gee arise how does a CEO gauge whether their business is at the investment
their business is at the investment
their business is at the investment stage or not do people often seek
stage or not do people often seek
stage or not do people often seek investment they don’t need yeah I think
investment they don’t need yeah I think
investment they don’t need yeah I think also Evan people probably and I saw this
also Evan people probably and I saw this
also Evan people probably and I saw this a lot back in the crazy kind of convent
a lot back in the crazy kind of convent
a lot back in the crazy kind of convent California people raised it’s crazy to
California people raised it’s crazy to
California people raised it’s crazy to set almost too much money and when you
set almost too much money and when you
set almost too much money and when you do today it just drives the whole
do today it just drives the whole
do today it just drives the whole mentality of the DNA the company in the
mentality of the DNA the company in the
mentality of the DNA the company in the wrong direction and it’s a real great
wrong direction and it’s a real great
wrong direction and it’s a real great sense to almost bootstrap of business
sense to almost bootstrap of business
sense to almost bootstrap of business and have that hunger every day and worry
and have that hunger every day and worry
and have that hunger every day and worry about making payroll and sitting down on
about making payroll and sitting down on
about making payroll and sitting down on Sunday evening and working at new
Sunday evening and working at new
Sunday evening and working at new expenses your cash flow your pipeline
expenses your cash flow your pipeline
expenses your cash flow your pipeline and all that sort of stuff so I think my
and all that sort of stuff so I think my
and all that sort of stuff so I think my might and I learned this from you
might and I learned this from you
might and I learned this from you actually it’s kind of make money before
actually it’s kind of make money before
actually it’s kind of make money before you raise money let’s build a business
you raise money let’s build a business
you raise money let’s build a business bill buddy for customers and obviously
bill buddy for customers and obviously
bill buddy for customers and obviously you need to kind of keep a real-time
you need to kind of keep a real-time
you need to kind of keep a real-time weather eye on the cash flow and the
weather eye on the cash flow and the
weather eye on the cash flow and the fuel growth which is cash but you kind
fuel growth which is cash but you kind
fuel growth which is cash but you kind of really want to focus on the
of really want to focus on the
of really want to focus on the fundamentals of business and that’s how
fundamentals of business and that’s how
fundamentals of business and that’s how would face and that’s on the market in
would face and that’s on the market in
would face and that’s on the market in the customers and the value provided and
the customers and the value provided and
the customers and the value provided and then you can build a financial model and
then you can build a financial model and
then you can build a financial model and it doesn’t have to be a
it doesn’t have to be a
it doesn’t have to be a three-dimensional 16 dimensional
three-dimensional 16 dimensional
three-dimensional 16 dimensional spreadsheet can be pretty simple and
spreadsheet can be pretty simple and
spreadsheet can be pretty simple and then really focus on running the
then really focus on running the
then really focus on running the business and generating the cash you
business and generating the cash you
business and generating the cash you need to fuel the growth and then go and
need to fuel the growth and then go and
need to fuel the growth and then go and get investment when you need to provide
get investment when you need to provide
get investment when you need to provide points in time yeah I think the answer
points in time yeah I think the answer
points in time yeah I think the answer that I think too many entrepreneurs do
that I think too many entrepreneurs do
that I think too many entrepreneurs do start looking for capital too soon and
start looking for capital too soon and
start looking for capital too soon and you’re going to lose too much of your
you’re going to lose too much of your
you’re going to lose too much of your company right because there’s a lot of
company right because there’s a lot of
company right because there’s a lot of risk associated with a start-up and any
risk associated with a start-up and any
risk associated with a start-up and any angel investor VC coming in if they see
angel investor VC coming in if they see
angel investor VC coming in if they see a lot of risks and they want more equity
a lot of risks and they want more equity
a lot of risks and they want more equity as a result and so the more that you can
as a result and so the more that you can
as a result and so the more that you can show momentum some traction some sales
show momentum some traction some sales
show momentum some traction some sales some media something something that
some media something something that
some media something something that separates you from everybody else then
separates you from everybody else then
separates you from everybody else then your valuation will get much richer and
your valuation will get much richer and
your valuation will get much richer and it’ll be a lot easier to close the sales
it’ll be a lot easier to close the sales
it’ll be a lot easier to close the sales we would always in the venture capital
we would always in the venture capital
we would always in the venture capital firm try to look for companies that want
firm try to look for companies that want
firm try to look for companies that want a growth capital not startup capital so
a growth capital not startup capital so
a growth capital not startup capital so you’ve shown a proof of concept that
you’ve shown a proof of concept that
you’ve shown a proof of concept that works if you’re selling in a local
works if you’re selling in a local
works if you’re selling in a local geographic market and now you need money
geographic market and now you need money
geographic market and now you need money to expand that expansion capitals the
to expand that expansion capitals the
to expand that expansion capitals the easiest kind of money to raise where the
easiest kind of money to raise where the
easiest kind of money to raise where the startup capital is the hardest so if you
startup capital is the hardest so if you
startup capital is the hardest so if you don’t absolutely need it I try to figure
don’t absolutely need it I try to figure
don’t absolutely need it I try to figure away to bootstrap it up yeah but the key
away to bootstrap it up yeah but the key
away to bootstrap it up yeah but the key thing is when you said that you’ve got
thing is when you said that you’ve got
thing is when you said that you’ve got to know how you can invest money in and
to know how you can invest money in and
to know how you can invest money in and even even the words I use are pretty
even even the words I use are pretty
even even the words I use are pretty pedantic on this I hate the word Spanish
pedantic on this I hate the word Spanish
pedantic on this I hate the word Spanish because as soon as you spend money
because as soon as you spend money
because as soon as you spend money implies waste if you’re ain’t you want
implies waste if you’re ain’t you want
