lifelong relationship here that we’re building
relationship here that we’re building
relationship here that we’re building there’s most angel investors are
there’s most angel investors are
there’s most angel investors are actually really unsophisticated most
actually really unsophisticated most
actually really unsophisticated most angel investors there’s a term so I used
angel investors there’s a term so I used
angel investors there’s a term so I used to be in the venture capital industry
to be in the venture capital industry
to be in the venture capital industry we’d call them DD eyes which is dentists
we’d call them DD eyes which is dentists
we’d call them DD eyes which is dentists and doctors with disposable income a lot
and doctors with disposable income a lot
and doctors with disposable income a lot of these guys and as my dentist would
of these guys and as my dentist would
of these guys and as my dentist would explain to me he didn’t really like his
explain to me he didn’t really like his
explain to me he didn’t really like his job and so he got to live vicariously
job and so he got to live vicariously
job and so he got to live vicariously through
through
through his investments and it was just kind of
his investments and it was just kind of
his investments and it was just kind of bragging rights did he get to tell his
bragging rights did he get to tell his
bragging rights did he get to tell his friends oh I made an investment of this
friends oh I made an investment of this
friends oh I made an investment of this company but he couldn’t really add a lot
company but he couldn’t really add a lot
company but he couldn’t really add a lot of value to the business he was just
of value to the business he was just
of value to the business he was just what they called dumb money he was just
what they called dumb money he was just
what they called dumb money he was just writing a check and that’s not what you
writing a check and that’s not what you
writing a check and that’s not what you want long term especially as you’re
want long term especially as you’re
want long term especially as you’re building your business if if you’re
building your business if if you’re
building your business if if you’re trying to go for venture capitals the
trying to go for venture capitals the
trying to go for venture capitals the next round they look at who your angel
next round they look at who your angel
next round they look at who your angel investors are and it’s just a whole
investors are and it’s just a whole
investors are and it’s just a whole bunch of dentists and nothing against
bunch of dentists and nothing against
bunch of dentists and nothing against dentists there’s a bunch of people who
dentists there’s a bunch of people who
dentists there’s a bunch of people who basically can’t provide a lot of
basically can’t provide a lot of
basically can’t provide a lot of experience connections beyond just
experience connections beyond just
experience connections beyond just writing a check then it makes it harder
writing a check then it makes it harder
writing a check then it makes it harder for you to raise the next round and
for you to raise the next round and
for you to raise the next round and continue to grow and so I I get and feel
continue to grow and so I I get and feel
continue to grow and so I I get and feel the real kind of short-term pain and
the real kind of short-term pain and
the real kind of short-term pain and suffering if I need this $50,000 to
suffering if I need this $50,000 to
suffering if I need this $50,000 to start my company but you want to really
start my company but you want to really
start my company but you want to really make sure that you’re bringing on the
make sure that you’re bringing on the
make sure that you’re bringing on the right person who’s gonna give you
right person who’s gonna give you
right person who’s gonna give you guidance connections advice as you
guidance connections advice as you
guidance connections advice as you continue to build and grow yeah actually
continue to build and grow yeah actually
continue to build and grow yeah actually on that but I think that’s such a great
on that but I think that’s such a great
on that but I think that’s such a great point but and by the way I think you’ve
point but and by the way I think you’ve
point but and by the way I think you’ve got great teeth so he’s done a good job
got great teeth so he’s done a good job
got great teeth so he’s done a good job ah ah ah you got great teeth but I think
ah ah ah you got great teeth but I think
ah ah ah you got great teeth but I think the other thing I just think about when
the other thing I just think about when
the other thing I just think about when I was into investing really actively
I was into investing really actively
I was into investing really actively probably about 12 years ago and what we
probably about 12 years ago and what we
probably about 12 years ago and what we also did with the founders the company
also did with the founders the company
also did with the founders the company is actually say a part of the deal is
is actually say a part of the deal is
is actually say a part of the deal is every three months every quarter will
every three months every quarter will
every three months every quarter will give a day of our time up to help you on
give a day of our time up to help you on
give a day of our time up to help you on the business plan the operating plan you
the business plan the operating plan you
the business plan the operating plan you know use our network so we literally sat
know use our network so we literally sat
know use our network so we literally sat down with these early stage management
down with these early stage management
down with these early stage management teams every quarter
teams every quarter
teams every quarter and gave them just invaluable advice
and gave them just invaluable advice
and gave them just invaluable advice about what what work what doesn’t work
about what what work what doesn’t work
about what what work what doesn’t work you know how to do product development
you know how to do product development
you know how to do product development all this sort of stuff introduce them to
all this sort of stuff introduce them to
all this sort of stuff introduce them to other people and the other thing I think
other people and the other thing I think
other people and the other thing I think about angel investing is if you can as I
about angel investing is if you can as I
about angel investing is if you can as I think the reality is it’s quite likely
think the reality is it’s quite likely
think the reality is it’s quite likely that you will have an angel investor and
that you will have an angel investor and
that you will have an angel investor and a fuel for capital that you’ll need to
a fuel for capital that you’ll need to
a fuel for capital that you’ll need to do further rounds so it’s really neat if
do further rounds so it’s really neat if
do further rounds so it’s really neat if you can go to your angel investors and
you can go to your angel investors and
you can go to your angel investors and they’ve got an understanding that
they’ve got an understanding that
they’ve got an understanding that they’re probably going to back your
they’re probably going to back your
they’re probably going to back your business for a number of years and there
business for a number of years and there
business for a number of years and there could be follow on rounds associated
could be follow on rounds associated
could be follow on rounds associated with that so you might want to raise
with that so you might want to raise
with that so you might want to raise that $100,000 first of all
that $100,000 first of all
that $100,000 first of all but then you’re gonna raise another
but then you’re gonna raise another
but then you’re gonna raise another $50,000 in a year’s time and and so on
$50,000 in a year’s time and and so on
$50,000 in a year’s time and and so on and so forth and it’s much easier going
and so forth and it’s much easier going
and so forth and it’s much easier going back to the same people who’ve already
back to the same people who’ve already
back to the same people who’ve already got big skin in the game who get it
got big skin in the game who get it
got big skin in the game who get it hopefully who they’re very credible
hopefully who they’re very credible
hopefully who they’re very credible because if you go to venture capitals
because if you go to venture capitals
because if you go to venture capitals capitalists they’ll definitely think if
capitalists they’ll definitely think if
capitalists they’ll definitely think if you got a luminary kind of set of angel
you got a luminary kind of set of angel
you got a luminary kind of set of angel investors it just makes their decision
investors it just makes their decision
investors it just makes their decision much easier to take so kind of follow-on
much easier to take so kind of follow-on
much easier to take so kind of follow-on rounds and also I definitely think you
rounds and also I definitely think you
rounds and also I definitely think you know that the angel investors if they’re
know that the angel investors if they’re
know that the angel investors if they’re the right guys that and they’re not
the right guys that and they’re not
the right guys that and they’re not they’re not the dentists and doctors but
they’re not the dentists and doctors but
they’re not the dentists and doctors but they know your industry inside out and
they know your industry inside out and
they know your industry inside out and they can and then they can be really
they can and then they can be really
they can and then they can be really good eyes and ears and effectively give
good eyes and ears and effectively give
good eyes and ears and effectively give you an insight because you know what
you an insight because you know what
you an insight because you know what it’s like when you you’re running your
it’s like when you you’re running your
it’s like when you you’re running your own business you’re going flat out a
own business you’re going flat out a
own business you’re going flat out a thousand miles an hour and it’s so rare
thousand miles an hour and it’s so rare
thousand miles an hour and it’s so rare that you get the time to sort of take a
that you get the time to sort of take a
that you get the time to sort of take a reflective view of how we do and you
reflective view of how we do and you
reflective view of how we do and you know against the plan we set are we off
know against the plan we set are we off
know against the plan we set are we off track you know where did it go and well
track you know where did it go and well
track you know where did it go and well was it not going well and if you get
was it not going well and if you get
was it not going well and if you get your angel investors in once a quarter
your angel investors in once a quarter
your angel investors in once a quarter and and have that sort of reflective
and and have that sort of reflective
and and have that sort of reflective session you know you get so much value
session you know you get so much value
session you know you get so much value out of it you get just so much insight
out of it you get just so much insight
out of it you get just so much insight so much value and also then get them
so much value and also then get them
so much value and also then get them doing work and doing introductions to
doing work and doing introductions to
doing work and doing introductions to people introductions to new customers or
people introductions to new customers or
people introductions to new customers or all that sort of stuff so they can be
all that sort of stuff so they can be
all that sort of stuff so they can be not only investors but they can be
not only investors but they can be
not only investors but they can be tremendous resources to help you grow
tremendous resources to help you grow
tremendous resources to help you grow your business Nicky has a follow-up
your business Nicky has a follow-up
your business Nicky has a follow-up question about angels does an angel
question about angels does an angel
question about angels does an angel investor always have to take a
investor always have to take a
investor always have to take a percentage of the company and what is a
percentage of the company and what is a
percentage of the company and what is a fair percentage to give yeah typically
fair percentage to give yeah typically
fair percentage to give yeah typically they do there are other ways you know
they do there are other ways you know
they do there are other ways you know you could you could get and I’ve been
you could you could get and I’ve been
you could you could get and I’ve been danger investor and we said we don’t
danger investor and we said we don’t
danger investor and we said we don’t want any further dilution because we
want any further dilution because we
want any further dilution because we think that’s in the best interests of
think that’s in the best interests of
think that’s in the best interests of companies so we’ve got the angel
companies so we’ve got the angel
companies so we’ve got the angel investors actually to structure a sort a
investors actually to structure a sort a
investors actually to structure a sort a debt package for the company for a
debt package for the company for a
debt package for the company for a three-year debt package and we all we
three-year debt package and we all we
three-year debt package and we all we all said that and at that point in time
all said that and at that point in time
all said that and at that point in time that was the right thing to do so they
that was the right thing to do so they
that was the right thing to do so they were in a lot of it depends on what’s in
were in a lot of it depends on what’s in
were in a lot of it depends on what’s in the best interest of the business and
the best interest of the business and
the best interest of the business and the relationship as well I think the key
the relationship as well I think the key
the relationship as well I think the key thing then is that you need to make sure
thing then is that you need to make sure
thing then is that you need to make sure that when you give away equity is
that when you give away equity is
that when you give away equity is sensible now back to the kind of Evans
sensible now back to the kind of Evans
sensible now back to the kind of Evans first point if you go and get funding
first point if you go and get funding
first point if you go and get funding from the get-go
from the get-go
from the get-go you know how maybe you value your
you know how maybe you value your
you know how maybe you value your business it’s just an idea that’s all it
business it’s just an idea that’s all it
business it’s just an idea that’s all it is so you know you read the papers and
