Startup Fundraising Office Hours Free Monthly Livestream for Entrepreneurs [Replay]

MasterMinds Startup Fundraising Video Office Hours help early stage company founders raise money for their startups. 

The fun, friendly live video Q&A sessions answer financing and strategy questions from entrepreneurs from all over the world with FREE expert startup advice. 

Startup Founder Discussion Questions

This month Startup Council CEO Scott Fox took questions from startup founders live on camera and via chat, including:

• Armaan, Irvine CA: How to raise money for a hardware startup that has purchase orders but no revenue yet? What are factoring and venture debt strategies to help fund a startup?
• Jordan, Detroit MI: Who is best to talk to in a client or supplier company to see if they will invest in your startup? Is this a good alternative to raising angel or venture capital?
• Joe, Herdon VA: How to raise money when the investors keep moving the goal posts and asking for more and more proof? Is it better to bootstrap instead?
• Jacqueline, Long Beach CA: How to disclose a previous business failure to investors in an updated pitch deck?
• Mariella, San Diego CA: How to find and share equity with co-founders, including how to develop business requirements documents to help engage technical resources?

To watch this month’s Startup Office Hours replay click here. 

And see a complete TRANSCRIPT BELOW.

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MasterMinds Startup Fundraising Office Hours are a free community service of the Startup Council. 

MasterMinds Startup Fundraising Office Hours TRANSCRIPT for September 28, 2021:

