Raise through an SPV-syndicated round. What does that mean? Jeremy Neilson from Assure will explain

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They're releasing to fundraising
video a podcast about

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fundraising for early-stage
startups, the major rule that we

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follow here is no bullshit on
this podcast.

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No music to relax, you know,
advertisements of our sponsors.

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We only talk about fundraising
here and nothing else.

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So let's jump into the episode.
And today's guest speaker, we

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have Jeremy Nelson CEO and
co-founder of Usher.

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And today we'll talk about the
spd's and specifically how it

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sure is transforming them from
being the vehicle specifically

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for investors to be in a vehicle
for Founders to make a more

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comfortable race for themselves.
And we're going to talk about

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what it means to have a Founder
run as PV and how those works

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and how those can help you raise
money for your company.

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So Germany, let's kick it off by
you giving us some background on

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yourself.
Self.

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And on a short-term, thanks for
having me a sure we do as

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peavey's.
Where spb Ninjas Geniuses if you

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will and a little background.
My background is in Industry, I

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went to a lot of school, got a
law degree, got an MBA, then was

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hired and to launch and run the
state of Utah's Utah fund of

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funds program, where worked with
entrepreneurs worked with VCS

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and that's how I got.
Into the business, learn the

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business.
If you will my co-founder she

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was operations.
Worked at Fortune 500 companies

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and she's also my wife.
So she spent a lot of time

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managing the home and is the
sure and our lives kind of

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combined and moved and
eventually collided where she

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and I jumped in together to grow
a sure the whole business

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started when AngelList call,
Called us and said, hey, you

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know, with the jobs act changing
and some things here in the US,

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we think there's an opportunity
here to build this platform and

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provide this service.
Can you guys figure out how to

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do the back end?
Can you figure out how to do

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funds in bulk?
So we said yes co-founder and I

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we figured it out, right?
You know, to be honest, I wasn't

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exactly sure what I was saying,
yes to I knew for my experience

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and my education and my
co-founder like we could figure

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it out, but there's plenty of
Today's nights where I was

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completely lost as I was
figuring and groping around

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trying to figure it out.
And we did and, you know, we're

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here today doing thousands of
spb's per year for our clients.

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I have that kind of background.
My co-founder has that

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operational, genius great.
And yet, as you said, as sure is

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the most notable player in the
field of as PV creation and the

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entire basically back and
operations behind A ton of

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fundraisings.
And yeah, when you guys reach

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out to me I was like, absolutely
you are coming on.

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This podcast is going to be
super interesting conversation

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here and later on, we're going
to jump into more details of how

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the SPV are operating, who
actually needs them, and what

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are their so important for some
fundraising.

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But let's start with your own
story which is the fact that

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you've been actually a co-ceo of
a short for over 10 years.

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Why did you decide to co-ceo and
how does that work?

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Yeah, it's been a journey of
multiple roles and approaches my

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co-founder.
Like I mentioned is my wife she

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and I basically just work on a
sure all the times when we go

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home at night we talked about a
sure when we get up in the

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morning we talked about a sure.
When we go on vacation, we

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talked about a sure we go on
dates.

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We talk about assure our
children.

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We have four children, they get
quite annoyed with it.

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You know, the they'll ask us a
question and we will kind of

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start answering their question
or they're kind of involved in

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this conversation with us and
then we'll divert was run off

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the road.
We'll talk about a sure.

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They'll like you know throw
their hands up and you know make

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fun of us or be annoyed.
And so because we're so tight

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and always together, it just
makes sense that we run this

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business together and we've done
it.

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Well we've done it.
Lee a different times with

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regards to roles we we have
found is that it works best for

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us when we have defined lines.
Like you work on Revenue, you

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work on Tech.
You work on upright.

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So very defined lines.
Is where we work best and the

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titles really don't matter to
us.

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It's like you hold this towel
for a while, then I'll hold this

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title for a while and just
whatever.

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Whatever is needed is what we
do.

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Who's Purrs most suitable or fit
or has the capacity and the

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business continuously changes
and grows if anyone's built a

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company, you know, that it's
kind of constant change.

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And so we plug in where we need
to and unplug and let the other

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one plug-in and just move around
and get the company to where we

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need it to be.
So let's just worked really well

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for us, not every day, right?
But overall, for the most part

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it's worked really well for us.
Absolutely, and just one more

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question.
I swear we're going to move on

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to talk about the actual part
about building the spb's and

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raising through the spd's.
But first things first, when you

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start the short company, a lot
of investors or a lot of

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Founders are being recommended
not to start companies with

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their significant others.
Or you know, relatives of any

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kind was that a concern for you
when you begun and do you think

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that?
I mean, Sure is number one now,

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so obviously that was very cold,
but at the time do you think,

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you know, were you considering
some other options or was it

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just, you know, an obvious
option to you?

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It was a very obvious option, a
little more about my story is I

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ran the Utah fund of funds did
that, for seven years, got laid

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off, got fired, whatever,
whatever word you want to use.

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And I then tried multiple
things, I, you know, started to

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trademark grow my career and
failed at a lot of things.

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And so I actually went to years
of failing before it really

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started to take traction and so
there was definitely a an air of

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desperation with regards to
getting something moving and

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getting some getting some
traction.

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And my co-founder Katie.
She just she just Jumped in,

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right?
I'm going to help took it

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gladly, right?
Just like absolutely please

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help.
So there's multiple things that

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are amazing about my co-founder
one should work anybody under

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the table including me to her
skill sets or opposite of mine.

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And so, it's really yin and yang
with regards to our skill sets.

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The other thing that is amazing
about her.

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Something I haven't seen in
anybody else ever.