is so you know you read the papers and
is so you know you read the papers and you get kind of all you go online you
you get kind of all you go online you
you get kind of all you go online you get crazy ideas founded at a billion
get crazy ideas founded at a billion
get crazy ideas founded at a billion dollars but that doesn’t happen often so
dollars but that doesn’t happen often so
dollars but that doesn’t happen often so if you just got an idea with a business
if you just got an idea with a business
if you just got an idea with a business plan it’s likely the valuation of your
plan it’s likely the valuation of your
plan it’s likely the valuation of your business is going to be low but if
business is going to be low but if
business is going to be low but if you’ve got a customer and you’ve got a
you’ve got a customer and you’ve got a
you’ve got a customer and you’ve got a product and you’ve started the journey
product and you’ve started the journey
product and you’ve started the journey your valuations gonna be probably
your valuations gonna be probably
your valuations gonna be probably tenfold what it is than just an idea so
tenfold what it is than just an idea so
tenfold what it is than just an idea so that’s why you don’t want too much
that’s why you don’t want too much
that’s why you don’t want too much dilution early on you really want to be
dilution early on you really want to be
dilution early on you really want to be making money first and then the dilution
making money first and then the dilution
making money first and then the dilution will come much more sensibly and gently
will come much more sensibly and gently
will come much more sensibly and gently now if I most of the sort of startup
now if I most of the sort of startup
now if I most of the sort of startup businesses the maximum realistic
businesses the maximum realistic
businesses the maximum realistic valuation say in loonies Canadian
valuation say in loonies Canadian
valuation say in loonies Canadian currency maybe five million dollars but
currency maybe five million dollars but
currency maybe five million dollars but you typically expect the idea to be well
you typically expect the idea to be well
you typically expect the idea to be well formed with a business plan probably
formed with a business plan probably
formed with a business plan probably with a prototype product so if you think
with a prototype product so if you think
with a prototype product so if you think about it at that time you you know
about it at that time you you know
about it at that time you you know there’s a number of variables once the
there’s a number of variables once the
there’s a number of variables once the market valuation and you can set your
market valuation and you can set your
market valuation and you can set your own valuation you can go to other people
own valuation you can go to other people
own valuation you can go to other people you can look at comparators in your
you can look at comparators in your
you can look at comparators in your industry of where you are once you get
industry of where you are once you get
industry of where you are once you get trading then there’s a load of metrics
trading then there’s a load of metrics
trading then there’s a load of metrics around for each industry what the
around for each industry what the
around for each industry what the valuation should be and typically
valuation should be and typically
valuation should be and typically they’re based off our for any stage
they’re based off our for any stage
they’re based off our for any stage company’s percentage of revenues so you
company’s percentage of revenues so you
company’s percentage of revenues so you know in really exciting technology
know in really exciting technology
know in really exciting technology companies you might get 15 times the
companies you might get 15 times the
companies you might get 15 times the revenues and then you get you know
revenues and then you get you know
revenues and then you get you know whether it’s training revenue forward or
whether it’s training revenue forward or
whether it’s training revenue forward or revenue all that sort of stuff so
revenue all that sort of stuff so
revenue all that sort of stuff so there’s loads of different metrics but
there’s loads of different metrics but
there’s loads of different metrics but the kind of key thing is you need to
the kind of key thing is you need to
the kind of key thing is you need to establish what’s the market value what’s
establish what’s the market value what’s
establish what’s the market value what’s what if we were a company and we wanted
what if we were a company and we wanted
what if we were a company and we wanted to do ultimately sell ourselves well we
to do ultimately sell ourselves well we
to do ultimately sell ourselves well we sell ourselves at and what’s the
sell ourselves at and what’s the
sell ourselves at and what’s the valuation then the next question is how
valuation then the next question is how
valuation then the next question is how much money do you need and again I would
much money do you need and again I would
much money do you need and again I would absolutely argue strongly go for really
absolutely argue strongly go for really
absolutely argue strongly go for really drip-feed in yourself and take kind of
drip-feed in yourself and take kind of
drip-feed in yourself and take kind of as little money as you need to but get
as little money as you need to but get
as little money as you need to but get the firepower in place that you’ve got
the firepower in place that you’ve got
the firepower in place that you’ve got you know the next kind of three years
you know the next kind of three years
you know the next kind of three years mapped out if you do need to dip into
mapped out if you do need to dip into
mapped out if you do need to dip into further dilution and then then that
further dilution and then then that
further dilution and then then that gives you a business plan where you know
gives you a business plan where you know
gives you a business plan where you know how much cash cash you’re going to
how much cash cash you’re going to
how much cash cash you’re going to consume for the next phase of growth
consume for the next phase of growth
consume for the next phase of growth you know your market valuation and then
you know your market valuation and then
you know your market valuation and then that gives you you know percentage of
that gives you you know percentage of
that gives you you know percentage of how much money you need to raise so
how much money you need to raise so
how much money you need to raise so absolutely if you had a valuation on
absolutely if you had a valuation on
absolutely if you had a valuation on business of five million Canadian
business of five million Canadian
business of five million Canadian dollars you need to raise five hundred
dollars you need to raise five hundred
dollars you need to raise five hundred thousand dollars then effectively you’re
thousand dollars then effectively you’re
thousand dollars then effectively you’re looking at potentially a ten percent
looking at potentially a ten percent
looking at potentially a ten percent equity race and get everybody to do that
equity race and get everybody to do that
equity race and get everybody to do that say is it’s a pretty simple set of math
say is it’s a pretty simple set of math
say is it’s a pretty simple set of math mathematical algorithms that just drive
mathematical algorithms that just drive
mathematical algorithms that just drive the the level of dilution but and and
the the level of dilution but and and
the the level of dilution but and and the other fail be honest is you’ve got
the other fail be honest is you’ve got
the other fail be honest is you’ve got when you’ve hired people this is
when you’ve hired people this is
when you’ve hired people this is something you really need to do when
something you really need to do when
something you really need to do when you’re hiring people if you give people
you’re hiring people if you give people
you’re hiring people if you give people when they join particularly if you’re
when they join particularly if you’re
when they join particularly if you’re running it like a real bootstrap you’re
running it like a real bootstrap you’re
running it like a real bootstrap you’re probably going to give them some equity
probably going to give them some equity
probably going to give them some equity in the business because you means you
in the business because you means you
in the business because you means you reduce you know what you don’t want to
reduce you know what you don’t want to
reduce you know what you don’t want to do is pay people you know hundreds of
do is pay people you know hundreds of
do is pay people you know hundreds of thousand dollars a year you’re much
thousand dollars a year you’re much
thousand dollars a year you’re much better off paying them less and giving
better off paying them less and giving
better off paying them less and giving them a bit of equity but what you need
them a bit of equity but what you need
them a bit of equity but what you need to do when they join is say you know
to do when they join is say you know
to do when they join is say you know inevitably there’s going to be some
inevitably there’s going to be some
inevitably there’s going to be some dilution on the business and therefore
dilution on the business and therefore
dilution on the business and therefore they might join and you might give them
they might join and you might give them
they might join and you might give them half a percent equity if they’re really
half a percent equity if they’re really
half a percent equity if they’re really you know a senior manager in the company
you know a senior manager in the company
you know a senior manager in the company you are in but at that point in time
you are in but at that point in time
you are in but at that point in time you’ve got to set their expectations is
you’ve got to set their expectations is
you’ve got to set their expectations is when you do further rounds there’ll be
when you do further rounds there’ll be
when you do further rounds there’ll be further dilution because you know what
further dilution because you know what
further dilution because you know what what I’ve had this where we failed to do
what I’ve had this where we failed to do
what I’ve had this where we failed to do this and then that we sold the company
this and then that we sold the company
this and then that we sold the company in the end and a lot of the people who
in the end and a lot of the people who
in the end and a lot of the people who were working for us said well I thought
were working for us said well I thought
were working for us said well I thought I had half a percent of you know this
I had half a percent of you know this
I had half a percent of you know this amazing number where we sold it for like
amazing number where we sold it for like
amazing number where we sold it for like 40 million dollars and it wasn’t half
40 million dollars and it wasn’t half
40 million dollars and it wasn’t half percent because we’ve been through
percent because we’ve been through
percent because we’ve been through further rounds and diluted everybody you
further rounds and diluted everybody you
further rounds and diluted everybody you know it’s just the way it works but you
know it’s just the way it works but you
know it’s just the way it works but you need to explain that to people as well
need to explain that to people as well
need to explain that to people as well and obviously explain that to the angel
and obviously explain that to the angel
and obviously explain that to the angel investors if they don’t top up you can
investors if they don’t top up you can
investors if they don’t top up you can give when you do your angel investors
give when you do your angel investors
give when you do your angel investors you can give them sort of rights when
you can give them sort of rights when
you can give them sort of rights when you do further rounds that they top up
you do further rounds that they top up
you do further rounds that they top up there they’re round to maintain their
there they’re round to maintain their
there they’re round to maintain their percentage but if they don’t do that
percentage but if they don’t do that
percentage but if they don’t do that then they’re going to get diluted so I
then they’re going to get diluted so I
then they’re going to get diluted so I think it’s a good idea to have a few
think it’s a good idea to have a few
think it’s a good idea to have a few rules one is raise as little money as
rules one is raise as little money as
rules one is raise as little money as you need to so you’re not doing you’re
you need to so you’re not doing you’re
you need to so you’re not doing you’re minimizing the level of dilution but
minimizing the level of dilution but
minimizing the level of dilution but also it drives a culture where you’re
also it drives a culture where you’re
also it drives a culture where you’re scrapping you you know you
scrapping you you know you
scrapping you you know you hungry you’re not wasting money secondly
hungry you’re not wasting money secondly
hungry you’re not wasting money secondly it gives you the the really important
it gives you the the really important
it gives you the the really important factor is when you do raise money for
factor is when you do raise money for
factor is when you do raise money for angel investors rule of thumb we talked
angel investors rule of thumb we talked
angel investors rule of thumb we talked about the previous question is user much
about the previous question is user much
about the previous question is user much more than just investors and then the
more than just investors and then the
more than just investors and then the third thing is just to pry the
third thing is just to pry the
third thing is just to pry the mathematical calculation and the longer
mathematical calculation and the longer
mathematical calculation and the longer you go on the journey and the more
you go on the journey and the more
you go on the journey and the more success you have obviously the
success you have obviously the
success you have obviously the valuations going to be higher and that’s
valuations going to be higher and that’s
valuations going to be higher and that’s what you want to do this
what you want to do this
what you want to do this that means there’s less dilutions and
that means there’s less dilutions and
that means there’s less dilutions and you hold on to more equity yourself I
you hold on to more equity yourself I
you hold on to more equity yourself I love it the detailed answers I love it
love it the detailed answers I love it
love it the detailed answers I love it Nikki I would agree with you know pretty
Nikki I would agree with you know pretty
Nikki I would agree with you know pretty much everything Stephen said you know
