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Joe: Hey everybody, as we gear up for 2020 I want to hear from you and the things that you’d like to see on this show. If you have a question, a comment, a topic, a guest, any kind of suggestion for How I Built It in 2020, let me know by going to HowIBuilt.It/Feedback. That’s HowIBuilt.It/Feedback if you would like to see something on this show in 2020. And now, on with the show.

Nathan Beckord: Put yourself in the shoes of an investor. People are coming at you all day long, 50 people a day knocking on your door, seeking money from you. Are you going to take someone seriously if it’s just an idea and they haven’t put any real either time, blood, sweat, effort, money into it? This guy’s not serious.

Joe: Nathan Beckord is the CEO of Founder Suite, a group of tools to help those seeking venture capital, as well as tools for venture capitalists. We talk all about how he built this after spending a decade helping startups raise their own VC funds. We also cover how to seek VC funding, and if business plans are even useful anymore. I had to write a business plan about 10 years ago, and it was not fun. I was not a big fan of it because it asked things like, what is your exit strategy? We talk about all of that, so this is a great conversation. It’s a fun conversation because it’s an area I’m only loosely familiar with, so I learned a lot, and I think you will too. We’ll get into all of that right after a word from our sponsors.

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Joe: Hey everybody, and welcome to another episode of How I Built It, the podcast that asks, how did you build that? Today my guest is Nathan Beckord, he is the CEO of FounderSuite.com. Nathan, how are you today?

Nathan Beckord: Very, very good. Thank you so much for having me.

Joe: Thanks for coming on the show. I’m excited to talk about this topic because it’s not something that I often talk about, but Founder Suite is basically software to help people get funding for their ideas. Is that about right?

Nathan Beckord: Yeah, that’s correct. It’s software for raising capital and managing investors, used by startups.

Joe: Awesome. I mean, did you come up with this idea because you were looking for funding, or because you were funding projects and you wanted a better way to do it? What was kind of the genesis of the idea for Founder Suite?

Nathan Beckord: Yeah, I spent 10 years or so as a consultant, kind of a CFO consultant working with startups, helping them raise capital. In doing that I built some stuff, like these elaborate spreadsheets in Excel that I’d use to help track and manage the investor pipeline, and things like that. It was kind of like, as a consultant I built some stuff. I’m like, “You know what? This could actually be a product that might have a broader audience, beyond just using it with my clients.” That’s really where the idea came from.

Joe: Oh, that’s great. So you basically have this internal tool that you built with spreadsheets, that you decided to productize. Now, for someone who has never gone through the process of getting any kind of funding, my dad gave me an initial investment of like $1,000 for my business. But, that was more of a symbolic thing. What is the process for getting funding like, just like a 10,000 foot overview to set the stage here?

Nathan Beckord: There’s two parts to that question, or two answers to the question. There are as many funding stories, and ways people raise money as there are startups in the universe. In other words, there’s kind of not really a right way, or people get it done in 1,000 different ways. But, in my strongly held belief, there is kind of a right way to do it.

Nathan Beckord: The right way to do it would be to first, spend a pretty good chunk of time, often 50 to 100 hours building a target list of investors. That’s tapping a lot of different databases, and sources out on the web, to build a list of 50 to 200 potential target investors, figuring out how to reach them if you have mutual connections. Doing the research, and then really getting out there and hustling, and trying to get some heat going for your deal. We call that running a process, where you’re really running a sales process for a period of X months, two to six months, where you’re really just taking this around to investors in your target list, getting them interested, keeping them up to date with what’s going on, and trying to get some competitive bidding situation going for your startup. That’s what we think about fundraising.

Joe: Gotcha. You said like 50 to 100 hours building a list of possible investors, that is probably a larger chunk … that’s more time than I expected to hear. But, then there’s like the rest of the preparation, right? I mean, it’s … I can just build some website thing that I think is a good idea, but then I don’t just show that to investors and say, “Hey, I built this, and you should give me money to keep building it.” Right? You need like a … How important is a business plan in the traditional sense?