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Is she always catches up And
when I mean by that is when a,

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when a business grows, the
girls, the business will grow

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past you, it'll like, you know,
go from five employees to 50 to

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100 to 200 and you'll have
employees who are amazing.

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People but you can just see that
they were perfect yesterday and

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then all of a sudden they're not
as perfect for this role.

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Doesn't mean they're not
amazing.

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They are but they don't have
experience with 200 employees or

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they don't have experience with
1000s PV.

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He's and they were perfect
before.

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Now they're not my co-founder is
always just caught up it's just

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been an amazing amazing thing.
Just just to watch the other

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final thing about having a
co-founder who shares expenses

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with you is she basically took
no salary for years and has been

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underpaid forever and still is
underpaid.

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And so the value just didn't
like her skill set is.

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Raising the value to the company
of her.

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Just not taking that full
paycheck.

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Yeah.
It could have been made could

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have been her, you know, for us.
It's kind of all the same but

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it's just been invaluable to to
the company.

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And so, you know, I remember
those days that you described

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where's like - you know, don't
don't do.

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Don't do friends, don't do
cousins, don't do siblings,

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don't do spouses.
And I've seen a change like it

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was there.
R.

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I've seen that.
There's a bit of a big change

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and there is a big movement of
people spouses.

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Let's write its relations that
are doing companies together and

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not saying that they all work
out, but there is a healthy

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number that do work out in.
There is a very strong positive

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elements to that Arrangement,
absolutely, I've injured dozens

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dozens of Founders who have
started their companies with

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their spouses, with their
brothers, with their cousins, as

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you said.
And they have actually Succeeded

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a very much in this journey but
now let's actually go back and

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talk about the major topic of
today's discussion which is the

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spb's and specifically founder,
let us do.

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So sure is best known for
serving investors but the head

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of Partnerships of assure
reached out to me to talk about

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founder and Lead spe
specifically.

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So can you tell us a little more
about those?

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How do they work?
What is a Founder lettuce, PV

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curve so in spb's and has to be,
it doesn't matter.

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If investors using it or a
founder or a sponsor or anybody

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else and you know, and as PV is
a vehicle structure vehicle that

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looks and behaves a lot like a
venture fund.

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This is investors coming in that
Vehicles, going to aggregate

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money that vehicles are going to
send that money on to purchase

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an asset.
Not describes a venture fund

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Venture funds.
Tend to do lots of assets and

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you know, have this long life
cycle and performs slightly

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different TV is special purpose.
So it's like this one time

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thing.
Let's do this one deal.

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Let's, let's do this one round.
And so it's a little bit like an

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SP V or Venture fund kind of on
steroids, where you're going to

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do everything you're going to do
in a venture fund Bridge.

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You're going to do it quicker
and faster faster quicker, they

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just like all this stuff in a
very short timeframe.

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So this SPV is meant to
aggregate investment when it

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Comes to a Founder LED as PV.
The founder is the one saying.

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I want the investors that come
and sit on my cap table to come

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in an organized fashion.
So you have two options, you

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either allow people to come
direct and sit on your cap table

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direct or you make them go
through a structured vehicle.

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You know, Aventure Capital funds
are structure vehicle.

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You know, all the LPS in that
Venture fund aren't coming to

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you direct.
They're going through that

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venture.
I want the same thing is in SPV

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where you may have a large
number of people coming say,

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hey, I'm interested.
I want to write ten thousand

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dollar check when right?
Twenty thousand dollar check,

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I'll do a 50 thousand dollar.
Check use a Founder, you have to

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say, do I want 10 or 30 or 50
people sitting on my cap table?

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All writing five to fifty
thousand dollar checks, or do I

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want to say love to have you
I've set up an SP V.

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Or I've you know, I'm using
somebody to have this SPV set up

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for this purpose.
Please go through the SPV.

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So that Aggregates all that
money and then you get one, two

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hundred thousand dollar check or
five hundred thousand dollar

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check and you can have as many
founder LED spb's as you want,

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right?
You could have five or ten,

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right?
It's really about organizing

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your investors and we can talk
about why that's interesting and

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potentially very important but
that's at the founder.

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Let s PV is or Using all those
investors into a structured

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vehicle, right?
That is true.

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And yeah.
Recently, we released a course

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on fundraising for early-stage
startups, and there have

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actually mentioned that spb's
are not ideal because it is hard

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to find an investor who is
willing to run or lead that as

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TV.
Now, that problem is apparently

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solved.
So, let's start by talking about

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some details of organizing, SPV
specifically through a short,

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because you're here.
So, let's talk about that first.

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Question is, how much can a
Founder expect to set to spend

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on creating that spb from the
legal perspective.

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So what's the cost of creating
that spb in order to organize

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investors in this kind of batch
Known as BV has legal, but it

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has tax, it also has compliance.
It has banking, as admin has a

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lot of these Professional
Services that are needed, and if

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you don't go through sure,
you're basically going to be

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calling a law firm.
Your me calling it The Tax firm,

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you and me calling calling on
banks.

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You're going to be doing this by
yourself and frankly, it just

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doesn't make sense, Spencer,
especially the founder.

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And one of the reasons Founders
haven't used them.

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00:13:27,100 --> 00:13:30,400
Particularly in the past is, you
know, you're very busy, you're

225
00:13:30,400 --> 00:13:32,500
really not.
Go out and do all this work.

226
00:13:32,600 --> 00:13:35,200
It's just too much of a
headache, so that assure you

227
00:13:35,200 --> 00:13:37,700
come in and we have a slick
system.