much everything Stephen said you know
much everything Stephen said you know angel investors are typically people
angel investors are typically people
angel investors are typically people take an investment in your business they
take an investment in your business they
take an investment in your business they take equity there’s people who will give
take equity there’s people who will give
take equity there’s people who will give you loans but they’re not really
you loans but they’re not really
you loans but they’re not really considered angels so for the sake of
considered angels so for the sake of
considered angels so for the sake of most discussions an angel investor
most discussions an angel investor
most discussions an angel investor someone who owns an equity piece in your
someone who owns an equity piece in your
someone who owns an equity piece in your business in terms of the percentage you
business in terms of the percentage you
business in terms of the percentage you know you want to think about how big can
know you want to think about how big can
know you want to think about how big can your company get you know are you just
your company get you know are you just
your company get you know are you just doing this neighborhood mom-and-pop kind
doing this neighborhood mom-and-pop kind
doing this neighborhood mom-and-pop kind of store are you trying to build
of store are you trying to build
of store are you trying to build something huge and so what we would do
something huge and so what we would do
something huge and so what we would do when I was in the venture capital
when I was in the venture capital
when I was in the venture capital industry was project I look five years
industry was project I look five years
industry was project I look five years so like in five years where’s our
so like in five years where’s our
so like in five years where’s our revenue gonna be like how big can this
revenue gonna be like how big can this
revenue gonna be like how big can this company get because for an for an
company get because for an for an
company get because for an for an investor looking that deal they don’t
investor looking that deal they don’t
investor looking that deal they don’t know is this gonna be a hundred million
know is this gonna be a hundred million
know is this gonna be a hundred million dollar company it’s gonna be a 1 million
dollar company it’s gonna be a 1 million
dollar company it’s gonna be a 1 million dollar company right it obviously
dollar company right it obviously
dollar company right it obviously impacts the size of the investment and
impacts the size of the investment and
impacts the size of the investment and so understanding how big that company
so understanding how big that company
so understanding how big that company can grow and then kind of discounting
can grow and then kind of discounting
can grow and then kind of discounting that valuation back to today you can
that valuation back to today you can
that valuation back to today you can come to an assessment of how much like
come to an assessment of how much like
come to an assessment of how much like see if I said how much you need versus
see if I said how much you need versus
see if I said how much you need versus how much the company is worth a really
how much the company is worth a really
how much the company is worth a really good angel investor that will also
good angel investor that will also
good angel investor that will also understand that they don’t want to take
understand that they don’t want to take
understand that they don’t want to take too much of your company like a really
too much of your company like a really
too much of your company like a really good angel investor won’t come in and
good angel investor won’t come in and
good angel investor won’t come in and take 40% of your business because they
take 40% of your business because they
take 40% of your business because they know this is gonna be future rounds and
know this is gonna be future rounds and
know this is gonna be future rounds and you’re gonna get diluted and diluted and
you’re gonna get diluted and diluted and
you’re gonna get diluted and diluted and diluted and then if you own 10% of your
diluted and then if you own 10% of your
diluted and then if you own 10% of your company do you still have the motivation
company do you still have the motivation
company do you still have the motivation to get up every day and drive really
to get up every day and drive really
to get up every day and drive really hard to build this business forward and
hard to build this business forward and
hard to build this business forward and so a smart angel and this is where you
so a smart angel and this is where you
so a smart angel and this is where you want to find somebody again that we’ve
want to find somebody again that we’ve
want to find somebody again that we’ve talked about who’s done this before
talked about who’s done this before
talked about who’s done this before who’s mentor people along the path this
who’s mentor people along the path this
who’s mentor people along the path this isn’t their first deal
isn’t their first deal
isn’t their first deal because if you get diluted down to
because if you get diluted down to
because if you get diluted down to almost nothing you’re not going to have
almost nothing you’re not going to have
almost nothing you’re not going to have the incentive to want to keep working
the incentive to want to keep working
the incentive to want to keep working yeah as a rule of thumb Evan is you know
yeah as a rule of thumb Evan is you know
yeah as a rule of thumb Evan is you know when I’ve angel invested its timidly
when I’ve angel invested its timidly
when I’ve angel invested its timidly I’ve taken between about 2 and the max
I’ve taken between about 2 and the max
I’ve taken between about 2 and the max my ever talk was 10% equity and and then
my ever talk was 10% equity and and then
my ever talk was 10% equity and and then actually on on most the investments I’m
actually on on most the investments I’m
actually on on most the investments I’m investing them I exercised the top-up
investing them I exercised the top-up
investing them I exercised the top-up facility so I maintain my percentage
facility so I maintain my percentage
facility so I maintain my percentage ownership as they went down for further
ownership as they went down for further
ownership as they went down for further rounds and the you know I think to Evans
rounds and the you know I think to Evans
rounds and the you know I think to Evans point as well it’s really good because
point as well it’s really good because
point as well it’s really good because just mentally what are you doing with an
just mentally what are you doing with an
just mentally what are you doing with an angel investor you you’re pitching to
angel investor you you’re pitching to
angel investor you you’re pitching to him so so what do they want to know
him so so what do they want to know
him so so what do they want to know exactly what Evan said they won’t know
exactly what Evan said they won’t know
exactly what Evan said they won’t know what the market opportunity is what
what the market opportunity is what
what the market opportunity is what could it look like in five years time
could it look like in five years time
could it look like in five years time you know have you’ve got a coherent
you know have you’ve got a coherent
you know have you’ve got a coherent business plan to execute the growth
business plan to execute the growth
business plan to execute the growth what’s your value proposition what’s
what’s your value proposition what’s
what’s your value proposition what’s your unique selling point have you got a
your unique selling point have you got a
your unique selling point have you got a plan a you a credible person have you
plan a you a credible person have you
plan a you a credible person have you done this before have you have you got a
done this before have you have you got a
done this before have you have you got a plan if you’ve got three or four other
plan if you’ve got three or four other
plan if you’ve got three or four other people in place that’s the management
people in place that’s the management
people in place that’s the management team how quite how much quality is the
team how quite how much quality is the
team how quite how much quality is the management team in terms of the
management team in terms of the
management team in terms of the execution risk and all those sort of
execution risk and all those sort of
execution risk and all those sort of things but you know then set their
things but you know then set their
things but you know then set their expectations that get someone in or you
expectations that get someone in or you
expectations that get someone in or you can there’s loads of stuff on the
can there’s loads of stuff on the
can there’s loads of stuff on the internet around valuation of companies
internet around valuation of companies
internet around valuation of companies and the good the actually the good thing
and the good the actually the good thing
and the good the actually the good thing I’d say the smart angel investors they
I’d say the smart angel investors they
I’d say the smart angel investors they weren’t nickel and dime you they won’t
weren’t nickel and dime you they won’t
weren’t nickel and dime you they won’t screw you on the valuation because also
screw you on the valuation because also
screw you on the valuation because also there’s a there’s a few disaster cases
there’s a there’s a few disaster cases
there’s a there’s a few disaster cases right you never want to do a future
right you never want to do a future
right you never want to do a future round that’s a down round and what what
round that’s a down round and what what
round that’s a down round and what what I mean by that is you don’t want to
I mean by that is you don’t want to
I mean by that is you don’t want to raise money and then basically the next
raise money and then basically the next
raise money and then basically the next round you come up with a lower valuation
round you come up with a lower valuation
round you come up with a lower valuation you came round at the first round so
you came round at the first round so
you came round at the first round so everybody you know it’s really it’s
everybody you know it’s really it’s
everybody you know it’s really it’s tempting I suppose to give yourself a
tempting I suppose to give yourself a
tempting I suppose to give yourself a ridiculous valuation in the first round
ridiculous valuation in the first round
ridiculous valuation in the first round and say we’re worth you know I don’t
and say we’re worth you know I don’t
and say we’re worth you know I don’t know 50 million on the base of an idea
know 50 million on the base of an idea
know 50 million on the base of an idea but the risk then is the next round you
but the risk then is the next round you
but the risk then is the next round you do when you kind of need money is you’re
do when you kind of need money is you’re
do when you kind of need money is you’re gonna have a down round and you’re gonna
gonna have a down round and you’re gonna
gonna have a down round and you’re gonna have investors who kind of really are
have investors who kind of really are
have investors who kind of really are disenfranchised so I think you’ve got to
disenfranchised so I think you’ve got to
disenfranchised so I think you’ve got to be really sensible and that’s also why
be really sensible and that’s also why
be really sensible and that’s also why you want to raise as little money in the
you want to raise as little money in the
you want to raise as little money in the early stages until you’re making money
early stages until you’re making money
early stages until you’re making money because then when you’re making money
because then when you’re making money
because then when you’re making money evaluations going to be sustainable and
evaluations going to be sustainable and
evaluations going to be sustainable and higher
higher
higher next fault question comes from dar who’s
next fault question comes from dar who’s
next fault question comes from dar who’s asking is it better to find an angel
asking is it better to find an angel
asking is it better to find an angel investor or raise money from friends and
investor or raise money from friends and
investor or raise money from friends and family I think probably you know and it
family I think probably you know and it
family I think probably you know and it typically tends to be a bit of a mixture
typically tends to be a bit of a mixture
typically tends to be a bit of a mixture and and the other thing though is you
and and the other thing though is you
and and the other thing though is you know and I know and I’ve had this when
know and I know and I’ve had this when
know and I know and I’ve had this when I’ve been in companies a lot of my
I’ve been in companies a lot of my
I’ve been in companies a lot of my friends have said oh how can I invest
friends have said oh how can I invest
friends have said oh how can I invest it’s great and particularly if you’ve
it’s great and particularly if you’ve
it’s great and particularly if you’ve done it once or twice before and you’ve
done it once or twice before and you’ve
done it once or twice before and you’ve been successful then everybody kind of
been successful then everybody kind of
been successful then everybody kind of wants to join you or your bandwagon
wants to join you or your bandwagon
wants to join you or your bandwagon I’d say the big difference is if you can
I’d say the big difference is if you can
I’d say the big difference is if you can get angel investors who really add value
get angel investors who really add value
get angel investors who really add value in terms of the growth of the business
in terms of the growth of the business
in terms of the growth of the business and coach and mentor and support you
and coach and mentor and support you
and coach and mentor and support you that’s what you really want to go for
that’s what you really want to go for
that’s what you really want to go for and and then you know if I had a ratio
and and then you know if I had a ratio
and and then you know if I had a ratio maybe I’d do ninety percent of the money
maybe I’d do ninety percent of the money
maybe I’d do ninety percent of the money I raised her angel investors and maybe
I raised her angel investors and maybe
I raised her angel investors and maybe ten percent through friends and family
ten percent through friends and family
ten percent through friends and family but I’d make that friends and family
but I’d make that friends and family
but I’d make that friends and family very small the other thing you know by
very small the other thing you know by
very small the other thing you know by the very nature you don’t want to be
