How can you grow your business consciously? In today’s episode, Dr. Diane Hamilton interviews JV Crum III, a mindset and strategy expert and author of Conscious Millionaire. JV gives some bits and pieces about his book and some brief guidance on how you too can reach millions of dollars for your business.
Nathan Beckord, the CEO of Foundersuite.com educates us about venture capital and how to raise more for your business. He shares some tips on creating and delivering the right pitch for enticing investors. Learn more from Nathan as he teaches you how to scale up your enterprise the right way.
I’m so glad you joined us. We have JV Crum III and Nathan Beckord here. JV is the expert in mindset and strategy. He’s the author of Conscious Millionaire, and Nathan is the Founder of Foundersuite. We’re going to talk to both of them.
Listen to the podcast here:
Conscious Millionaire With JV Crum III
I am here with JV Crum III who is a mindset and strategy expert. Inc. Magazine listed his show as one of the top business podcasts and he’s the author of Conscious Millionaire. It’s nice to have you here, JV.
Diane, it is such a pleasure. I have enjoyed having you on my show. You’re reaching so many incredible people. I want to say hi to everyone reading this and thank you for being here so we can share this conversation with you.
I’m excited because you and I have been talking throughout the years. It’s been a while since I’ve had a chance to catch up with what you’re up to. I know that you have started doing more masterminds, you do accelerator programs for entrepreneurs, and you deal with a lot of 6 to 7-figure clients. I know you’ve made a lot of money even in your early twenties and you have a good backstory. Before we go into what you’re doing, can we get a little bit of the backstory of how you did what you did and ended up where you are?
The right place to start is the mindset. I grew up out in the country. Every family around us, there were 200 or 300 people on a big lake but nobody had any money. There was a big poverty mindset and a lot of negative thoughts about people who had money. It might be that you envied them but something was wrong. When I was five, I had been well-trained. When we’ve been to the grocery store, I didn’t ask for the candy bar. The reason I was trained to do that is my mom didn’t want people to think that we couldn’t afford it, when in fact, that was exactly the situation.
One day, I said, “There has to be a solution to this.” As little kids, we sit around and we get creative. We have a belief system that’s different than adults because we haven’t had people tell us that a lot of stuff isn’t possible. We dream big and we create all these ideas. I said, “I know that solution. When I grow up, I’m going to be a millionaire.” That solves the whole problem. I ran into the house and told both of my parents as if I had discovered water and this was great to solve everything on the planet.
I remember my mom shook her fingers at me and said, “Don’t you tell anybody.” I’m proud and as a little five-year-old, I told everyone because that’s what five-year-olds do. I’m sure that all these older women who had retired there and their husbands had died, we had a lot of those people moved down from the North, this was Florida, I’m sure they rolled their eyes. At that time, I went by James, which is my first name, they looked at each other, winked and said, “Little James is going to be a millionaire.” No one believed this. Fortunately, I didn’t care because I had made my decision. When I went to write my book, I wrote that in the book and my editors were going, “JV, you’ve got to explain that statement to your readers.” I had to go back and think through. Why did my mother say that to me?
She didn’t want me to have a bad life. We lived across the street from the country church. Part of the belief system that kept my parents from smart people that were thriving financially was, they believed, my mother in particular, if you had that money you must have done something wrong. You must have scammed people or done something illegal because in her mind, given our situation, that would obviously be the only way you got there. It clearly didn’t have anything to do with being smart because they were smart so that wasn’t the answer. I figured that out. I realized that’s a story to share. If you’re reading this and you’re feeling stuck, you’re like, “I keep hitting this same ceiling year after year and I don’t seem to be able to get through it.” Somewhere inside of you, there’s a belief system. Either that it’s not wrong, it’s not right for you or you don’t deserve it.
There’s something going on inside which is one of the things I work with clients. I work with that and I work with, “Let’s unblock that and let’s get the right strategies so that we can double whatever you have in the next twelve months.” That was a learning for me. I didn’t somehow pick all that up. I didn’t internalize it because at five I decided I was going to be a millionaire. At 25, I had a four-storey home on the water and a brand-new Mercedes in the garage when it was a Bentley because there weren’t that many around. It’s amazing how there are so many now, but you go back 3 or 4 decades, it was a rare thing somebody had a Mercedes. I got there because of my belief system. I didn’t know how I was going to do it. I want everybody reading to read that clearly.
The first step, wherever you’re at, I don’t care if you’re at $1 million, $5 million or you’re not even at $100,000, it doesn’t matter. It’s all the same thing. The first step is getting clear about where you want to go. It’s not how you’re going to get there. If you’re clear about where you want to go and you’re 100% committed, that path is going to unfold. You’re going to figure it out. You’re going to have synchronicities occur because you’re driven to get there. That’s the first step for everybody.