228
00:13:37,700 --> 00:13:41,600
Going to SP be in a box.
You get documents, you get a

229
00:13:41,600 --> 00:13:46,000
bank account, you get a system
for everybody to sign will do

230
00:13:46,000 --> 00:13:48,500
the security.
Filings will do the taxes all

231
00:13:48,500 --> 00:13:52,800
that in one flat fee.
And so, the fee part of the

232
00:13:52,800 --> 00:13:57,100
conversation, if you do a small
spb, we have, we have two

233
00:13:57,100 --> 00:13:59,200
products.
We have a sure Labs product that

234
00:13:59,200 --> 00:14:01,100
is tiered.
So if you do a really small, As

235
00:14:01,100 --> 00:14:04,500
PV you'll pay four thousand
dollars, plus whatever the Blue

236
00:14:04,500 --> 00:14:08,700
Sky, filing fees are, which is
an 80's, some states, require

237
00:14:08,700 --> 00:14:11,900
you to throw in some money and
tell them that you raise money

238
00:14:11,900 --> 00:14:14,100
from their citizens, their
residents.

239
00:14:15,400 --> 00:14:19,800
And so if you did a 50,000 raise
for two thousand dollar raise

240
00:14:19,800 --> 00:14:23,600
SPV or lower, you're going to be
paying four to five thousand

241
00:14:23,600 --> 00:14:27,200
dollars one-time to assure to do
all those things, legal tax

242
00:14:27,200 --> 00:14:31,500
accounting admin, compliance
banking for you for uh, 27

243
00:14:31,500 --> 00:14:33,700
years, it steered.
So, if you raise a hundred

244
00:14:33,700 --> 00:14:37,100
thousand, it goes up.
Like 4500 if you know 150,000

245
00:14:37,100 --> 00:14:41,700
kind of takes up and you're
going to max out 10,500, we have

246
00:14:41,700 --> 00:14:44,500
a standard product that adds a
few other features.

247
00:14:44,600 --> 00:14:49,800
You're basically in the range of
about 42 about thirteen,

248
00:14:49,800 --> 00:14:55,300
fourteen thousand dollars, Max
one time when the deal closes 47

249
00:14:55,300 --> 00:14:58,900
year life cycle for that for
that entity nice.

250
00:15:00,300 --> 00:15:03,100
Nice, nice.
Nice at there is greed pricing.

251
00:15:03,600 --> 00:15:08,200
So, let's touch on to the part
that you mentioned at the very

252
00:15:08,200 --> 00:15:13,700
end of that speech, which is the
fact that if you close the SBB

253
00:15:13,700 --> 00:15:15,800
actually.
So what happens if the founders

254
00:15:15,800 --> 00:15:18,700
started fundraising?
And it just, it just doesn't go

255
00:15:18,700 --> 00:15:21,300
well, what happens then and
let's say they close couple of

256
00:15:21,308 --> 00:15:23,600
investors, but they do not feel
their target of.

257
00:15:23,600 --> 00:15:26,500
Let's say 55 thousand dollars as
PB.

258
00:15:27,000 --> 00:15:30,600
What happens then Yeah.
So to sure we don't charge for a

259
00:15:30,600 --> 00:15:33,000
failed deal.
We do have retainer.

260
00:15:33,000 --> 00:15:34,800
You only want to make sure that
people are serious.

261
00:15:34,800 --> 00:15:36,300
Yeah.
The most Parts you're going to

262
00:15:36,300 --> 00:15:40,200
pay 2,500 bucks to assure and if
that's if that's it then that's

263
00:15:40,200 --> 00:15:42,500
that's the end of it.
Maybe, maybe you're going to pay

264
00:15:42,500 --> 00:15:46,900
2,500 bucks one time, that's it.
If you did multiple deals, right

265
00:15:46,900 --> 00:15:49,200
that retainer works for lots of
deals.

266
00:15:50,800 --> 00:15:53,600
We just want those people that
are serious to come into a sure.

267
00:15:54,600 --> 00:15:57,900
And the end of the day we don't
charge for failed deals.

268
00:15:58,600 --> 00:16:01,700
And we just know that that's
that's part of the business.

269
00:16:02,100 --> 00:16:04,600
Yes, I've noticed.
And that is sure many or most of

270
00:16:04,600 --> 00:16:08,300
our clients are our syndicators,
they're going to do lots and

271
00:16:08,300 --> 00:16:10,900
lots and lots of deals.
And so, not every deal goes.

272
00:16:10,900 --> 00:16:15,100
Well, so use a Founder.
You get, you get the benefit of

273
00:16:15,100 --> 00:16:18,800
that feature inside the product,
which is, we don't charge for

274
00:16:18,800 --> 00:16:21,900
failed deals because most of the
clients are going to have some

275
00:16:21,900 --> 00:16:24,000
of those as they do.
Lots and lots of deals with the

276
00:16:24,000 --> 00:16:27,900
shirt Eventually, it happens,
it's bound to happen.

277
00:16:27,900 --> 00:16:30,900
It always happens to everyone.
Even the most successful

278
00:16:30,900 --> 00:16:33,500
investors is just how start
World works.

279
00:16:33,800 --> 00:16:36,200
So yeah, that's that's great to
hear and a lovely.

280
00:16:36,200 --> 00:16:40,500
So now, let's talk about when it
actually makes sense to pay 4000

281
00:16:40,500 --> 00:16:42,600
plus dollars in order to create
that as p b.

282
00:16:42,600 --> 00:16:45,400
So from your perspective, when
does it make sense to raise

283
00:16:45,400 --> 00:16:48,200
through an SPD or rather than a
living old investors?

284
00:16:48,200 --> 00:16:52,200
Just be shown on the cap table.
Yeah, it's really.