the very nature you don’t want to be
the very nature you don’t want to be distracted by all your friends and
distracted by all your friends and
distracted by all your friends and family coming to ask you how the
family coming to ask you how the
family coming to ask you how the business is doing every day and you get
business is doing every day and you get
business is doing every day and you get loads of emails from them and stuff like
loads of emails from them and stuff like
loads of emails from them and stuff like that you you want to be running the
that you you want to be running the
that you you want to be running the business and putting all your energy and
business and putting all your energy and
business and putting all your energy and passion into growing the business so you
passion into growing the business so you
passion into growing the business so you kind of want your both your angel
kind of want your both your angel
kind of want your both your angel investors and your friends and family to
investors and your friends and family to
investors and your friends and family to be low maintenance and that’s why I’d
be low maintenance and that’s why I’d
be low maintenance and that’s why I’d suggest if you do get angel investors
suggest if you do get angel investors
suggest if you do get angel investors it’s a really good thing that you kind
it’s a really good thing that you kind
it’s a really good thing that you kind of control when they have access to the
of control when they have access to the
of control when they have access to the company maybe once a quarter once a year
company maybe once a quarter once a year
company maybe once a quarter once a year you know don’t owe to a review of the
you know don’t owe to a review of the
you know don’t owe to a review of the business how we do and where we’re going
business how we do and where we’re going
business how we do and where we’re going how we grow in when it’s likely good
how we grow in when it’s likely good
how we grow in when it’s likely good you’re gonna need more money to set
you’re gonna need more money to set
you’re gonna need more money to set their expectation you know in a year’s
their expectation you know in a year’s
their expectation you know in a year’s time we’re gonna be coming back to you
time we’re gonna be coming back to you
time we’re gonna be coming back to you and asking you for more money because
and asking you for more money because
and asking you for more money because we’re gonna grow faster and then you
we’re gonna grow faster and then you
we’re gonna grow faster and then you know maybe take them out for dinner or
know maybe take them out for dinner or
know maybe take them out for dinner or drinks or something like that and then
drinks or something like that and then
drinks or something like that and then it means that you know there’s a
it means that you know there’s a
it means that you know there’s a specific time slice when they know that
specific time slice when they know that
specific time slice when they know that you’re gonna come to them and give them
you’re gonna come to them and give them
you’re gonna come to them and give them an update on the business well you don’t
an update on the business well you don’t
an update on the business well you don’t want to do Diaries have all your friends
want to do Diaries have all your friends
want to do Diaries have all your friends and family say my house of business
and family say my house of business
and family say my house of business doing you have to spend all you time
doing you have to spend all you time
doing you have to spend all you time turn everybody how is it doing I’d also
turn everybody how is it doing I’d also
turn everybody how is it doing I’d also say final thing is you don’t want too
say final thing is you don’t want too
say final thing is you don’t want too many of these folks you you wouldn’t
many of these folks you you wouldn’t
many of these folks you you wouldn’t want hundreds of friends and family you
want hundreds of friends and family you
want hundreds of friends and family you want to constrain it just to maximum
want to constrain it just to maximum
want to constrain it just to maximum odds probably half a dozen
odds probably half a dozen
odds probably half a dozen maybe maybe maximum ten to twelve but
maybe maybe maximum ten to twelve but
maybe maybe maximum ten to twelve but you don’t want to you don’t want to
you don’t want to you don’t want to
you don’t want to you don’t want to dilute you know you don’t want to have
dilute you know you don’t want to have
dilute you know you don’t want to have everybody having like point zero zero
everybody having like point zero zero
everybody having like point zero zero zero one percent of the business because
zero one percent of the business because
zero one percent of the business because it’s just all sets a lot of admin
it’s just all sets a lot of admin
it’s just all sets a lot of admin paperwork you need to get an attorney
paperwork you need to get an attorney
paperwork you need to get an attorney probably to draw up a share agreement
probably to draw up a share agreement
probably to draw up a share agreement all that sort of stuff and it’s cost and
all that sort of stuff and it’s cost and
all that sort of stuff and it’s cost and distraction yeah Dyer I would say one it
distraction yeah Dyer I would say one it
distraction yeah Dyer I would say one it depends on how much money you need to
depends on how much money you need to
depends on how much money you need to raise so if you know how much money you
raise so if you know how much money you
raise so if you know how much money you need to raise if you’re looking at under
need to raise if you’re looking at under
need to raise if you’re looking at under fifty thousand dollars you’re probably
fifty thousand dollars you’re probably
fifty thousand dollars you’re probably going the friends and family and not to
going the friends and family and not to
going the friends and family and not to ‘angels you know if you’re like I need
‘angels you know if you’re like I need
‘angels you know if you’re like I need five thousand dollars you know an angel
five thousand dollars you know an angel
five thousand dollars you know an angel investor doesn’t want to invest $5,000
investor doesn’t want to invest $5,000
investor doesn’t want to invest $5,000 it’s just not worth the time their time
it’s just not worth the time their time
it’s just not worth the time their time to look at your deal and do the due
to look at your deal and do the due
to look at your deal and do the due diligence and get to know you the return
diligence and get to know you the return
diligence and get to know you the return isn’t gonna be there for them so if you
isn’t gonna be there for them so if you
isn’t gonna be there for them so if you know that you need less than 50k I’d be
know that you need less than 50k I’d be
know that you need less than 50k I’d be looking at friends and family first off
looking at friends and family first off
looking at friends and family first off instead of angels the other thing to
instead of angels the other thing to
instead of angels the other thing to Stevens point I’d be looking at okay do
Stevens point I’d be looking at okay do
Stevens point I’d be looking at okay do I want my friends and family involved in
I want my friends and family involved in
I want my friends and family involved in my company is Uncle Joe now gonna want
my company is Uncle Joe now gonna want
my company is Uncle Joe now gonna want to be you know an adviser to the
to be you know an adviser to the
to be you know an adviser to the business and do I want Uncle Joe’s an
business and do I want Uncle Joe’s an
business and do I want Uncle Joe’s an adviser to my business is this gonna
adviser to my business is this gonna
adviser to my business is this gonna cause issues when we have Thanksgiving
cause issues when we have Thanksgiving
cause issues when we have Thanksgiving dinner together or Christmas time just
dinner together or Christmas time just
dinner together or Christmas time just those kinds of things to think about
those kinds of things to think about
those kinds of things to think about sometimes when you mix money and family
sometimes when you mix money and family
sometimes when you mix money and family it can go really really wrong sometimes
it can go really really wrong sometimes
it can go really really wrong sometimes it can be great you know some of the
it can be great you know some of the
it can be great you know some of the first people that I brought on my team
first people that I brought on my team
first people that I brought on my team were people my family I’ve had amazing
were people my family I’ve had amazing
were people my family I’ve had amazing relationships working with my family in
relationships working with my family in
relationships working with my family in different different paths but a lot of
different different paths but a lot of
different different paths but a lot of people can’t do it as well so you just
people can’t do it as well so you just
people can’t do it as well so you just want to pay really close attention again
want to pay really close attention again
want to pay really close attention again back to our point talking about angels
back to our point talking about angels
back to our point talking about angels it’s great that you know you need that
it’s great that you know you need that
it’s great that you know you need that money and here’s a short-term option for
money and here’s a short-term option for
money and here’s a short-term option for you but you have to remember this is
you but you have to remember this is
you but you have to remember this is gonna be something that you’re gonna
gonna be something that you’re gonna
gonna be something that you’re gonna have to deal with for a long time and so
have to deal with for a long time and so
have to deal with for a long time and so do you want to take Uncle Joe’s money
do you want to take Uncle Joe’s money
do you want to take Uncle Joe’s money and then have to deal with the
and then have to deal with the
and then have to deal with the consequences of that yes evidence is
consequences of that yes evidence is
consequences of that yes evidence is great when things go well but if you’re
great when things go well but if you’re
great when things go well but if you’re there at the Thanksgiving dinner and the
there at the Thanksgiving dinner and the
there at the Thanksgiving dinner and the business isn’t doing well and you have
business isn’t doing well and you have
business isn’t doing well and you have another investment round that’s lower
another investment round that’s lower
another investment round that’s lower than Uncle Joe put in before you know
than Uncle Joe put in before you know
than Uncle Joe put in before you know you’re gonna get ninth degree
you’re gonna get ninth degree
you’re gonna get ninth degree of burns from the questioning so it’s
of burns from the questioning so it’s
of burns from the questioning so it’s almost like you know when you if you do
almost like you know when you if you do
almost like you know when you if you do friends and family I’d the quote I gave
friends and family I’d the quote I gave
friends and family I’d the quote I gave they’re going to when you’re raising
they’re going to when you’re raising
they’re going to when you’re raising money especially with friends and family
money especially with friends and family
money especially with friends and family look at look at the lens of what happens
look at look at the lens of what happens
look at look at the lens of what happens when things go wrong so you know we hope
when things go wrong so you know we hope
when things go wrong so you know we hope we don’t go wrong but I think the you’re
we don’t go wrong but I think the you’re
we don’t go wrong but I think the you’re right Evan it’s all about the quantum if
right Evan it’s all about the quantum if
right Evan it’s all about the quantum if it’s a small quantum it makes sense but
it’s a small quantum it makes sense but
it’s a small quantum it makes sense but you do have to again I guess the reality
you do have to again I guess the reality
you do have to again I guess the reality is as an entrepreneur we’re always
is as an entrepreneur we’re always
is as an entrepreneur we’re always optimistic aren’t we we’re always
optimistic aren’t we we’re always
optimistic aren’t we we’re always optimistic you’ll always believe in your
optimistic you’ll always believe in your
optimistic you’ll always believe in your idea but when if you raise money with
idea but when if you raise money with
idea but when if you raise money with friends and family you have to kind of
friends and family you have to kind of
friends and family you have to kind of give them that government health warning
give them that government health warning
give them that government health warning a thousand times saying it could go
a thousand times saying it could go
a thousand times saying it could go wrong you could lose your money so don’t
wrong you could lose your money so don’t
wrong you could lose your money so don’t bust my chops if if it all blows up and
bust my chops if if it all blows up and
bust my chops if if it all blows up and you lose your money you know it’s a risk
you lose your money you know it’s a risk
you lose your money you know it’s a risk but the upside is if it goes well would
but the upside is if it goes well would
but the upside is if it goes well would do well but I you know then want to fall
do well but I you know then want to fall
do well but I you know then want to fall out with you in two years time when you
out with you in two years time when you
out with you in two years time when you know we’re shutting down the company and
know we’re shutting down the company and
know we’re shutting down the company and I’m moving on to my next big idea so you
I’m moving on to my next big idea so you
I’m moving on to my next big idea so you just got to be really honest with them
just got to be really honest with them
just got to be really honest with them because otherwise this is you know
because otherwise this is you know
because otherwise this is you know friends and family you could have no
friends and family you could have no
friends and family you could have no friends and family if you do it wrong
friends and family if you do it wrong
friends and family if you do it wrong and they thought you screw them out of
and they thought you screw them out of
and they thought you screw them out of us very very true okay next up chart
us very very true okay next up chart
us very very true okay next up chart your trade I have both a service and a
your trade I have both a service and a
your trade I have both a service and a product as part of my business can you
product as part of my business can you
product as part of my business can you get angel investors for just one part of