It’s important and a lot of people worry about all those steps in the middle. A lot of what we’re going to see coming up is mentorship. It’s going to be such a huge part of what gets people to that end goal. If you don’t know where you’re going, you might end up somewhere else. That’s a huge point. You didn’t know where you were going in your twenties. You felt that you weren’t having a lot of meaning. Didn’t you live in a Buddhist monastery for a while?
That was later. That was at 40 or 41. What happened was I went to college, I was going to go to med school, get all my premed and decided that it was the right decision for me. It was my first major intuitive decision. It was a good decision. I’m glad I have the science background but I ended up with a Master’s and my first graduate degree was a Master’s in Clinical Psychology. When I was finishing that at 22, I went home and I was working on my thesis. My father always had a jagged financial life. If the company did well that he had one year, the next year it would lose money. It was always up and down and everything was pretty much on the road to bankruptcy. I didn’t know anything about this because my father kept saying, “Will you come and work with me?”
He knew that I knew how to figure out things going. I’ve been good at school, and I was always able to figure out answers to problems. What’s interesting is, not because I wanted to be an entrepreneur, even though I got all these entrepreneurial things as a little kid like I had a lawn mowing business, sold cards and candles to everybody in town. I was always looking for something to sell and going door to door to do it. I didn’t get that it was entrepreneurial. We didn’t have any money and if I was going to get a Coca-Cola, I had to come up with the money and that’s what that was about.
At any rate, I said, “I’ll work with you for six months.” It turned out it was a duck to water. I was entrepreneurial to the core. I put in all these systems. I didn’t even know the column systems, but I had a system for how to do things in school. I started systemizing things and every day I’d go, “This is my outcome. How do I get there?” I would focus on it. Within three months, it was a regional trucking line. I realized that our suppliers were taking extreme advantage of the situation. I started taking bids. Once I took bids, all of a sudden, our costs went down. I also discovered that every week, we had less cash coming in than we paid out. I talked to all of our clients and in one day I raised our rates as much as 25% to a major client. I said, “We can’t keep giving you this service unless you can pay us more money because we’re losing money.” In the fourth month, I opened our own maintenance company to do all the maintenance on all of our trucks and trailers.
That saved us a lot of money. By the end of the year, I’m past the six months, I’m going, “This is fun and interesting.” For the first time, I’m beginning to make money and I see how there’s a whole thing here that I can build. This is interesting. By the third year, we’re making as much as $100,000 profit a month. I was on my way because there was a millionaire in this incredible new home, four storeys on the water with the Mercedes. Something major happened. In the third month, I wrote about it in the book because it was important, it was one of the most major pivots in my life. I realized in a single moment, every time I describe it, it’s like I’m there again. There are palm trees on the front lawn, there’s the bay in front of me, people sailing, the sun is shining and I said to myself, “Something is wrong with this picture.”
I unraveled in 60 seconds and I started saying things like, “I don’t even like myself. I’m horrible at relationships.” There’s something totally wrong here. I’m not fulfilled. I realized that I had this little boy dream, which I realized. Especially in the United States, a lot of people have this dream and like everyone else, I bought in that if he got the $1 million, it’s for sure that your life was going to be amazing. It turned out it wasn’t. I was in a nice house and had a nice car. I didn’t want to get those back, but I said, “You’ve got to go discover yourself.” I started reading Wayne Dyer and Tony Robbins and reading every personal development book, Think and Grow Rich.
I was looking for answers that I later realized was, “What’s the meaning of life? What is the purpose that I’m here for? It’s something different than making money. There’s some higher purpose.” It took a while because I had to work through family dynamics and all that. I got a law degree and MBA in the meantime while running the company. That led me to sell the company to go off on a search ultimately. That’s when I went off for four months. I did 30,000 miles and it is possible. I traveled the country. I traveled all over Canada, every province, every major city and I went and lived in a Buddhist monastery.Purpose is a golden coin. Once discovered, you want to out it in your pocket every day. Click To Tweet
After, I went and lived at Esalen, which is a personal development retreat center where the human potential movement thought practical purposes started on the Big Sur Coast in California. I lived there for three months. I went to Boulder, which was a bigger Buddhist monastery personal development place. I’d go camping for 2 and 3 weeks at a time and asked, “Why am I on the planet? I’ve got all these skills but how can I use them to change people’s lives? How can I use them to make this a better world for people?” Through that whole process of asking and asking, I took six months and I was skiing for the winter in Lake Tahoe at an amazing place with a fireplace, a Jacuzzi tub and all that.
I went to San Francisco, which for reference is a 3.5-hour drive on the interstate so it’s not that bad for the weekend. I was walking around and I saw a thick brochure, probably 100 pages, for an upcoming green festival, which I later went to. I picked it up, put it in my SUV, took it home, I got in the hot tub that night and I was thumbing through it. I want you, reading, to ask yourself to be open to inspired thought. That’s what happened in my forehead because I get my intuition visually and I get a kinesthetic confirmation. I looked down as I was thumbing through and I saw the word, conscious.