285
00:16:52,400 --> 00:16:56,600
This is all so it's very much a
Founder decision if you want to

286
00:16:56,600 --> 00:16:58,900
do this.
But there's a number of great

287
00:16:59,000 --> 00:17:05,300
features or outcomes for and in
using founder LED s, PV s.

288
00:17:06,099 --> 00:17:10,599
So as a Founder, a clean cap
table can be very advantageous

289
00:17:10,599 --> 00:17:13,700
and important to you.
I'm a, I'm a Founder, I'm a

290
00:17:13,700 --> 00:17:17,099
venture back founder.
I kind of walked the same path

291
00:17:17,500 --> 00:17:22,700
that I'm talking to each of you
about and I Stand that pressure.

292
00:17:22,700 --> 00:17:25,599
We're seeing someone says hey
you know I got 10 grand gets

293
00:17:25,599 --> 00:17:29,700
exciting you just want to say
yes but at the end of the day

294
00:17:30,000 --> 00:17:34,200
you will most likely grow or you
want to grow and so preparing

295
00:17:34,200 --> 00:17:37,900
yourself and being having that
foresight that says I'm going to

296
00:17:37,900 --> 00:17:40,000
do a seed round.
I'm going to do an a around, I'm

297
00:17:40,008 --> 00:17:42,100
going to do a be round.
See round it, maybe you don't

298
00:17:42,100 --> 00:17:45,600
get there but preparing for that
is very important.

299
00:17:45,600 --> 00:17:48,500
Just like growing up your
company of saying, you know, we

300
00:17:48,500 --> 00:17:51,500
do financials here.
We we make sure we hire The

301
00:17:51,500 --> 00:17:55,100
right representation we get good
documentation, all these things

302
00:17:55,100 --> 00:17:59,600
that that are helping you be
professional grown up ready for

303
00:17:59,600 --> 00:18:02,100
big investors.
Sophisticated investors, great

304
00:18:02,100 --> 00:18:07,300
employees, same thing is with
your cap table, so as you grow,

305
00:18:07,400 --> 00:18:11,500
maybe the seed stage, you're
like, I'll take anybody but that

306
00:18:11,500 --> 00:18:15,300
comes back around to kind of
bite you when a series a comes

307
00:18:15,300 --> 00:18:18,200
around and the more
sophisticated investors may be

308
00:18:18,200 --> 00:18:20,800
the big VC start coming around.
I'm going to look at that

309
00:18:20,800 --> 00:18:23,500
Captain.
Abel like what's going on here?

310
00:18:23,600 --> 00:18:25,900
Who are these individuals?
Who these people?

311
00:18:25,900 --> 00:18:27,700
Are they accredited?
And you're going to start to

312
00:18:27,708 --> 00:18:31,000
have to answer some very
interesting tough questions.

313
00:18:31,600 --> 00:18:34,400
You go you keep going from
there, be round, see round.

314
00:18:34,700 --> 00:18:38,700
There's more sophisticated more
scrutiny, more due diligence is

315
00:18:38,700 --> 00:18:41,800
going to come upon you and that
dude on that on that cap table.

316
00:18:42,200 --> 00:18:45,200
And so if you basically are
like, here's my cap table more

317
00:18:45,200 --> 00:18:49,400
like, oh s PV ministered by sure
K, we know that everyone that

318
00:18:49,400 --> 00:18:51,200
went through, there is going to
be accredited because, uh, sure

319
00:18:51,600 --> 00:18:54,500
Does those checks their
background checks?

320
00:18:54,700 --> 00:18:58,100
This is being professionally.
Managed nice, right?

321
00:18:58,200 --> 00:19:01,000
You don't get those questions.
And so you're basically setting

322
00:19:01,000 --> 00:19:04,900
yourself up for a much more
smooth, much more professional

323
00:19:04,900 --> 00:19:10,400
grown up, looking due, diligence
and conversation down the road

324
00:19:10,400 --> 00:19:13,400
when you work with institutional
investors.

325
00:19:13,500 --> 00:19:17,500
So that's that's one big
advantageous aspect in something

326
00:19:17,500 --> 00:19:20,600
you should really consider.
And I want to just point out too

327
00:19:20,600 --> 00:19:23,500
is some Investors are going to
resist, the SPV.

328
00:19:24,000 --> 00:19:26,000
This is going to be a decision.
You're going to have to make

329
00:19:26,000 --> 00:19:29,100
some are just going to say.
I want to be on the cap table,

330
00:19:29,100 --> 00:19:31,300
right?
I want to be close to you.

331
00:19:31,300 --> 00:19:35,200
I don't want to go through this
structure vehicle and there's

332
00:19:35,200 --> 00:19:39,500
plenty of reasons to for them to
say that the end of the day you

333
00:19:39,500 --> 00:19:42,200
need to say, you know, what am I
building here?

334
00:19:42,200 --> 00:19:44,700
What am I creating how am I
organizing this?

335
00:19:45,300 --> 00:19:49,300
And another advantageous piece
is when somebody is sitting on

336
00:19:49,300 --> 00:19:53,000
your cap table as much, Harder
to deal with.

337
00:19:54,200 --> 00:19:58,500
Honore or misbehaving investors
sitting on your cap table.

338
00:19:58,800 --> 00:20:03,200
Then inside an SP V1, is there
inside the SPV, their little

339
00:20:03,200 --> 00:20:04,900
bit.
Shielded from you right there

340
00:20:04,900 --> 00:20:09,700
may be misbehaving in the SPV if
you will but administrator

341
00:20:09,700 --> 00:20:11,900
whoever like Asher has to deal
with them.

342
00:20:12,300 --> 00:20:16,700
If somebody is quite upset,
maybe that a life event and they

343
00:20:16,700 --> 00:20:19,700
need maybe they need out, right?
Maybe there's a divorce or a

344
00:20:19,708 --> 00:20:23,100
death or something that's it's
big you know, life happens and

345
00:20:23,100 --> 00:20:25,500
they like hey can I get, can I
get out of this deal?