get angel investors for just one part of
get angel investors for just one part of the business I’d like it for just a
the business I’d like it for just a
the business I’d like it for just a product part of my business is that
product part of my business is that
product part of my business is that possible yeah I guess it depends how you
possible yeah I guess it depends how you
possible yeah I guess it depends how you structure your company but it sounds
structure your company but it sounds
structure your company but it sounds like it’s a bit complicated but you
like it’s a bit complicated but you
like it’s a bit complicated but you could have like an overall company and
could have like an overall company and
could have like an overall company and then two companies sort of beneath that
then two companies sort of beneath that
then two companies sort of beneath that the product and services company and
the product and services company and
the product and services company and then you can raise money for the product
then you can raise money for the product
then you can raise money for the product company and ultimately you could then
company and ultimately you could then
company and ultimately you could then you know some state if you want to
you know some state if you want to
you know some state if you want to consider an exit Salem is independent
consider an exit Salem is independent
consider an exit Salem is independent businesses so yeah it’s definitely
businesses so yeah it’s definitely
businesses so yeah it’s definitely possible there’s ways to do that and I
possible there’s ways to do that and I
possible there’s ways to do that and I think obviously on the product side
think obviously on the product side
think obviously on the product side typically it on the services business
typically it on the services business
typically it on the services business hopefully you can do that instruction
hopefully you can do that instruction
hopefully you can do that instruction out that’s cashflow positive from day
out that’s cashflow positive from day
out that’s cashflow positive from day one but on the product side it does tend
one but on the product side it does tend
one but on the product side it does tend to need you know greater investment and
to need you know greater investment and
to need you know greater investment and as I said I guess a neat way of doing
as I said I guess a neat way of doing
as I said I guess a neat way of doing this you know if it’s other things like
this you know if it’s other things like
this you know if it’s other things like technology space or software or products
technology space or software or products
technology space or software or products that come from the services
that come from the services
that come from the services if they’re related as a business if you
if they’re related as a business if you
if they’re related as a business if you can get the monies and the cash you’re
can get the monies and the cash you’re
can get the monies and the cash you’re generating through the services business
generating through the services business
generating through the services business to fund the product business that’s a
to fund the product business that’s a
to fund the product business that’s a great way of doing it but I think yeah
great way of doing it but I think yeah
great way of doing it but I think yeah Emily possible doing what you want to do
Emily possible doing what you want to do
Emily possible doing what you want to do and you could kind of set set up two
and you could kind of set set up two
and you could kind of set set up two separate companies to do that and then
separate companies to do that and then
separate companies to do that and then have a company that owns both companies
have a company that owns both companies
have a company that owns both companies overriding it it’s totally possible the
overriding it it’s totally possible the
overriding it it’s totally possible the challenge will be trying to convince an
challenge will be trying to convince an
challenge will be trying to convince an angel investor to just find one part of
angel investor to just find one part of
angel investor to just find one part of the business because the concern from an
the business because the concern from an
the business because the concern from an angel is going to be well why are you
angel is going to be well why are you
angel is going to be well why are you spending time on this other thing yeah
spending time on this other thing yeah
spending time on this other thing yeah okay you know I want to make sure that
okay you know I want to make sure that
okay you know I want to make sure that angels want to make sure that you like
angels want to make sure that you like
angels want to make sure that you like everything you have is going into making
everything you have is going into making
everything you have is going into making the thing that they’re investing in work
the thing that they’re investing in work
the thing that they’re investing in work and so their concern is going to be if
and so their concern is going to be if
and so their concern is going to be if your time is split between two or three
your time is split between two or three
your time is split between two or three different ideas and and they’re only
different ideas and and they’re only
different ideas and and they’re only invested into one of them then that’s
invested into one of them then that’s
invested into one of them then that’s gonna be a problem so from from a
gonna be a problem so from from a
gonna be a problem so from from a technical point of view you just need to
technical point of view you just need to
technical point of view you just need to set up a separate business and you can
set up a separate business and you can
set up a separate business and you can sell shares in that company that’s fine
sell shares in that company that’s fine
sell shares in that company that’s fine it’s just a sales point of view it could
it’s just a sales point of view it could
it’s just a sales point of view it could be a real big challenge getting an
be a real big challenge getting an
be a real big challenge getting an investor to buy into that idea that your
investor to buy into that idea that your
investor to buy into that idea that your time is going to be split and you want
time is going to be split and you want
time is going to be split and you want me to invest money only into one idea I
me to invest money only into one idea I
me to invest money only into one idea I think that’s gonna be your challenge
think that’s gonna be your challenge
think that’s gonna be your challenge especially if your other ideas making
especially if your other ideas making
especially if your other ideas making money like if this new product one is
money like if this new product one is
money like if this new product one is the one that you want to launch any
the one that you want to launch any
the one that you want to launch any funding for but your other side of the
funding for but your other side of the
funding for but your other side of the business is more establishment is making
business is more establishment is making
business is more establishment is making money
money
money the investor ideally is gonna want to
the investor ideally is gonna want to
the investor ideally is gonna want to have a piece of the other one because
have a piece of the other one because
have a piece of the other one because there’s a little bit more guarantees a
there’s a little bit more guarantees a
there’s a little bit more guarantees a little less risk involved so I think
little less risk involved so I think
little less risk involved so I think it’s gonna be a challenge if you try to
it’s gonna be a challenge if you try to
it’s gonna be a challenge if you try to get it going yes philosophically as well
get it going yes philosophically as well
get it going yes philosophically as well Evan I think it actually this is maybe
Evan I think it actually this is maybe
Evan I think it actually this is maybe strange advice to give but with these
strange advice to give but with these
strange advice to give but with these sort of things with angel investors I
sort of things with angel investors I
sort of things with angel investors I would encourage the founders and the
would encourage the founders and the
would encourage the founders and the entrepreneurs to be generous I think you
entrepreneurs to be generous I think you
entrepreneurs to be generous I think you know in that example an angel investor
know in that example an angel investor
know in that example an angel investor would feel very uncomfortable about a
would feel very uncomfortable about a
would feel very uncomfortable about a prior you know having to invest in one
prior you know having to invest in one
prior you know having to invest in one side of the business not having total
side of the business not having total
side of the business not having total skin in the game on that side and not
skin in the game on that side and not
skin in the game on that side and not playing on the other side of the fence
playing on the other side of the fence
playing on the other side of the fence so I
so I
so I generally I’d say why not be generous
generally I’d say why not be generous
generally I’d say why not be generous and give the angel investor the
and give the angel investor the
and give the angel investor the opportunity to enjoy the outside on both
opportunity to enjoy the outside on both
opportunity to enjoy the outside on both sides of the business and I think you
sides of the business and I think you
sides of the business and I think you know it’s fun aliens would quote from
know it’s fun aliens would quote from
know it’s fun aliens would quote from Jonathan Swift actually says when it
Jonathan Swift actually says when it
Jonathan Swift actually says when it when it comes to money it’s all about
when it comes to money it’s all about
when it comes to money it’s all about the head but what it really should be is
the head but what it really should be is
the head but what it really should be is about the heart as well and I think you
about the heart as well and I think you
about the heart as well and I think you know I would I don’t know why people
know I would I don’t know why people
know I would I don’t know why people become really sort of selfish and they
become really sort of selfish and they
become really sort of selfish and they lose their personality because I think
lose their personality because I think
lose their personality because I think most entrepreneurs a huge optimistic
most entrepreneurs a huge optimistic
most entrepreneurs a huge optimistic very generous and I think you want to be
very generous and I think you want to be
very generous and I think you want to be quite generous with your angel investors
quite generous with your angel investors
quite generous with your angel investors because they’re back and you they’re
because they’re back and you they’re
because they’re back and you they’re gonna give they’re gonna give their
gonna give they’re gonna give their
gonna give they’re gonna give their personal time their commitment probably
personal time their commitment probably
personal time their commitment probably their own reputation by picking up the
their own reputation by picking up the
their own reputation by picking up the phone to introduce you to various people
phone to introduce you to various people
phone to introduce you to various people and and it’s a real it has to be a real
and and it’s a real it has to be a real
and and it’s a real it has to be a real win-win where where I’ll definitely
win-win where where I’ll definitely
win-win where where I’ll definitely advocate be generous with them and most
advocate be generous with them and most
advocate be generous with them and most of these ng investor everybody talked
of these ng investor everybody talked
of these ng investor everybody talked about this probably probably would look
about this probably probably would look
about this probably probably would look for something like a tenfold return that
for something like a tenfold return that
for something like a tenfold return that would probably a good benchmark but
would probably a good benchmark but
would probably a good benchmark but there at the the other good about things
there at the the other good about things
there at the the other good about things about the angel Buster’s they know when
about the angel Buster’s they know when
about the angel Buster’s they know when stuff goes wrong because they’ll have
stuff goes wrong because they’ll have
stuff goes wrong because they’ll have invested probably in six seven eight
invested probably in six seven eight
invested probably in six seven eight companies and only one in six kind of
companies and only one in six kind of
companies and only one in six kind of work out but that one in six is giving
work out but that one in six is giving
work out but that one in six is giving them a tenth of return so so I
them a tenth of return so so I
them a tenth of return so so I definitely share share the upside share
definitely share share the upside share
definitely share share the upside share the downside yeah we didn’t talk much
the downside yeah we didn’t talk much
the downside yeah we didn’t talk much about expectations for for angels I
about expectations for for angels I
about expectations for for angels I agree so you’re looking for a tenfold
agree so you’re looking for a tenfold
agree so you’re looking for a tenfold return and they’re also looking for an
return and they’re also looking for an
return and they’re also looking for an exit path so it has to be clear how how
exit path so it has to be clear how how
exit path so it has to be clear how how are they going to get their money out of
are they going to get their money out of
are they going to get their money out of this business
this business
this business I usually if somebody’s gonna buy you so
I usually if somebody’s gonna buy you so
I usually if somebody’s gonna buy you so they want to see a path that something
they want to see a path that something
they want to see a path that something will buy your company so like who’s an
will buy your company so like who’s an
will buy your company so like who’s an acquisition or how can you be an
acquisition or how can you be an
acquisition or how can you be an acquisition target for somebody else it
acquisition target for somebody else it
acquisition target for somebody else it could be I’m gonna take my company
could be I’m gonna take my company
could be I’m gonna take my company public and that’s gonna be our exit is
public and that’s gonna be our exit is
public and that’s gonna be our exit is going to be an IPO but so few companies
going to be an IPO but so few companies
going to be an IPO but so few companies actually go and IPO that really it’s how
actually go and IPO that really it’s how