I’ve been thinking for a couple of years that I’d to do a million or a program to help people. I don’t want it to be at that time because there were so many people selling how to be a millionaire in the box, “Pay me $2,000 and I’m going to give you the magic system.” Oftentimes, the only person who got rich was the person selling it. It didn’t have anything to do with what I had already discovered which was, there was no meaning part to it, which is, “Get the money. Your life is going to be wonderful. You’ll have the flashy car and all that.” I said, “I don’t want to tell people that because it’s a lie.”
When I saw the word conscious in my forehead came the phrase, Conscious Millionaire. I got a tingling in my spine and I immediately said to myself, “That’s it. That’s why I’m on the planet.” I waited for about 40 minutes because I know how this mosaic seems to work. It’s something you’re supposed to do. I said to myself, “ConsciousMillionaire.com is going to be there,” and it was. I took it and within a month, I filed my trademarks and owned the trademark on consciousness all over the world in multiple classes. I knew in a moment, in fact, when I got out of the hot tub to go to the computer and I did. Once I got out, I did go and get ConsciousMillionaire.com.
I said to myself on a spiritual level, because I realized it was a huge spiritual component to this that this was my assignment. I had no idea what conscious millionaire was. Even before I said, “That’s a sexy phrase. That’s cool. I don’t know what it is, but I’m pretty excited to go find out and figure out what we’re going to build here.” I said, “This is my assignment.” I realized that all of a sudden purpose came into my life. This was going to be a purposeful way to teach entrepreneurs how to make the impact they want, how to make the money they want, and as a result of making an impact, not making a transaction, they were going to get fulfilled at a level they never would have if it was about how do I go make some money? That’s what’s on fire for me, to help people do that.
You talk about the purpose and how important that was. I was listening to one of your interviews where you were talking about how you define a purpose. I like how you talked about how you have to look outward. How do you define purpose?
I like to think of purpose as a gold coin and once you discovered it, you want to put that gold coin in your pocket every day. Every coin has two sides. On one side, imagine the word, purpose. I had already figured out when I sold the companies that purpose was the deal and I lacked purpose. I read so much on purpose and it would be things that made me feel good. They would say things like, “When you discover your purpose, you’ll know it.” Being trained and also as an attorney, I’m going, “This is not practical.” I assumed that but how am I going to discover this thing off my purpose? Once I discovered mine, I create formulas, I went, “This is easy. I can teach this to people.”
The other side has the secret or the formula for how to get your purpose. It’s simple. It’s a difference that you feel compelled to make and that difference is always going to be for someone, some group or something outside of you. It could be for, in my case, entrepreneurs. It could be for a particular type of person or a particular niche market. It could be for an organization or a business. It could be for animals that you care about animals. It could be that it was more for a global cause. You cared about clean water and you wanted to find ways that the third world countries could have clean water and everybody would have clean water 40, 50 years from now. It won’t be all used up and contaminated. It’s a difference that you feel compelled to make. That’s the purpose piece.
It’s hard for some people to figure out what it is that they can do to make a difference. Some of the people have a product they see as me too or they don’t know how they can stand out from the crowd. How do you realize that there’s something you can do big with your lives without necessarily traveling the world and joining a monastery?
I have a three-step process for that. I’m going to let you all know. We’re going to give you my book absolutely free. This isn’t paid shipping and handling. You’re going to get a PDF of it. We’re going to give it to you. This is in chapter four, I call it in chapter four Finding Your True North. The first thing is to get connected with what is an activity that you’re passionate about doing. Here are the three pieces to that. I tend to work in threes. The first one is you get in your zone. You get in the flow that when you’re doing this activity, you tend to get so immersed in it that you lose all track of time. You think it was 30 minutes and it was 4 hours and that’s great. Unless you were supposed to meet your partner of dinner.
Sometimes you have to set a little alarm because you go, “I’m going to get so immersed in this.” The second thing is you literally go through a state change. If you see somebody after you’ve been doing this activity, you’re going to be at such a deep state of immersion with it that you are going to look, your energy is going to be different. All of us have walked in a room and seeing someone where we can literally feel this positive energy coming off of them. It’s like they’re radiating. That’s what you’re going to be like. If somebody looks at it, they’re going to go, “Diane, you look different right now.” It’s because you’ve been doing your passion activity.
The third thing and this is the fun part, life is filled with humor. Not only is this going to be the clue for how you can make some of your biggest money as an entrepreneur but I bet you’ve done it for free for others, maybe even strangers. You’re on such an empowered bandwagon that you want to go out there and beat the drums and tell everybody about this. What happens to you and the emotion is different for everyone. What I found is when people get deeply in this, everyone starts identifying a similar emotion at the core. That emotion is a deep and profound joy. You’re filled with joy when you do this. You’ve done it for free for people so it’s something that you immerse yourself into and it’s always an activity.
