March 3, 2022
Raising and selling - no bootstrapping, why? By Nick Desai
Nick Desai - Founder and CEO at HeyRenee in this episode talks about how he started 5 companies and how many of them actually made it. He also explains why he chose to raise money from VCs for all his companies and how that decision affected the business.
HeyRenee site: https://www.heyrenee.co/
Nick's LinkedIn: https://www.linkedin.com/in/nickdesaiheal/
Can your investors fire me? Here is an episode of Fundraising Radio explaining this question: https://www.fundraisingradio.com/Jeb-Banner/
If you choose to go the other route, check out our course about reaching out to investors! https://www.fundraising-courses.com/
Transcript
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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 Nick decides a founder and
CEO of, hey, Renee.
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And this episode we'll talk
About how Nick managed to start
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five venture-backed companies.
How many of those were
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successful?
How many of those did she try to
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bootstrap?
And how many ways his take on
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bootstrapping versus raising
money from institutional
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investors such as venture
capitalist Sonique.
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A let's kick it off by you
giving us some background on
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yourself and on, hey Renee,
thanks Constantine.
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And thanks for having me on the
program.
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I as you mentioned, I'm Nick
Desai.
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I met, my background is I'm a
first-generation immigrant.
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I was born in Mumbai, India, but
I'm older than most
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entrepreneurs these days.
I'm 51.
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And I went to my undergrad and
grad school.
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Both in electrical engineering
did grad school at UCLA and
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electrical engineering and other
than an internship at Rockwell
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Science Center.
I am been a Serial entrepreneur.
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I'm a five-time venture funded
technology, entrepreneur, from
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scratch.
Then the first employee, and
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founder of 5, Esther funded
companies, seven years ago.
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I founded a company called he
has seven and a half almost a
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company called heel that dr.
House calls and home Centric
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primary care.
That raised two hundred million
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dollars.
I did that one with my wife dr.
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Renee Dua that company is still
around and doing very well and
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continues to grow based on the
foundation that Renee and I
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created over our six and a half
years of working there to change
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the way Primary Care is
delivered from Health Care will
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never happen in to home to home.
Centric Care being thought of as
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the primary and best way to
deliver care.
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I'd like to you know, think that
we were responsible for making
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that happen Renee.
And I particular we left heel a
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little under a year ago to take
a little breather and to do
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something new and Innovative and
earlier sort of middle of last
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year, we started this new
company.
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Hey Renee, which is named after
my wife and I started With her,
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which is a digital care
coordination platform, for older
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and underserved patients to
easily manage all aspects of
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their health care under one
simple integrated tool, and
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that's a background audit.
That is quite an impressive
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background, especially problems
for starting to you.
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I am seeing that you have raised
over 164 million dollars.
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So that is how intertwined
impressive over 200 million and
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we were sleeping, you know, we
really, really enjoyed building
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heal.
It was a great experience.
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We innovated things like we're
the first solution was real-time
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eligibility, verification for
insurance first solution with
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price print.
Real for upfront price,
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transparency, the first
in-network doubt, dr.
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House called provider where you
could use your insurance, to get
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a doctor house, called seven
days a week.
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We won the Consumer Electronic
Show, Innovation and small
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business of the Year award.
So we really, really enjoyed
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that and served a lot of With
exceptionally high quality care.
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Which of course is the most
important thing.
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Absolutely. 100% it.
So it will start with something
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you've just mentioned in your
introduction, which is the fact
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that you have just one job
outside of being a, actual
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founder of wishes just one
internship, can you tell us a
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little more why you have decided
not to go, the path of, you
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know, working for corporates for
a few years and then starting
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your own company.
Once you have the connections,
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the finances and more background
knowledge in the field, Old.
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So it's a very good question and
the answer for me in my case
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ever, since I distinctly
remember, watching TV, when I
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was five years old and I was
watching a TV show called The
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Dukes of Hazzard, which is a
show from the 70s that in
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retrospect was very racist in.
There were Confederate symbols,
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and whatever, but it had a
character named Boss Hogg.
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Who was a bad guy, but I was
five.
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I don't think I Should that, but
he was a boss or this town and I
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just grew up thinking.
I want to be a boss.
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I want to have my own business,
my father had his own business,
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my grandfather had his own
business, and so, ever since I
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was a little kid, I wanted to
have my own business and really
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the only reason to do the
internship was actually to put
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my engineering training into
practice because what you learn
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in school is very in the school
case of engineering, very useful
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and very applicable, but to see,
you know, I learned
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semiconductor physics and
gallium arsenide Electronics.
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In my grad school and I went to
Rockwell Science Center and
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built 1.1, GHz, receiver chips
for commercial GPS.
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And to this day, I worked in a
Fab and I we built a really cool
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semiconductor things.
And to this day, that's really
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important to me.
But I always wanted to have my
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own business.
I always wanted to be able to
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start with a blank sheet of
paper and create something from
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nothing and hopefully build.
Actually services that help
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people or make life easier or
make life better in however, big
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or small away, right?
So let's let's move on to my
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next question.
Then the bootstrapping question
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a lot of founders with a similar
background as yours.
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Start, their companies with the
major goal off, you know,
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generating Revenue without an
actual plan of selling it.
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Eventually, in your case, you
have started all of your
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companies and raise money from
Reese's, why you decided to go
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with the way of raising venture
capital and Other Equity funding
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rather than going the
bootstrapping way.
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Well, so there's a couple
different things.
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The first is I did do a start-up
very early on that was
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bootstrapped and it was just
very hard to get off the ground.
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And the second thing is that the
second thing is that, I think
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that a great test of the quality
of your idea and the quality of,
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or my idea and the quality of my
preparation to pursue that idea.
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And the quality of the
seriousness and financial
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viability of that idea, is its
fund ability, early on right
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now, there are some incredible
companies that have built out of
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bootstrapping and, and, and that
can absolutely happen in credit
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to those a.
But for me meeting that Venture
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threshold meets means that I've
met that threshold of a viable
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financial model, a viable
business, good team early.
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Eon.
Obviously, there's some work
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that goes in prior to funding,
but I've had that opportunity
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and now with the track record,
the ability to raise money that
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that I think I can go faster.
The other thing that I think is
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sometimes a bootstrap business,
sometimes you make better
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decisions because of it, in the
people who've done bootstrap,
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companies owned a lot more of
their companies.
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And some of them are very, very,
very, very wealthy and, and do
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very well for themselves of
change the world, and there are
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a lot of great examples, That.
But, but Mark Cuban always talks
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about it though.
Now, he's on Shark Tank, but in
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investing in other people's
ideas, but the point of that is
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to say that sometimes it forces
you to make bad decisions,
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early, right?
I got to take this Revenue deal,
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I got even being underfunded
will do that, right?
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Very early on in.
He'll I agreed to some contracts
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to deliver our service for an
extremely low price that, you
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know, was I was stuck in for a
long period of time and And
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ultimately, I could have done a
lot better than those deals.
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Understood that is quite
interesting approach.
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So let's touch on to that.
So raising as early as ideas to
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each, that's quite a complicated
fundraising to pull off,
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especially for a Founder who
doesn't have much experience or
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Connections in the field.
So when would you recommend for
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Founders to actually start
fundraising for their companies?
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Is that when they start
generating first reaction, is it
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when they start growing their
first potential customer
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interviews?
Or when is that moment when you
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think the founder has enough?
What to bring to the investor
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and actually asked for their
money.
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Yeah, look.
So I think that fundraising has
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gotten easier right now, the
market is frothy and we'll see
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how that holds out, right?
The Dow is being choppy.
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The NASDAQ is being choppy,
these last few months.
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So we'll see how that plays out.
And ultimately, no matter what,
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anyone says the public market
affect the private markets
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because if public companies in
your space aren't worth as much,
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then private companies are going
to be worth less and so on and
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so forth, right on how to count
and ultimately public private
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companies, lead liquidity events
and IPOs are big liquidity
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event.
So so that you know, that we'll
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see how long the Frog class but
now, you know what, I raised my
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first round, I was tell their
story, it was 1998 and I looked
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up in a physical book in a
physically printed manual.
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Okay.
The internet was 34 years old at
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the time, there was a physically
printed manual about the Los
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Angeles Venture Association.
That I bought and I don't even
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know how it was recommended to
me or solid a bookstore.
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I think it was, I was Barnes.
And Nobles to go to before the
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internet.
I've been an avid reader for
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forever and before the internet,
yeah, I subscribe to some
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newspapers Wall Street Journal
LA Times, New York Times,
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whatever.
But I would go to Barnes & Noble
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on browse all the Business
magazines and read them, right?
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Because I couldn't afford to buy
50 magazine, it's a week.
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So I think I bought it there.
I saw that there was an event.
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I read This Venture fund called
Draper Fisher jurvetson.
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Dear Tim Draper is famous fund.
Hmm.
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He was speaking at the event and
so I bought a ticket to the
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event.
I went there, I will listen to
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him speak.
I walked up to him.
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Afterwards said, can I get your
business card?
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Because I'd like to call your
assistant schedule.
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Time to pitch you, right?
That was how I found my first
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PC.
That is how I got in the door
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and that's how it was done back
that, right today, there's
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websites devoted.
Voted to VC's Angel seed, fund
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precede Angel, incubator
accelerator this array, tur that
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aerator have no money here.
First, ten Grand, your first 50
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Grand.
Your first is there are there so
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many websites that I think you'd
be lost in the options.
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Write the number of tools
available from the y
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combinator's in the 500 startups
and the these kinds of incubator
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and accelerator models to angels
and high net worth individuals
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and sites like Angel list set
up, your phone's I've, to
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crowdfunding.
Right to, you know, the program,
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missing the name.
Now they're probably on
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Kickstarter and and GoFundMe and
all these different things.
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There are so many different ways
to get to investors to get your
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idea out there and to pitch it.
So I think Fundraising for an
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idea, is actually easier now
than it's ever been.
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And and I think that that is,
you know, that is where I would.
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That's what I would say is that,
it's easier now and it doesn't
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mean that you can't do even
fundraising for an idea is not
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never just an idea, right?
It's I had developed an idea, I
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wrote a deck, I developed a
financial model, I had a few
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phone calls to test the
viability of the idea.
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I talked to some people through
Linkedin.
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And there's also a great way to
find people will called
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LinkedIn, right?
You don't have to spend it, just
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go and look for people
backgrounds.
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You talk to them old people, if
you mess with them and say, did
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I know this?
Because I do this all the time.
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People message me today.
I'm an aspiring Health Tech
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entrepreneur.
I want to learn.
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I have an idea.
Can I pick your brain?
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I give him.
You know?
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Not, I can't say yes to
everybody, but I write three
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four times a week.
I'll take a 30-minute call.
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What's an aspiring entrepreneur?
Give them a little advice, Point
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him in the direction.
So, because of all those Horses.
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I think that it is not hard to
get your head in the game and to
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00:12:34,800 --> 00:12:39,500
get funding early.