00:00

to startup office hours i'm scott fox

00:02

i'm here today to talk to you about

00:03

startups we're going to talk about

00:04

entrepreneurial adventures of the

00:06

venture capital kind and hopefully be

00:09

some help to you i'm broadcasting live

00:11

from southern california where i live

00:13

but i'm reaching out to you across the

00:14

internets to see if we can boost your

00:17

business and accelerate the

00:18

opportunities that you're creating to

00:20

bring your creativity into the world and

00:22

hopefully make some money doing it today

00:23

we're gonna have some questions from the

00:25

audience and that might include you so i

00:27

hope you'll want to join us you can come

00:29

over if you're

00:30

watching online you can actually join us

00:33

at uh the link i just put on the screen

00:35

or if you're listening to the audio

00:37

version uh that's at bit.li masterminds

00:40

on camera link be taking your questions

00:43

live this is an ama ask me anything i've

00:45

been uh investing in and building

00:47

startups for many years

00:50

about as long as anybody that's active

00:51

these days i know i don't look that old

00:53

but i've been doing this since the mid

00:55

90s i raised my first venture around

00:57

back in 1996

00:59

during the first.com boom after i

01:01

graduated from stanford for graduate

01:02

school so i come by this expertise

01:05

honestly been doing it for a long time

01:07

and be happy to help you and your

01:08

venture if you want to join us today you

01:11

can tell your friends by the way invite

01:13

your friends they can join us over here

01:14

youtube.com scottfox that's the easiest

01:18

url to cap to capture us at but of

01:21

course we're streaming on linkedin and

01:22

facebook and

01:24

a couple other platforms i lose track of

01:26

them honestly so uh happy to have you

01:28

here the today's mission is really to

01:31

encourage innovation i've done pretty

01:33

well through my years in silicon valley

01:35

and building uh software companies um

01:38

content companies a lot of different

01:40

kinds of companies and i've been

01:41

involved as an investor and a consultant

01:43

and advisor and even more for many years

01:45

the books you see behind me here are

01:47

written by me

01:49

the middle ones of the english the other

01:50

ones with foreign translations so these

01:52

books are in many languages around the

01:53

world again with the mission of trying

01:55

to help you accelerate your creativity

01:58

and entrepreneurship uh to make the dent

02:01

in the universe that you were born to

02:02

make like steve jobs used to say

02:04

so if you're from somewhere out outside

02:07

the united states as well welcome i

02:08

apologize for the time zone i'm working

02:10

around my lunch hour here in california

02:13

so those of you in europe i know it's

02:14

late thank you and those of you in

02:16

australia and asia i know it's real

02:17

early so nice to see you too

02:20

again if you want to join us today you

02:21

can come on camera at this link here and

02:24

we're going to be recording this session

02:26

by the way and also has a couple

02:27

disclaimers of course i i do have a

02:29

degree in law degree and also background

02:32

is an investment banker but this is not

02:34

professional legal advice

02:36

and you should qualify consult your own

02:38

qualified uh representatives for

02:40

anything to do anything that's serious

02:42

you should talk to a real adult with

02:43

real credentials before you jump in okay

02:46

don't mortgage your house or or quit

02:48

school and do something crazy um there

02:50

are rules to this game and that's what

02:52

we're here to talk about to hopefully

02:53

help you do that um and by the way this

02:56

session is being recorded and will be

02:57

online worldwide on those internets okay

03:00

so if you'd like to join us today i'm

03:02

happy to have you here i'm scott fox and

03:04

um

03:05

i'm a serial internet entrepreneur uh

03:07

the founder and ceo of several startups

03:09

um i've been the head of business

03:11

development the head of product and

03:13

design for others companies

03:15

mostly companies you wouldn't have heard

03:17

of but a few that you have of course i'm

03:19

an active angel investor through tech

03:20

coast angels which is the largest angel

03:22

investment group in the united states

03:24

based here in southern california i'm

03:25

also the chairman of the stanford angels

03:28

and entrepreneurs group here in orange

03:29

county california where i live now and

03:31

i'm these days i'm also the ceo of the

03:33

startup council which you can see this

03:35

banner here behind me which is based

03:37

here in orange county california but is

03:38

dedicated to helping increase access to

03:41

innovation and investment to

03:43

entrepreneurs all over the world

03:44

especially those folks who might not

03:46

have had uh quite a fair shake in uh

03:49

getting access to the online uh worlds

03:51

of capital and innovation so so i'm here

03:53

for you and today we're gonna have some

03:55

fun so enough of that um

03:58

let's get on to some questions i see

03:59

we've got three people we've got uh

04:00

armin and joe and jacqueline all here to

04:03

talk to us and probably some more on the

04:04

way let me put that link up again in

04:06

case anybody else wants to get in the

04:08

queue um and we're going to take their

04:10

questions live and figure out what we

04:12

can do i don't have all the answers but

04:14

at least i can help you think them

04:15

through a little bit better hopefully um

04:17

because i've been doing this a long time

04:18

and i'm a volunteer oh by the way no

04:20

sales pitches today this is free

04:22

honestly uh the one request i do have

04:24

for you we don't have any sponsors for

04:25

this show it's literally me in my office

04:27

with a webcam trying to help you uh so

04:29

if you have a second and you can like or

04:31

share this or forward it to a friend or

04:34

click like and share and all that stuff

04:36

on instagram or linkedin or youtube

04:38

subscribe to the youtube channel blah

04:40

blah blah all that stuff right so we'd

04:41

love to have you support in that way a

04:43

couple clicks do make a difference

04:44

because that's that's what the software

04:46

does right it recognizes when people are

04:47

paying attention

04:49

all right so let's get going here so

04:50

we've got um armand joe and jacqueline i

04:53

think armand you were here first so

04:55

maybe let's see here let me see what i

04:58

can do here

04:59

got a couple different buttons we got to

05:01

turn these on

05:04

high-tech stuff here

05:05

modern now there we go got a couple

05:07

folks here um okay sorry hey oh hi

05:10

jacqueline nice to meet you i'm gonna

05:12

i'm gonna go to uh to armin to get

05:14

started if you don't mind clicking on

05:16

the uh oh i forgot to talk about the

05:18

chat there we go andre andre

05:20

uh tsarukian has already figured that

05:23

out if you want guys want to go into the

05:24

chat that would be great to have you

05:26

there's a live chat here and there's

05:27

scott lee joining in as well there is

05:29

live chat available uh for real time

05:31

questions and commentary you can do that

05:33

over on youtube is the easiest way i

05:34

think the chat but there's also chat on

05:36

the startup council page on linkedin i

05:38

think um and i'm happy to have you join

05:41

in that way and you know the goal for

05:42

this chat by the way is to help each

05:44

other right i'm i'm here to try to

05:46

moderate and try to

05:48

offer uh my advice but you can certainly

05:50

help each other

05:51

you can put in your linkedin profile

05:53

actually let me do that i'll put in my

05:54

linkedin profile

05:56

and we can connect

05:58

because you know honestly the there we

06:00

go that's me

06:02

startups do not get built solo it's not

06:05

it's really not a solo act right the

06:06

media loves to cover mark zuckerberg or

06:08

steve jobs as these titanic founders but

06:11

honestly teams make this a lot easier

06:12

it's much easier as a group armin's

06:14

nodding he knows um and uh i encourage

06:17

you all to talk to each other as much as

06:19

to me i'm just the catalyst for this and

06:21

hopefully you all can build some

06:22

relationships as well uh and uh we'd

06:25

love to have you uh share this stuff

06:27

with everybody okay armin i'm coming

06:28

hang on sorry just get all this this uh

06:31

housekeeping to do here no worries this

06:33

dashboard is just sophisticated enough

06:35

that i get lost sometimes

06:37

hang on there we go they make this the

06:39

scroll bar so tiny right it's like

06:41

great and it's gray on gray that's

06:43

really helpful right yeah okay

06:45

okay so

06:47

okay nice to see you armand so uh i've

06:50

known armin for a couple years now he

06:51

comes to the masterminds workshops that

06:53

i host here in orange county um and also

06:56

online these days thanks to the pandemic

06:57

one nice thing that's come out of the

06:58

pandemic is the masterminds workshops

07:00

that we run

07:01

these are kind of like this session but

07:03

with a whole bunch of us all at the same

07:04

time talking together and networking and

07:07

that's how i know armin so armin is here

07:08

to ask

07:09

about his company which is called

07:12

hindsight all right

07:14

armin it's uh the microphone is yours

07:17

all right um

07:19

so i guess first off i'll give a um a

07:21

little description of the company uh

07:23

we're basically a consumer smart glasses

07:25

startup and what we do is we uh so we

07:29

have a pair of smart glasses and

07:31

whenever you see something that you wish

07:33

you could have recorded even after it's

07:34

already happened you can simply push a

07:37

button on the glasses it'll capture the

07:40

last 20 seconds of footage even after

07:42

it's already happened record another 20

07:44

seconds of footage uh and then send it

07:46

straight to your smartphone so basically

07:48

you never miss a moment ever again

07:50

um and so that's kind of the gist of it

07:53

uh we're aiming for the consumer market

07:55

and my question

07:57

is uh as most invest in investors expect

08:00

a company to already be in the market

08:02

before investing uh coming from a

08:05

hardware startup perspective which

08:07

already has pre-orders and a strong ip

08:09

portfolio

08:11

how can we get to market bootstrapped

08:13

when we hit technical roadblocks that

08:15

require large amounts of capital to

08:17

overcome you know such as pcb

08:19

development mechanical engineering fcc

08:22

compliance etc because in hardware

08:25

there's always this chicken and egg

08:27

problem of not being far enough along

08:29

but

08:30

massive capital uh events investments

08:33

needed to get over that so i'd love some

08:35

insight on that

08:36

yeah well that's a tough one like they

08:38

say hardware is hard

08:41