It changes your state and you’ve probably done it for free. That’s the first thing. Once you start tapping into that at the core, for me, I am enamored by personal and conscious development. At the core of Conscious Millionaire, a lot of work that I do with people involves them growing so that their businesses can also grow. It’s very difficult for you to grow your business with only the external pieces. I work with mindset, strategy and execution. A lot of people say, “I only want the right strategy.” That is not the answer. It’s becoming the right person. It’s growing and evolving.
As you evolve and change the way you’re thinking, you change the way you’re thinking about your self-perception. I’d like to go, “Where do you want to be in three years?” I have all this NLP training and go, “Let’s install that now. Let’s get you shifted so you’re thinking about yourself. When you’re thinking about yourself and your future three-year person and you become that now, all of a sudden, the opportunities you’re looking for change. The truth is, they were all around you anyway. You don’t notice them because you didn’t think they were right for you.
To put it bluntly, they weren’t in your frequency. They weren’t where you were at in terms of your state. You up your state, you changed your perception of who you are. Now, you’re going to choose different strategies than you would have before. You’re going to choose strategies for playing bigger. You may realize, “I want to get to $10 million.” Great. Let’s figure out the one simplest path for getting there because you don’t need ten things to do that. The companies that I use as such a wonderful example, and I happened to use both of these are Leadpages and ClickFunnels because most people know of them.
Both of them got to eight figures pretty quickly. They got to eight figures doing one thing. They figured out one market, one problem and they figured out one solution. I find that people who grow the fastest keep it the simplest and they’re on a narrow lane focus to help some specific group. Both of those are helping entrepreneurial types of people who are doing business online who want to have better conversion in a nutshell. They could be speakers, coaches, marketers. They can be all kinds of different people but they’re entrepreneurial online and they want better conversion. That’s what they’re, both of those systems are about and they capped into what people need. They provided it at a cost that was reasonable versus the ROI they could be getting. That’s how you build a business quickly.
You have a lot of great information there and you mentioned that you’re giving away your book. I want to make sure everybody has that. It’s at ConsciousMillionaire.com/freebook. JV has written this amazing book called Conscious Millionaire, but that’s also the name of his show. He has a very famous podcast that is heard by tens of millions of listeners in I don’t know how many hundreds of countries.
It’s heard in 190 countries and twelve million listeners a month. We have over 2,000 episodes. You can hear it six days a week. In the book, I’d suggest you read chapter four. That’s what we’re talking about. The third part of that, to finish so we don’t leave the loop open is, once you’ve identified that passion so you get clear about it. You get that difference you want to be making. You look at what your top 1, 2 and 3 skills that I have. Once you put those three together and now you have something that differentiates you.As you evolve and you change the way you're thinking, you've changed the way of thinking about your self-perception. Click To Tweet
There are other people on the planet that are talking about living with purpose and making money but they aren’t doing it the way I’m doing it. They are nearing the interior and the exterior and saying, “You’ve got to bring these together.” They aren’t saying, “Let’s identify your purpose and build the business from the inside out. Don’t go start looking at your market. Don’t decide what the product or services upfront. Let’s figure out that pathway,” and I want to give you another three to complete this process, “Let’s go figure out what the niche is and what we’re going to be offering.” Here are the three questions to ask there.
Imagine that you want to make this difference. Even if you said entrepreneurs could be 100 different niches. I always go, “There are 100 different niches for everything you don’t need but one and you need the right one.” Here are the three things to identify about that niche. When you start with a difference, what you’re starting, remember there’s one market, one problem, one solution, you’re starting with the solution. The typical, when I went and got my MBA, they start with the market. You want to have meaning and fulfillment and you’re on this planet. I guarantee you to do something specific that makes a difference with your life. You have to start with you and you go out and find the market and the problem.
The niche is the market, and these are the questions to ask about them, is the way the problem shows up for them excite you and bring you joy? If it does not excite you and bring you joy, you will not be excited to get out of bed every day. Therefore, you’re not going to go prospecting and you’re not going to go sell. The truth is that on a deep level where you don’t want to work with them. That’s true. Every client that I have is such joy because I love them. I love them and feel honored that I get to work with them because it brings me so much joy. I get to do my purpose by helping them. I had to get very clear about who were those people. If they’re not impassioned to make an empowered difference with their life, they don’t want to make an impact and they also don’t want to get rich and make a lot of money, that’s not the right client for me.
Those are the people I resonate with. The second part is you’ve got to go, “Is this problem compelling to them?” They can’t wait. They’re salivating to get it solved. Here’s the contrast, “Every one of us knows somebody who complains all the time about the same problem.” If they’re complaining all the time about the same problem, I can already shortcut this. You don’t even have to ask them. They do not want to solve it. They don’t want to complain about it. You do not want a market that wants to complain because they are never going to pay you.