actually go and IPO that really it’s how are you going to get bought out in ten
are you going to get bought out in ten
are you going to get bought out in ten years and if your plan is well I never
years and if your plan is well I never
years and if your plan is well I never want to get bought out I want to I want
want to get bought out I want to I want
want to get bought out I want to I want to run this company for 50 years and
to run this company for 50 years and
to run this company for 50 years and pass it on to my kids and grandkids that
pass it on to my kids and grandkids that
pass it on to my kids and grandkids that starts raising alarm bells to and that
starts raising alarm bells to and that
starts raising alarm bells to and that okay well buy invest money into this
okay well buy invest money into this
okay well buy invest money into this company how am I ever gonna get anything
company how am I ever gonna get anything
company how am I ever gonna get anything back
back
back is going to be a noun multi-generational
is going to be a noun multi-generational
is going to be a noun multi-generational family run business and so just
family run business and so just
family run business and so just factoring that in if it’s a percentage
factoring that in if it’s a percentage
factoring that in if it’s a percentage of profits or some kind of payment plan
of profits or some kind of payment plan
of profits or some kind of payment plan something’s that as an investor if you
something’s that as an investor if you
something’s that as an investor if you know going in like this investor wants
know going in like this investor wants
know going in like this investor wants to be able to make ten times their money
to be able to make ten times their money
to be able to make ten times their money in maybe a ten year period how is that
in maybe a ten year period how is that
in maybe a ten year period how is that going to happen yeah actually we there’s
going to happen yeah actually we there’s
going to happen yeah actually we there’s a couple of other things sort of related
a couple of other things sort of related
a couple of other things sort of related to this and and you want to see if you
to this and and you want to see if you
to this and and you want to see if you run the head and see how the movie plays
run the head and see how the movie plays
run the head and see how the movie plays out so definitely IPO which is an
out so definitely IPO which is an
out so definitely IPO which is an initial public offering you go on the
initial public offering you go on the
initial public offering you go on the Nasdaq or you go on the Toronto exchange
Nasdaq or you go on the Toronto exchange
Nasdaq or you go on the Toronto exchange yeah that’s very rare so you’ve got to
yeah that’s very rare so you’ve got to
yeah that’s very rare so you’ve got to think of a sale and exit until you
think of a sale and exit until you
think of a sale and exit until you that’s known as a trade sale now one of
that’s known as a trade sale now one of
that’s known as a trade sale now one of the brilliant things and I’ve been
the brilliant things and I’ve been
the brilliant things and I’ve been involved as an angel in a company that
involved as an angel in a company that
involved as an angel in a company that did this is they even from day one they
did this is they even from day one they
did this is they even from day one they thought about where is the likely places
thought about where is the likely places
thought about where is the likely places we’re going to get acquired and they
we’re going to get acquired and they
we’re going to get acquired and they actually got an investment from one of
actually got an investment from one of
actually got an investment from one of those companies because and we’ve done
those companies because and we’ve done
those companies because and we’ve done this actually we bought a company back
this actually we bought a company back
this actually we bought a company back in March where the year before we’d made
in March where the year before we’d made
in March where the year before we’d made a 20% investment and and it’s kind of
a 20% investment and and it’s kind of
a 20% investment and and it’s kind of try before you buy because then
try before you buy because then
try before you buy because then everybody gets to know you get to know
everybody gets to know you get to know
everybody gets to know you get to know the management team you get to know the
the management team you get to know the
the management team you get to know the chemistry the culture they’re like the
chemistry the culture they’re like the
chemistry the culture they’re like the product so a really smart thing to do is
product so a really smart thing to do is
product so a really smart thing to do is get an investment from a company that
get an investment from a company that
get an investment from a company that you want to be bought by and let them
you want to be bought by and let them
you want to be bought by and let them either white label your product or or
either white label your product or or
either white label your product or or whatever and and form that relationship
whatever and and form that relationship
whatever and and form that relationship because then it becomes a really low
because then it becomes a really low
because then it becomes a really low risk for them to do an acquisition and
risk for them to do an acquisition and
risk for them to do an acquisition and buy you out the other thing I’d say
buy you out the other thing I’d say
buy you out the other thing I’d say actually we didn’t talk about this
actually we didn’t talk about this
actually we didn’t talk about this either
either
either is you know my experience with angel
is you know my experience with angel
is you know my experience with angel investors they want you to put all the
investors they want you to put all the
investors they want you to put all the money you’re making back in the business
money you’re making back in the business
money you’re making back in the business so you know if they want to do things
so you know if they want to do things
so you know if they want to do things like dividends and stuff like that
like dividends and stuff like that
like dividends and stuff like that doesn’t make sense you shouldn’t be
doesn’t make sense you shouldn’t be
doesn’t make sense you shouldn’t be taking money out of the business you
taking money out of the business you
taking money out of the business you should be keeping all the money in the
should be keeping all the money in the
should be keeping all the money in the business so it’s angel investors they
business so it’s angel investors they
business so it’s angel investors they need to know that there’s an exit plan
need to know that there’s an exit plan
need to know that there’s an exit plan they need to know they’re gonna get the
they need to know they’re gonna get the
they need to know they’re gonna get the money out but they’re also typically
money out but they’re also typically
money out but they’re also typically well the typically time horizon might be
well the typically time horizon might be
well the typically time horizon might be five seven years if you get lucky it
five seven years if you get lucky it
five seven years if you get lucky it could be three years but that’s the sort
could be three years but that’s the sort
could be three years but that’s the sort of horizon you’re looking for an angel
of horizon you’re looking for an angel
of horizon you’re looking for an angel investor and tenfold return no dividends
investor and tenfold return no dividends
investor and tenfold return no dividends so no profit share or anything like that
so no profit share or anything like that
so no profit share or anything like that all the
all the
all the it’s get plowed back in the business
it’s get plowed back in the business
it’s get plowed back in the business because you want to grow grow grow and
because you want to grow grow grow and
because you want to grow grow grow and grow faster so we started off this
grow faster so we started off this
grow faster so we started off this session talking about loans and we moved
session talking about loans and we moved
session talking about loans and we moved a lot to angel investing and Yousef is
a lot to angel investing and Yousef is
a lot to angel investing and Yousef is asking so which is better getting a loan
asking so which is better getting a loan
asking so which is better getting a loan or angel investing what are our thoughts
or angel investing what are our thoughts
or angel investing what are our thoughts so when when should you go for either
so when when should you go for either
so when when should you go for either option it’s a lot of it’s about the time
option it’s a lot of it’s about the time
option it’s a lot of it’s about the time in stage and quantum so probably earlier
in stage and quantum so probably earlier
in stage and quantum so probably earlier on I you know very early on it might be
on I you know very early on it might be
on I you know very early on it might be a little bit of friends and family as
a little bit of friends and family as
a little bit of friends and family as you scale up I quite like angel
you scale up I quite like angel
you scale up I quite like angel investing with people who’ve got real
investing with people who’ve got real
investing with people who’ve got real skin in the game and a lot of experience
skin in the game and a lot of experience
skin in the game and a lot of experience and I would use loans pretty sparingly
and I would use loans pretty sparingly
and I would use loans pretty sparingly really – Evans point but you know
really – Evans point but you know
really – Evans point but you know fundamentally again it probably depends
fundamentally again it probably depends
fundamentally again it probably depends on how much investment you need to grow
on how much investment you need to grow
on how much investment you need to grow and what cap you require in the business
and what cap you require in the business
and what cap you require in the business but my general philosophy and a lot of
but my general philosophy and a lot of
but my general philosophy and a lot of it biased by this because most of my
it biased by this because most of my
it biased by this because most of my experiences where I’ve been an angel
experiences where I’ve been an angel
experiences where I’ve been an angel investor those companies tend to be kind
investor those companies tend to be kind
investor those companies tend to be kind of much better run much more involved in
of much better run much more involved in
of much better run much more involved in good management teams hiring a good
good management teams hiring a good
good management teams hiring a good people and equity at share of an equity
people and equity at share of an equity
people and equity at share of an equity really does create a great culture in a
really does create a great culture in a
really does create a great culture in a business because you you everybody’s an
business because you you everybody’s an
business because you you everybody’s an owner and we say you know there’s
owner and we say you know there’s
owner and we say you know there’s something called founders mentality I
something called founders mentality I
something called founders mentality I mentioned last time check it out on the
mentioned last time check it out on the
mentioned last time check it out on the web type in founders mentality it drives
web type in founders mentality it drives
web type in founders mentality it drives a great culture it’s about custom
a great culture it’s about custom
a great culture it’s about custom session it’s about all the things that
session it’s about all the things that
session it’s about all the things that really matter in the culture of business
really matter in the culture of business
really matter in the culture of business and you get that from ownership where
and you get that from ownership where
and you get that from ownership where you where you borrow money and you
you where you borrow money and you
you where you borrow money and you raised it I think you get less of that
raised it I think you get less of that
raised it I think you get less of that but obviously you know needs muss and
but obviously you know needs muss and
but obviously you know needs muss and you’re probably going to have a mixture
you’re probably going to have a mixture
you’re probably going to have a mixture honestly as you grow and expand
honestly as you grow and expand
honestly as you grow and expand you’re probably gonna start with some
you’re probably gonna start with some
you’re probably gonna start with some friends and family then you’ll get some
friends and family then you’ll get some
friends and family then you’ll get some major investment you almost certainly
major investment you almost certainly
major investment you almost certainly have some sort of revolving credit
have some sort of revolving credit
have some sort of revolving credit facility and you might for short periods
facility and you might for short periods
facility and you might for short periods of time
of time
of time take debt so generally I think go the
take debt so generally I think go the
take debt so generally I think go the long haul raise equity short term
long haul raise equity short term
long haul raise equity short term requirements typically alone yeah so
requirements typically alone yeah so
requirements typically alone yeah so with all of this we want to try to raise
with all of this we want to try to raise
with all of this we want to try to raise as little capital as possible because we
as little capital as possible because we
as little capital as possible because we want to you know try to keep it to
want to you know try to keep it to
want to you know try to keep it to ourselves and be able to grow but but
ourselves and be able to grow but but
ourselves and be able to grow but but you need cap
you need cap
you need cap to expand offs in the business if you
to expand offs in the business if you
to expand offs in the business if you can get a business loan and not a
can get a business loan and not a
can get a business loan and not a personal guarantee loan a business loan
personal guarantee loan a business loan
personal guarantee loan a business loan that’s going to be your cheapest form of
that’s going to be your cheapest form of
that’s going to be your cheapest form of capital because you’re paying three four
capital because you’re paying three four
capital because you’re paying three four five six seven whatever percent interest
five six seven whatever percent interest
five six seven whatever percent interest on it which will be way less to you than
on it which will be way less to you than
on it which will be way less to you than giving up a chunk of your company if you