yeah you're climbing a high hill there

08:44

um

08:45

well i have some ideas i don't have an

08:47

answer but you know you've been to our

08:48

meetings i'll do my best i just have a

08:51

quick question because i know you i've

08:53

known about this product for a while

08:55

this i'm probably everybody's wondering

08:56

how does it

08:58

capture

08:59

the past

09:00

right isn't that one of your how does it

09:02

do that you can you said 20 seconds of

09:04

something that's already happened so is

09:05

it recording all the time is that what

09:06

it's doing yeah so basically it's always

09:09

recording the last 20 seconds passively

09:12

and just rewrites the last second

09:14

well and it's it doesn't have to be 20

09:16

seconds we recommend 20 seconds because

09:18

that way it'll be able to last eight

09:20

hours in a single charge but you can

09:22

actually choose in the smartphone app uh

09:24

how long into the past you want to

09:26

record but yeah the gist of it is that

09:29

yeah it's recording on this temporary

09:30

buffer and nothing is actually saved

09:33

until you push the button and then a lot

09:35

it uh a light illuminates letting people

09:38

know you've initiated recording it

09:40

records another 20 seconds and then it

09:42

goes straight to your smartphone via the

09:43

hindsight app where you can then edit

09:45

the videos and then export to any social

09:47

media you want

09:49

interesting so this is a bad i'm sure

09:51

you have better examples but like i'm at

09:52

dinner and somebody sneezes

09:55

for if i wanted to capture that sneeze

09:57

somehow i could tap it and it would go

09:59

back and

10:00

i would have video of my wife sneezing

10:03

yeah yeah exactly for example but that's

10:05

the concept right yeah yeah exactly and

10:08

yeah it just people have these moments

10:10

all the time and there's no way to

10:11

capture them um i mean whether you're a

10:13

parent or a dog owner and your pet or

10:16

your baby does something really cute and

10:18

now you've got it because obviously

10:19

you're not gonna be sitting there with a

10:20

smartphone or for people who are

10:22

cyclists out there or hikers and they

10:24

see an animal run by you know again

10:26

you're not gonna have your phone out

10:28

ready to go

10:29

you can now get that and just everyday

10:31

life there's just stuff you want to

10:32

capture that you're not going to be

10:33

ready you know on the fly interesting

10:36

okay cool well cool stuff amazing what

10:38

we can do these days right yeah okay so

10:40

let's get to the the heart of the matter

10:42

which is how do you take a bootstrapped

10:44

company that needs a bunch of capital

10:46

especially in hardware to get to market

10:48

so

10:49

um

10:51

well first of all it would be helpful

10:53

how much money are we talking about do

10:55

you think you need a hundred thousand or

10:56

a million or 10 million like what yeah

10:58

so

10:59

to basically get to a market ready mvp

11:02

it would be about 1.5 million

11:05

okay and have you raised money

11:06

previously

11:07

um so we currently raised 55 000 through

11:10

our friends and family round so we got

11:12

the ball rolling a bit okay

11:14

um

11:15

okay so

11:17

next it's a pretty that's a pretty high

11:18

lift and what do you have do you have

11:20

any revenue yet you have you have

11:21

interest i know right but is any of that

11:23

actually

11:24

tell me about the the interest yeah yeah

11:26

so we currently have 540 000 in

11:29

pre-orders

11:30

um and so that primarily comes from some

11:33

of our strategic partnerships so

11:36

we partnered up with a company called

11:38

bom vision that has designed eyewear for

11:40

companies such as like louis vuitton

11:42

marc jacobs rebecca minkov and a variety

11:45

of other luxury eyewear brands because

11:47

for us

11:48

excuse me

11:49

uh for us one of the real issues with

11:52

smart glasses adoption is the

11:54

fashionability aspect and so us as a

11:56

company prioritize the aesthetic value

11:58

of the glasses so

12:01

that's why we partnered up with them

12:02

they also help

12:03

along with the industrial design they

12:05

help with our distribution and so

12:07

they've ordered a half a million dollars

12:09

in hindsight glasses as soon as they're

12:11

ready to go um the other 40 000 in

12:14

pre-orders we have is actually with a

12:15

private security company who wants to

12:17

just test the glasses out and see if

12:19

it's something they can potentially use

12:20

which might roll over into something

12:22

larger okay okay great well congrats on

12:25

the progress that's not easy building

12:26

something from nothing it's no joke

12:29

um it's been a tough it's been tough few

12:31

years yeah for sure um and i can see

12:34

people uh chiming in in the chat room

12:36

that's great welcome to scott and hey

12:38

gabriel nice to see you and zach

12:40

and kirk anybody that wants to chime in

12:42

please if you have suggestions i'll try

12:44

to moderate them also but i'm sure that

12:45

armin is reading them as well so if you

12:47

have suggestions please chime in i don't

12:48

i do not have all the answers full

12:50

disclosure

12:51

um okay so good news is i had an idea

12:54

bad news is you've i think you've

12:56

already kind of done this one i was

12:57

hoping so i'm glad i asked you about

13:00

your your financing because um it sounds

13:02

to me like

13:03

the avenue i would try to pursue is to

13:05

get financing from my customers or my

13:07

suppliers

13:09

because that's the obvious place right

13:10

if you don't have actual revenue that

13:12

investors want to see the people most

13:13

interested in you succeeding are the

13:14

people that care the most to buy the

13:16

thing so is that a fair characterization

13:18

of it was boom what was the name company

13:20

boombox

13:22

um bomb vision bomb vision sorry yes

13:24

bomb vision yeah yeah so is that that

13:26

half a million order is they are a

13:28

partner supplier sort of that's right

13:30

yeah and they have an equity stake in

13:32

the company as well so they're really

13:33

invested in this right right great well

13:35

okay well that was my that was my going

13:37

to be my best answer so um the chat room

13:39

i'm looking for help here uh

13:41

you are in a hard situation ryan you're

13:43

a smart guy you know this right um there

13:44

is not the answer here i guess the other

13:46

way to go would be to look um i guess i

13:49

would start looking for grants you know

13:50

there might be military or security or

13:53

um you know scientific uses for this

13:55

especially in the military that i don't

13:56

know you know they have all kinds of

13:58

interesting grants these days i don't

13:59

know if you've gone that route um but

14:01

the sbi uh

14:02

is that right sbir yeah and actually we

14:06

have so there's uh you know the nsf has

14:09

a lot of grants in a variety of areas we

14:11

currently

14:12

are going through the process with a

14:14

wearable technologies grant with them

14:17

okay yeah yeah

14:19

that's that would be another thing i

14:20

would try uh and then this is a question

14:23

i think joe

14:24

i think joe has the next question here

14:28

is similar to his question and i think a

14:30

lot of that might be about finding other

14:32

investors right you just got to keep

14:34

looking to find the right person i've

14:35

been working with a um another startup

14:38

that is nothing like yours but has a

14:40

hardware component to it and it really

14:42

is a question of

14:44

looking and looking and looking until

14:46

you find somebody ideally you know with

14:48

a background in that space who is

14:50

interested enough to believe you right

14:51

it's it's a question of trust as much as

14:54

anything or or

14:55

shared optimism may be another way to

14:57

put it right

14:58

and you've got to find the people that

15:00

actually appreciate that market and can

15:02

see the potential because

15:04

you know if you're talking to people

15:05

that are real estate investors they're

15:06

going to have no idea what you're

15:07

talking about and why would they believe

15:09

you right so it sounds like and i'm sure

15:11

you've done this too so i know this is

15:12

not some brilliant insight but um maybe

15:15

there are more investors that you can

15:17

talk to especially if you really dig

15:19

into uh alumni of say luxxotica or

15:22

ray-ban or whoever the you know those

15:24

other companies are you know the often

15:27

um i don't know if you can get a million

15:28

and a half out of them but if you could

15:29

find a lead investor for a hundred grand

15:31

or you know something to get people

15:32

excited um i'd spend a bunch of time on

15:35

linkedin looking you know who retired

15:37

who's the ex ceo of those companies you

15:39

know or even you know senior executives

15:41

who have some cash now and some time you

15:43

know to sort of mentor and participate

15:46

um and then you know that's coming at it

15:47

from the eyeglass angle uh but then the

15:50

other angles you have obviously are you

15:51

know security which you've already

15:53

identified um and then uh scott in the

15:55

uh chat room there said something about

15:58

um you know chip manufacturers like

16:00

people maybe they'll see an interesting

16:01

app a certain kind of chip or or pcb you

16:04

mean printed circuit board is that what

16:06

you're meaning when you say that

16:09

yeah yeah exactly

16:11

so people from that hardware side of

16:13

things who might be looking for new

16:14

markets i mean you just gotta think

16:16

outside the box and i would look at your

16:18

product as having several different

16:20

vectors you know like i said there's the

16:22

the glasses and the design of it there's

16:24

the inputs in terms of the chips um and

16:26

then there's the use cases which you've

16:28

identified a bit already like security

16:29

or military like we talked about a

16:31

second ago and try to think who there

16:33

might be

16:34

um

16:35

uh yeah

16:36

i wish i had a better answer for you

16:38

let's let's see what the chat room says

16:39

people are

16:40

got some good like there's some good

16:41

stuff there

16:42

yeah let's see here um

16:45

and everybody by the way go ahead and

16:46

chime in if you're just tuning in i'm

16:47

scott fox you're watching the startup

16:49

office hours this is a team approach to

16:52

helping armin get his company the next

16:53

level so uh scott says it's his first

16:56

time here what's the main goal i think

16:58

you figured it out scott because you've

16:59

got some good comments here can you

17:01

start by building chips to do that and

17:02

make it really small say it's part of

17:04

the frame of the glass i presume you've

17:06

looked into that

17:08

if you make smaller first i'll say you i

17:11

think he's suggesting really focus on

17:12

the chip rather than the eyeglasses um

17:15