They’re never going to hire you. That’s the third component. Do they have the money available or do they have access to it? They have a credit card. They have somebody else that can pay it so that they can pay you at the level you want to get paid so that you feel that not only are you getting paid well, but they’re getting a great ROI. In order to know the answer to that question, I want you to go out because if you’ve chosen the right market, you will not need to change that market for three years. You don’t need to expand it. You need to love it and own it. That’s what you need to do.
Years from now, ask yourself, “What’s the revenue I want to be having in my business?” Go back and ask, “Was this group with this problem I’m in love with, that they’re compelled to get solved, do they have the money? Are there enough of them to reasonably think that I’m going to be able to market and reach that number in three years?” If the answer is no, go look to another market or go look to a different problem. That’s what has to come together. When you get all that together, you’re on fire because now you can build and scale.
You have so much great content from what you listed and what you have in your book. People are never going to get all of it from this quick show. I hope they take some time to follow your show, read your book and go to your site. I want to make sure we share your site one more time with them to make sure. JV, can you share how people could reach you?
I’m going to keep you on my cell phone. If you’re reading and you’ve got a 6, 7 or 8 business, I’m being specific that’s who I work with, and you would have a conversation with me. You can text me, tell me your name, tell me your business. I’m one of those people who follow up. I remember one time that somebody did that and I write back with them. They went, “I thought this was fake or this was going to be some assistant.” I go, “No, this is me.” I picked up the phone and I thought, “If they don’t believe me, I’m going to pick up the phone and call them.”
Here’s my cell phone. Text me, tell me your name, tell me about your business, what you’d like to discuss, and I will absolutely look forward to getting back with you. It’s (303) 641-0401. I’d love to hear from you. If you want the book, you can go get it for free. I want you to download it and take a look at it. There are fourteen chapters in it and it’s at ConsciousMillionaire.com/freebook and at ConsciousMillionaire.com you can also access our podcast and radio show, Conscious Millionaire Show. I’d love to have you come and give a listen because I’m on fire to impact people and I am so excited that you’re here with Diane. If you’re here with Diane, I know you’re an amazing person because you’re showing up with some incredible guests. Diana, it’s an honor to be on your show. Thank you.
Thank you, JV. It was such an honor to have you on my show and I’m so glad we were able to connect again. I hope everybody takes some time to check out all your information.
Venture Capital And Investors With Nathan Beckord
I am here with Nathan Beckord, who is the CEO of Foundersuite. It’s a venture-backed company that makes the leading investor CRM and investor updated tools for startups raising capital. I’m interested in this, Nathan. I’m excited to have you on the show. Welcome.
Thanks for having me. I’m glad to be here.
You’re welcome. I used to deal with teaching a lot more entrepreneurship-based courses than I do now. One of the biggest issues that everybody had was how do you pay for this? That’s a big issue. You helped raise billions in seed and venture capital. You’re the expert to go to. How did you get into this? Let’s get a little background on you, to begin with.
I’ll try and do the short version. I’ve got out of college and I tried to start a startup and got off the ground but it failed not too long after. I went away to grad school and worked in investment banking for a little while. I did some time in JP Morgan in New York. A lot of that was helping later stage companies raise their B rounds, C rounds, and their mezzanine financing. After that, I’m like, “What do I want to do? I love working with startups.” I’ve caught the startup bug. I had the skillset in fundraising and let me hang out a shingle as a fractional CFO or CFO consultant and work with startups who are raising money. I did that for close to twelve years.
I had some partners and built a little team around. It’s called Venture Archetypes and the whole time we were doing this consulting to startups, helping them raise money, their pitch, and build their target investor list. I had this idea in my back of my head, “I want to build a product company.” Eventually, I had this idea, “Let’s productize some of the stuff we’re doing here and turn it into the software.” It was around the time when Marc Andreessen had this “software is eating the world” statement. That was the genesis. I’m like, “Let’s build some software around this.” Foundersuite came out as a little side project. Around 2015, we raised some money and I jumped into it full-time. That’s the career arc in a nutshell.
Give our readers a little background. A lot of people either bootstrap at the beginning or they’re looking for different crowdfunding things. A lot of my students were talking about what they wanted to do. I’m starting basic because I put these into the courses I teach as well. If you’re starting a new company and you’ve never started one before, is there a best way to go about raising funds?
The best way is something that you already touched on which is bootstrapping. That’s the best way to get going, especially in those early days, if you don’t have a track record. If you don’t have a track record and you don’t have a product in the market too much, it’s hard to raise money. If you can get customers to pay you in those early days, that’s fantastic. That gives you a little bit of runway, a little momentum to start building upon. You can turn that into the momentum that might be interesting to investors.
The other alternatives and those early days are friends and family. They’re banking on you as a person. They don’t know if you can pull this off, but they’re going to take a wager on you. Depending on your business, crowdfunding can sometimes come in. I say this a lot but crowdfunding fits in if you already have an audience built. It’s like you with your podcast. You have an audience. If you are going to crowdfund, you’d have a built-in potential backer source. If you’ve got some product that’s crazy, unique, and wacky or you see a lot of these Kickstarter projects are pretty novel things, sometimes crowdfunding can fit. That’s bootstrapping, friends and family and sometimes crowdfunding are the early days.