Nathan Beckord: Yeah, I mean so that number of hours and research is a shock to people I think, because a lot of founders are like, “All right, I want to go raise money. I just start, get out there, and-”

Joe: Yeah.

Nathan Beckord: … “start hustling.” That research, but if you take the time to do that research and really build a nice funnel, we call it a pipeline or funnel of potential investors, everything goes faster once you’ve done that work. It’s, another thing we kind of refer back to a lot is fundraising is just like another sales process, right? Sales people build a pipeline of prospects, and they put in a lot of time building their sales funnel. We just want to do that same thing with fundraising.

Nathan Beckord: To your other question, I mean a business plan, it’s funny because when I was consulting years ago, everyone would write a detailed business plan, and these were actual physical-

Joe: Mm-hmm (affirmative).

Nathan Beckord: … written documents.

Joe: Yeah.

Nathan Beckord: 20 to 50 pages long. No one does that anymore. However, the stuff that used to go into these business plans, like announcements of your target market, and competitive situation, and your business model, how you are going to make money. All that stuff is still really important, and stuff you still need to know and be able to communicate to investors, right? But, the physical written plan, no one does that anymore. Fortunately.

Joe: Yeah. Right, absolutely. I said I’ve never gone for funding, but I did enter a business plan competition when I was a student. I just remember thinking, “Here’s the template you need to follow.” We placed third, so I guess it was like the third best idea, or maybe the third best business plan. I’m just like, “What’s my exit strategy? How much do I think I’m going to make in five years?” I felt like a lot of it was guess work, but it was my first kind of foray into this world. I guess I’m happy that people aren’t doing that anymore, but it is important to still know kind of who your competitors are, right? And, why you think this idea is profitable, right? I suspect that, that’s a very important part of actually getting funding, because the people who are investing want to see a return on their investment, either through what? A seller going public, is that-

Nathan Beckord: Right.

Joe: … okay, cool, cool. So the stage is set a little bit for kind of how you go about getting funding. If I were to signup for … First of all, the Founder Suite is for somebody who does want to raise funding, and come up with, and like find investors, right?

Nathan Beckord: Mm-hmm (affirmative), yeah.

Joe: What does that process look like, if I were to sign up today for that?

Nathan Beckord: Yeah, so we have five different tools within the platform, and they kind of match how fundraising actually happens. We have a database of investors, it’s like 40,000 funds, and about 100,000 angels, and high net worth individuals. Of course that is something you search on by industry, or location, or type, to help build that top of the funnel, right? To help build that target list, so that’s the database.

Nathan Beckord: Then, we have a CRM, which is like a Kanban Board style, where you have each investor is represented by a small card. And you’ve got stages on this board where it’s like new, research, contacted, pitched, due diligence, said yes, said no. You have this pipeline management tool so you’re kind of managing all these investors through the stages of fundraising. Then we have this investor update tool, which is really kind of to do this regular ongoing newsletters, right? Whether you’re building relationships with investors, or if you’re lucky enough and you raise some money, you’ve got to keep these investors up to date with what’s going on with your company and your business, so this is a very nice newsletter tool designed to do that. There’s a pitch deck hosting tool, one of the most common things. People don’t do business plans anymore, but you still need a pretty solid pitch deck, right?

Joe: Yeah.

Nathan Beckord: PowerPoint, PDF, this is a way to upload that into the Cloud, create a URL around that, which you can then send to investors, track which investors are looking at your pitch deck. And then, last but not least is a collection of like startup documents. Things like pitch decks, term sheets, cap tables, kind of the … these are Word files and Excel files, things that you need to get the deal done. We’re trying to create this end to end suite of tools, really to help you get this job done, which is a pretty painful job.

Joe: Yeah, I mean just like the idea of kind of going to people and asking them for money. That’s a big risk either way, but I mean making the process easier. It sounds like the process is easier for both you, and … for both the person seeking funds, and the investors, right? Because you have these kind of premade documents that I’m sure the investors probably like to use, or like to see so that they don’t have to spin their wheels or whatever.