that's really a valid angle i get the

17:17

sense your angle is more the design

17:19

you're coming more from the design

17:20

background though right or are you i

17:22

don't know your background that well are

17:23

you a chip designer on the side oh

17:26

well actually my my background's in like

17:28

computer vision uh and neuroscience and

17:30

more the ai aspect of things but i just

17:32

love hard products and hard tech

17:34

um but you know to to address that so

17:38

let me just pull these out really

17:39

quickly so yeah these these current

17:41

prototypes actually have a raspberry pi

17:43

inside of a 3d printed pair of frames um

17:46

and i think what you're you know

17:48

getting to is like getting to building

17:50

on breadboards and then miniaturizing

17:52

after that so none of us have experience

17:56

doing that and we can try

17:58

uh we have been trying the the thing is

18:01

how we're looking at it now we actually

18:02

have a really rock solid engineering

18:05

team uh composed of people who actually

18:08

work on google glass themselves to like

18:10

a bunch of engineers from jawbone

18:13

and even including the old cto and so

18:16

they really understand embedded systems

18:18

and lower level optimization and they've

18:19

given us their quote and

18:21

the main thing is if we were to go with

18:24

a more

18:25

boutique firm and say shell out 40 000

18:28

or something for that when we

18:30

it wouldn't be enough

18:33

to

18:34

it wouldn't be good enough for customers

18:36

i'll put it that way when we start

18:37

getting to things like mechanical

18:39

engineering and then you know things

18:40

like thermal issues

18:42

um so we want to use all of our money

18:45

with the right people instead of

18:47

you know um

18:49

using it in other places and then end up

18:50

scrapping all of it uh in the end

18:52

anyways

18:53

right so it's it's it's difficult like

18:56

like what's god said it it's been

18:57

incredibly difficult

18:59

i think you said a couple words that

19:00

were key to me is the right people i

19:02

guess my suggestion is are you sure

19:04

you're talking to the right people right

19:06

like if you reimagine what you're doing

19:08

that's kind of what scott

19:09

lee in the chat room is saying too like

19:11

you've talked to a lot of people i'm

19:13

sure right

19:14

you've been at this a while but

19:16

who else can you talk to like really

19:18

re-examine those assumptions um maybe

19:20

there's another angle to this um even in

19:24

terms of the use cases right i mean is

19:26

there something a little more compelling

19:28

than

19:29

you know i'd like to capture something

19:31

fun like security or like you said

19:33

bicycle i thought you were gonna say

19:34

like um

19:35

you know i got hit and therefore as soon

19:38

as i hit the ground you know i can do

19:39

this and i can capture the fact that

19:40

that truck really did hit me right

19:42

that's valuable insurance stuff right

19:44

you get there's insurance or police use

19:46

you know different

19:48

would lead to different uh outcomes in

19:50

terms of investment interest as well and

19:52

it's it's actually interesting you say

19:54

that because part of our utility patents

19:56

we have granted uh we actually do we'll

19:59

have an accelerometer in the frames that

20:01

you can turn a mode on that basically a

20:03

high velocity collision will

20:04

automatically trigger a download so we

20:06

had that exactly in mind when we were

20:09

building the product out in the first

20:10

place so yeah you're on the money there

20:12

right right interesting okay well

20:14

fascinating stuff um let's see what else

20:16

uh

20:17

and then uh joe if you want to come on

20:19

camera you would be next otherwise i'll

20:21

go to jaclyn but i don't see your camera

20:23

working yet joe um yeah

20:25

and it's a

20:27

yeah um scott it's a resource drink i

20:30

have it off

20:32

uh otherwise you are here

20:35

okay okay so hang on

20:36

with me that'd be great

20:38

okay hang on a second we'll get to you

20:40

then just glad to know you're here

20:42

hang on

20:43

um okay so uh zach says uh networking

20:47

outside of your current network yeah

20:48

trade shows and stuff yeah so that's

20:50

that's a good idea i will pile on there

20:53

with zach like which trade shows right

20:55

like that's where i think you could like

20:57

everything could change for you if you

20:59

can you know adjust your angle a little

21:02

bit and find a new market or a new use

21:04

scott says again i would think it'd be

21:06

more valuable build a few prototypes and

21:08

apple android as part of other

21:10

applications yeah that's interesting

21:11

jordan hi jordan welcome when reaching

21:13

out to suppliers if they're interested

21:15

investing who in the organization should

21:16

we be talking to

21:17

okay good that's a good question hold on

21:20

i will get to that but i um

21:22

somebody this thing's scrolling too fast

21:24

kirk okay so kirk said something also

21:26

kirk was a great point

21:28

about factoring right and i presume

21:30

you've looked at this armand but let me

21:31

just address that so kirk says if you

21:33

have something like confirmed orders you

21:34

can look into factoring um or does

21:37

development exceed the revenue too much

21:38

so factoring for those of you don't know

21:40

is the idea that you have orders uh

21:43

accounts receivable basically people are

21:45

placing orders but it's usually used on

21:47

a cash flow basis like i know i'm going

21:49

to get 100 grand in from customers you

21:51

know in 90 days but i need some of that

21:53

cash now so there are firms out there

21:55

called factors that will say it'll make

21:57

you essentially a short-term loan which

21:59

says okay we know you've got 100 grand

22:00

coming in 90 days but you need 50 now

22:02

we'll give you that and take a you know

22:04

basically an ownership of those incoming

22:07

revenues and they'll charge you a fee of

22:08

course and it's not cheap um but it's

22:10

like a payday loan basically for a

22:12

company um and but that's called

22:14

factoring so that's a totally legitimate

22:16

point kirk yeah

22:17

i don't know if you've explored that or

22:19

not well have you have you looked into

22:21

factoring no no i haven't uh

22:24

and so this is this is great we're

22:25

definitely going to look into that thank

22:27

you for that yeah yeah there's okay so

22:29

factoring so i was okay so you should

22:31

look at it full stop right um mike

22:50

okay we're back are we

22:52

back yeah it looks like you froze up

22:54

there for a second okay that was

22:56

exciting um

22:58

okay

22:58

hopefully you can hear me um

23:01

factoring generally is used as my

23:03

understanding i'm not an expert but um

23:05

for businesses that have consistent

23:07

actual cash flow not just orders but

23:10

these days there's all kinds of people

23:11

doing all kinds of stuff so and there

23:13

are revenue based um

23:16

financing firms for startups that

23:18

specifically look at this kind of thing

23:19

so if you have a purchase order uh from

23:21

a company with good credit yeah that

23:23

could be a thing i wouldn't get you a

23:25

million and a half bucks on a five

23:26

hundred thousand dollar po right yeah it

23:28

might get you

23:29

whatever you know 50 grand or 100 grand

23:31

or something um so yeah

23:33

factoring is a key word i would also

23:34

look into i mean if if that's a new

23:37

concept to you then i would also look at

23:39

venture debt

23:40

venture debt is another concept that's

23:42

usually a bank loan uh and that

23:44

generally is done

23:45

i was talking to a banker just on friday

23:47

about this

23:49

generally done based on the amount of

23:50

cash you have in the bank which i

23:52

presume you guys don't have a lot of

23:54

cash in the bank so that may or may not

23:55

work but yeah also sort of a blanket

23:58

term for that whole industry venture

23:59

debt so factoring venture debt and then

24:01

there's another one's called another way

24:03

to put it is revenue based financing uh

24:06

and you don't really have revenue yet

24:08

but that would get you in the direction

24:10

of people who would be interested in

24:12

helping you with that

24:13

um

24:14

okay so that's all hopefully helpful

24:16

let's uh i want to respond to jordan's

24:18

question and then we'll move on to joe

24:20

and jacqueline hang in there i see

24:21

you're here

24:23

um

24:24

let's see so jordan says i thought this

24:26

was interesting

24:29

and welcome mariella

24:31

first cousin okay so kirk says first

24:33

cousin to factoring is receivables

24:35

financing lots of banks will go to

24:36

eighty percent okay great thank you kirk

24:38

sounds like you uh i'm an expert here

24:42

so jordan i want let's talk about this

24:43

when reaching out to suppliers to see if

24:45

they're interested investing who in the

24:46

organization who in the organization

24:48

should we be talking to how do you get

24:50

that conversation started through a

24:52

sales rep for example so um great

24:55

question this is a basic sort of

24:56

business development strategy question

24:59

right and business development was my

25:01

really my first career so the answer is

25:04

whoever will go to bat for you

25:06

right you need a fan

25:08

so usually a sales rep won't have the

25:10

clout to have the company commit cash to

25:14

something uh that's outside the company

25:16

especially if it's an unproven startup

25:18

but you know if that sales rep is really

25:20

excited about what you're doing and you

25:22

know who knows maybe their uncle owns

25:24

the company or whatever you know that

25:25

could be the perfect person generally

25:27

speaking you would have to go to

25:28

somebody a little more senior especially

25:30

somebody with financial authority

25:31

probably more on the finance side of the

25:33

house like the cfo

25:35

or you know the owner or somebody like

25:37

that but

25:38

any wedge you can get into a big company

25:41

is a legitimate place to start and not

25:43

easy to find right so if you have a

25:45

great relationship with the sales rep

25:46

they may be the best person because they

25:49

are excited because presumably because

25:51

it will help them do their job or help

25:53

them with the customers and maybe help

25:55

them sell more right so a sales rep can

25:57

be great because they'll say

25:58

to their boss look armin's got this

26:01

thing and if we could you know help him

26:03

out then we could sell double i could

26:04

you know double my quota every month

26:06

because his thing complements our thing

26:08

and you know if you can do that kind of

26:10

equation and show to the bosses hey you

26:12

know if we could you know we're a big

26:14

company we could slide him whatever 50

26:16

grand and be the lead investor in his

26:17

next round you know that

26:19

comes back to us not just in terms of