Sometimes if it doesn’t work, you lose your friends and family. That’s something you’ve got to think about too. You failed at the beginning. What is the percentage of people who fail?
I’ve heard lots of different statistics but it’s 80% and 90% of the majority for sure. I took a little bit of money from my dad in that first venture but he’s good about it. He’s a good sport.
You can’t do it too often.
Who knows? There is that anecdote that people are always talking about, “How is the Thanksgiving dinner if you’ve lost your Uncle Joe $50,000?” How has that dynamic gone to be? It’s something you have to take into consideration when raising money from friends and family for sure.
You learn the best things from failure. One of the things that you’ll hear often is, “I wouldn’t have changed a thing because I learned everything that way.” Sometimes that helps you with the next startup. When you’re trying to raise capital and I have a lot of people send me their decks and their PowerPoint presentations for what they hope to achieve. I find interesting, even though I wouldn’t necessarily consider myself a venture capitalist and people think I am so they send me everything, but I see many who think they’re going to be the next unicorn. Is that the thing that if you can’t be a unicorn, nobody will even look at it? What is the thinking that’s what the minimum is these days?Hiring a CFO, COO, or an HR brings in the structural layers of you company. Click To Tweet
It is funny and it’s something I’ve observed over the years. It’s almost grade inflation.
4.0 is no longer good enough.
Partly it’s that function that there are so many startups out there and you’ve heard this, I’m sure, and there’s never been an easier time to start a startup. It’s so much easier to start a business than it was years ago. You have a lot more entrepreneurs out there and it’s more competitive. Everyone is trying to call themselves potentially unicorns. The other factor is the whole venture model. You’ve got friends and family which leads to maybe an angel round or seed round and that ideally leads to a venture capital round on up the food chain to an IPO. Angels often don’t want to do a deal if they think VCs are not going to be interested. VCs are all looking for those unicorns to make their portfolio or their returns look good. There’s this perverse incentive all the way down to the earliest days that you have to be a potential unicorn for those angels to get interested.
I see a lot of faking it until they make it going on because of it. It’s interesting to see how many are actually going to make it. I’m attending an event that Reid Hoffman is doing, that’s for more of an accelerator than an incubator thing for past B and C rounds. What’s different from when you get past a B, C and beyond rounds that you think they need? What’s different from what they need as a startup?
There’s a lot more structure expected of the company and a lot more of B and C rounds when you’re probably hiring a CFO, maybe a COO, maybe even an HR. You’re putting in those layers of structure the company is expected to have figured out. It’s a marketing funnel in a granular and precise way. You’re not experimenting as much anymore, but you’ve figured out its podcast, Facebook ads, and events that are driving your sales, and you can scale and replicate that. Whereas, in the early days, it’s more of a search for product-market fit. At the later stages, there’s much more focus, especially when talking to investors about your financials and your unit economics. You’ve got to be dialed in on your cost to acquire customers, your lifetime value of customers, your churn rates, upsell or revenue expansion potential. Either it becomes more of a numbers pitch than maybe at those early days where it was so much more of a vision pitch.
It’s interesting because I see some that are in the GHN down the road of how many rounds they’re in. How does that impact the first people when they’re starting to raise capital? Don’t they usually have a time frame and they say, “We’ll probably sell out or be acquired or whatever by X, Y, Z date.” Is everybody hanging in there too for the next unicorn and they’re going to be patient? Do you find that a lot of investors start to get itchy?
There’s a lot of dynamics to that. There’s a pretty good expectation that year if you’re putting in money as an angel. It’s going to be 7 or 8 years until you see that money back. What has changed in years is companies are staying private longer. They’re raising these multiple private rounds and so that’s stretching out that time frame until they are able to sell those shares. Now it’s ten years instead of eight years that they’ve got a hold on to the IPO. Countering that, you’ve seen a few of these secondary markets that have popped up where people can unload some of their shares even before the company goes public.
How does it impact those investors? Each time you raise another big round, those early people are getting diluted more. That’s a real factor. We’ve done these models. We have one within our platform, Foundersuite that’s VC Dilution Scenario Model and it shows how your 20% goes down to 15% to 7% to 3% to 1.5%, and to 0.5%. Theoretically, the company is getting more valuable so even though your percent is going down dramatically, your actual value is going up. There are a lot of pieces to it.
A lot of the IPOs are surprising people. What do you think about all the latest in the news? Are you one who would invest early in an IPO? Are you one that says, “Wait.” Where do you stand on that?