346
00:20:26,200 --> 00:20:30,200
That's more difficult when
they're sitting on your cap

347
00:20:30,200 --> 00:20:32,700
table directly and if they're in
an SP V.

348
00:20:32,700 --> 00:20:37,100
So an inside an SP V, they could
basically go find somebody just

349
00:20:37,100 --> 00:20:40,900
to swap out their seats, right?
And they put in 2,500 bucks and

350
00:20:40,900 --> 00:20:45,200
go find someone hey I'm in this
startup company, I need out, you

351
00:20:45,200 --> 00:20:47,900
know, can we just trade spots
for 2,500 bucks?

352
00:20:48,600 --> 00:20:52,000
That's easily done happens all
the time and so there's a lot of

353
00:20:52,000 --> 00:20:53,900
more there's a lot more
flexibility and options.

354
00:20:54,000 --> 00:20:58,300
Already inside an SP V than
sitting directly on the cap

355
00:20:58,300 --> 00:21:00,700
table.
And then, you know, finally that

356
00:21:00,700 --> 00:21:05,700
accredited investor aspect, if
somebody comes and invest in

357
00:21:05,700 --> 00:21:07,300
your company, they're not
accredited.

358
00:21:07,800 --> 00:21:10,900
And I'm not saying that you
wouldn't ask or check or

359
00:21:10,900 --> 00:21:14,100
whatever but it's much easier
for them to slip through on that

360
00:21:14,200 --> 00:21:17,800
and a investor may be an
Institutional bias or finds out

361
00:21:17,800 --> 00:21:20,400
later.
You have to clean that up and

362
00:21:20,900 --> 00:21:22,700
they're going to have to come
off your cap table.

363
00:21:23,500 --> 00:21:25,900
We can go in what, you know,
whole Branch down.

364
00:21:25,900 --> 00:21:28,800
Why, that's why that's the case.
Well, bore you with the legalese

365
00:21:28,800 --> 00:21:30,500
on that.
But, you know, it's coming

366
00:21:30,500 --> 00:21:34,100
through an SP V1, it's fixed
easier to like a sure.

367
00:21:34,100 --> 00:21:36,200
We don't let non-accredited
investors, right?

368
00:21:36,200 --> 00:21:40,400
We have the checks and stuff
like that, going through going

369
00:21:40,400 --> 00:21:42,900
through that.
So those are kind of three off

370
00:21:42,900 --> 00:21:47,100
the, you know, the top of the
list of why founder LED spb's,

371
00:21:47,200 --> 00:21:51,600
are a good idea to consider
right hand the credit investors

372
00:21:51,600 --> 00:21:54,100
are super important.
I mean in most cases you You

373
00:21:54,100 --> 00:21:55,900
have to run those checks, one
way or another.

374
00:21:55,900 --> 00:21:58,900
Of course, you can do it by the
lawyer, but not all of your

375
00:21:59,200 --> 00:22:02,000
investors.
Might have a lawyer available to

376
00:22:02,000 --> 00:22:05,600
write the the layers saying that
you are a crit and indeed.

377
00:22:06,100 --> 00:22:09,800
So, let's actually one thing
that you mentioned is sounds

378
00:22:09,800 --> 00:22:13,100
very interesting, which has
trade seats for 2,500 bucks.

379
00:22:13,400 --> 00:22:15,000
Let's talk about that for a
second to.

380
00:22:15,000 --> 00:22:17,900
How can that be done?
Because I know that in most

381
00:22:17,900 --> 00:22:23,500
cases or in like 99.9 percent of
the cases, it is you just cannot

382
00:22:23,500 --> 00:22:26,400
sell your Shares in the company
or even exchange them in any

383
00:22:26,400 --> 00:22:27,900
way.
You'd like you're just stuck

384
00:22:27,900 --> 00:22:31,000
there for years before the
triggering event happens.

385
00:22:31,100 --> 00:22:35,100
How can that be done?
Yeah, so I think there's some

386
00:22:35,100 --> 00:22:38,700
keywords there, so there's trade
versus sale.

387
00:22:39,000 --> 00:22:44,500
So let's say if you sell your
position that tends to mean that

388
00:22:44,500 --> 00:22:46,100
you're, you've increased your
price.

389
00:22:46,100 --> 00:22:50,400
So you put in 2,300 now, you're
asking for five grand in

390
00:22:50,400 --> 00:22:53,700
exchange.
That's more of a sale that is

391
00:22:53,700 --> 00:22:57,400
permitted for a document so
we're really kind of getting

392
00:22:57,400 --> 00:23:02,100
into legal document SEC stuff.
It is permitted.

393
00:23:02,100 --> 00:23:08,200
It does cause Requirements about
legal documents and and tracking

394
00:23:08,200 --> 00:23:11,000
it also affects taxes.
So there's this kind of

395
00:23:11,000 --> 00:23:14,200
waterfall effective when
somebody does that throughout

396
00:23:14,200 --> 00:23:20,100
the SPV and there's there's kind
of best practices there and in

397
00:23:20,200 --> 00:23:23,800
other ways to kind of do that.
But it's happening all the time

398
00:23:23,800 --> 00:23:27,400
in spb's and it's one of the
reasons spb's are being used

399
00:23:27,400 --> 00:23:29,900
more and more and it's just
growing and growing is because

400
00:23:29,900 --> 00:23:34,700
the flexibility of these
vehicles is so much greater than

401
00:23:34,700 --> 00:23:40,300
anything else out there.
And so it is permitted again,

402
00:23:40,300 --> 00:23:44,500
you know, there are some boxes
you need to check their trading

403
00:23:44,500 --> 00:23:47,100
is different.
When I say trading, it's more

404
00:23:47,100 --> 00:23:52,100
like I put in 2500, I just want
2500 back, so there's no real

405
00:23:52,100 --> 00:23:54,000
cell.
There's no, there's no, you

406
00:23:54,000 --> 00:23:58,300
know, increase of Christ.
There's not all that water

407
00:23:58,300 --> 00:24:01,800
falling of effect with the
legalese.