26:21

equity but um maybe or maybe it's a loan

26:24

whatever it is but also increasing their

26:25

own sales like the it's the old what's

26:28

in it for me strategy right

26:30

so any of those conversations can be

26:32

good um it tends to be harder than it

26:35

sounds because as entrepreneurs are

26:37

always optimistic that everybody's going

26:38

to get this and want to invest i got to

26:40

warn you you know most companies are in

26:42

the business of doing their own business

26:44

not investing in other people so it can

26:47

be a long difficult conversation

26:50

but it definitely happens right so it

26:52

tends to

26:53

kind of oddly almost be easier with

26:55

really large companies because they may

26:57

have somebody who's done this before

26:58

they may even have a venture

27:00

arm or partnerships department right um

27:03

if you do this with small sort of owner

27:06

owned businesses um they tend to be much

27:09

more conservative about their capital

27:10

right so

27:11

it it there's a lot of that's a big

27:13

spectrum of different options but

27:16

talking to anybody that will go to bat

27:18

for you is

27:19

i guess i could have said that and be

27:20

done two minutes ago but that that's the

27:22

answer

27:24

i'm going to give you the whole context

27:25

there because corporate development is

27:27

business development is hard if you if

27:28

you don't have training in that

27:29

especially a lot of folks maybe a lot of

27:31

you if you come from an engineering

27:32

background or something you don't you're

27:34

not used to this kind of you know world

27:36

and that's that's kind of the world i

27:37

grew up in so

27:38

okay

27:39

all right well was that helpful uh i

27:41

hope so harmon

27:43

nice to see you and hope i hope this

27:45

goes well

27:46

i'm gonna move

27:49

thank you for everyone in the chat this

27:51

this has been incredibly helpful i'm

27:53

definitely going to go through this

27:54

again later awesome

27:56

awesome well good to see you and i'm

27:58

going to move on here to

28:00

some other folks let's see there's

28:02

jacqueline hi mariella sorry we're going

28:04

to joe here actually next

28:06

okay joe i'm going to turn your mic on

28:09

it's not going to be our best visual but

28:10

i hear you if you can't

28:12

it should be

28:13

there we go

28:14

how about that joe can you hear us

28:17

that's that's i you look good you sound

28:19

good uh hopefully you can hear me

28:21

yeah no it can sound you sound great

28:23

that's fine okay okay cool so

28:25

all right

28:26

so we have a

28:30

enterprise product

28:32

uh focus um not only enterprises but

28:34

agency

28:36

is and market research we collect zero

28:38

party data but also our application

28:40

allows for

28:42

the interaction with consumers um

28:44

directly within the application so

28:46

the market or researcher need not go out

28:48

of the app of the application

28:51

uh to communicate with the consumer

28:53

based on the zero property data that is

28:54

collected okay having said that um it's

28:58

been a struggle so far now we've raised

29:00

120k so far

29:03

uh but it's not getting us to where we

29:05

need to be and it's interesting what's

29:06

happening and it's the

29:08

the goal posts continue to move let me

29:11

explain what that means

29:13

uh when we first went out and started

29:16

presenting ourselves to the community

29:19

uh the almost universal uh pushback was

29:22

well you know

29:24

build an mvp and so we did so we built

29:27

an mvp albeit not with

29:30

not using the architecture that we have

29:32

laid out

29:34

because that is an exposition

29:36

we forged something together and we took

29:40

to demonstrate um

29:42

product in the cup uh so going we circle

29:45

back with those investors um

29:47

and

29:48

the goal post move and it was now well

29:51

let's see it in a pilot run a pilot okay

29:54

so we're running a pilot right now we're

29:56

distributing it to 52 000 consumers in

30:00

the uk

30:01

uh right and we're gathering on metrics

30:03

we're moving ahead um and we're reaching

30:06

back to all those investors and

30:09

those same investors are saying well

30:11

tell me when you're up to um

30:14

x uh run rate in revenue monthly revenue

30:18

right um so

30:20

it continues to move the goal posts

30:22

continue to move

30:24

and i've never had this experience

30:26

before with startups i don't

30:29

know why this is occurring um so

30:32

your questions and feedback would be

30:35

greatly appreciated

30:36

sure well welcome to startup life

30:41

that sucks and i sympathize i've been

30:42

there personally um there is

30:46

is very frustrating so

30:48

there's not a simple answer but i i have

30:50

two thank you for sending in your

30:51

question in advance i had a little

30:52

chance to think about it

30:54

um i think and everybody in the chat

30:56

room go ahead and chime in your comments

30:58

their last time were great for arm and

31:00

i'm sure you've got some good thoughts

31:01

uh here for joe as well um okay so

31:05

there's two ways to read what's

31:06

happening to you one is the literal way

31:08

and the other is the subtext

31:09

so the literal way is of course that

31:12

they're the goal posts are moving i mean

31:14

that's that's obviously true this is

31:16

very common first of all don't feel bad

31:18

about did did you say this was your

31:19

first startup or this is just with this

31:21

was the first time you'd had this role

31:23

in a startup or what's your personal

31:24

background

31:26

yeah this is number four

31:27

number four okay so you've been through

31:29

this game before okay um

31:31

okay um

31:33

then you've probably seen this before

31:34

right the the investors

31:36

somebody asked in the chat room mahi or

31:38

somebody said what do investors look for

31:40

investors are looking for infinite

31:42

return with no risk

31:43

right so the problem is that they want

31:46

to take no risk and make a zillion

31:47

dollars on your hard work right that's

31:49

the the negative side of investors and i

31:51

am an investor these days so i will

31:52

paint myself with that brush as well

31:54

right we're busy

31:55

we have lots of other things going on um

31:58

and we would like to make money while we

32:00

sleep doing nothing right that's that's

32:02

what we're looking for so the problem is

32:05

as an entrepreneur like joe um that

32:07

means that the goal posts keep moving so

32:10

um what he described if you have not

32:12

been through it yet my fellow founders

32:14

it will happen to you too which is first

32:16

they say they want this you come back

32:18

with that then they want this then they

32:20

come back with this request and then

32:21

they want this and it says ladder of

32:22

every you know the

32:24

the goal posts moving literally this

32:25

isn't it for those of you outside the

32:26

united states this is an american

32:28

football analogy the end zone the field

32:30

keeps getting longer is what he's saying

32:31

so he can't ever quite score um

32:34

so

32:36

this is typical and annoying okay so

32:39

there's two ways to look at this one is

32:41

that there really is something else you

32:43

need to do for whatever reason they

32:45

really um something has changed in their

32:47

mandate i mean people forget investors

32:49

have bosses too right they have limited

32:51

partners um they have their own partners

32:54

within the firm lots of other competing

32:56

obligations and requirements for their

32:58

money so maybe their investment thesis

33:01

changed or the market changed or they

33:03

had an exit or a failure of another

33:05

company in their portfolio that's

33:06

related to yours and that changes how

33:08

they look at the market there are lots

33:10

of legitimate reasons for the goal posts

33:13

to move from their point of view right

33:14

it's not cool if they promise you

33:15

something and then they change the game

33:17

obviously but but

33:19

the world is bigger for investors than a

33:21

lot of entrepreneurs think that you know

33:23

it's not they're just sitting around

33:25

with a checkbook waiting for somebody to

33:26

walk in and hand out money right um most

33:28

investors actually are not super super

33:31

wealthy people especially angel

33:32

investors they're trying they've got a

33:34

few bullets in the gun and they're

33:35

trying to pick their shots and so they

33:36

have to be very discriminating okay

33:38

that's enough apologies for investors so

33:40

the literal thing is okay maybe

33:42

something changed and you just have to

33:43

do it okay you obviously know that i'm

33:45

just giving that context for everybody

33:46

else joe the subtext is

33:49

they're not ready they don't like what

33:50

you're doing right they're bullshitting

33:52

you

33:53

um and the fact is that you'll never

33:55

really get a straight answer because

33:57

they like you enough to keep talking to

33:59

you but venture capitalists never say no

34:02

their job is to string you along forever

34:04

until they get to that hypothetical

34:06

point of infinite return and zero risk

34:08

they're they're just waiting for the

34:10

risk equation to go so low that then

34:12

they can justify their investment

34:14

whether it's to their partners

34:15

or their limited partners or their wives

34:18

or husbands you know what i mean they

34:20

have a risk profile that you are so far

34:22

have not crossed that threshold

34:24

so there's two ways to deal with this

34:26

one is to really look at what you're

34:28

doing and really look at what they're

34:30

saying

34:31

and adjust like

34:33

i don't know what it is they don't like

34:34

about you let's be let's be blunt they

34:36

don't like you enough to write a check i

34:38

don't know why i don't even know you i

34:39

can't even see you right but that's a

34:41

fact

34:42

they don't like you and i don't know why

34:44

and they're not going to tell you why

34:46

because they like you enough

34:48

that you might have something and then

34:50

they're going to show up and be your

34:50

best friend right so you got to figure

34:53

out what it is they don't like is it

34:54

something about the product is it your

34:56

haircut i i have no idea right um is it

34:59

that you know the market size or is it

35:01

something outside of you like i

35:03

mentioned earlier something happened in

35:04

their portfolio or their limited

35:06

partners pulled back the cash they had a

35:08

capital call i don't know maybe the

35:10

partner is getting divorced right so

35:11

they can't take any more risk and

35:13

lots of things so first of all look at

35:15

that they don't like you enough to write

35:16

a check and you have to deal with it and

35:18

that's unfortunate but i've never heard

35:20

a venture capitalist actually say that

35:21

out loud so i'm telling you guys that's

35:23

the truth if a venture capitalist keeps

35:25

stringing along something's wrong