giving up a chunk of your company if you
giving up a chunk of your company if you look at okay I’m gonna grow over the
look at okay I’m gonna grow over the
look at okay I’m gonna grow over the next five years how much is that going
next five years how much is that going
next five years how much is that going to cost me
to cost me
to cost me but that assumes that one that you have
but that assumes that one that you have
but that assumes that one that you have the cash flow to support the loan and to
the cash flow to support the loan and to
the cash flow to support the loan and to you you are confident in your team and
you you are confident in your team and
you you are confident in your team and your ability as people to go out and
your ability as people to go out and
your ability as people to go out and execute bringing on angel investors and
execute bringing on angel investors and
execute bringing on angel investors and people on your team really you’re doing
people on your team really you’re doing
people on your team really you’re doing it for yes to money but the expertise
it for yes to money but the expertise
it for yes to money but the expertise like if I bring in mr. Stephen Kelly
like if I bring in mr. Stephen Kelly
like if I bring in mr. Stephen Kelly angel investor extraordinary into my
angel investor extraordinary into my
angel investor extraordinary into my business how much does that help my
business how much does that help my
business how much does that help my company’s reputation Stephen picking up
company’s reputation Stephen picking up
company’s reputation Stephen picking up a phone you know making some calls for
a phone you know making some calls for
a phone you know making some calls for me that that experience that wisdom that
me that that experience that wisdom that
me that that experience that wisdom that mentorship that trust can really explode
mentorship that trust can really explode
mentorship that trust can really explode your company forward but it’s about
your company forward but it’s about
your company forward but it’s about really finding the right person to bring
really finding the right person to bring
really finding the right person to bring on board and not just treating them like
on board and not just treating them like
on board and not just treating them like a bank account yeah good of us good
a bank account yeah good of us good
a bank account yeah good of us good qualm Mel Mel’s taking us up the next
qualm Mel Mel’s taking us up the next
qualm Mel Mel’s taking us up the next step you these exact urate about the
step you these exact urate about the
step you these exact urate about the difference between angels and venture
difference between angels and venture
difference between angels and venture capitalists and our thoughts on those
capitalists and our thoughts on those
capitalists and our thoughts on those two yeah and you know again it’s it’s
two yeah and you know again it’s it’s
two yeah and you know again it’s it’s not completely binary there can be
not completely binary there can be
not completely binary there can be overlap where angel investors can also
overlap where angel investors can also
overlap where angel investors can also be venture capitalists and also venture
be venture capitalists and also venture
be venture capitalists and also venture capitalists partners can be private
capitalists partners can be private
capitalists partners can be private investors as well so mama I think is a
investors as well so mama I think is a
investors as well so mama I think is a good question again it’s typically the
good question again it’s typically the
good question again it’s typically the stage of a business you probably start
stage of a business you probably start
stage of a business you probably start with friends and family then you move on
with friends and family then you move on
with friends and family then you move on to Andrew investment and then you go on
to Andrew investment and then you go on
to Andrew investment and then you go on to venture capital and then you know
to venture capital and then you know
to venture capital and then you know typically when you’re dealing with
typically when you’re dealing with
typically when you’re dealing with venture capital in normally millions of
venture capital in normally millions of
venture capital in normally millions of dollars typically and they’ll they’ll
dollars typically and they’ll they’ll
dollars typically and they’ll they’ll look at you know the management team the
look at you know the management team the
look at you know the management team the market opportunity the business idea you
market opportunity the business idea you
market opportunity the business idea you probably you know there’s all whole over
probably you know there’s all whole over
probably you know there’s all whole over the series series ABC at different stage
the series series ABC at different stage
the series series ABC at different stage of the company so you can be a pre
of the company so you can be a pre
of the company so you can be a pre product idea and you can go and raise
product idea and you can go and raise
product idea and you can go and raise our VC money typically the reason why it
our VC money typically the reason why it
our VC money typically the reason why it tends to be later stage is if you go
tends to be later stage is if you go
tends to be later stage is if you go very early then you get massive ty
very early then you get massive ty
very early then you get massive ty Lucien because these VCS you know
Lucien because these VCS you know
Lucien because these VCS you know normally would be 2040
normally would be 2040
normally would be 2040 of the equity of the company and
of the equity of the company and
of the equity of the company and sometimes you know they’ll bill look at
sometimes you know they’ll bill look at
sometimes you know they’ll bill look at even more than 50% so you lose kind of
even more than 50% so you lose kind of
even more than 50% so you lose kind of the ownership of the company then as
the ownership of the company then as
the ownership of the company then as well so there’s it’s a trade off is to
well so there’s it’s a trade off is to
well so there’s it’s a trade off is to trade off there’s not kind of one right
trade off there’s not kind of one right
trade off there’s not kind of one right answer but I think the other thing if
answer but I think the other thing if
answer but I think the other thing if you do do look at the VC route it’s
you do do look at the VC route it’s
you do do look at the VC route it’s pretty good to tease out the partners of
pretty good to tease out the partners of
pretty good to tease out the partners of those VCS to invest as angels and I know
those VCS to invest as angels and I know
those VCS to invest as angels and I know a lot of VCs you know typically these
a lot of VCs you know typically these
a lot of VCs you know typically these are really wealthy people evans worked
are really wealthy people evans worked
are really wealthy people evans worked in the industry you know they’re they’re
in the industry you know they’re they’re
in the industry you know they’re they’re driving Ferraris and all this stuff
driving Ferraris and all this stuff
driving Ferraris and all this stuff private jets they normally then and
private jets they normally then and
private jets they normally then and they’re normally very experienced people
they’re normally very experienced people
they’re normally very experienced people they’re normally got great networks
they’re normally got great networks
they’re normally got great networks again if you get into the VC world I’d
again if you get into the VC world I’d
again if you get into the VC world I’d make sure that they bring expertise of
make sure that they bring expertise of
make sure that they bring expertise of your domain and experience typically the
your domain and experience typically the
your domain and experience typically the other thing actually sorry to say on VCS
other thing actually sorry to say on VCS
other thing actually sorry to say on VCS they want quite a lot of control of the
they want quite a lot of control of the
they want quite a lot of control of the company they want board seats normally
company they want board seats normally
company they want board seats normally one or two board seats and all that sort
one or two board seats and all that sort
one or two board seats and all that sort of stuff so it just tends to be when
of stuff so it just tends to be when
of stuff so it just tends to be when you’re at a later stage of a bit more
you’re at a later stage of a bit more
you’re at a later stage of a bit more grown-up company so then that the amount
grown-up company so then that the amount
grown-up company so then that the amount you want to raise makes a huge
you want to raise makes a huge
you want to raise makes a huge difference like these C’s if you want to
difference like these C’s if you want to
difference like these C’s if you want to raise a hundred thousand dollars they’re
raise a hundred thousand dollars they’re
raise a hundred thousand dollars they’re not interested in you it’s just not
not interested in you it’s just not
not interested in you it’s just not their game right and and that may be
their game right and and that may be
their game right and and that may be beyond the stretch of your friends and
beyond the stretch of your friends and
beyond the stretch of your friends and family too to write a hundred thousand
family too to write a hundred thousand
family too to write a hundred thousand dollar check so that’s where the Angels
dollar check so that’s where the Angels
dollar check so that’s where the Angels come into play right so under 50k you’re
come into play right so under 50k you’re
come into play right so under 50k you’re looking at friends and family 50k to
looking at friends and family 50k to
looking at friends and family 50k to three hundred four hundred thousand
three hundred four hundred thousand
three hundred four hundred thousand dollars like VCS really don’t want to do
dollars like VCS really don’t want to do
dollars like VCS really don’t want to do those little small deals really anything
those little small deals really anything
those little small deals really anything under half a million they don’t really
under half a million they don’t really
under half a million they don’t really want to touch they might because they
want to touch they might because they
want to touch they might because they see you know long-term potential but
see you know long-term potential but
see you know long-term potential but really they want to be doing that the
really they want to be doing that the
really they want to be doing that the twenty five fifty hundred million dollar
twenty five fifty hundred million dollar
twenty five fifty hundred million dollar deals and if that really stuff kind of
deals and if that really stuff kind of
deals and if that really stuff kind of helps something they’ll do it but under
helps something they’ll do it but under
helps something they’ll do it but under under half a million really you’re
under half a million really you’re
under half a million really you’re looking at angel investors and then
looking at angel investors and then
looking at angel investors and then above a half a million that’s a hard
above a half a million that’s a hard
above a half a million that’s a hard check for an angel to write like not
check for an angel to write like not
check for an angel to write like not many angels will write a five hundred
many angels will write a five hundred
many angels will write a five hundred thousand dollar check to you so that’s
thousand dollar check to you so that’s
thousand dollar check to you so that’s where you get into the VCS VCS also want
where you get into the VCS VCS also want
where you get into the VCS VCS also want you know the ten times they return
you know the ten times they return
you know the ten times they return they’ll have a much more aggressive path
they’ll have a much more aggressive path
they’ll have a much more aggressive path than an angel
than an angel
than an angel so they
so they
so they want to happen like ASAP they’ll they’ll
want to happen like ASAP they’ll they’ll
want to happen like ASAP they’ll they’ll blow you up for growth or just blow up
blow you up for growth or just blow up
blow you up for growth or just blow up your company and the same idea of one of
your company and the same idea of one of
your company and the same idea of one of ten works out well they’ve made their
ten works out well they’ve made their
ten works out well they’ve made their money and they don’t really care so much
money and they don’t really care so much
money and they don’t really care so much what happens to the others a lot of them
what happens to the others a lot of them
what happens to the others a lot of them end up blowing up yet eleven is ideally
end up blowing up yet eleven is ideally
end up blowing up yet eleven is ideally you want to have angels who are
you want to have angels who are
you want to have angels who are connected to VC network and the VCS
connected to VC network and the VCS
connected to VC network and the VCS would look at your angels if they know
would look at your angels if they know
would look at your angels if they know them they’re highly credible individuals
them they’re highly credible individuals
them they’re highly credible individuals that helps you massively the other thing
that helps you massively the other thing
that helps you massively the other thing you find on VCS a lot of them kind of
you find on VCS a lot of them kind of
you find on VCS a lot of them kind of want to create syndicates so there’s two
want to create syndicates so there’s two
want to create syndicates so there’s two or three VCS are all coming together and
or three VCS are all coming together and
or three VCS are all coming together and you know you’ll find in the West Coast
you know you’ll find in the West Coast
you know you’ll find in the West Coast people that benchmark all these sort of
people that benchmark all these sort of
people that benchmark all these sort of guys will actually form great
guys will actually form great
guys will actually form great relationship with other VCS and they
relationship with other VCS and they
relationship with other VCS and they tend to hunt in packs but you know let’s
tend to hunt in packs but you know let’s
tend to hunt in packs but you know let’s let’s now kid ourselves when you get VCS
let’s now kid ourselves when you get VCS
let’s now kid ourselves when you get VCS involved it’s great when the business is
involved it’s great when the business is
involved it’s great when the business is going well but boy oh boy if you have a
going well but boy oh boy if you have a
going well but boy oh boy if you have a couple of bad quarters you’ll find them
couple of bad quarters you’ll find them