408
00:24:01,800 --> 00:24:06,900
There is much less as Now this
happens quite frequently with

409
00:24:06,900 --> 00:24:12,100
regards to the column membership
transfers because frequently

410
00:24:12,100 --> 00:24:15,800
somebody will transfer their
membership interest to something

411
00:24:15,800 --> 00:24:17,800
else that they control.
So maybe they investors in

412
00:24:17,800 --> 00:24:21,700
individual they set up a trust
or an LLC and they just want to

413
00:24:21,708 --> 00:24:26,400
move it over it's very similar
to that by way of ease and

414
00:24:26,400 --> 00:24:31,300
documentation and accounting and
tax and so I can use that

415
00:24:31,300 --> 00:24:33,600
scenario someone's like you know
I'm not really looking.

416
00:24:33,700 --> 00:24:36,000
In for a profit here just like
to get my money back.

417
00:24:36,000 --> 00:24:39,700
I've had some life events.
I would like just to cash out.

418
00:24:39,700 --> 00:24:44,400
That's a much simpler outcome.
Both legally Tax Administration,

419
00:24:44,600 --> 00:24:47,100
then if someone's like, hey I
got a right up here.

420
00:24:47,100 --> 00:24:49,000
And who wants, you know, who
wants to bid?

421
00:24:49,200 --> 00:24:52,900
Who wants to bid it up?
It's permitted happens all the

422
00:24:52,900 --> 00:24:59,300
time, but, but that, that kind
of life event is much easier.

423
00:24:59,700 --> 00:25:03,100
Transaction, great, they're
interesting honestly, never

424
00:25:03,100 --> 00:25:06,000
heard of Scenarios.
Maybe I'm just, I just never

425
00:25:06,000 --> 00:25:08,600
asked those questions, and
Founders are not super happy to

426
00:25:08,600 --> 00:25:11,300
discuss those, but that does
sound very interesting.

427
00:25:11,300 --> 00:25:14,600
And in later episodes, I'll be
sure to ask about that.

428
00:25:15,100 --> 00:25:18,800
But before we move on, with more
questions about STDs, and when

429
00:25:18,800 --> 00:25:21,500
they're applicable, one question
about your own fundraising, as

430
00:25:21,500 --> 00:25:24,700
you said, you are a
venture-backed company and I'm

431
00:25:24,700 --> 00:25:26,300
just checking your crunchbase
right now.

432
00:25:26,300 --> 00:25:29,300
And it looks like you have
raised money from Jason

433
00:25:29,300 --> 00:25:33,300
calacanis which is props to you.
Congrats, that is a huge name

434
00:25:33,300 --> 00:25:36,400
there.
R1 question, it seems like on

435
00:25:36,400 --> 00:25:37,200
crunchbase.
At least.

436
00:25:37,200 --> 00:25:40,200
It only shows that you have
raised your free seed and Seed,

437
00:25:40,200 --> 00:25:43,300
rounds, is that where you
stopped raising, and just

438
00:25:43,300 --> 00:25:45,500
realize that you were January
enough Revenue.

439
00:25:45,500 --> 00:25:48,900
So you don't actually need any
additional cash influx or did

440
00:25:48,900 --> 00:25:51,800
you just decide to not disclose
it on crunchbase?

441
00:25:52,200 --> 00:25:57,300
Yeah, we just had one round.
It was a seed round cash flow

442
00:25:57,300 --> 00:26:00,600
from the very beginning.
You know, our business started

443
00:26:00,600 --> 00:26:04,700
very much like maybe a law firm
or accounting firm we Services.

444
00:26:05,100 --> 00:26:08,700
We didn't need much of anything,
just, you know, computer and

445
00:26:08,700 --> 00:26:12,300
expertise.
And we generated a significant

446
00:26:12,300 --> 00:26:15,800
amount of Revenue as we turned
into the fintech business that

447
00:26:15,800 --> 00:26:18,600
we are.
Today we started as a

448
00:26:19,000 --> 00:26:21,400
fundamental straighter
Professional Services, just

449
00:26:21,400 --> 00:26:23,400
trying to figure this thing out,
what are the boxes?

450
00:26:23,400 --> 00:26:25,000
What are the filings?
One of the legal?

451
00:26:25,000 --> 00:26:28,200
Where are the documents all?
You'll walk that path which we

452
00:26:28,200 --> 00:26:30,500
did, we then started to codify
it.

453
00:26:30,600 --> 00:26:33,200
We started in a cell's for
system.

454
00:26:33,600 --> 00:26:37,000
And then created our own system.
We're now on our second and kind

455
00:26:37,000 --> 00:26:41,200
of best system right now.
And so we have today, we're very

456
00:26:41,200 --> 00:26:46,100
much a fin tech company.
Yeah, for very much, a just

457
00:26:46,600 --> 00:26:50,600
Services, Professional Services
businesses that you have little

458
00:26:50,600 --> 00:26:54,200
does, you know, no overhead.
So the cash flow really just

459
00:26:54,200 --> 00:26:56,700
allowed us to grow the grow the
business.