I would both agree and disagree
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00:12:39,500 --> 00:12:41,000
here.
Honestly, I think that's
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00:12:41,000 --> 00:12:44,100
fundraising now became so much
easier that a lot of Founders
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00:12:44,700 --> 00:12:46,600
just start fundraising super
early on.
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00:12:46,600 --> 00:12:49,500
And eventually the investors get
bombarded with this kind of, you
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00:12:49,500 --> 00:12:53,200
know, extra extra, early ideas
stages startups.
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00:12:53,500 --> 00:12:54,700
But yet you're absolutely
correct.
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00:12:54,700 --> 00:12:57,200
That's a good way to starts.
If that doesn't work out, you
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00:12:57,200 --> 00:12:59,900
realize that investors just need
more from you.
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00:13:00,100 --> 00:13:03,300
Go for it, get more traction,
you know, not that's another
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00:13:03,300 --> 00:13:04,800
perk of being in the 21st
century.
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00:13:04,800 --> 00:13:07,400
You don't need that much money
to start generating Traction.
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00:13:07,500 --> 00:13:11,400
In most cases, of course, in
your next case it's Bayou,
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00:13:12,000 --> 00:13:13,800
everything related to the
medical field is usually
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00:13:13,800 --> 00:13:16,400
extremely expensive.
So yeah, in that case that might
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00:13:16,400 --> 00:13:19,400
make quite a bit of sense and
yeah you started your story by
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00:13:19,400 --> 00:13:23,400
saying that, you know, you have
raised your first round in 1998.
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00:13:24,100 --> 00:13:27,600
Why reading something in an
actual like physical booklet,
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00:13:27,600 --> 00:13:30,700
which is extremely hard for me
to imagine, and You literally
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00:13:30,700 --> 00:13:34,500
would after a pitch, you would
FedEx your business plan yeah
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00:13:34,700 --> 00:13:41,200
which was printed on paper with
with that with that in mind.
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00:13:41,200 --> 00:13:43,900
How did this industry obviously
transform quite a bit?
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00:13:43,900 --> 00:13:49,200
So Moving forward to the current
days which was your approach to
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00:13:49,200 --> 00:13:50,300
fundraising for.
Hey Renee.
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00:13:50,300 --> 00:13:52,800
Because one of the reasons why I
decided to invite you on
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00:13:52,800 --> 00:13:55,900
fundraising we do is because you
have raised from greed, greed
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00:13:55,900 --> 00:13:58,600
investors investors, such as
tell painters and more per
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00:13:58,600 --> 00:14:00,800
capsule.
Both of those I know personally,
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00:14:00,800 --> 00:14:03,900
absolutely amazing investor.
So how did you get in touch with
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00:14:03,900 --> 00:14:07,500
those people?
Well, so should I just want to
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00:14:07,500 --> 00:14:09,100
go back to your previous
comment, though, just say
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something real quick, which is
being funded.
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00:14:12,400 --> 00:14:14,800
Does not mean having a good
time.
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00:14:15,000 --> 00:14:18,700
Company, or a great company or a
viable company, right?
255
00:14:19,000 --> 00:14:21,600
And one of the Town Ventures
told me they look at 2,000
256
00:14:21,600 --> 00:14:27,000
business plans to or 2000
pitches to fund 10 companies in
257
00:14:27,000 --> 00:14:30,100
the year, right?
Some bigger VC's will look at
258
00:14:30,100 --> 00:14:33,900
20,000 and fund 100 companies
but the point is the ratio is
259
00:14:33,900 --> 00:14:37,400
still, right?
Hey now there's a lot more
260
00:14:37,400 --> 00:14:39,600
investors out there.
Everyone has to get into the
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00:14:39,600 --> 00:14:42,200
adventure game, and everyone
hears about the guy who the
262
00:14:42,200 --> 00:14:44,800
first 250 Grand and Uber is
worth 2 billion.
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00:14:45,000 --> 00:14:47,200
Dollars a year everyone, here's
out stories, right?
264
00:14:47,500 --> 00:14:51,900
But let's say you get that check
that first check that first
265
00:14:51,900 --> 00:14:54,300
quarter million half million
million to billion whatever.
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00:14:55,500 --> 00:15:01,100
How many of those companies then
go to the a round, then go to
267
00:15:01,100 --> 00:15:04,400
the be round, then have some
kind of exit.
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00:15:04,600 --> 00:15:08,200
You'd have to look at 20,000 up
needs to get to 1 right 2.
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00:15:08,200 --> 00:15:15,700
Maybe so just sometimes getting
money is put a pressure on you
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00:15:16,100 --> 00:15:20,200
in a way you're not ready for,
and you don't deliver it because
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00:15:20,200 --> 00:15:23,200
you when you talk to investors,
you say, for this much money,
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00:15:23,200 --> 00:15:26,400
I'm going to do that much.
Expect some variants, some
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00:15:26,400 --> 00:15:28,800
problem in some hiccups, any
good investor does.
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00:15:29,100 --> 00:15:33,400
Yeah.
Um, but, but they do, they do
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00:15:33,400 --> 00:15:35,900
expect that.
There's, you know, at some point
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00:15:35,900 --> 00:15:39,500
you will deliver right at some
point in and if you don't
277
00:15:39,500 --> 00:15:43,600
deliver Buck is, they are not
going to be happy and you won't
278
00:15:43,600 --> 00:15:48,500
get any more money, right?
So, in the case of how I raised
279
00:15:48,500 --> 00:15:52,300
additional Capital, right, I'm
sorry.
280
00:15:52,300 --> 00:15:54,400
How I raise capital from those
investors.
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00:15:54,400 --> 00:15:58,400
At this point, the answer to
that question is, I'm just very,
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00:15:58,400 --> 00:16:03,000
very fortunate in the building
of heel in the building of
283
00:16:03,000 --> 00:16:04,900
federal bit before that.
And the companies have built
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00:16:04,900 --> 00:16:08,700
before that to have gotten a no
and thankfully built a favorable
285
00:16:08,700 --> 00:16:13,300
reputation with investors as A
someone who has, you know, is
286
00:16:13,300 --> 00:16:15,800
one of my investors said, I'm a
Visionary, right?
287
00:16:16,400 --> 00:16:20,400
It was Big Ideas that can change
the world and be the ability.
288
00:16:20,500 --> 00:16:23,700
There was a VC that contacted me
recently, that uses some kind of
289
00:16:23,700 --> 00:16:29,300
AI based platform to look at a
company in the seed stage and
290
00:16:29,300 --> 00:16:34,800
decide.
If it has the ability to decide
291
00:16:34,800 --> 00:16:39,000
the likelihood, that it will get
a B round up to the be round
292
00:16:39,000 --> 00:16:41,100
stage, and get a funded be
around.
293
00:16:41,500 --> 00:16:45,500
Based upon it.
It certainly performed based
294
00:16:45,500 --> 00:16:48,600
upon who the founders are
primarily and I was very, very
295
00:16:48,600 --> 00:16:52,800
excited when they said you
scored a 97 percent in our
296
00:16:52,800 --> 00:16:57,200
scale, right?
And and and in they take anyone
297
00:16:57,200 --> 00:16:59,900
who has 85 percent or higher and
I was really excited to know
298
00:16:59,900 --> 00:17:02,900
that, right?
Only because it's a, it's a
299
00:17:02,900 --> 00:17:06,200
reputation I built with Renee
and our other co-founder in this
300
00:17:06,200 --> 00:17:12,000
company, Alexandra, go and but
and sometimes people here, Story
301
00:17:12,000 --> 00:17:15,500
and it makes them think so.
Let me just start to finish the
302
00:17:15,500 --> 00:17:19,900
thought who's extremely happy.
I knew Morgan Livermore from
303
00:17:19,900 --> 00:17:23,599
quiet Capital when he was at
Excel and I wanted him to work
304
00:17:23,599 --> 00:17:26,599
with him, right?
I knew I'm at the guard from
305
00:17:26,599 --> 00:17:29,300
the, The Venture Community, I
didn't work with him before but
306
00:17:29,300 --> 00:17:32,800
I wanted to work with him
because and my curve in mucker
307
00:17:32,800 --> 00:17:36,500
capital or La based companies
who I knew of and so it was
308
00:17:36,500 --> 00:17:38,800
relatively straightforward to
get to them to take a look.
309
00:17:38,900 --> 00:17:41,200
But two things to say.
Hey.
310
00:17:42,600 --> 00:17:45,500
Those four groups said, yes, and
two others, globalfoundries
311
00:17:45,500 --> 00:17:49,700
capital and fast Ventures said,
yes, but 20 groups had now.
312
00:17:50,000 --> 00:17:52,200
Yeah, and that's right.
Even that lovely?
313
00:17:52,300 --> 00:17:54,500
Yeah, we love you, Nick.
We wanted to the next round.
314
00:17:54,500 --> 00:17:55,800
You're a little early.
We love you.
315
00:17:55,800 --> 00:17:57,100
We have an investment, this
pace.
316
00:17:57,400 --> 00:18:01,100
We it wasn't like, oh, okay, we
don't want to invest in you, but
317
00:18:01,200 --> 00:18:04,500
regardless of what the reason
is, they said no, right, right.
318
00:18:04,500 --> 00:18:06,900
So, the thing, for a first time
I could rig is sometimes people.
319
00:18:06,900 --> 00:18:09,500
When I was a first time
entrepreneur, I'll be like, oh,
320
00:18:09,500 --> 00:18:12,200
you gotta use your network and
you gotta use your back.
321
00:18:12,400 --> 00:18:14,200
Ground and you go back to the
same DC.
322
00:18:14,200 --> 00:18:15,400
Something, what are you talking
about?
323
00:18:15,400 --> 00:18:17,700
I don't have a network, I don't
have a background, I don't know.
324
00:18:17,700 --> 00:18:19,300
Anybody sees what the hell am I
going to do?
325
00:18:19,600 --> 00:18:24,000
Yeah, but the easiest term sheet
I ever got to this day, is that
326
00:18:24,000 --> 00:18:28,600
very first term sheet in 1998.
We went to the meeting in
327
00:18:28,600 --> 00:18:32,300
person, I pitched by the time I
got back to my office, he had
328
00:18:32,300 --> 00:18:35,600
faxed me.
Literally, it was faxed me in
329
00:18:35,600 --> 00:18:39,900
term sheet, right?
That day that time, right?
330
00:18:39,900 --> 00:18:44,200
So that the point, It is the
quality of the idea of the
331
00:18:44,200 --> 00:18:46,000
quality of the team.
The quality of the work you've
332
00:18:46,000 --> 00:18:49,800
done today.
And we'll a first time
333
00:18:49,800 --> 00:18:52,900
entrepreneur is as much to end
repeat entrepreneurs will
334
00:18:52,900 --> 00:18:56,800
sometimes make the mistake of
assuming just because there are
335
00:18:56,808 --> 00:19:00,500
a lot of entrepreneurs who've
had great exits, and their
336
00:19:00,500 --> 00:19:04,000
second company in their third
company, just are duds, right?