35:27

right they don't like you enough right

35:29

it's a what's that old thing it's not me

35:31

it's you or whatever right it's like a

35:32

relationship it really is

35:34

the other thing that it's slightly more

35:36

optimal so i would encourage you for

35:37

some self-examination you and your team

35:39

what is it you're missing right or take

35:41

the the people that you're talking to

35:43

out like for a drink you know something

35:44

off the record not just an email like

35:46

just try to get come on really what com

35:48

what what really what's going on here

35:50

right and it may not be you at all like

35:52

i've said three times now the other

35:54

thing is

35:55

um

35:56

is that maybe you're talking to the

35:57

wrong people and i don't know your

36:00

business well enough and obviously i

36:01

don't know who you're talking to but uh

36:03

the easiest way for startup

36:05

entrepreneurs to raise money more

36:06

quickly is to invest more time in

36:09

researching

36:11

who they're pitching

36:12

when i was an entrepreneur i know

36:15

and i still see it all the time

36:19

you're in this place where you want the

36:20

money you believe in what you have it

36:22

anybody with a checkbook

36:24

you think they've got to be as convinced

36:25

as you are and i'm not accusing you of

36:27

this joe but just for everybody's

36:28

edification you know it's like that's

36:30

not the way to do this you got to triple

36:32

the time you do on research and lower

36:35

the amount of time you do on outreach

36:37

find the people that do this and you

36:39

notice it's the same thing i was talking

36:40

about with armin you know like are you

36:42

sure you got the right people because if

36:44

you got people that are

36:46

adjacent of course they're going to be

36:48

casually interested but you can't run a

36:50

company on casual interest you got to

36:52

find the people that are excited about

36:54

this and that means they probably have a

36:55

background in this and hopefully they're

36:57

so good at it that they have a checkbook

36:58

right that's

37:00

hard to find

37:01

but it is what you need to do rather

37:03

than

37:05

addressing anybody who happens to be say

37:08

seed stage in in

37:10

sas software right because even in seed

37:13

stage software there's thousands of

37:15

people and i would double down on the

37:18

research of who you're looking to talk

37:19

to

37:21

and

37:23

the real goal here is to create urgency

37:26

and that's the hardest thing to get

37:27

venture capitalists to do um because

37:29

again they're risk-averse so what you

37:31

need to do and this is for armin too

37:32

you've got to find a reason

37:35

to make them

37:36

move right like this is happening and

37:39

creating that sense of momentum is what

37:41

will get people off the dime if they've

37:43

been flirting with you for six months or

37:45

six years and they still haven't written

37:46

the check

37:48

you haven't created a sense of urgency

37:49

and or they don't like you enough to

37:51

write the check so those are your

37:53

challenges and i i know a lot of this

37:55

i'm just getting back to you what you

37:56

know but maybe hearing it from somebody

37:57

else will help um

37:59

different investors and finding a reason

38:01

that this has to happen now and you know

38:03

the ultimate is we're going out of

38:05

business but that's not the right one

38:06

because it scares the whole lot of

38:07

people right um but something about you

38:10

know a a product launch or a new hire or

38:13

some opportunity or you've gotta fake it

38:16

till you make it and get them to move

38:18

okay so i've talked enough let's see

38:19

what other people is this helpful joe

38:20

are we on the right track at all

38:24

yeah um yeah scott it is um

38:27

it's um

38:29

hey

38:29

um

38:31

it's your ground that that has been

38:34

covered right we've we've discussed this

38:38

amongst ourselves

38:40

um and

38:41

we're to the conclusion that

38:46

we might as well self-fund this this

38:48

this thing

38:50

and skip dc community wall

38:53

together generate the revenue or

38:55

somebody would great if not

38:58

we'll just share the equity with

38:59

customers

39:01

um you know in the form so in the form

39:03

of warrants

39:05

um and moving that in that direction um

39:07

it's as if

39:09

we just

39:11

can't waste any more time with them

39:14

uh yeah you know let's just generate

39:16

some dollars

39:18

yeah uh you know case in point

39:22

where we're

39:24

go ahead

39:25

well the world has changed a lot if

39:26

you've done this four times like i have

39:28

you know

39:29

it looks like we're maybe roughly the

39:31

same age right like we've been doing

39:32

this for a while the world has changed

39:34

you know you used to be able to raise

39:36

money earlier without traction you know

39:38

with ideas and it just doesn't happen

39:40

anymore and you guys have traction i'm

39:41

not accusing you of that but i'm just

39:42

saying the bar keeps getting higher um

39:45

and you know young people come in today

39:47

to my events all the time and and they

39:49

like have you know just an idea but

39:51

they're reading like they're reading my

39:52

books from you know 15 years ago and

39:54

like sorry it just doesn't work like

39:56

that anymore and if you have the ability

39:58

to bootstrap um and you can do it

40:00

without losing your house you know that

40:02

might be the way to go because i i was

40:04

talking to a woman a founder a local

40:06

here the other day

40:07

and you'll know this too but the

40:09

difference between having zero revenue

40:11

and any revenue even like five dollars

40:13

is infinite right so if you guys that's

40:15

when investors are like oh this really

40:16

works customers actually want to buy

40:18

this like that's when they start to

40:20

pay attention um and if you guys can get

40:23

and obviously more than five dollars is

40:25

great

40:26

uh if you can get a larger number

40:27

i think you'll your phone calls will

40:29

change um so if that's what you need to

40:31

do that might be what you need to do

40:33

um let's uh let's look at the chat room

40:35

here and then

40:38

let's see here

40:40

what were you going to say there joe

40:43

i

40:44

was just going to thank you for the

40:45

feedback that's okay let's see what else

40:48

we got here um

40:50

okay scott and adam having a good

40:52

conversation um self-funding

40:55

okay sonny we will try to get to that

40:57

yep um how much equity should an

40:59

entrepreneur give out

41:00

uh

41:02

okay

41:06

okay okay i don't think any of those

41:07

were directly related to this then sorry

41:09

sorry for delay okay well joe i wish i

41:11

had a fancier more specific answer um

41:14

but uh i would encourage you you know

41:16

again and you're an adult so i if this

41:18

may be obvious but looking at different

41:19

investors you might go back and see

41:21

who's emerged even in the last you know

41:23

six months because there's so many funds

41:25

popping up now and um even crowdfunding

41:28

sites are really happening now and even

41:30

for professional investors you know

41:31

crowdfunding you know five years ago was

41:34

just for random consumer items that

41:36

people got excited about but there are

41:38

serious deals uh happening now like

41:40

venture type deals on um

41:43

we funder and start engine and net

41:44

capital and republic and vcs are

41:46

starting to look there as well so it's

41:48

harder to do if you have a b2b sort of

41:50

sas product

41:51

it's not going to match consumer appeal

41:53

but but though they're my point is just

41:55

there are new ways of doing this and if

41:57

you haven't looked it you know it might

41:58

be worth an afternoon anyway

42:00

so okay

42:03

i appreciate it appreciate it thanks

42:05

scott sure nice to meet you uh we're

42:07

gonna move on now jacqueline has been

42:09

waiting very patiently hey there

42:10

jacqueline nice to meet you nice to meet

42:12

you as well let's see okay so thank you

42:15

joe i'm gonna turn you off and then uh

42:18

mariella will be next

42:20

okay hey jaclyn so where are you calling

42:22

from

42:23

i'm calling from long beach california

42:25

okay you're nearby then all right well

42:27

nice to meet you uh what can uh can i

42:29

help you i'd be happy to do that i hope

42:31

you can okay um

42:33

i um

42:35

am restarting i guess a company under

42:37

new branding that i had closed just

42:40

prior to the pandemic

42:42

and i'm trying to

42:44

fundraise

42:45

but

42:46

i had an original pitch deck because

42:49

it's the same product

42:51

i'm trying to understand what's the best

42:53

way to

42:55

recraft that pitch deck

42:58

and talk about kind of like what i have

43:00

learned in the new position i'm in now

43:03

why it's going to be successful now

43:06

i was trying to fundraise before and

43:08

basically ran out of runway so i closed

43:11

because i couldn't afford it i don't

43:12

have a team anymore because i couldn't

43:14

afford to pay anybody anymore you know

43:17

oh i'm trying to restart but i need to

43:20

know how to position that

43:23

so the the question about repositioning

43:25

the reboot process

43:27

basically because i have to go through

43:30

the um you know the market has changed

43:32

over the last year and a half

43:35

so you know i have to redo all the work

43:37

and um

43:39

determine if the product should be

43:41

exactly the same which i know it

43:43

shouldn't be exactly the same but

43:45

you know i need to go through the

43:46

process for how it needs to change and

43:49

that kind of thing and i want to explain

43:51

all that but then i thought well i don't

43:53

know do i need to explain all of that

43:55

what do i need to say about how it was

43:58

when i ended

44:00

yeah

44:01

yeah just looking into real quick

44:03

context what kind of product and

44:04

business are we talking about it's a

44:06

climatetech product

44:08

um it helps eliminate food waste at home

44:12

okay cool uh so it's a physical thing

44:14

like uh yeah

44:16

something okay okay great um by the way

44:18

and if you want to pitch your startups

44:19

you're welcome to put your urls of your

44:21

ideas and so forth in the chat and make

44:23

friends with each other that's the point

44:24

of all this

44:26

um

44:26

okay so

44:28

this is an interesting question i i'm

44:30

glad you wrote it i've had i've seen a

44:32

couple versions of this over the years

44:34

including in myself and and even on

44:36

family people with with sort of rebooted

44:38

startups

44:39

um

44:42

just gathering my thoughts and uh by the

44:43

way folks if you have um ideas put them

44:45

in the in the chat room for for

44:47

jacqueline um okay well

44:52

have you raised money before you i'm

44:54

sorry you were you did raise money or

44:55

you didn't i tried to raise money but i

44:57

wasn't successful i couldn't convince