couple of bad quarters you’ll find them big you know you’ll find those bald
big you know you’ll find those bald
big you know you’ll find those bald meters become pretty brutal and even you
meters become pretty brutal and even you
meters become pretty brutal and even you know they’ll be forcing things like
know they’ll be forcing things like
know they’ll be forcing things like changes changes of you know the new
changes changes of you know the new
changes changes of you know the new management team so you lose a lot of
management team so you lose a lot of
management team so you lose a lot of control say just yeah walk into it with
control say just yeah walk into it with
control say just yeah walk into it with your eyes open another thing that I saw
your eyes open another thing that I saw
your eyes open another thing that I saw a lot of when I was in the VC world was
a lot of when I was in the VC world was
a lot of when I was in the VC world was investors new investors coming in don’t
investors new investors coming in don’t
investors new investors coming in don’t want to buy out old investors so what
want to buy out old investors so what
want to buy out old investors so what would happen a lot of times is people
would happen a lot of times is people
would happen a lot of times is people would raise money from angels dentists
would raise money from angels dentists
would raise money from angels dentists and it would you know go live and they
and it would you know go live and they
and it would you know go live and they built their business but the dentist is
built their business but the dentist is
built their business but the dentist is just some silent shareholder and they
just some silent shareholder and they
just some silent shareholder and they want to buy them out because they’re not
want to buy them out because they’re not
want to buy them out because they’re not contributing understand that no investor
contributing understand that no investor
contributing understand that no investor wants to come in just to buy out
wants to come in just to buy out
wants to come in just to buy out somebody else they want to see that
somebody else they want to see that
somebody else they want to see that their money is going to be put to use to
their money is going to be put to use to
their money is going to be put to use to grow the company so that’s why the first
grow the company so that’s why the first
grow the company so that’s why the first investors that you bring in are really
investors that you bring in are really
investors that you bring in are really important because if you bring on
important because if you bring on
important because if you bring on reputable angel investors and then they
reputable angel investors and then they
reputable angel investors and then they go to a VC they’ll actually help you
go to a VC they’ll actually help you
go to a VC they’ll actually help you like their name their credibility of
like their name their credibility of
like their name their credibility of their experience and contacts helps you
their experience and contacts helps you
their experience and contacts helps you get that next deal where if you’re going
get that next deal where if you’re going
get that next deal where if you’re going with somebody who has no experience and
with somebody who has no experience and
with somebody who has no experience and it’s their first deal and they’re not
it’s their first deal and they’re not
it’s their first deal and they’re not contribute anything they actually hurt
contribute anything they actually hurt
contribute anything they actually hurt you because when you go and create your
you because when you go and create your
you because when you go and create your pitch you’re also showing who’s involved
pitch you’re also showing who’s involved
pitch you’re also showing who’s involved on your team look who’s on your Board of
on your team look who’s on your Board of
on your team look who’s on your Board of Advisors or Board of Directors and who
Advisors or Board of Directors and who
Advisors or Board of Directors and who you’re in
you’re in
you’re in your investors are and it’s a bunch of
your investors are and it’s a bunch of
your investors are and it’s a bunch of people that nobody recognizes that’s
people that nobody recognizes that’s
people that nobody recognizes that’s gonna hurt your ability to get the next
gonna hurt your ability to get the next
gonna hurt your ability to get the next round
round
round yeah and this if you do get involved
yeah and this if you do get involved
yeah and this if you do get involved with VCS there’s kind of a few things
with VCS there’s kind of a few things
with VCS there’s kind of a few things you want to do kind of rule says there’s
you want to do kind of rule says there’s
you want to do kind of rule says there’s loads of embel just pick three one is
loads of embel just pick three one is
loads of embel just pick three one is always manage their expectations
always manage their expectations
always manage their expectations so typically under-promise over-deliver
so typically under-promise over-deliver
so typically under-promise over-deliver secondly is performance becomes
secondly is performance becomes
secondly is performance becomes excruciating because they will want they
excruciating because they will want they
excruciating because they will want they won’t want quarterly board packs they
won’t want quarterly board packs they
won’t want quarterly board packs they want monthly reports so one a lot of
want monthly reports so one a lot of
want monthly reports so one a lot of evidence to know that you’re working
evidence to know that you’re working
evidence to know that you’re working their money well so performance is
their money well so performance is
their money well so performance is everything and third things kind of
everything and third things kind of
everything and third things kind of don’t do what they consider stupid stuff
don’t do what they consider stupid stuff
don’t do what they consider stupid stuff so I’ve been sitting in an early-stage
so I’ve been sitting in an early-stage
so I’ve been sitting in an early-stage company have been going pretty well and
company have been going pretty well and
company have been going pretty well and then the CEO said actually you know
then the CEO said actually you know
then the CEO said actually you know we’re going out doing a little round and
we’re going out doing a little round and
we’re going out doing a little round and I’ve actually like to take a little bit
I’ve actually like to take a little bit
I’ve actually like to take a little bit of personal money off the table buy a
of personal money off the table buy a
of personal money off the table buy a second home now that’s stupid you know
second home now that’s stupid you know
second home now that’s stupid you know you don’t want to hear like your chief
you don’t want to hear like your chief
you don’t want to hear like your chief executives saying I want to take some
executives saying I want to take some
executives saying I want to take some money off you want to doubling down you
money off you want to doubling down you
money off you want to doubling down you want them to put you know and and this
want them to put you know and and this
want them to put you know and and this was a case at you all the executives put
was a case at you all the executives put
was a case at you all the executives put their own money into the business which
their own money into the business which
their own money into the business which we haven’t talked about and when you’re
we haven’t talked about and when you’re
we haven’t talked about and when you’re hard people absolutely give them the
hard people absolutely give them the
hard people absolutely give them the opportunity to do they want to invest in
opportunity to do they want to invest in
opportunity to do they want to invest in the business because wow if you’ve got
the business because wow if you’ve got
the business because wow if you’ve got someone you’ve hired who puts their own
someone you’ve hired who puts their own
someone you’ve hired who puts their own money in the business and actually earns
money in the business and actually earns
money in the business and actually earns equity wow that is awesome that’s a
equity wow that is awesome that’s a
equity wow that is awesome that’s a great way to raise money and that’s
great way to raise money and that’s
great way to raise money and that’s something you should ask them you know
something you should ask them you know
something you should ask them you know if they are that they may have been made
if they are that they may have been made
if they are that they may have been made redundant they’ve got a check from
redundant they’ve got a check from
redundant they’ve got a check from somewhere they’ve got some inheritance
somewhere they’ve got some inheritance
somewhere they’ve got some inheritance what why not back back themselves and
what why not back back themselves and
what why not back back themselves and back your business and actually be an
back your business and actually be an
back your business and actually be an investor because then you’ve got massive
investor because then you’ve got massive
investor because then you’ve got massive skin in the game you know those guys
skin in the game you know those guys
skin in the game you know those guys work so hard for your success it’s a
work so hard for your success it’s a
work so hard for your success it’s a great great formula I love it well
great great formula I love it well
great great formula I love it well stupid is crazy how quickly an hour goes
stupid is crazy how quickly an hour goes
stupid is crazy how quickly an hour goes by we’ve answered a ton of questions a
by we’ve answered a ton of questions a
by we’ve answered a ton of questions a lot more ki-moon that we didn’t have
lot more ki-moon that we didn’t have
lot more ki-moon that we didn’t have time for but thank you guys for joining
time for but thank you guys for joining
time for but thank you guys for joining us Stephen last word goes to you a quote
us Stephen last word goes to you a quote
us Stephen last word goes to you a quote or some words of wisdom to sum all of
or some words of wisdom to sum all of
or some words of wisdom to sum all of this up what do you got yeah I think um
this up what do you got yeah I think um
this up what do you got yeah I think um you know it’s a great topic ever today
you know it’s a great topic ever today
you know it’s a great topic ever today and I think great questions out there
and I think great questions out there
and I think great questions out there and really appreciate everything you you
and really appreciate everything you you
and really appreciate everything you you kind of asked us I think it’s a rich
kind of asked us I think it’s a rich
kind of asked us I think it’s a rich topic I hope we’ve helped you but with
topic I hope we’ve helped you but with
topic I hope we’ve helped you but with all these things you know
all these things you know
all these things you know with everything tree tree the company’s
with everything tree tree the company’s
with everything tree tree the company’s money as if it’s your own because it is
money as if it’s your own because it is
money as if it’s your own because it is and even when you raise money from other
and even when you raise money from other
and even when you raise money from other people just treat it as if it’s your own
people just treat it as if it’s your own
people just treat it as if it’s your own and the most important thing is kind of
and the most important thing is kind of
and the most important thing is kind of be smart see how the movies gonna play
be smart see how the movies gonna play
be smart see how the movies gonna play out think ahead and and really when you
out think ahead and and really when you
out think ahead and and really when you go and sell you a big idea just think
go and sell you a big idea just think
go and sell you a big idea just think when you’re going to invest as though as
when you’re going to invest as though as
when you’re going to invest as though as important as when you’re pitching to
important as when you’re pitching to
important as when you’re pitching to customers and do a great job in terms of
customers and do a great job in terms of
customers and do a great job in terms of pitch and idea and when they’re on board
pitch and idea and when they’re on board
pitch and idea and when they’re on board you know manager expectations hopefully
you know manager expectations hopefully
you know manager expectations hopefully blow the blow they’ve kind of knocked
blow the blow they’ve kind of knocked
blow the blow they’ve kind of knocked the ball out of the park and
the ball out of the park and
the ball out of the park and under-promise over-deliver because
under-promise over-deliver because
under-promise over-deliver because that’s what all investors want they want
that’s what all investors want they want
that’s what all investors want they want you to come and say would place a
you to come and say would place a
you to come and say would place a quarter we closed a year we actually did
quarter we closed a year we actually did
quarter we closed a year we actually did a little bit better than we thought
a little bit better than we thought
a little bit better than we thought always sort of under-promise and
always sort of under-promise and
always sort of under-promise and over-deliver that’s a great message for
over-deliver that’s a great message for
over-deliver that’s a great message for anybody addressing investors I love it
anybody addressing investors I love it
anybody addressing investors I love it well thank you sieving for the great
well thank you sieving for the great
well thank you sieving for the great advice thank you guys for watching if
advice thank you guys for watching if
advice thank you guys for watching if you want to give us suggestions for the
you want to give us suggestions for the
you want to give us suggestions for the topic next month leave it in the
topic next month leave it in the
topic next month leave it in the comments below not the live one because
comments below not the live one because
comments below not the live one because YouTube deletes all that but after this
YouTube deletes all that but after this
YouTube deletes all that but after this video goes public leave it down the
video goes public leave it down the
video goes public leave it down the comments below and we’ll consider it
comments below and we’ll consider it
comments below and we’ll consider it thank you guys again continue to believe
thank you guys again continue to believe
thank you guys again continue to believe and we’ll see you next month
and we’ll see you next month
and we’ll see you next month great job love Evan
”
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