337
00:19:04,900 --> 00:19:07,800
In the same way that great
directors, have one root
338
00:19:07,800 --> 00:19:12,000
incredible movie and then every
other movies are dead because
339
00:19:12,400 --> 00:19:15,600
They have that one story to tell
right or they sort of lost the
340
00:19:15,600 --> 00:19:19,300
fire, you know.
So you know those things are
341
00:19:19,300 --> 00:19:23,200
also factors, right?
So on this note actually want to
342
00:19:23,200 --> 00:19:27,000
jump in and ask you the question
about that company or about that
343
00:19:27,000 --> 00:19:29,600
fund.
That invests based on the
344
00:19:29,700 --> 00:19:34,000
likelihood of a company reaching
Series, be just based on the
345
00:19:34,008 --> 00:19:35,500
founders.
What's the company name?
346
00:19:35,500 --> 00:19:37,600
Because I definitely heard of
something like that.
347
00:19:37,600 --> 00:19:40,300
And I think I intrude somewhere
in that space But I personally
348
00:19:40,500 --> 00:19:42,900
forgot the name.
Do you have The nerve because
349
00:19:42,900 --> 00:19:45,500
I'm higher like, there's more
than one be she that might do
350
00:19:45,500 --> 00:19:48,000
this.
But this one is called 2.12,
351
00:19:48,000 --> 00:19:52,300
Ventures, 2.12 and say, it's 100
K, check type of company.
352
00:19:52,600 --> 00:19:55,600
We were far beyond their stage
because we raised eight million
353
00:19:55,600 --> 00:19:58,300
dollars.
But that process and how that
354
00:19:58,300 --> 00:20:01,800
was interesting to me, right?
And just knowing that based on
355
00:20:01,800 --> 00:20:04,200
what they could tell publicly
which is who our Founders are,
356
00:20:04,400 --> 00:20:06,800
they scored us at high
understood?
357
00:20:06,800 --> 00:20:09,200
Perfect for people who are
curious to see how much they're
358
00:20:09,200 --> 00:20:13,200
going to score there.
I'll make sure to leave the link
359
00:20:13,300 --> 00:20:15,600
in the, but I don't think he's
going to apply.
360
00:20:15,600 --> 00:20:19,200
I think, they'll like I didn't
apply to their process own to
361
00:20:19,200 --> 00:20:23,000
get the score.
They came to me and said, when
362
00:20:23,000 --> 00:20:24,600
we talk to, you will tell you
how we contact you.
363
00:20:24,608 --> 00:20:28,000
So I took the call in partner,
find out what made them decide
364
00:20:28,000 --> 00:20:29,700
to contact me.
So I don't know that.
365
00:20:29,700 --> 00:20:33,100
That's, that's one that you can,
you can reach out to.
366
00:20:33,400 --> 00:20:38,000
But what I will say, is, if you
are going to get your company
367
00:20:38,100 --> 00:20:40,900
funded with one dollar or a
hundred million dollars, You're
368
00:20:40,900 --> 00:20:43,900
going to do it because you are
an aggressive go-getter who's
369
00:20:43,900 --> 00:20:45,800
not afraid of hearing the word.
No.
370
00:20:46,000 --> 00:20:51,000
Right.
And and and too often the
371
00:20:51,000 --> 00:20:54,500
biggest limitation people have
is that they limit themselves.
372
00:20:54,500 --> 00:20:56,200
Oh my God.
What if they say no you don't my
373
00:20:56,200 --> 00:21:00,200
other student life is always
been that I got to kill you then
374
00:21:00,200 --> 00:21:03,100
I got to spit on you.
They're just going to say no.
375
00:21:03,100 --> 00:21:06,300
So what you know what?
I asked seven girls to the prom.
376
00:21:06,500 --> 00:21:08,400
All seven of them?
Said no, when I was in high
377
00:21:08,400 --> 00:21:10,600
school, I'm married to a
wonderful woman.
378
00:21:10,700 --> 00:21:13,200
In now, and we have a happy
family together, three,
379
00:21:13,200 --> 00:21:16,200
wonderful kids, and my life has
worked out pretty nicely right?
380
00:21:16,300 --> 00:21:20,000
So what people say, no cares.
Yeah, that's right.
381
00:21:20,000 --> 00:21:22,500
And most likely investors will
not spit on you.
382
00:21:22,500 --> 00:21:24,700
That is quite rare.
Especially in the covid, 'z
383
00:21:24,700 --> 00:21:27,200
scenario.
If so, yeah, go for it.
384
00:21:27,300 --> 00:21:30,200
Hopefully, they won't spit on
you otherwise either.
385
00:21:30,200 --> 00:21:34,500
But yes, in the covid sense.
Especially won't absolutely.
386
00:21:34,500 --> 00:21:37,400
Absolutely.
They will not so on this note.
387
00:21:37,400 --> 00:21:40,200
So let's touch on to something
that you've mentioned.
388
00:21:40,700 --> 00:21:45,100
You're in your one of your
answers, which is the exits, and
389
00:21:45,300 --> 00:21:49,100
some kind of, you know, any kind
of exits, either IPO, or an
390
00:21:49,100 --> 00:21:52,900
acquisition or merger, from all
those five companies that you
391
00:21:52,908 --> 00:21:56,400
have started with outdoor Nate,
hey Rene, it's going to be for
392
00:21:56,400 --> 00:21:59,500
Force, but for those four
companies, how many of them have
393
00:21:59,500 --> 00:22:07,700
actually reached the exit 12?
Well, one is still around, okay?
394
00:22:07,700 --> 00:22:10,900
You had an exit one.
Didn't make it God, Shh.
395
00:22:11,100 --> 00:22:14,000
So that is quite impressive with
one being well.
396
00:22:14,000 --> 00:22:17,700
One was a modest.
One of them was a pretty modest
397
00:22:17,700 --> 00:22:20,400
exhibit.
Was it was better than dying but
398
00:22:20,400 --> 00:22:22,800
it wasn't.
It wasn't much better than
399
00:22:22,800 --> 00:22:24,000
dying.
It's better than dying.
400
00:22:24,000 --> 00:22:27,200
That's those are still exits.
You know what the thing I will
401
00:22:27,200 --> 00:22:32,500
say in that process is when you
are a Founder, especially, I
402
00:22:32,500 --> 00:22:37,100
meant, I'm an immigrant, it's
sort of cultural that, that we,
403
00:22:37,200 --> 00:22:39,800
you know, think this way is
Indian people, I'm in an
404
00:22:39,800 --> 00:22:41,900
inversion.
But But a lot of people think
405
00:22:41,900 --> 00:22:44,200
this way regardless of their
cultural background, right?
406
00:22:44,200 --> 00:22:50,500
This is not restricted to Indian
people, but we give a lot of a
407
00:22:50,500 --> 00:22:56,400
lot of of Sort of deference
respect in Credence to
408
00:22:56,400 --> 00:23:00,900
investors, right?
And you should you should to an
409
00:23:00,900 --> 00:23:06,900
extent but you should challenge
them to write that company and I
410
00:23:06,908 --> 00:23:09,700
won't say the name that didn't
have the great exit.
411
00:23:10,600 --> 00:23:17,100
We had an offer to be acquired
for triple the valuation of our
412
00:23:17,100 --> 00:23:20,000
previous, double the value.
Sorry of between two and three
413
00:23:20,000 --> 00:23:23,300
times evaluation of our last
round four.
414
00:23:23,600 --> 00:23:26,800
It's after the round it was a
cash offer it would have been a
415
00:23:26,800 --> 00:23:29,000
great exit.
I personally would have made 15
416
00:23:29,000 --> 00:23:33,800
million dollars and and the
investors had no it's not
417
00:23:33,800 --> 00:23:36,000
enough.
And I would.
418
00:23:36,200 --> 00:23:38,500
And and but what they said is
Nick, if you're going to leave
419
00:23:38,500 --> 00:23:43,000
the company, Because we don't
sell, then we'll sell and I
420
00:23:43,008 --> 00:23:45,700
should have the guts to say.
I will leave the company, right?
421
00:23:45,700 --> 00:23:48,200
Instead of saying no, I'm going
to be loyal like out of a sense
422
00:23:48,200 --> 00:23:50,700
of loyalty, right?
That is happened.
423
00:23:51,100 --> 00:23:55,300
Another time I've had a very,
very favorable incredibly
424
00:23:55,300 --> 00:23:59,000
favorable offer hundreds of
millions of dollars right from a
425
00:23:59,008 --> 00:24:02,100
publicly traded company.
But that time I stood firm,
426
00:24:02,200 --> 00:24:05,400
right?
And and ultimately whatever came
427
00:24:05,400 --> 00:24:07,600
to pass without getting into
details because there's so much
428
00:24:07,600 --> 00:24:10,400
company in China and stuff
involved turned out to be the
429
00:24:10,400 --> 00:24:11,600
right.
Thing right.
430
00:24:12,900 --> 00:24:17,300
But but investors expect you to
be the leader of your company.
431
00:24:17,300 --> 00:24:20,600
They're not going to enter, but
if you don't step up and lead
432
00:24:20,600 --> 00:24:24,700
your company, they will they
sure will investors love to do
433
00:24:24,700 --> 00:24:27,400
that.
And Ali in the company from the
434
00:24:27,400 --> 00:24:30,800
passenger seat is kind of very
fun for them to do.
435
00:24:31,200 --> 00:24:34,600
So let's let's briefly back to
that and part of the different
436
00:24:34,600 --> 00:24:36,200
part of the thing that you have
to do.
437
00:24:36,800 --> 00:24:39,900
One of the things that is
pounded into the minds if you
438
00:24:39,900 --> 00:24:43,700
read any Document by VC is
fundraising, it's always
439
00:24:43,700 --> 00:24:45,900
optimized for the valuation,
even on Shark Tank.
440
00:24:45,900 --> 00:24:47,700
You can you get the best deal?
Can you get the besties?
441
00:24:48,400 --> 00:24:52,500
The only valuation that matters
is the last one, okay, which is
442
00:24:52,500 --> 00:24:57,500
your exit or IPO price?
You're early valuations, don't
443
00:24:57,500 --> 00:25:02,900
matter nearly as much the terms
and the quality of the investors
444
00:25:03,200 --> 00:25:06,300
matter.
Are you investing in people are
445
00:25:06,300 --> 00:25:09,600
people investing in you.
That will say I'm investing in
446
00:25:09,600 --> 00:25:13,000
Nick and if you make bad
decisions, not if I do something
447
00:25:13,000 --> 00:25:16,100
crazy or criminal whatever, but
I make bad decisions, I'm going
448
00:25:16,100 --> 00:25:17,900
to bet on him.
And if you make good decisions,
449
00:25:18,200 --> 00:25:22,000
I'm going to bet on him right
versus I'm betting on this Nick
450
00:25:22,000 --> 00:25:24,900
and this idea, but I have my own
ideas about how they should go
451
00:25:24,900 --> 00:25:28,500
and Whatever and are they going
to override your judgment in
452
00:25:28,500 --> 00:25:31,600
your opinions, right?