45:00

people that the market existed that

45:02

people would really

45:04

do something

45:05

to improve the environment right now

45:08

there's other products that are on the

45:09

market

45:11

it's like yeah now it really does exist

45:13

see these people selling this stuff

45:15

right right right um okay well i asked

45:18

that because that's kind of good news in

45:20

the sense that nobody gave you money

45:21

that you lost right is that that's what

45:23

i'm hearing okay well that's good right

45:25

because investors don't want to know

45:26

that you wiped out your

45:28

your friends and family right just my

45:30

own money i guess yeah right they never

45:32

count that unfortunately just like your

45:34

time doesn't matter

45:36

um okay well my guess is that i mean

45:40

there's no right answer here right but i

45:41

wouldn't my inclination would be not to

45:43

make too big a deal of it i mean lots of

45:45

things happen with the pandemic

45:48

when you're a founder looking for money

45:50

you're really selling a dream right and

45:52

i would focus on the optimism um

45:55

you know you don't want to hide it or be

45:56

unethical or dishonest clearly and i can

45:58

tell that the very fact you're asking

46:01

this question means you're concerned

46:02

that you do you want to do this the

46:03

right way right so

46:05

so i think um

46:08

i'm not sure i would make a big deal of

46:10

it all at all honestly um the

46:13

investors are often get um

46:16

what's the word like wary once they find

46:18

out a startup has been around like six

46:20

years or whatever like what's going on

46:21

why is it taking six years right and

46:22

i've worked with lots of companies like

46:24

that and oftentimes you know they had to

46:25

pivot or whatever but um this pandemic

46:29

has given everybody like the biggest get

46:31

out of jail free card ever right so um i

46:34

think where it's really going to show up

46:35

is in your financial projections um or

46:37

if you had you know if you had a sales

46:40

a nice sales growth sort of chart going

46:42

that suddenly dipped but it doesn't

46:44

sound like you have that did you ever

46:45

get to market previously i didn't get to

46:48

market i needed money for product

46:50

development and i didn't get that money

46:52

so the sales projections

46:55

i mean it the projections were there but

46:57

it never actually started

46:59

because i never got that funding that i

47:01

needed at the beginning okay well then i

47:04

i'm not sure it's even an issue no harm

47:06

no foul i mean people in the chat room

47:08

you can argue with me here but i mean if

47:10

you didn't raise money and you didn't

47:12

sell anything um

47:14

then nobody

47:15

and don't want to sound harsh but nobody

47:17

knows you you know if a tree falls in

47:18

the forest nobody knows right um so

47:22

i wouldn't hide it but unless there are

47:24

obligations outstanding that would

47:26

affect the capital structure of a new

47:27

raise

47:30

who cares right i mean um you might say

47:33

you know uh

47:35

established 2016 or something you know

47:37

just so the people you don't want to i'm

47:39

not saying to hide it i'm just saying

47:42

the point of a pitch is to get the next

47:44

meeting right nobody raises money on a

47:46

pitch deck right so that is the kind of

47:48

detail that could be round two right or

47:51

or your history right or what buried you

47:53

know on page 12 of the deck where you

47:55

talk about you or something unless

47:57

here's a counter to that i just thought

47:58

of

47:59

unless there's a counter that's part of

48:01

your origin story right if there's

48:02

something you know most good pitches

48:04

have a story it's not just i do this and

48:06

i need this much money it's like i saw

48:08

this need and because of my personal

48:11

background you know and my suffering i

48:13

found the solution right and unless that

48:16

somehow is tied to something that was

48:18

very clearly you know like i don't know

48:20

a couple years like president obama you

48:21

know did this right or something you

48:23

know because that is clearly in the past

48:25

right he's been out of office now for a

48:26

while something or the olympics or the

48:28

super you know super bowl 57 or

48:30

something we're not there yet

48:32

super bowl 53 you know that kind of

48:33

thing um

48:35

so if you don't have a reason to tie the

48:37

story to a specific

48:38

timeline i i'm not

48:40

sure it matters what other folks think

48:43

uh or what do you think i mean am i

48:44

making

48:45

sense

48:47

you're making sense um

48:50

so

48:51

i actually closed the company before

48:55

started a new company

48:57

you mean legally like there was a a c

48:59

corp

49:00

i had an llc okay and so i closed the

49:03

llc i've opened a new llc different name

49:07

different branding

49:08

um

49:10

there are some people that know about it

49:13

and

49:15

it's like

49:18

because they people have approached me

49:20

because they know about that okay you

49:23

know because they think oh that was a

49:25

really great idea

49:27

so that's actually kind of why i decided

49:29

to start again

49:31

so i don't want to completely ignore it

49:34

right

49:35

well are those people customers or

49:36

investors or just friends

49:39

oh potential investors potential

49:41

investors okay well that's the one that

49:43

matters i hear you you're right okay i

49:45

see your your trepidation there um

49:48

i don't think that changes my answer

49:49

though and i really liked what um

49:51

somebody says alexis um is online on

49:54

youtube it looks like chatting and says

49:56

you could you could pivot it using the

49:58

pandemic time uh to improve the product

50:00

and what you're re-releasing is an

50:02

improved version i i that's like that's

50:05

80 of the answer right there alexis i

50:07

think that's great oh and scott said

50:08

something similar it looks like um sorry

50:11

i'm having trouble reading all these

50:12

chat um

50:15

yeah i think the pandemic is an

50:16

opportunity right um

50:19

yeah scott says pandemic pushed all

50:20

physical product online it is going no

50:23

backwards i'm not sure what that means

50:25

but anyway yeah endemic screwed up

50:27

everything so

50:28

and if your investors are actually

50:30

asking it sounds like you have a

50:31

sympathetic audience so i think they're

50:33

probably going to get that um the fact

50:35

that you closed had a previous company

50:37

close it down if there was no investors

50:39

and every nobody got hurt i don't i

50:41

don't think it's relevant honestly um

50:43

the other piece that would happen do you

50:44

have any patents is there a patented to

50:46

this okay so because you know once you

50:48

file a patent the clock starts ticking

50:49

on how long it is good for but you don't

50:51

have that

50:52

i would just um

50:55

you can almost i wouldn't do this too

50:57

much but almost make a joke of it you

50:59

know that dang pandemic thing it knocked

51:00

me off the rails but i'm back and like

51:02

alexa said bigger better than ever let's

51:05

go right and and again you know that can

51:07

come out in due diligence that you tried

51:10

and and died several years ago but it's

51:12

not that relevant to today the market

51:14

has changed and you've changed the

51:15

product is better

51:17

let's go i think i think that's enough

51:19

uh without knowing you better that's uh

51:22

that's you get the

51:23

the value of that advice is what you

51:24

paid for it so

51:26

i hope that's helpful

51:29

thank you i appreciate it and thank you

51:31

um alexis i guess specifically but the

51:34

rest of the people in the chat i

51:35

appreciate your input also sure

51:37

excellent okay well nice to meet you

51:39

jacqueline hope to meet you one of these

51:40

days we'll be doing our monthly

51:42

masterminds meetings in person again uh

51:44

if you want to come down to long beach i

51:45

usually do them in the irvine area be

51:46

happy to meet you face to face

51:48

um okay

51:51

you're welcome nice to meet you and for

51:52

everybody else uh

51:54

so here comes mariela

51:55

there we go there you are marilla see oh

51:57

okay i was like

51:59

i don't understand this platform okay oh

52:02

you weren't on there yet hang on a

52:03

second let me just a couple more

52:05

commercials here uh nice to see you um

52:08

so i'm just gonna say that we do do

52:10

events uh masterminds workshops that are

52:13

trying to find the right chiron for that

52:14

there it is so if you're watching this

52:16

show and you're enjoying it we do um

52:19

these masterminds workshops i think

52:20

marilla was at the last one um and we

52:22

have 30 or 40 people together and

52:25

everybody talks

52:26

brings their questions and we do this in

52:27

a group more

52:28

less chat and more chat more

52:30

talking a lot of fun and if you're in

52:32

southern california and the pandemic is

52:33

over i'll be doing them in person again

52:35

i've been doing them those for four or

52:36

five years now and they're uh like

52:38

everything else i do trying to help you

52:39

guys get farther faster with your

52:42

startup ideas okay so mariela nice to

52:44

see you what uh what's on your mind

52:47

uh i was just joining to listen in

52:50

really um

52:51

i was i don't really have a question so

52:53

to speak although

52:55

um

52:56

right now i'm

52:58

in the position where i feel like i need

53:01

to

53:03

um

53:04

i need to find

53:06

a suitable person

53:07

as a co-founder

53:10

um

53:12

and i was wondering

53:14

where would be the best place to

53:16

uh meet such person right okay well we

53:20

can roll that in with uh let me look in

53:22

the chat somebody was asking that all

53:24

something similar was it

53:25

sunny or somebody was asking about

53:28

this platform is really uh

53:31

you really i can't really see uh

53:36

like much of what's been

53:38

you can't see the chat yeah

53:40

it's it's really quite strange

53:45

later on youtube if you'd like

53:47

okay talk about finding co-founders then

53:49

so co-founders are um

53:52

i think co-founders are way overrated

53:56

because

53:57

most people don't actually need a

53:58

co-founder what they need is help with a

54:00

specific task a co-founder implies that

54:02

you're going to give something like

54:05

staff company to someone to do something

54:07

that you don't want to do

54:09

and that if you're gonna

54:11

i see that more as like a plumber or a

54:14

gardener somebody i'm gonna hire because

54:16

i don't want to do it well i don't have

54:17

to give them half my company for that

54:19

yeah i would go on upwork.com or um some

54:23

sort of skills marketplace uh and see if

54:25

there's somebody that you can hire to do

54:28

a job right okay because i hear this

54:30

most often from non-technical founders

54:32

who want somebody to write code and

54:34