I was around during the first dot-com days and I was working in investment banking. If you could get into an IPO before it went live, that was a great way to make quick money. The bankers would always price it 20% below and sometimes they go out flat. You still see some of that a little bit but you’re also seeing some of these high-profile unicorns that have gone out and are now trading below their offering price, which is putting people on pause. If I had money that I wasn’t throwing back into Foundersuite, I don’t know if I’d be buying a lot of IPO, maybe only ones that I knew well. We use Stripe. Everyone uses Stripe. I love Stripe. I’d probably like to buy that at IPO and some of these sharing models. I also love WeWork and we use WeWork. I don’t know if I would buy it. I don’t know if I’d buy that. No offense WeWork.
Was it surprising to you with what happened with WeWork?
Yes and no. Every time they raised a new round was surprising to me. I’m making up these numbers but a couple of months ago with a $2 billion. They raised a new round and now they’re valued at $10 billion. Every round was surprising to me. It wasn’t totally surprising that it all collapsed and shrunk a little bit. How fast and how dramatically it all unfolded? That was surprising. That was wild to watch and it’s still unfolding.
I’m curious how’d you recognize if you’re going to get into a WeWork or even a Theranos thing?
I would distinguish. I don’t think there was actual fraud at Theranos. WeWork has aggressive founder, big vision, free-spending, no restraints on him, but I haven’t heard anything about fraud. There was some self-dealing.
Losing money is what I mean. One way or another, either through them is doing something maybe not the best decision-making or where they’re faking it too much until they’re making it. How do you know? That’s hard for people to know.
It’s totally hard. It’s always easier in hindsight to see these things after they’ve already imploded or something and they are in the middle. I have to give Adam Neumann credit. All the things that made the company successful and one of the fastest-growing companies ever also both factors helped derail it. You can see it with some other high-profile founders too. It’s that raw insane ambition is what made that company but it also is a detriment to the company sometimes at the end.
What do you help people do in Foundersuite exactly? You’re giving them advice for startups to raise capital, but what else do you do.
We have software content and templates. It’s all around the fundraising of investor relations, a piece of it, which happens post fundraising and also the pre-funding marketing. We’ve got five tools. We’ve got an investor database. When you’re starting to raise money, you can use this to help build that target list of prospects. Maybe it’s the 100 or 200 prospective or target investors. We got a CRM for managing your funnel. When you’re talking to 200 investors, you’ve got to keep track of all the activities and actions and stuff. You got Pitch Deck Hosting Tools. You want to put your pitch deck up there, send it out the track and see which investors are looking at it.
A bunch of startup documents, templates like VC Dilution Scenario Tool, cap tables, pitch deck and stuff that. Last but not least, once you’ve raised money, we’ve got an Investor Update Tool that is helping you do those ongoing communications. It’s important and I don’t think it gets enough airtime. Once you raise money, you now have a duty to keep your investors involved in the loop. We’ve got a tool for that and rounded it out. We’ve got a lot of content both on the blog on the Foundersuite.com and on our podcast about fundraising. A lot of founders have never done it before. It’s scary and intimidating and so we can unpack it and shed some light on how to do fundraising best practices.
It’s interesting because it brings up some conversations I’ve had on the show. I had Guy Kawasaki on and he talked about people coming to them with their pitch decks. They say they’re big fans and they love everything he does. They show him a pitch deck and it’s got a tiny font and all the things he says not to do. Do you have advice for a good pitch deck?
I’m trying not to be too self-serving, but we have this thing called the Ultimate Pitch Deck Guide or something like that. It’s how to do a clean and crisp story. Pitch decks are all about telling a story. You want it to be as simple as possible. I do some practice pitch reviews with some of our customers and almost universally the two things I say are, “Go in and with a scalpel, cut out 25% of what you’ve got in there because you have too much. You want to think of it like, ‘What is the investor that you pitch on Wednesday going to remember a week later at their partner’s meeting? What simple messages or threads will be retained after that information starts to be forgotten?’” Go in and cut out 25% and that makes what remains that much more powerful. It’s more crystal clear. I definitely agree with Guy and his emphasis on using gigantic fonts helps does that same thing.
He doesn’t want a million PowerPoint slides either. That’s the problem. It’s hard for people. They want to say so much. It’s helpful to hear from people like Guy and I had Sheila Barry Driscoll, who dealt with the Billionaire Foundation and different things. She had specific things that she wanted to hear when people came to pitch to her too. She did say, “Do not show up even a couple minutes early. I want you to be right there right on time.” She had specific things and that helps people if they can get guidelines of what exactly people are looking for. Some of it is guesswork, isn’t it?Having a simple story arc for your pitch can be very powerful. Click To Tweet
Yeah. There’s a commonality. You’ve seen Sequoia has this pitch deck outline that’s been around for years. A lot of people referred to it. Guy Kawasaki’s template is also great. I see that referred to a lot. There are some commonalities. I have a little form I too use that’s almost the minimal viable pitch where it’s problem, solution, market size, team and traction. That’s five or so slides. Nail those first five slides, problem, solution, market opportunity, team and traction. Make that and put an end and everything else put it in an appendix.
The financials you’d have more in the appendix?