Because, and that's important
453
00:25:31,600 --> 00:25:34,600
because you might think, oh,
this term sheet is out of 50
454
00:25:34,600 --> 00:25:37,500
million dollar valuation, but
this term sheets at a hundred
455
00:25:37,500 --> 00:25:39,600
million dollar valuation, a
hundred million dollars better
456
00:25:40,200 --> 00:25:43,800
but if you get an investor who
then let you sell the company so
457
00:25:44,900 --> 00:25:50,000
you make so much money, right?
That later?
458
00:25:50,000 --> 00:25:52,900
Or you have such great success
later or you enjoy the process,
459
00:25:52,900 --> 00:25:55,700
more than it was worth it.
Right?
460
00:25:55,700 --> 00:26:00,200
So it doesn't matter what your
first valuation is matters.
461
00:26:00,200 --> 00:26:02,300
What your last one is, it's
really important to keep in
462
00:26:02,300 --> 00:26:05,100
mind, I'm going to slightly
disagree with the here.
463
00:26:05,100 --> 00:26:08,300
I think that valuations early on
do matter, because some Founders
464
00:26:08,300 --> 00:26:11,300
go for to high evaluation
eventually struggled to raise
465
00:26:11,300 --> 00:26:15,000
four years and some Founders go
for to low valuation and end up
466
00:26:15,000 --> 00:26:17,700
with four percent of their own
company at the exit.
467
00:26:18,300 --> 00:26:20,400
So something to shout for it for
sure.
468
00:26:20,400 --> 00:26:24,000
But before you jump in one more
question about what you said
469
00:26:24,000 --> 00:26:27,900
earlier, which is Investors
allow you to sell the company
470
00:26:27,900 --> 00:26:30,000
which is very interesting
statement.
471
00:26:30,000 --> 00:26:33,200
So when you say that, whether it
industry allows you to sell or
472
00:26:33,200 --> 00:26:36,800
not, what do you mean by that?
Do the investors in your case
473
00:26:36,800 --> 00:26:39,600
have the right to prevent you
from doing something, you know?
474
00:26:39,700 --> 00:26:42,300
So so I think the two talks are
related.
475
00:26:42,300 --> 00:26:44,800
Yes, valuation matters.
You shouldn't tell too much
476
00:26:44,800 --> 00:26:48,300
work, even if you command to
high evaluation or I wasn't
477
00:26:48,300 --> 00:26:51,600
saying it doesn't matter but the
quality of the investor also
478
00:26:51,600 --> 00:26:53,700
matters, very, very much.
I'm sure you're right.
479
00:26:53,700 --> 00:26:56,300
Were, but we're saying sir.
Two different sides of the same
480
00:26:56,300 --> 00:26:59,300
thing.
But the thing the thing about
481
00:26:59,300 --> 00:27:05,900
selling is If at some point to
company will get big enough that
482
00:27:05,900 --> 00:27:08,300
you as a Founder, Renee and I
were to bid, you don't have
483
00:27:08,300 --> 00:27:10,900
control over your board of
directors, right?
484
00:27:11,400 --> 00:27:13,500
Whether it's me whether it's
being a co-founder, you don't
485
00:27:13,500 --> 00:27:15,400
have control over your board,
right?
486
00:27:15,700 --> 00:27:18,100
And if you don't have enough
independent board members and if
487
00:27:18,100 --> 00:27:21,300
the investors control the board
or you've given up a controlling
488
00:27:21,300 --> 00:27:24,000
interest in your company, these
are things to keep in mind.
489
00:27:24,000 --> 00:27:29,200
But also what is there to keep
in mind is that You you have to
490
00:27:29,300 --> 00:27:32,300
there's some there's some
bedding and some guesswork,
491
00:27:32,300 --> 00:27:36,000
you're going to have to do
because at some point it is very
492
00:27:36,000 --> 00:27:39,400
unlikely that you will build a
huge company while controlling
493
00:27:39,400 --> 00:27:42,500
the board and controlling a
majority of the company, right
494
00:27:43,000 --> 00:27:45,500
to raise enough cap because
investors want to put on good
495
00:27:45,500 --> 00:27:48,700
controls because there have been
too many examples, some of them
496
00:27:48,700 --> 00:27:50,900
criminal like their nose, right?
Yeah.
497
00:27:50,900 --> 00:27:55,200
And where there's been so much
hype in demand that they let the
498
00:27:55,600 --> 00:27:57,900
founder have whatever they want.
Oh, you can have more control
499
00:27:57,900 --> 00:28:00,500
and you can have super majority
voting and you can have this and
500
00:28:00,700 --> 00:28:03,200
you can have that and you can
have whatever and then they end
501
00:28:03,200 --> 00:28:05,800
up with with literally a crime
on their hands.
502
00:28:05,800 --> 00:28:07,400
Right?
And what do they do, right?
503
00:28:07,600 --> 00:28:12,800
So I think that good governance
just to, I'll I don't mind that
504
00:28:12,800 --> 00:28:15,200
there are board members.
I don't mind that I'm not a
505
00:28:15,200 --> 00:28:17,800
majority in the ward.
I don't mind that I don't own
506
00:28:17,800 --> 00:28:20,300
50%.
It's a company 51% of the
507
00:28:20,308 --> 00:28:23,800
company.
What I do want is people who are
508
00:28:23,800 --> 00:28:28,900
in it with me and who will back
my play, Will be convinced by
509
00:28:28,900 --> 00:28:32,300
Logic and reason it's not right
because I said so but it's also
510
00:28:32,300 --> 00:28:34,500
not right?
Because they said so right,
511
00:28:34,800 --> 00:28:36,900
that's a way to look at it.
And by the way, for people who
512
00:28:36,900 --> 00:28:41,100
are curious to listen more about
how the board seats work and how
513
00:28:41,100 --> 00:28:43,300
the investors can actually
control your company were not
514
00:28:43,300 --> 00:28:45,700
control your company.
Definitely check out the episode
515
00:28:45,700 --> 00:28:48,200
that we've just released by the
time this episode, we'll go
516
00:28:48,200 --> 00:28:50,600
life.
So on this note, let's move on
517
00:28:50,600 --> 00:28:53,600
to the very, very last question.
If it is episode, we choose a
518
00:28:53,600 --> 00:28:55,800
call to action.
So the ink would you want to
519
00:28:55,800 --> 00:28:58,500
listen to do as soon as?
As this episode is over.
520
00:28:59,800 --> 00:29:03,500
What I want listeners to do as
soon as this episode is over, is
521
00:29:03,500 --> 00:29:06,500
if you're at all interested in
the health Tech space and you're
522
00:29:06,500 --> 00:29:09,400
an engineer or product person
and could help us with growth
523
00:29:09,400 --> 00:29:13,100
and Business Development, visit
our site which will be in the
524
00:29:13,100 --> 00:29:16,900
links below and we'll be is that
hey Rene .c.
525
00:29:16,900 --> 00:29:20,900
Oh, it's super easy.
Heyy re n Eed T.
526
00:29:20,900 --> 00:29:25,900
Oh, right, right, if you are an
entrepreneur, Pursue your
527
00:29:25,900 --> 00:29:27,200
dreams.
Go chase him.
528
00:29:27,200 --> 00:29:30,000
Chase some hard.
Chase, some smart.
529
00:29:30,300 --> 00:29:33,800
And if you connect with me on
LinkedIn, and if you give me a
530
00:29:33,800 --> 00:29:37,500
passionate reason, why I might
take the time to get help you.
531
00:29:37,500 --> 00:29:41,400
If I have the time I do my work,
I do this full time.
532
00:29:41,400 --> 00:29:45,300
I have three young kids at home,
obviously my wife and and I want
533
00:29:45,300 --> 00:29:49,100
to be there for my kids.
So I balance my time only.
534
00:29:52,600 --> 00:29:58,300
But but I do try to help people.
It's my way of giving back.
535
00:29:58,700 --> 00:30:00,800
Awesome, lovely.
In that case, I'll make sure to
536
00:30:00,800 --> 00:30:03,700
include the link to thanks
LinkedIn in the description to
537
00:30:03,708 --> 00:30:05,100
this episode.
Of course, there's going to be
538
00:30:05,100 --> 00:30:08,700
linked to hey Rene and probably
a few other links, which I'm not
539
00:30:08,700 --> 00:30:12,100
sure what they're going to be
yet, but that's gonna be my call
540
00:30:12,100 --> 00:30:13,700
to action.
Check out those Corrections this
541
00:30:13,700 --> 00:30:16,100
episode.
And as always have a good day,
00:00:05,200 --> 00:00:07,800
They're releasing to fundraising
video a podcast about
2
00:00:07,800 --> 00:00:11,400
fundraising for early-stage
startups, the major rule that we
3
00:00:11,400 --> 00:00:14,600
follow here is no bullshit on
this podcast.
4
00:00:14,600 --> 00:00:17,800
No music to relax, you know,
advertisements of our sponsors.
5
00:00:18,000 --> 00:00:21,100
We only talk about fundraising
here and nothing else.
6
00:00:21,400 --> 00:00:24,800
So let's jump into the episode.
And today's guest speaker, we
7
00:00:24,800 --> 00:00:28,500
have Nick decides a founder and
CEO of, hey, Renee.
8
00:00:28,800 --> 00:00:32,000
And this episode we'll talk
About how Nick managed to start
9
00:00:32,000 --> 00:00:34,300
five venture-backed companies.
How many of those were
10
00:00:34,300 --> 00:00:36,400
successful?
How many of those did she try to
11
00:00:36,400 --> 00:00:39,900
bootstrap?
And how many ways his take on
12
00:00:40,000 --> 00:00:42,600
bootstrapping versus raising
money from institutional
13
00:00:42,600 --> 00:00:45,000
investors such as venture
capitalist Sonique.
14
00:00:45,100 --> 00:00:47,400
A let's kick it off by you
giving us some background on
15
00:00:47,400 --> 00:00:51,600
yourself and on, hey Renee,
thanks Constantine.
16
00:00:51,600 --> 00:00:53,600
And thanks for having me on the
program.
17
00:00:54,100 --> 00:00:56,000
I as you mentioned, I'm Nick
Desai.
18
00:00:56,100 --> 00:00:59,900
I met, my background is I'm a
first-generation immigrant.
19
00:01:00,000 --> 00:01:03,900
I was born in Mumbai, India, but
I'm older than most
20
00:01:03,900 --> 00:01:05,700
entrepreneurs these days.
I'm 51.
21
00:01:05,700 --> 00:01:09,500
And I went to my undergrad and
grad school.
22
00:01:09,500 --> 00:01:12,400
Both in electrical engineering
did grad school at UCLA and
23
00:01:12,400 --> 00:01:16,700
electrical engineering and other
than an internship at Rockwell
24
00:01:16,700 --> 00:01:20,800
Science Center.