460
00:26:57,100 --> 00:27:02,000
So we did a very small round,
invited some of our clients to

461
00:27:02,000 --> 00:27:08,100
invest and Cash flow has been
our friend ever since nice and

462
00:27:08,200 --> 00:27:11,200
raising from your customers.
That is just absolutely amazing

463
00:27:11,200 --> 00:27:14,900
and this case it makes tons and
tons of sense while why Jason

464
00:27:14,900 --> 00:27:17,400
calacanis was the one to invest
quite a bit.

465
00:27:18,200 --> 00:27:21,900
So question, do you raise your
entire round from your customers

466
00:27:21,900 --> 00:27:23,800
exclusively?
Or did you actually decide to

467
00:27:23,808 --> 00:27:25,600
reach out to some strategic
investors?

468
00:27:26,900 --> 00:27:29,000
They will is it was all of our
clients.

469
00:27:29,000 --> 00:27:34,500
I had had a number of
conversations but all of the

470
00:27:34,500 --> 00:27:39,400
investors came from either my
co-founder and I or our clients

471
00:27:39,900 --> 00:27:43,000
nice that is just great success
for fundraising.

472
00:27:43,000 --> 00:27:45,800
Right there.
When your clients invest, that

473
00:27:45,800 --> 00:27:50,400
is absolutely epic.
So before we jump into the very

474
00:27:50,400 --> 00:27:53,600
last question of days, episode
one more question about what

475
00:27:53,600 --> 00:27:56,400
happens to a lot of Founders
after they sell their companies?

476
00:27:56,600 --> 00:27:58,500
Cecily.
So, they happy any of these

477
00:27:58,500 --> 00:28:02,400
start world is, or the start of
Journey is acquisition or sale

478
00:28:02,400 --> 00:28:06,000
or IPO, and the founder usually,
or frequently leaves after that

479
00:28:06,000 --> 00:28:08,100
moment.
And a lot of them afterwards,

480
00:28:08,100 --> 00:28:10,400
decide not to leave the startup
world and continue either

481
00:28:10,400 --> 00:28:12,600
investing in other companies,
while they're building their

482
00:28:12,600 --> 00:28:17,000
own, or just purely investing in
becoming full on institutional

483
00:28:17,000 --> 00:28:18,800
investors.
So for those Founders who are

484
00:28:18,800 --> 00:28:22,300
not professional investors
Percy, what kind of structure

485
00:28:22,300 --> 00:28:25,300
would you recommend to do you
think that Funt make sense?

486
00:28:25,300 --> 00:28:27,100
Do you think that rolling funds?
Sense.

487
00:28:27,100 --> 00:28:30,700
Or do you think that those sbbs
make the most sense when they

488
00:28:30,700 --> 00:28:32,900
just, you know, see, one
particular deal and they're

489
00:28:32,900 --> 00:28:35,000
like, you know what?
That's that looks great for me.

490
00:28:35,000 --> 00:28:37,400
I'm going to create an SP
specifically for that.

491
00:28:37,900 --> 00:28:40,400
Yeah, so everyone's journey is
different.

492
00:28:40,600 --> 00:28:43,200
You mentioned kind of three
products, their Venture fund,

493
00:28:43,200 --> 00:28:45,500
which I think we all know of
kind of traditionally as a sort

494
00:28:45,500 --> 00:28:49,400
of product mentioned rolling
funds, which really are SP vs.

495
00:28:49,800 --> 00:28:53,200
There's a nice little marketing
wrapper around that it's really

496
00:28:53,400 --> 00:28:57,500
as PVS and then single asset.
S PV s.

497
00:28:57,700 --> 00:29:01,000
So this entire did not this
entire ecosystems really graying

498
00:29:01,000 --> 00:29:03,700
all the different products or
kind of touching each other and

499
00:29:03,700 --> 00:29:07,700
becoming one giant pool of
options.

500
00:29:08,200 --> 00:29:12,200
We see a lot of our clients
start with single asset as

501
00:29:12,200 --> 00:29:14,200
peavey's.
Then they make those decisions.

502
00:29:14,200 --> 00:29:17,300
Do I want to kind of move
upstream and do a venture fund?

503
00:29:17,300 --> 00:29:20,200
So single acid, SUVs are great
and multiple reasons, one,

504
00:29:20,700 --> 00:29:22,900
you're not committing to this
fund before.

505
00:29:22,900 --> 00:29:25,200
Maybe you've experienced doing
deals, right?

506
00:29:25,200 --> 00:29:27,600
You're not.
It's In your life that you're

507
00:29:27,600 --> 00:29:31,700
committing to also allows you to
build the track record to

508
00:29:31,700 --> 00:29:34,200
perhaps, do a fund in the
future.

509
00:29:34,400 --> 00:29:37,700
It allows you to start to build
your network of investors who

510
00:29:37,700 --> 00:29:42,200
may be the investors for your
fund more funding.

511
00:29:42,200 --> 00:29:44,100
A lot of them not wanting to do
a fun, right?

512
00:29:44,100 --> 00:29:45,900
They just don't want that
commitment.

513
00:29:45,900 --> 00:29:47,500
They want to do Deals.
They don't want to be an

514
00:29:47,500 --> 00:29:49,800
administrator.
So we have a large number of

515
00:29:49,800 --> 00:29:51,100
clients.
You just said, I'm just going to

516
00:29:51,100 --> 00:29:55,300
do single asset spb's forever,
you know, unless you're really

517
00:29:55,300 --> 00:29:57,500
going for like a man.
Management fee.

518
00:29:58,800 --> 00:30:00,500
You really don't need to do a
venture fund.