implies waste if you’re ain’t you want to return so as an entrepreneur you
to return so as an entrepreneur you
to return so as an entrepreneur you should have a really kind of tight I um
should have a really kind of tight I um
should have a really kind of tight I um when do you need to raise money to fuel
when do you need to raise money to fuel
when do you need to raise money to fuel the work and then you need to know how
the work and then you need to know how
the work and then you need to know how you’re going to invest at you is no one
you’re going to invest at you is no one
you’re going to invest at you is no one just raising money and having two
just raising money and having two
just raising money and having two million dollars in the bank and not
million dollars in the bank and not
million dollars in the bank and not knowing how you’re going to deploy it to
knowing how you’re going to deploy it to
knowing how you’re going to deploy it to gray business and scale that’s a really
gray business and scale that’s a really
gray business and scale that’s a really interesting distinction do you do you
interesting distinction do you do you
interesting distinction do you do you encourage that so you have a staff of
encourage that so you have a staff of
encourage that so you have a staff of over 10,000 people 14,000 people
over 10,000 people 14,000 people
over 10,000 people 14,000 people something like that do you do you
something like that do you do you
something like that do you do you encourage them to eliminate the word
encourage them to eliminate the word
encourage them to eliminate the word spend from their vocabulary and look at
spend from their vocabulary and look at
spend from their vocabulary and look at invest yeah when I was actually another
invest yeah when I was actually another
invest yeah when I was actually another co it’s about 15 years ago one of my VPS
co it’s about 15 years ago one of my VPS
co it’s about 15 years ago one of my VPS and marketing came in and you can
and marketing came in and you can
and marketing came in and you can imagine it in those days 8080 slide
imagine it in those days 8080 slide
imagine it in those days 8080 slide PowerPoint deck you lose the will to
PowerPoint deck you lose the will to
PowerPoint deck you lose the will to live and the last slide slide 79 is the
live and the last slide slide 79 is the
live and the last slide slide 79 is the punchline i need a 15 million dollar
punchline i need a 15 million dollar
punchline i need a 15 million dollar budget for a brand campaign or something
budget for a brand campaign or something
budget for a brand campaign or something happening I said a little bit kind of
happening I said a little bit kind of
happening I said a little bit kind of get yella fit in the room let’s get real
get yella fit in the room let’s get real
get yella fit in the room let’s get real about this and the guy kept on talking
about this and the guy kept on talking
about this and the guy kept on talking about spend spend spend I said wow we’re
about spend spend spend I said wow we’re
about spend spend spend I said wow we’re not going to spend money in this company
not going to spend money in this company
not going to spend money in this company ever like drunk and see if we’re going
ever like drunk and see if we’re going
ever like drunk and see if we’re going to kind of focus on investment return on
to kind of focus on investment return on
to kind of focus on investment return on investment and if what we talked about
investment and if what we talked about
investment and if what we talked about before test drive and stuff test drive
before test drive and stuff test drive
before test drive and stuff test drive stuff till we get the data to know what
stuff till we get the data to know what
stuff till we get the data to know what really works so we can really scale our
really works so we can really scale our
really works so we can really scale our business and I think in the world you
business and I think in the world you
business and I think in the world you know it’s great digital economy digital
know it’s great digital economy digital
know it’s great digital economy digital marketing everything’s accelerated now
marketing everything’s accelerated now
marketing everything’s accelerated now so what two years takes weeks and months
so what two years takes weeks and months
so what two years takes weeks and months now and I think you can really from an
now and I think you can really from an
now and I think you can really from an investment point of view you can
investment point of view you can
investment point of view you can actually matter where as I’m sure should
actually matter where as I’m sure should
actually matter where as I’m sure should I go for one big lump sum of investment
I go for one big lump sum of investment
I go for one big lump sum of investment or should I do it in a number of small
or should I do it in a number of small
or should I do it in a number of small kind of incremental series and I would
kind of incremental series and I would
kind of incremental series and I would always advocate go for kind of small
always advocate go for kind of small
always advocate go for kind of small test drive staff and
test drive staff and
test drive staff and you when you don’t give away half your
you when you don’t give away half your
you when you don’t give away half your business and lose total control of it
business and lose total control of it
business and lose total control of it yeah I love that and so again i love the
yeah I love that and so again i love the
yeah I love that and so again i love the distinction between spend and invest and
distinction between spend and invest and
distinction between spend and invest and to add to that point of raisin and
to add to that point of raisin and
to add to that point of raisin and rounds uh what you can do is bet on
rounds uh what you can do is bet on
rounds uh what you can do is bet on yourself and so you can raise your first
yourself and so you can raise your first
yourself and so you can raise your first round maybe a million dollar valuation
round maybe a million dollar valuation
round maybe a million dollar valuation and then say hey if I hit these
and then say hey if I hit these
and then say hey if I hit these milestones will you come and fund me but
milestones will you come and fund me but
milestones will you come and fund me but at a 1.5 million or two million or five
at a 1.5 million or two million or five
at a 1.5 million or two million or five million valuation and so you’re betting
million valuation and so you’re betting
million valuation and so you’re betting on yourself to actually go and hit those
on yourself to actually go and hit those
on yourself to actually go and hit those milestones but if you do then it’s a lot
milestones but if you do then it’s a lot
milestones but if you do then it’s a lot less riskier for the investor to get
less riskier for the investor to get
less riskier for the investor to get involved in so you can end up raising
involved in so you can end up raising
involved in so you can end up raising the same amount of money but over time
the same amount of money but over time
the same amount of money but over time so you get the money you need to grow
so you get the money you need to grow
so you get the money you need to grow and you’ve lost less of the company
and you’ve lost less of the company
and you’ve lost less of the company through dilution
”
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