I am been a Serial entrepreneur.
25
00:01:20,800 --> 00:01:25,300
I'm a five-time venture funded
technology, entrepreneur, from
26
00:01:25,300 --> 00:01:28,000
scratch.
Then the first employee, and
27
00:01:28,000 --> 00:01:32,900
founder of 5, Esther funded
companies, seven years ago.
28
00:01:32,900 --> 00:01:35,800
I founded a company called he
has seven and a half almost a
29
00:01:35,808 --> 00:01:38,600
company called heel that dr.
House calls and home Centric
30
00:01:38,600 --> 00:01:40,900
primary care.
That raised two hundred million
31
00:01:40,900 --> 00:01:42,800
dollars.
I did that one with my wife dr.
32
00:01:42,800 --> 00:01:47,400
Renee Dua that company is still
around and doing very well and
33
00:01:47,400 --> 00:01:50,900
continues to grow based on the
foundation that Renee and I
34
00:01:50,900 --> 00:01:55,000
created over our six and a half
years of working there to change
35
00:01:55,000 --> 00:01:59,200
the way Primary Care is
delivered from Health Care will
36
00:01:59,200 --> 00:02:02,500
never happen in to home to home.
Centric Care being thought of as
37
00:02:02,800 --> 00:02:04,600
the primary and best way to
deliver care.
38
00:02:04,600 --> 00:02:07,400
I'd like to you know, think that
we were responsible for making
39
00:02:07,400 --> 00:02:12,600
that happen Renee.
And I particular we left heel a
40
00:02:12,600 --> 00:02:17,900
little under a year ago to take
a little breather and to do
41
00:02:17,900 --> 00:02:23,000
something new and Innovative and
earlier sort of middle of last
42
00:02:23,000 --> 00:02:24,900
year, we started this new
company.
43
00:02:24,900 --> 00:02:28,400
Hey Renee, which is named after
my wife and I started With her,
44
00:02:28,400 --> 00:02:32,800
which is a digital care
coordination platform, for older
45
00:02:32,800 --> 00:02:36,200
and underserved patients to
easily manage all aspects of
46
00:02:36,200 --> 00:02:42,300
their health care under one
simple integrated tool, and
47
00:02:42,300 --> 00:02:45,800
that's a background audit.
That is quite an impressive
48
00:02:45,800 --> 00:02:48,700
background, especially problems
for starting to you.
49
00:02:48,700 --> 00:02:51,800
I am seeing that you have raised
over 164 million dollars.
50
00:02:51,800 --> 00:02:56,100
So that is how intertwined
impressive over 200 million and
51
00:02:56,100 --> 00:02:59,300
we were sleeping, you know, we
really, really enjoyed building
52
00:02:59,300 --> 00:03:00,800
heal.
It was a great experience.
53
00:03:00,800 --> 00:03:05,200
We innovated things like we're
the first solution was real-time
54
00:03:05,400 --> 00:03:08,900
eligibility, verification for
insurance first solution with
55
00:03:08,900 --> 00:03:10,600
price print.
Real for upfront price,
56
00:03:10,600 --> 00:03:14,300
transparency, the first
in-network doubt, dr.
57
00:03:14,300 --> 00:03:16,300
House called provider where you
could use your insurance, to get
58
00:03:16,300 --> 00:03:18,100
a doctor house, called seven
days a week.
59
00:03:19,100 --> 00:03:22,400
We won the Consumer Electronic
Show, Innovation and small
60
00:03:22,400 --> 00:03:26,000
business of the Year award.
So we really, really enjoyed
61
00:03:26,000 --> 00:03:29,800
that and served a lot of With
exceptionally high quality care.
62
00:03:30,000 --> 00:03:31,700
Which of course is the most
important thing.
63
00:03:32,000 --> 00:03:34,800
Absolutely. 100% it.
So it will start with something
64
00:03:34,800 --> 00:03:37,100
you've just mentioned in your
introduction, which is the fact
65
00:03:37,100 --> 00:03:42,100
that you have just one job
outside of being a, actual
66
00:03:42,100 --> 00:03:45,600
founder of wishes just one
internship, can you tell us a
67
00:03:45,600 --> 00:03:48,600
little more why you have decided
not to go, the path of, you
68
00:03:48,600 --> 00:03:52,100
know, working for corporates for
a few years and then starting
69
00:03:52,100 --> 00:03:54,300
your own company.
Once you have the connections,
70
00:03:54,300 --> 00:03:58,200
the finances and more background
knowledge in the field, Old.
71
00:03:59,200 --> 00:04:04,300
So it's a very good question and
the answer for me in my case
72
00:04:04,900 --> 00:04:08,400
ever, since I distinctly
remember, watching TV, when I
73
00:04:08,408 --> 00:04:14,200
was five years old and I was
watching a TV show called The
74
00:04:14,208 --> 00:04:17,899
Dukes of Hazzard, which is a
show from the 70s that in
75
00:04:17,899 --> 00:04:21,500
retrospect was very racist in.
There were Confederate symbols,
76
00:04:21,500 --> 00:04:25,600
and whatever, but it had a
character named Boss Hogg.
77
00:04:25,600 --> 00:04:27,300
Who was a bad guy, but I was
five.
78
00:04:27,300 --> 00:04:31,600
I don't think I Should that, but
he was a boss or this town and I
79
00:04:31,600 --> 00:04:34,500
just grew up thinking.
I want to be a boss.
80
00:04:34,500 --> 00:04:36,600
I want to have my own business,
my father had his own business,
81
00:04:36,600 --> 00:04:39,300
my grandfather had his own
business, and so, ever since I
82
00:04:39,300 --> 00:04:41,300
was a little kid, I wanted to
have my own business and really
83
00:04:41,300 --> 00:04:45,800
the only reason to do the
internship was actually to put
84
00:04:45,800 --> 00:04:49,700
my engineering training into
practice because what you learn
85
00:04:49,700 --> 00:04:55,100
in school is very in the school
case of engineering, very useful
86
00:04:55,100 --> 00:04:58,200
and very applicable, but to see,
you know, I learned
87
00:04:58,200 --> 00:05:01,000
semiconductor physics and
gallium arsenide Electronics.
88
00:05:01,000 --> 00:05:04,800
In my grad school and I went to
Rockwell Science Center and
89
00:05:04,800 --> 00:05:08,900
built 1.1, GHz, receiver chips
for commercial GPS.
90
00:05:08,900 --> 00:05:15,800
And to this day, I worked in a
Fab and I we built a really cool
91
00:05:15,800 --> 00:05:18,300
semiconductor things.
And to this day, that's really
92
00:05:18,300 --> 00:05:20,800
important to me.
But I always wanted to have my
93
00:05:20,800 --> 00:05:22,900
own business.
I always wanted to be able to
94
00:05:23,200 --> 00:05:25,900
start with a blank sheet of
paper and create something from
95
00:05:25,900 --> 00:05:29,400
nothing and hopefully build.
Actually services that help
96
00:05:29,400 --> 00:05:33,900
people or make life easier or
make life better in however, big
97
00:05:33,900 --> 00:05:37,400
or small away, right?
So let's let's move on to my
98
00:05:37,400 --> 00:05:39,400
next question.
Then the bootstrapping question
99
00:05:39,400 --> 00:05:41,900
a lot of founders with a similar
background as yours.
100
00:05:42,300 --> 00:05:44,500
Start, their companies with the
major goal off, you know,
101
00:05:44,500 --> 00:05:47,900
generating Revenue without an
actual plan of selling it.
102
00:05:47,900 --> 00:05:50,300
Eventually, in your case, you
have started all of your
103
00:05:50,300 --> 00:05:53,600
companies and raise money from
Reese's, why you decided to go
104
00:05:53,600 --> 00:05:58,800
with the way of raising venture
capital and Other Equity funding
105
00:05:58,800 --> 00:06:00,700
rather than going the
bootstrapping way.
106
00:06:01,300 --> 00:06:03,000
Well, so there's a couple
different things.
107
00:06:03,200 --> 00:06:07,300
The first is I did do a start-up
very early on that was
108
00:06:07,300 --> 00:06:10,400
bootstrapped and it was just
very hard to get off the ground.
109
00:06:10,400 --> 00:06:16,500
And the second thing is that the
second thing is that, I think
110
00:06:16,500 --> 00:06:22,600
that a great test of the quality
of your idea and the quality of,
111
00:06:23,300 --> 00:06:27,500
or my idea and the quality of my
preparation to pursue that idea.
112
00:06:28,000 --> 00:06:32,800
And the quality of the
seriousness and financial
113
00:06:32,800 --> 00:06:36,700
viability of that idea, is its
fund ability, early on right
114
00:06:36,900 --> 00:06:40,700
now, there are some incredible
companies that have built out of
115
00:06:40,700 --> 00:06:46,100
bootstrapping and, and, and that
can absolutely happen in credit
116
00:06:46,100 --> 00:06:50,400
to those a.
But for me meeting that Venture
117
00:06:50,400 --> 00:06:54,700
threshold meets means that I've
met that threshold of a viable
118
00:06:54,700 --> 00:06:57,700
financial model, a viable
business, good team early.
119
00:06:57,800 --> 00:06:59,500
Eon.
Obviously, there's some work
120
00:06:59,500 --> 00:07:03,400
that goes in prior to funding,
but I've had that opportunity
121
00:07:03,600 --> 00:07:07,400
and now with the track record,
the ability to raise money that
122
00:07:08,400 --> 00:07:11,500
that I think I can go faster.
The other thing that I think is
123
00:07:11,800 --> 00:07:15,100
sometimes a bootstrap business,
sometimes you make better
124
00:07:15,100 --> 00:07:17,600
decisions because of it, in the
people who've done bootstrap,
125
00:07:17,600 --> 00:07:20,300
companies owned a lot more of
their companies.
126
00:07:20,300 --> 00:07:24,100
And some of them are very, very,
very, very wealthy and, and do
127
00:07:24,100 --> 00:07:27,100
very well for themselves of
change the world, and there are
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a lot of great examples, That.
But, but Mark Cuban always talks
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about it though.
Now, he's on Shark Tank, but in
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investing in other people's
ideas, but the point of that is
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to say that sometimes it forces
you to make bad decisions,
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early, right?
I got to take this Revenue deal,
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I got even being underfunded
will do that, right?
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00:07:46,600 --> 00:07:50,000
Very early on in.
He'll I agreed to some contracts
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to deliver our service for an
extremely low price that, you
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know, was I was stuck in for a
long period of time and And
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ultimately, I could have done a
lot better than those deals.
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Understood that is quite
interesting approach.
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So let's touch on to that.
So raising as early as ideas to
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each, that's quite a complicated
fundraising to pull off,
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especially for a Founder who
doesn't have much experience or
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Connections in the field.
So when would you recommend for
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Founders to actually start
fundraising for their companies?
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Is that when they start
generating first reaction, is it
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when they start growing their
first potential customer
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interviews?