519
00:30:00,800 --> 00:30:06,600
Our clients do more deals with
SP vs and raise more money than

520
00:30:06,600 --> 00:30:11,000
they would in a venture fund.
So if you're going for Carrie

521
00:30:11,300 --> 00:30:16,000
and you're going for, you know,
deals single SPV, these are

522
00:30:16,000 --> 00:30:21,300
fantastic option, it's a deal by
deal carry, you can do things

523
00:30:21,600 --> 00:30:25,000
outside of a kind of defined
thesis, which you required to

524
00:30:25,000 --> 00:30:28,400
kind of put yourself into a box
for a fun, it allows you to

525
00:30:28,500 --> 00:30:32,100
Explore so many different
aspects in areas it allows you

526
00:30:32,100 --> 00:30:36,800
to do pro rata rounds, and
future rounds with more SP v's

527
00:30:36,800 --> 00:30:39,500
and get more carry.
Your overall economics

528
00:30:39,500 --> 00:30:44,700
flexibility and in optionality
is so much greater when you have

529
00:30:44,700 --> 00:30:47,900
when you do as peavey's and it
is when you do a fun funds are

530
00:30:47,908 --> 00:30:49,400
gray.
There's there, they have their

531
00:30:49,400 --> 00:30:55,100
place not bagging on funds but
as TVs, just provide so many

532
00:30:55,100 --> 00:30:59,000
optionality that a lot of
people, Start there.

533
00:30:59,000 --> 00:31:02,600
And many people never move out
of the Ice Cube in space.

534
00:31:02,900 --> 00:31:05,200
Yeah, I'm percent.
I have actually entered one of

535
00:31:05,200 --> 00:31:09,600
the investors who is very very
active with this model and he is

536
00:31:09,600 --> 00:31:12,400
working under the assures
umbrella.

537
00:31:12,400 --> 00:31:15,400
So I'll be sure to leave a link
to that entry in description of

538
00:31:15,400 --> 00:31:17,900
this episode.
So Founders, if you're listening

539
00:31:17,900 --> 00:31:21,300
to this, check out that episode
if you want to understand how

540
00:31:21,300 --> 00:31:24,700
investors, who invest through
spb's operate and how they can

541
00:31:24,700 --> 00:31:27,800
affect your fundraising.
So on this know Jeremy, let's

542
00:31:27,800 --> 00:31:30,200
move on to the last question,
which is a call to action.

543
00:31:30,200 --> 00:31:33,900
So what do you want the listener
to do as soon as this episode is

544
00:31:33,900 --> 00:31:35,800
over?
Two things.

545
00:31:35,800 --> 00:31:37,700
One, go check out our YouTube
channel.

546
00:31:37,700 --> 00:31:40,900
It's a sure CEO.
We've got a bunch of videos

547
00:31:40,900 --> 00:31:42,000
shorts.
Little shorts.

548
00:31:42,000 --> 00:31:43,900
You know.
One to two minutes to continue

549
00:31:43,900 --> 00:31:47,100
to describe and explain as
peavey's and how you can use

550
00:31:47,100 --> 00:31:49,000
them.
The other one is going, sign up

551
00:31:49,000 --> 00:31:54,700
for our quarterly, free online
virtual conference that we do

552
00:31:55,000 --> 00:31:58,000
every quarter.
And we go through all the

553
00:31:58,000 --> 00:32:00,900
aspects of an SP V.
So if you're wondering or should

554
00:32:00,900 --> 00:32:03,800
I, maybe I shouldn't, you know,
number of our clients, actually,

555
00:32:03,800 --> 00:32:05,900
our founders Their current
Founders.

556
00:32:06,000 --> 00:32:09,200
They have no intention to sell
in the next 12 or 18 months.

557
00:32:09,200 --> 00:32:12,600
They do spb's on the side, they
use it a little bit like a Biz

558
00:32:12,600 --> 00:32:14,500
Dev, you know, being in the
industry.

559
00:32:14,500 --> 00:32:17,600
They know something and they are
doing, SP these wild, they are

560
00:32:17,600 --> 00:32:20,900
CEOs.
And this conference goes

561
00:32:20,900 --> 00:32:24,300
through, you know, 18 different
sessions, 30 minutes each just

562
00:32:24,300 --> 00:32:26,900
really educating you all about
SPV.

563
00:32:26,900 --> 00:32:30,300
So if you want to get smarts
fast on SP vs, go to our

564
00:32:30,300 --> 00:32:33,500
website, assured out co sign up
for the conference.

565
00:32:33,500 --> 00:32:35,700
It's free.
It's going to Then in about 30

566
00:32:35,700 --> 00:32:39,400
days for this upcoming quarter,
that is a lovely.

567
00:32:39,400 --> 00:32:41,100
Would love to check it out
myself.

568
00:32:41,200 --> 00:32:46,000
I see some great stuff being
developed on Berkeley campus so

569
00:32:46,000 --> 00:32:49,200
will be super interesting to
take a closer look at Olli

570
00:32:49,200 --> 00:32:51,900
details, which we didn't have a
chance to cover in this episode.

571
00:32:52,200 --> 00:32:54,100
But yet, on this note, my call
to action is going to be.

572
00:32:54,100 --> 00:32:56,300
As always, check out the
description of this episode, a

573
00:32:56,308 --> 00:32:59,900
tons of useful links are going
to be there and be both useful

574
00:32:59,900 --> 00:33:03,000
for Founders and investors.
The two percent of investors who

575
00:33:03,000 --> 00:33:06,900
are listening to this podcast.
But for Founders and still super

576
00:33:06,900 --> 00:33:09,400
educational ends, it's always
good to understand, you know,

577
00:33:09,400 --> 00:33:13,900
how you can utilize tools, such
as spb's at, that are made

578
00:33:13,900 --> 00:33:17,800
specifically for you.
And as usually have a good day,