because they have a good idea but they

54:36

don't know how to

54:37

you know write the code so

54:39

um

54:40

now of course you're not going to get

54:42

great results if you're only paying 20

54:44

bucks an hour to somebody that you've

54:45

never met who's on the other side of the

54:46

world to write your code but

54:49

to me that's still a better place to

54:51

start than someone you meet randomly

54:53

online or maybe at a bar or a alumni

54:56

event at your college or something yeah

54:58

after your company right

55:00

so

55:00

yeah no i mean i recognize that um

55:04

you know i don't know that i wouldn't

55:06

give half my company but probably you

55:09

know shares um

55:12

and then also there would be some

55:15

prerequisites to

55:17

those shares being given that's right

55:20

well that's the way to think about it

55:21

exactly so every equity grant should

55:23

have uh specific milestones both in

55:26

terms of time but also in terms of

55:27

deliverables what this person is going

55:29

to be with and when it could be done by

55:31

and that's precisely my problem is like

55:34

i don't

55:35

really know the deliverables and

55:38

like i don't i'm not real technical in

55:40

that case and so i

55:42

so that's the first

55:44

project actually is they call that

55:45

requirements you need a requirements

55:47

document and most technical people or

55:49

most non-technical people

55:51

aren't have never written a requirements

55:53

document so that actually can be a

55:55

project right is that something that you

55:57

can hire for online because it's more

55:59

containable maybe for a few hundred

56:01

dollars or something you can get

56:03

somebody technical to talk through

56:05

what you're after and break it down into

56:08

the points that you need because the

56:10

first thing you do when you contact any

56:12

software developer they said what are

56:13

your requirements and if you're starting

56:14

to pay their rates

56:16

just to talk about your requirements

56:18

before they've actually encoded you

56:19

you're doing a disservice to your own

56:21

wallet right you're paying way more than

56:22

you need to there's yeah asks um

56:26

so that's a place to start

56:28

uh

56:28

so i'm just write that down because i

56:30

gotta remember to tell some other people

56:32

that you helped me crystallize that

56:34

so so requirements uh talk to somebody

56:39

about

56:40

what it is i'm trying to do and then

56:42

what the requirements would be yeah and

56:44

that's that's the word for it you want

56:46

to develop a requirements document and

56:48

have a um

56:49

uh

56:51

essentially like a request for proposal

56:53

rfp is another way to say it or a scope

56:55

of work there's lots of different

56:56

phrases for this but these are the

56:57

buzzwords

56:58

uh that you could then give to a

56:59

technical person and say this is what

57:01

i'm looking for

57:02

uh and i'd like you to consider you know

57:05

what what would you need to do this

57:07

either cash or like you said shares or

57:09

you know then it gives you something to

57:11

have a discussion about because as a

57:12

non-technical person talking to a

57:14

technical person

57:15

he goes i have this idea it's this app

57:17

and then they're like okay great where

57:19

would i start right they need that's

57:21

their job is the specifics right and

57:23

unless you have specifics you're both

57:24

just going to waste time

57:26

blue sky yeah and that's what i like i

57:29

really you know uh money like speed and

57:33

um so

57:34

really i just want to stop

57:36

procrastinating and getting

57:39

you know i'm almost to the point where

57:41

you know i can want to sketch it out on

57:43

paper as to what i want it to be and

57:46

what it

57:47

to look like in the functionalities

57:50

but

57:51

to actually then have it and you know i

57:54

was wondering if maybe there might be

57:56

like a site where you can kind of put

57:58

together like a proto prototype

58:01

um

58:02

yeah i'm sure there are i don't have one

58:04

off hand how about the audience guys you

58:06

can there's some good ideas in here um

58:08

sunny says a brd that's another way to

58:11

call it business requirement document uh

58:13

scott used rfp which i mentioned rfp is

58:16

needed for projection of what your scope

58:18

will be and how to pitch in your future

58:20

market right these are all different

58:21

lingo but basically you need something

58:22

that spells out

58:24

spells out the path

58:25

um

58:26

so yeah i would look online they've got

58:28

to be

58:29

wizards or questionnaires that you can

58:31

kind of work through to even give

58:33

yourself a draft that's a great idea

58:34

just as there are for business plans

58:35

this is essentially kind of like a

58:37

business plan for the technical team

58:39

um

58:40

alexis okay zach says build fire i don't

58:43

know that one but that's thank you zach

58:44

and alexis says figma oh yeah right

58:46

is free figma is uh i think it's more

58:49

like wire framing though isn't it alexis

58:51

but even so that's a great place to

58:53

start

58:54

um

58:55

and um you can uh look at some of those

58:58

things let's i'm getting warnings that

58:59

we're already at our hour this has been

59:01

a

59:02

happy fun time let me we can run a

59:04

little over here if we want but let me

59:07

just remind everybody if you're watching

59:09

um this i'm scott fox you've been

59:10

listening to the masterminds startup

59:12

fundraising office hours and happy to

59:15

have you here happy to help if we can

59:16

please like and share and promote and

59:18

tell your friends

59:20

there's no sales here this is all free

59:22

but it would really help get more people

59:24

help these great questions and help

59:25

other people uh learn this stuff okay

59:28

okay so um marielle and then uh sonny i

59:30

want to talk about your question a bit

59:31

and then i think we'll be done but um so

59:33

that's what we got for the moment mary i

59:34

hope that's helpful given that you

59:36

didn't have a question that was a pretty

59:37

good topic i know right

59:43

all right well nice to see you and i'm

59:45

gonna uh sunny we're gonna head over

59:47

here to talk to sunny

59:49

okay so sunny you're the uh we're gonna

59:51

do the wrap up here with you

59:53

and um

59:55

looks okay cool so sonny had a good

59:57

question um

59:58

sorry and i lost it now um

60:01

uh how do you get in the queue to speak

60:03

well that's a good one that's an easy

60:04

one so next time for next one i do this

60:06

once a month by the way the last tuesday

60:08

or the fourth tuesday of every month um

60:10

and uh if you sign up you've somehow

60:13

found us here

60:14

you can there's a form on the eventbrite

60:17

listing for this and you can rsvp and

60:19

send in your questions in advance and

60:20

that's really helpful to me so i can

60:22

think about them and people you know

60:24

send stuff in to me in advance and then

60:27

you can get on camera and we can really

60:28

work through it and if you do that i'll

60:30

be happy to have you at our next

60:31

masterminds workshop as my guest but i

60:33

wanted to talk quickly about your other

60:35

question sonny when you first arrived

60:38

um

60:40

it which is oh cool your idea is an

60:44

aggregator for south asian community to

60:45

find hindu pendants temples flores and

60:47

crematoriums wow that's a cool one sunny

60:49

we're i'm curious where you're based um

60:52

i know we get some people all the way

60:54

from india but given this time zone i

60:56

don't know where you are today anyway so

60:58

um this is the question i want to talk

61:00

about how much equity should an

61:01

entrepreneur give out when raising money

61:04

you're looking at a five to seven year

61:05

journey for your startup you've been

61:06

self-funding to start for the last year

61:09

uh you're in new jersey okay that's what

61:10

i figured you're more in our time zone

61:12

excellent nice to see you um

61:14

uh okay um what are the criteria and how

61:17

much equity i should give out thank you

61:18

in advance sure my pleasure so there are

61:21

rules for this stuff right

61:24

if you want to give out equity there are

61:25

industry standards for all of this stuff

61:28

now so i don't have we know the time

61:29

left today to talk through the details

61:31

but just google google the crap out of

61:33

that question there are standards

61:35

essentially given like your valuation is

61:38

whatever five million dollars and you

61:39

want to raise a hundred thousand dollars

61:41

how much should that generally get right

61:43

and if it's 10 million dollars but you

61:44

want to raise three million dollars how

61:46

much should you give there are

61:48

fairly established norms for all of that

61:51

kind of thing these days so it's not a

61:53

mystery i know it feels like a mystery

61:54

but if you google that sort of stuff you

61:56

could figure it out some places i might

61:58

look um other than just google like

62:00

literally copy what you wrote me and put

62:02

it in google i bet you'll get some

62:03

pretty good articles

62:05

but there are several companies that uh

62:07

specialize and they call it cap table

62:09

management capitalization table which is

62:11

the spreadsheet basically that shows who

62:13

put how much money in your company and

62:15

at how many shares they got and what

62:17

it's worth that kind of thing they

62:18

manage this so a leading one is carta

62:20

c-a-r-t-a

62:22

another one that's uh i think is pulley

62:25

p-u-l-l-e-y

62:27

and another one is cake cake down there

62:31

down under in australia

62:33

and um my personal favorite is cap bass

62:36

c-a-p-b-a-s-e

62:39

cap bass uh gabriel says give away as

62:40

little as possible okay that's that

62:42

you're right gabriel that's the fastest

62:43

that's a quicker answer

62:45

good point um but anyway uh so uh carter

62:49

um i forget the second one i said pulley

62:52

and cat base um those are all places

62:54

that i would look because they're in the

62:56

business of managing cap tables they

62:58

often have a lot of educational articles

63:00

that will help walk founders through

63:01

this

63:02

the other is the founders institute they

63:05

have a bunch of good articles so there's

63:06

plenty of stuff out there

63:08

and i should disclose i'm an investor in

63:10

cap base and in cake as well because i

63:13

think this is a real need that a lot of

63:14

us entrepreneurs suffer with they're

63:16

trying to make that process easier uh

63:19

so hopefully that some of that is

63:20

helpful to you

63:22

sonny grace yes

63:23

lol give away as little as possible

63:25

absolutely

63:26

okay so hey everybody well thank you for

63:28

being here i hope it was helpful to you

63:30

i'm scott fox please like and share this

63:32

stuff like i said that's what makes it

63:33

go um

63:34

this is a

63:36

labor of love for me because i love you