Or when is that moment when you
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think the founder has enough?
What to bring to the investor
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and actually asked for their
money.
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Yeah, look.
So I think that fundraising has
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gotten easier right now, the
market is frothy and we'll see
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how that holds out, right?
The Dow is being choppy.
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The NASDAQ is being choppy,
these last few months.
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So we'll see how that plays out.
And ultimately, no matter what,
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anyone says the public market
affect the private markets
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because if public companies in
your space aren't worth as much,
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then private companies are going
to be worth less and so on and
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so forth, right on how to count
and ultimately public private
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companies, lead liquidity events
and IPOs are big liquidity
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event.
So so that you know, that we'll
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see how long the Frog class but
now, you know what, I raised my
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first round, I was tell their
story, it was 1998 and I looked
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up in a physical book in a
physically printed manual.
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Okay.
The internet was 34 years old at
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the time, there was a physically
printed manual about the Los
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Angeles Venture Association.
That I bought and I don't even
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know how it was recommended to
me or solid a bookstore.
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I think it was, I was Barnes.
And Nobles to go to before the
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internet.
I've been an avid reader for
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forever and before the internet,
yeah, I subscribe to some
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newspapers Wall Street Journal
LA Times, New York Times,
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whatever.
But I would go to Barnes & Noble
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on browse all the Business
magazines and read them, right?
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Because I couldn't afford to buy
50 magazine, it's a week.
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So I think I bought it there.
I saw that there was an event.
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I read This Venture fund called
Draper Fisher jurvetson.
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00:10:01,800 --> 00:10:04,700
Dear Tim Draper is famous fund.
Hmm.
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He was speaking at the event and
so I bought a ticket to the
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event.
I went there, I will listen to
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him speak.
I walked up to him.
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Afterwards said, can I get your
business card?
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Because I'd like to call your
assistant schedule.
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Time to pitch you, right?
That was how I found my first
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PC.
That is how I got in the door
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and that's how it was done back
that, right today, there's
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websites devoted.
Voted to VC's Angel seed, fund
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00:10:31,700 --> 00:10:35,600
precede Angel, incubator
accelerator this array, tur that
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00:10:35,600 --> 00:10:38,200
aerator have no money here.
First, ten Grand, your first 50
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Grand.
Your first is there are there so
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many websites that I think you'd
be lost in the options.
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00:10:43,400 --> 00:10:46,400
Write the number of tools
available from the y
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combinator's in the 500 startups
and the these kinds of incubator
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and accelerator models to angels
and high net worth individuals
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00:10:56,900 --> 00:11:00,500
and sites like Angel list set
up, your phone's I've, to
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crowdfunding.
Right to, you know, the program,
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missing the name.
Now they're probably on
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Kickstarter and and GoFundMe and
all these different things.
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There are so many different ways
to get to investors to get your
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idea out there and to pitch it.
So I think Fundraising for an
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idea, is actually easier now
than it's ever been.
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And and I think that that is,
you know, that is where I would.
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That's what I would say is that,
it's easier now and it doesn't
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mean that you can't do even
fundraising for an idea is not
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00:11:44,800 --> 00:11:50,800
never just an idea, right?
It's I had developed an idea, I
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wrote a deck, I developed a
financial model, I had a few
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phone calls to test the
viability of the idea.
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I talked to some people through
Linkedin.
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00:12:00,100 --> 00:12:01,900
And there's also a great way to
find people will called
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00:12:01,900 --> 00:12:04,100
LinkedIn, right?
You don't have to spend it, just
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go and look for people
backgrounds.
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You talk to them old people, if
you mess with them and say, did
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I know this?
Because I do this all the time.
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People message me today.
I'm an aspiring Health Tech
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entrepreneur.
I want to learn.
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I have an idea.
Can I pick your brain?
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I give him.
You know?
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00:12:19,900 --> 00:12:22,500
Not, I can't say yes to
everybody, but I write three
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00:12:22,500 --> 00:12:24,700
four times a week.
I'll take a 30-minute call.
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00:12:24,700 --> 00:12:27,600
What's an aspiring entrepreneur?
Give them a little advice, Point
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00:12:27,600 --> 00:12:30,500
him in the direction.
So, because of all those Horses.
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I think that it is not hard to
get your head in the game and to
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get funding early.
I would both agree and disagree
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here.
Honestly, I think that's
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fundraising now became so much
easier that a lot of Founders
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just start fundraising super
early on.
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And eventually the investors get
bombarded with this kind of, you
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know, extra extra, early ideas
stages startups.
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But yet you're absolutely
correct.
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That's a good way to starts.
If that doesn't work out, you
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realize that investors just need
more from you.
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Go for it, get more traction,
you know, not that's another
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00:13:03,300 --> 00:13:04,800
perk of being in the 21st
century.
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You don't need that much money
to start generating Traction.
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In most cases, of course, in
your next case it's Bayou,
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everything related to the
medical field is usually
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extremely expensive.
So yeah, in that case that might
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make quite a bit of sense and
yeah you started your story by
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saying that, you know, you have
raised your first round in 1998.
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00:13:24,100 --> 00:13:27,600
Why reading something in an
actual like physical booklet,
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00:13:27,600 --> 00:13:30,700
which is extremely hard for me
to imagine, and You literally
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would after a pitch, you would
FedEx your business plan yeah
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00:13:34,700 --> 00:13:41,200
which was printed on paper with
with that with that in mind.
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00:13:41,200 --> 00:13:43,900
How did this industry obviously
transform quite a bit?
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00:13:43,900 --> 00:13:49,200
So Moving forward to the current
days which was your approach to
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fundraising for.
Hey Renee.
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Because one of the reasons why I
decided to invite you on
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fundraising we do is because you
have raised from greed, greed
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investors investors, such as
tell painters and more per
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00:13:58,600 --> 00:14:00,800
capsule.
Both of those I know personally,
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absolutely amazing investor.
So how did you get in touch with
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those people?
Well, so should I just want to
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go back to your previous
comment, though, just say
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something real quick, which is
being funded.
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Does not mean having a good
time.
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Company, or a great company or a
viable company, right?
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00:14:19,000 --> 00:14:21,600
And one of the Town Ventures
told me they look at 2,000
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00:14:21,600 --> 00:14:27,000
business plans to or 2000
pitches to fund 10 companies in
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00:14:27,000 --> 00:14:30,100
the year, right?
Some bigger VC's will look at
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20,000 and fund 100 companies
but the point is the ratio is
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00:14:33,900 --> 00:14:37,400
still, right?
Hey now there's a lot more
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investors out there.
Everyone has to get into the
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00:14:39,600 --> 00:14:42,200
adventure game, and everyone
hears about the guy who the
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00:14:42,200 --> 00:14:44,800
first 250 Grand and Uber is
worth 2 billion.
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00:14:45,000 --> 00:14:47,200
Dollars a year everyone, here's
out stories, right?
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00:14:47,500 --> 00:14:51,900
But let's say you get that check
that first check that first
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quarter million half million
million to billion whatever.
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How many of those companies then
go to the a round, then go to
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the be round, then have some
kind of exit.
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You'd have to look at 20,000 up
needs to get to 1 right 2.
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Maybe so just sometimes getting
money is put a pressure on you
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00:15:16,100 --> 00:15:20,200
in a way you're not ready for,
and you don't deliver it because
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you when you talk to investors,
you say, for this much money,
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I'm going to do that much.
Expect some variants, some
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problem in some hiccups, any
good investor does.
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00:15:29,100 --> 00:15:33,400
Yeah.
Um, but, but they do, they do
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expect that.
There's, you know, at some point
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you will deliver right at some
point in and if you don't
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00:15:39,500 --> 00:15:43,600
deliver Buck is, they are not
going to be happy and you won't
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00:15:43,600 --> 00:15:48,500
get any more money, right?
So, in the case of how I raised
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00:15:48,500 --> 00:15:52,300
additional Capital, right, I'm
sorry.
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How I raise capital from those
investors.
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00:15:54,400 --> 00:15:58,400
At this point, the answer to
that question is, I'm just very,
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very fortunate in the building
of heel in the building of
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federal bit before that.
And the companies have built
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00:16:04,900 --> 00:16:08,700
before that to have gotten a no
and thankfully built a favorable
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00:16:08,700 --> 00:16:13,300
reputation with investors as A
someone who has, you know, is
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00:16:13,300 --> 00:16:15,800
one of my investors said, I'm a
Visionary, right?
287
00:16:16,400 --> 00:16:20,400
It was Big Ideas that can change
the world and be the ability.
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00:16:20,500 --> 00:16:23,700
There was a VC that contacted me
recently, that uses some kind of
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00:16:23,700 --> 00:16:29,300
AI based platform to look at a
company in the seed stage and
290
00:16:29,300 --> 00:16:34,800
decide.
If it has the ability to decide
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00:16:34,800 --> 00:16:39,000
the likelihood, that it will get
a B round up to the be round
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00:16:39,000 --> 00:16:41,100
stage, and get a funded be
around.
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00:16:41,500 --> 00:16:45,500
Based upon it.
It certainly performed based
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00:16:45,500 --> 00:16:48,600
upon who the founders are
primarily and I was very, very
295
00:16:48,600 --> 00:16:52,800
excited when they said you
scored a 97 percent in our
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00:16:52,800 --> 00:16:57,200
scale, right?
And and and in they take anyone
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00:16:57,200 --> 00:16:59,900
who has 85 percent or higher and
I was really excited to know
298
00:16:59,900 --> 00:17:02,900
that, right?
Only because it's a, it's a
299
00:17:02,900 --> 00:17:06,200
reputation I built with Renee
and our other co-founder in this
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00:17:06,200 --> 00:17:12,000
company, Alexandra, go and but
and sometimes people here, Story
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00:17:12,000 --> 00:17:15,500
and it makes them think so.
Let me just start to finish the
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00:17:15,500 --> 00:17:19,900
thought who's extremely happy.
I knew Morgan Livermore from
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00:17:19,900 --> 00:17:23,599
quiet Capital when he was at
Excel and I wanted him to work
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00:17:23,599 --> 00:17:26,599
with him, right?
I knew I'm at the guard from
305
00:17:26,599 --> 00:17:29,300
the, The Venture Community, I
didn't work with him before but
306
00:17:29,300 --> 00:17:32,800
I wanted to work with him
because and my curve in mucker
307
00:17:32,800 --> 00:17:36,500
capital or La based companies
who I knew of and so it was
308
00:17:36,500 --> 00:17:38,800
relatively straightforward to
get to them to take a look.
309
00:17:38,900 --> 00:17:41,200
But two things to say.
Hey.
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00:17:42,600 --> 00:17:45,500
Those four groups said, yes, and
two others, globalfoundries
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00:17:45,500 --> 00:17:49,700
capital and fast Ventures said,
yes, but 20 groups had now.
312
00:17:50,000 --> 00:17:52,200
Yeah, and that's right.
Even that lovely?