I have a huge appendix that has any question you’re going to get asked. Maybe it’s about competition, financials, marketing strategy, and all the other stuff. Put it in the appendix so you’re ready to go there when the investor comes to it. Having this simple story arc over 5 or 6 slides can be powerful.
What’s the best thing they can do to manage their investor relationships once they have them?
Much of fundraising is about generating momentum and heat for your deal. Fundraising is correlated with momentum. Startups when they go out to fundraise, get momentum, they fundraise on their terms, have the leverage and negotiating power and they can set the timeline. It’s on the investor terms, in which case, it can drag out, it can be awful negotiations and you have no real leverage. People who’ve heard me talk, I constantly am talking about getting the momentum going and a lot of getting momentum going comes from having a healthy funnel, meaning you’ve identified a large number of well-qualified targets. You’ve qualified them and you make sure they invest in your space, at your stage, in your sector and all that stuff. It’s getting in there and hustling.
We have this podcast and one of the common themes of the people who raise money fairly quickly is that they have four-pitch meetings every day for four weeks straight. They’re meeting with four different investors. They’re full-time on the fundraising meeting after meeting and refining the pitch, getting that interest level going. Investors can pick up on it when you’ve got to end their meeting promptly on the hour because you’ve got to get down the road to the next investor. That’s a signal to them. That’s your job. It’s fundraising. Other parts of it are telling a clean story and building that list, but your job is about getting the momentum going for your company and deal.
Can we learn anything from Shark Tank or is that all just show?
I love Shark Tank. I have to say it’s my guilty pleasure on the treadmill at the gym. It’s the same theme of momentum. When a deal gets hot, you can see the psychology of the sharks change. They start to get more elbowy and competitive. That’s what you’re trying to do even when you’re out pitching VCs. There’s so much that dramatizes on that show that you should ignore.
You mean it doesn’t happen in 30 minutes or 10 minutes? It is fun to watch though.
I love it. The companies that get on there are some weird, quirky companies too, which is fun.
It brings up ideas and thoughts about what makes people interested and what doesn’t. I could see why people would be interested in getting help with this. It’s hard especially the first time you’re doing this to know how to raise money, where to start, what questions to ask and how to build a deck. I meet so many people and they have no clue. I could see why your services would be helpful to a lot of people. Say somebody is reading this and they’re thinking that they’ve been bootstrapping, but they can’t do much more on their own. Their family doesn’t want to talk to them anymore. What advice do you give him? How can they reach you? Is there a site you want to share or is it only Foundersuite.com? Is there something else that you’d like to share?
Foundersuite.com is our core software platform. Every now and then, someone will spell it as a candy, but it’s suite. That’s our core platform. We do have a podcast called How I Raised It and we started this a few years ago where it’s me interviewing founders who raised money and we get into the nitty-gritty of how they did it. I’ve learned more from doing these podcasts than I did from twelve-plus years of raising money. There are lots of interesting tactics, tips and hacks. That’s all in the usual places, Spotify, iTunes, SoundCloud. I would check that out. We’re also on Twitter @FounderSuite.
I learned a lot and I’ve interviewed close to 1,000 people in the show. Every time you talk to somebody, you learn something new. I learned something new. I always do. This is fascinating and a lot of people could benefit from this. Thank you so much, Nathan, for being on the show.
Thanks for having me. It’s fun.
I’d like to thank JV and Nathan for being my guests. We get so many great guests on the show. If you’ve missed any past episodes, please go to DrDianeHamilton.com. You can listen to us on all the different outlets, iTunes, iHeart, Roku. You name it, we’re on it. You can also find out more about Cracking the Curiosity Code and the Curiosity Code Index through my site or you can go right to CuriosityCode.com if you want that information specifically. I hope you enjoyed this episode and I hope you join us for the next episode of Take the Lead Radio.
- Conscious Millionaire
- Show – Conscious Millionaire Podcast
- Think and Grow Rich
- Venture Archetypes
- Blog – Foundersuite Blog
- Podcast – How I Raised It Podcast (Foundersuite)
- Guy Kawasaki – Previous Episode (Take The Lead Radio)
- Sheila Barry Driscoll – Previous Episode (Take The Lead Radio)
- Billionaire Foundation
- Spotify – How I Raised It Podcast (Foundersuite)
- SoundCloud – How I Raised It Podcast (Foundersuite)
- @Foundersuite – Twitter
- iTunes – Take The Lead Radio
- iHeart – Take The Lead Radio
About JV Crum III
J V Crum III is a mindset and strategy expert. Inc.
Magazine lists him as one of the top business podcasts. He is the author of Conscious Millionaire.
About Nathan Beckord
Nathan Beckord is the CEO of Foundersuite.com a venture-backed company that makes the leading Investor CRM and Investor Updater tools for startups raising capital.
Since launching the CRM in March of 2016, users have raised over $1.2 Billion in seed and venture capital.
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