313
00:17:52,300 --> 00:17:54,500
Yeah, we love you, Nick.
We wanted to the next round.
314
00:17:54,500 --> 00:17:55,800
You're a little early.
We love you.
315
00:17:55,800 --> 00:17:57,100
We have an investment, this
pace.
316
00:17:57,400 --> 00:18:01,100
We it wasn't like, oh, okay, we
don't want to invest in you, but
317
00:18:01,200 --> 00:18:04,500
regardless of what the reason
is, they said no, right, right.
318
00:18:04,500 --> 00:18:06,900
So, the thing, for a first time
I could rig is sometimes people.
319
00:18:06,900 --> 00:18:09,500
When I was a first time
entrepreneur, I'll be like, oh,
320
00:18:09,500 --> 00:18:12,200
you gotta use your network and
you gotta use your back.
321
00:18:12,400 --> 00:18:14,200
Ground and you go back to the
same DC.
322
00:18:14,200 --> 00:18:15,400
Something, what are you talking
about?
323
00:18:15,400 --> 00:18:17,700
I don't have a network, I don't
have a background, I don't know.
324
00:18:17,700 --> 00:18:19,300
Anybody sees what the hell am I
going to do?
325
00:18:19,600 --> 00:18:24,000
Yeah, but the easiest term sheet
I ever got to this day, is that
326
00:18:24,000 --> 00:18:28,600
very first term sheet in 1998.
We went to the meeting in
327
00:18:28,600 --> 00:18:32,300
person, I pitched by the time I
got back to my office, he had
328
00:18:32,300 --> 00:18:35,600
faxed me.
Literally, it was faxed me in
329
00:18:35,600 --> 00:18:39,900
term sheet, right?
That day that time, right?
330
00:18:39,900 --> 00:18:44,200
So that the point, It is the
quality of the idea of the
331
00:18:44,200 --> 00:18:46,000
quality of the team.
The quality of the work you've
332
00:18:46,000 --> 00:18:49,800
done today.
And we'll a first time
333
00:18:49,800 --> 00:18:52,900
entrepreneur is as much to end
repeat entrepreneurs will
334
00:18:52,900 --> 00:18:56,800
sometimes make the mistake of
assuming just because there are
335
00:18:56,808 --> 00:19:00,500
a lot of entrepreneurs who've
had great exits, and their
336
00:19:00,500 --> 00:19:04,000
second company in their third
company, just are duds, right?
337
00:19:04,900 --> 00:19:07,800
In the same way that great
directors, have one root
338
00:19:07,800 --> 00:19:12,000
incredible movie and then every
other movies are dead because
339
00:19:12,400 --> 00:19:15,600
They have that one story to tell
right or they sort of lost the
340
00:19:15,600 --> 00:19:19,300
fire, you know.
So you know those things are
341
00:19:19,300 --> 00:19:23,200
also factors, right?
So on this note actually want to
342
00:19:23,200 --> 00:19:27,000
jump in and ask you the question
about that company or about that
343
00:19:27,000 --> 00:19:29,600
fund.
That invests based on the
344
00:19:29,700 --> 00:19:34,000
likelihood of a company reaching
Series, be just based on the
345
00:19:34,008 --> 00:19:35,500
founders.
What's the company name?
346
00:19:35,500 --> 00:19:37,600
Because I definitely heard of
something like that.
347
00:19:37,600 --> 00:19:40,300
And I think I intrude somewhere
in that space But I personally
348
00:19:40,500 --> 00:19:42,900
forgot the name.
Do you have The nerve because
349
00:19:42,900 --> 00:19:45,500
I'm higher like, there's more
than one be she that might do
350
00:19:45,500 --> 00:19:48,000
this.
But this one is called 2.12,
351
00:19:48,000 --> 00:19:52,300
Ventures, 2.12 and say, it's 100
K, check type of company.
352
00:19:52,600 --> 00:19:55,600
We were far beyond their stage
because we raised eight million
353
00:19:55,600 --> 00:19:58,300
dollars.
But that process and how that
354
00:19:58,300 --> 00:20:01,800
was interesting to me, right?
And just knowing that based on
355
00:20:01,800 --> 00:20:04,200
what they could tell publicly
which is who our Founders are,
356
00:20:04,400 --> 00:20:06,800
they scored us at high
understood?
357
00:20:06,800 --> 00:20:09,200
Perfect for people who are
curious to see how much they're
358
00:20:09,200 --> 00:20:13,200
going to score there.
I'll make sure to leave the link
359
00:20:13,300 --> 00:20:15,600
in the, but I don't think he's
going to apply.
360
00:20:15,600 --> 00:20:19,200
I think, they'll like I didn't
apply to their process own to
361
00:20:19,200 --> 00:20:23,000
get the score.
They came to me and said, when
362
00:20:23,000 --> 00:20:24,600
we talk to, you will tell you
how we contact you.
363
00:20:24,608 --> 00:20:28,000
So I took the call in partner,
find out what made them decide
364
00:20:28,000 --> 00:20:29,700
to contact me.
So I don't know that.
365
00:20:29,700 --> 00:20:33,100
That's, that's one that you can,
you can reach out to.
366
00:20:33,400 --> 00:20:38,000
But what I will say, is, if you
are going to get your company
367
00:20:38,100 --> 00:20:40,900
funded with one dollar or a
hundred million dollars, You're
368
00:20:40,900 --> 00:20:43,900
going to do it because you are
an aggressive go-getter who's
369
00:20:43,900 --> 00:20:45,800
not afraid of hearing the word.
No.
370
00:20:46,000 --> 00:20:51,000
Right.
And and and too often the
371
00:20:51,000 --> 00:20:54,500
biggest limitation people have
is that they limit themselves.
372
00:20:54,500 --> 00:20:56,200
Oh my God.
What if they say no you don't my
373
00:20:56,200 --> 00:21:00,200
other student life is always
been that I got to kill you then
374
00:21:00,200 --> 00:21:03,100
I got to spit on you.
They're just going to say no.
375
00:21:03,100 --> 00:21:06,300
So what you know what?
I asked seven girls to the prom.
376
00:21:06,500 --> 00:21:08,400
All seven of them?
Said no, when I was in high
377
00:21:08,400 --> 00:21:10,600
school, I'm married to a
wonderful woman.
378
00:21:10,700 --> 00:21:13,200
In now, and we have a happy
family together, three,
379
00:21:13,200 --> 00:21:16,200
wonderful kids, and my life has
worked out pretty nicely right?
380
00:21:16,300 --> 00:21:20,000
So what people say, no cares.
Yeah, that's right.
381
00:21:20,000 --> 00:21:22,500
And most likely investors will
not spit on you.
382
00:21:22,500 --> 00:21:24,700
That is quite rare.
Especially in the covid, 'z
383
00:21:24,700 --> 00:21:27,200
scenario.
If so, yeah, go for it.
384
00:21:27,300 --> 00:21:30,200
Hopefully, they won't spit on
you otherwise either.
385
00:21:30,200 --> 00:21:34,500
But yes, in the covid sense.
Especially won't absolutely.
386
00:21:34,500 --> 00:21:37,400
Absolutely.
They will not so on this note.
387
00:21:37,400 --> 00:21:40,200
So let's touch on to something
that you've mentioned.
388
00:21:40,700 --> 00:21:45,100
You're in your one of your
answers, which is the exits, and
389
00:21:45,300 --> 00:21:49,100
some kind of, you know, any kind
of exits, either IPO, or an
390
00:21:49,100 --> 00:21:52,900
acquisition or merger, from all
those five companies that you
391
00:21:52,908 --> 00:21:56,400
have started with outdoor Nate,
hey Rene, it's going to be for
392
00:21:56,400 --> 00:21:59,500
Force, but for those four
companies, how many of them have
393
00:21:59,500 --> 00:22:07,700
actually reached the exit 12?
Well, one is still around, okay?
394
00:22:07,700 --> 00:22:10,900
You had an exit one.
Didn't make it God, Shh.
395
00:22:11,100 --> 00:22:14,000
So that is quite impressive with
one being well.
396
00:22:14,000 --> 00:22:17,700
One was a modest.
One of them was a pretty modest
397
00:22:17,700 --> 00:22:20,400
exhibit.
Was it was better than dying but
398
00:22:20,400 --> 00:22:22,800
it wasn't.
It wasn't much better than
399
00:22:22,800 --> 00:22:24,000
dying.
It's better than dying.
400
00:22:24,000 --> 00:22:27,200
That's those are still exits.
You know what the thing I will
401
00:22:27,200 --> 00:22:32,500
say in that process is when you
are a Founder, especially, I
402
00:22:32,500 --> 00:22:37,100
meant, I'm an immigrant, it's
sort of cultural that, that we,
403
00:22:37,200 --> 00:22:39,800
you know, think this way is
Indian people, I'm in an
404
00:22:39,800 --> 00:22:41,900
inversion.
But But a lot of people think
405
00:22:41,900 --> 00:22:44,200
this way regardless of their
cultural background, right?
406
00:22:44,200 --> 00:22:50,500
This is not restricted to Indian
people, but we give a lot of a
407
00:22:50,500 --> 00:22:56,400
lot of of Sort of deference
respect in Credence to
408
00:22:56,400 --> 00:23:00,900
investors, right?
And you should you should to an
409
00:23:00,900 --> 00:23:06,900
extent but you should challenge
them to write that company and I
410
00:23:06,908 --> 00:23:09,700
won't say the name that didn't
have the great exit.
411
00:23:10,600 --> 00:23:17,100
We had an offer to be acquired
for triple the valuation of our
412
00:23:17,100 --> 00:23:20,000
previous, double the value.
Sorry of between two and three
413
00:23:20,000 --> 00:23:23,300
times evaluation of our last
round four.
414
00:23:23,600 --> 00:23:26,800
It's after the round it was a
cash offer it would have been a
415
00:23:26,800 --> 00:23:29,000
great exit.
I personally would have made 15
416
00:23:29,000 --> 00:23:33,800
million dollars and and the
investors had no it's not
417
00:23:33,800 --> 00:23:36,000
enough.
And I would.
418
00:23:36,200 --> 00:23:38,500
And and but what they said is
Nick, if you're going to leave
419
00:23:38,500 --> 00:23:43,000
the company, Because we don't
sell, then we'll sell and I
420
00:23:43,008 --> 00:23:45,700
should have the guts to say.
I will leave the company, right?
421
00:23:45,700 --> 00:23:48,200
Instead of saying no, I'm going
to be loyal like out of a sense
422
00:23:48,200 --> 00:23:50,700
of loyalty, right?
That is happened.
423
00:23:51,100 --> 00:23:55,300
Another time I've had a very,
very favorable incredibly
424
00:23:55,300 --> 00:23:59,000
favorable offer hundreds of
millions of dollars right from a
425
00:23:59,008 --> 00:24:02,100
publicly traded company.
But that time I stood firm,
426
00:24:02,200 --> 00:24:05,400
right?
And and ultimately whatever came
427
00:24:05,400 --> 00:24:07,600
to pass without getting into
details because there's so much
428
00:24:07,600 --> 00:24:10,400
company in China and stuff
involved turned out to be the
429
00:24:10,400 --> 00:24:11,600
right.
Thing right.
430
00:24:12,900 --> 00:24:17,300
But but investors expect you to
be the leader of your company.
431
00:24:17,300 --> 00:24:20,600
They're not going to enter, but
if you don't step up and lead
432
00:24:20,600 --> 00:24:24,700
your company, they will they
sure will investors love to do
433
00:24:24,700 --> 00:24:27,400
that.
And Ali in the company from the
434
00:24:27,400 --> 00:24:30,800
passenger seat is kind of very
fun for them to do.
435
00:24:31,200 --> 00:24:34,600
So let's let's briefly back to
that and part of the different
436
00:24:34,600 --> 00:24:36,200
part of the thing that you have
to do.
437
00:24:36,800 --> 00:24:39,900
One of the things that is
pounded into the minds if you
438
00:24:39,900 --> 00:24:43,700
read any Document by VC is
fundraising, it's always
439
00:24:43,700 --> 00:24:45,900
optimized for the valuation,
even on Shark Tank.
440
00:24:45,900 --> 00:24:47,700
You can you get the best deal?
Can you get the besties?
441
00:24:48,400 --> 00:24:52,500
The only valuation that matters
is the last one, okay, which is
442
00:24:52,500 --> 00:24:57,500
your exit or IPO price?
You're early valuations, don't
443
00:24:57,500 --> 00:25:02,900
matter nearly as much the terms
and the quality of the investors
444
00:25:03,200 --> 00:25:06,300
matter.
Are you investing in people are
445
00:25:06,300 --> 00:25:09,600
people investing in you.
That will say I'm investing in
446
00:25:09,600 --> 00:25:13,000
Nick and if you make bad
decisions, not if I do something
447
00:25:13,000 --> 00:25:16,100
crazy or criminal whatever, but
I make bad decisions, I'm going
448
00:25:16,100 --> 00:25:17,900
to bet on him.
And if you make good decisions,
449
00:25:18,200 --> 00:25:22,000
I'm going to bet on him right
versus I'm betting on this Nick
450
00:25:22,000 --> 00:25:24,900
and this idea, but I have my own
ideas about how they should go
451
00:25:24,900 --> 00:25:28,500
and Whatever and are they going
to override your judgment in
452
00:25:28,500 --> 00:25:31,600
your opinions, right?
Because, and that's important
453
00:25:31,600 --> 00:25:34,600
because you might think, oh,
this term sheet is out of 50
454
00:25:34,600 --> 00:25:37,500
million dollar valuation, but
this term sheets at a hundred
455
00:25:37,500 --> 00:25:39,600
million dollar valuation, a
hundred million dollars better
456
00:25:40,200 --> 00:25:43,800
but if you get an investor who
then let you sell the company so
457
00:25:44,900 --> 00:25:50,000
you make so much money, right?
That later?
458
00:25:50,000 --> 00:25:52,900
Or you have such great success
later or you enjoy the process,
459
00:25:52,900 --> 00:25:55,700
more than it was worth it.
Right?
460
00:25:55,700 --> 00:26:00,200
So it doesn't matter what your
first valuation is matters.
461
00:26:00,200 --> 00:26:02,300
What your last one is, it's
really important to keep in
462
00:26:02,300 --> 00:26:05,100
mind, I'm going to slightly
disagree with the here.
463
00:26:05,100 --> 00:26:08,300
I think that valuations early on
do matter, because some Founders
464
00:26:08,300 --> 00:26:11,300
go for to high evaluation
eventually struggled to raise
465
00:26:11,300 --> 00:26:15,000
four years and some Founders go
for to low valuation and end up
466
00:26:15,000 --> 00:26:17,700
with four percent of their own
company at the exit.
467
00:26:18,300 --> 00:26:20,400
So something to shout for it for
sure.
468
00:26:20,400 --> 00:26:24,000
But before you jump in one more
question about what you said
469
00:26:24,000 --> 00:26:27,900
earlier, which is Investors
allow you to sell the company
470
00:26:27,900 --> 00:26:30,000
which is very interesting
statement.
471
00:26:30,000 --> 00:26:33,200
So when you say that, whether it
industry allows you to sell or
472
00:26:33,200 --> 00:26:36,800
not, what do you mean by that?
Do the investors in your case
473
00:26:36,800 --> 00:26:39,600
have the right to prevent you
from doing something, you know?
474
00:26:39,700 --> 00:26:42,300
So so I think the two talks are
related.
475
00:26:42,300 --> 00:26:44,800
Yes, valuation matters.
You shouldn't tell too much
476
00:26:44,800 --> 00:26:48,300
work, even if you command to
high evaluation or I wasn't
477
00:26:48,300 --> 00:26:51,600
saying it doesn't matter but the
quality of the investor also
478
00:26:51,600 --> 00:26:53,700
matters, very, very much.
I'm sure you're right.
479
00:26:53,700 --> 00:26:56,300
Were, but we're saying sir.
Two different sides of the same
480
00:26:56,300 --> 00:26:59,300
thing.
But the thing the thing about
481
00:26:59,300 --> 00:27:05,900
selling is If at some point to
company will get big enough that
482
00:27:05,900 --> 00:27:08,300
you as a Founder, Renee and I
were to bid, you don't have
483
00:27:08,300 --> 00:27:10,900
control over your board of
directors, right?
484
00:27:11,400 --> 00:27:13,500
Whether it's me whether it's
being a co-founder, you don't
485
00:27:13,500 --> 00:27:15,400
have control over your board,
right?
486
00:27:15,700 --> 00:27:18,100
And if you don't have enough
independent board members and if
487
00:27:18,100 --> 00:27:21,300
the investors control the board
or you've given up a controlling
488
00:27:21,300 --> 00:27:24,000
interest in your company, these
are things to keep in mind.
489
00:27:24,000 --> 00:27:29,200
But also what is there to keep
in mind is that You you have to
490
00:27:29,300 --> 00:27:32,300
there's some there's some
bedding and some guesswork,
491
00:27:32,300 --> 00:27:36,000
you're going to have to do
because at some point it is very
492
00:27:36,000 --> 00:27:39,400
unlikely that you will build a
huge company while controlling
493
00:27:39,400 --> 00:27:42,500
the board and controlling a
majority of the company, right
494
00:27:43,000 --> 00:27:45,500
to raise enough cap because
investors want to put on good
495
00:27:45,500 --> 00:27:48,700
controls because there have been
too many examples, some of them
496
00:27:48,700 --> 00:27:50,900
criminal like their nose, right?
Yeah.
497
00:27:50,900 --> 00:27:55,200
And where there's been so much
hype in demand that they let the
498
00:27:55,600 --> 00:27:57,900
founder have whatever they want.
Oh, you can have more control
499
00:27:57,900 --> 00:28:00,500
and you can have super majority
voting and you can have this and
500
00:28:00,700 --> 00:28:03,200
you can have that and you can
have whatever and then they end
501
00:28:03,200 --> 00:28:05,800
up with with literally a crime
on their hands.
502
00:28:05,800 --> 00:28:07,400
Right?
And what do they do, right?
503
00:28:07,600 --> 00:28:12,800
So I think that good governance
just to, I'll I don't mind that
504
00:28:12,800 --> 00:28:15,200
there are board members.
I don't mind that I'm not a
505
00:28:15,200 --> 00:28:17,800
majority in the ward.
I don't mind that I don't own
506
00:28:17,800 --> 00:28:20,300
50%.
It's a company 51% of the
507
00:28:20,308 --> 00:28:23,800
company.
What I do want is people who are
508
00:28:23,800 --> 00:28:28,900
in it with me and who will back
my play, Will be convinced by
509
00:28:28,900 --> 00:28:32,300
Logic and reason it's not right
because I said so but it's also
510
00:28:32,300 --> 00:28:34,500
not right?
Because they said so right,
511
00:28:34,800 --> 00:28:36,900
that's a way to look at it.
And by the way, for people who
512
00:28:36,900 --> 00:28:41,100
are curious to listen more about
how the board seats work and how
513
00:28:41,100 --> 00:28:43,300
the investors can actually
control your company were not
514
00:28:43,300 --> 00:28:45,700
control your company.
Definitely check out the episode
515
00:28:45,700 --> 00:28:48,200
that we've just released by the
time this episode, we'll go
516
00:28:48,200 --> 00:28:50,600
life.
So on this note, let's move on
517
00:28:50,600 --> 00:28:53,600
to the very, very last question.
If it is episode, we choose a
518
00:28:53,600 --> 00:28:55,800
call to action.
So the ink would you want to
519
00:28:55,800 --> 00:28:58,500
listen to do as soon as?
As this episode is over.
520
00:28:59,800 --> 00:29:03,500
What I want listeners to do as
soon as this episode is over, is
521
00:29:03,500 --> 00:29:06,500
if you're at all interested in
the health Tech space and you're
522
00:29:06,500 --> 00:29:09,400
an engineer or product person
and could help us with growth
523
00:29:09,400 --> 00:29:13,100
and Business Development, visit
our site which will be in the
524
00:29:13,100 --> 00:29:16,900
links below and we'll be is that
hey Rene .c.
525
00:29:16,900 --> 00:29:20,900
Oh, it's super easy.
Heyy re n Eed T.
526
00:29:20,900 --> 00:29:25,900
Oh, right, right, if you are an
entrepreneur, Pursue your
527
00:29:25,900 --> 00:29:27,200
dreams.
Go chase him.
528
00:29:27,200 --> 00:29:30,000
Chase some hard.
Chase, some smart.
529
00:29:30,300 --> 00:29:33,800
And if you connect with me on
LinkedIn, and if you give me a
530
00:29:33,800 --> 00:29:37,500
passionate reason, why I might
take the time to get help you.
531
00:29:37,500 --> 00:29:41,400
If I have the time I do my work,
I do this full time.
532
00:29:41,400 --> 00:29:45,300
I have three young kids at home,
obviously my wife and and I want
533
00:29:45,300 --> 00:29:49,100
to be there for my kids.
So I balance my time only.
534
00:29:52,600 --> 00:29:58,300
But but I do try to help people.
It's my way of giving back.
535
00:29:58,700 --> 00:30:00,800
Awesome, lovely.
In that case, I'll make sure to
536
00:30:00,800 --> 00:30:03,700
include the link to thanks
LinkedIn in the description to
537
00:30:03,708 --> 00:30:05,100
this episode.
Of course, there's going to be
538
00:30:05,100 --> 00:30:08,700
linked to hey Rene and probably
a few other links, which I'm not
539
00:30:08,700 --> 00:30:12,100
sure what they're going to be
yet, but that's gonna be my call
540
00:30:12,100 --> 00:30:13,700
to action.
Check out those Corrections this
541
00:30:13,700 --> 00:30:16,100
episode.
And as always have a good day,