Nathan Beckord: Absolutely. I mean, most … I don’t know what the, I’m making up this statistic. But, call it 99% of founders who are raising money, this is their first time doing it, right?

Joe: Mm-hmm (affirmative). Yeah, right, right.

Nathan Beckord: So, anything that helps them kind of learn the process faster, and reduces some of the friction, and complexity, and frustration, that’s what we’re all about. Yeah.

Joe: Yeah, that’s fantastic. The investor update tool was something that kind of jumped out to me as you were kind of explaining this, because you mentioned that it’s not necessarily just people who have already invested, it’s maybe people who expressed some sort of interest, right? Maybe they said, “You need to hit this milestone before we invest.” Is it something like that?

Nathan Beckord: Absolutely. That’s, you’re hitting the nail on the head. I kind of think of the investor update as two different tools. It’s one tool, but there’s sort of two different uses. One is, after you’ve raised money, you’ve got to keep your investors updated with what’s going on in the business. That’s just your fiduciary duty as an entrepreneur to do that, right? But, the other part is before raising money is, kind of the marketing side of things, right? You might have 100 investors on your target list, or your prospect list, and you want to be building a relationship with them, and kind of showing them that you’re a founder who can execute, and get things done, and you’re moving the needle. That has to play out over usually a period of time, right? That doesn’t happen in one month.

Joe: Mm-hmm (affirmative).

Nathan Beckord: That’s like, they want to watch you as an entrepreneur, and see how you’re making progress. That’s where the investor update tool really helps to kind of warm up those investor relationships, even before asking them for money. Really important like funding hack, if you want to call it that.

Joe: Yeah, yeah. They want to get to know you, right? I mean, if you’re selling a product online, it’s more likely somebody’s going to buy something from you if they know, like, and trust you. I’m sure that’s even more magnified when you’re asking somebody for several thousand, tens of thousands of dollars, whatever it is that you’re asking for, to fund your business.

Nathan Beckord: 100%. You hear people call fundraising like a marriage, you’re sort of getting married to these investors for the next five to 10 years of your life. You can’t really get rid of investors once they’ve invested in your company, they’re attached to you, and you’re attached to them. Building that relationship in advance is really super, super important.

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Joe: I’ve always wondered about this but I’ve never known who to ask, right? There’s the, as I mentioned before there’s like the exit plan, right? Where you either sell, or you go public. But, there’s also the dreaded third option, right? Which is your business fails. What happens, maybe if you can talk about this, what happens if say, you give me $10,000 to start a business, that’s a very … I assume that’s a rather low number. But, let’s say you give me $10,000 to start a business, and the business fails. Am I beholden to you at all for that $10,000, or is it like some assumed risk on the investors part?

Nathan Beckord: It’s assumed risk on the investors part, in most scenarios. I mean, there are exceptions. But, in most scenarios you’re buying equity in the business. And that business fails, that equity is now worthless. The only exceptions to that are, is if you structure it as like a loan, or debt.

Joe: Mm-hmm (affirmative).

Nathan Beckord: Sometimes creditors have a claim on the business, where if there’s any value remaining, like patents or something like that, or IP. In your case, a whole content catalog, maybe they’d have a claim to that, where they’d get that. But in general, it’s just the assumed risk of the business.

Joe: Yep.

Nathan Beckord: You fail, I fail as the investor, yeah.

Joe: Gotcha. I mean, which is why they want to get to know you over the course of several months before they want to invest in you, right?

Nathan Beckord: Totally, yeah.

Joe: Cool, so let’s get to the title question here, which is how did you build it? I know you have this experience, I’ve talked to more technical people, I come from a web development background. But, you can interpret this question however you’d like. Maybe from the business structuring side, or if you know the tech behind how the actual website was built, we could talk about that. You have free rein here.

Nathan Beckord: How did I build? As I mentioned in the beginning of this, I had some sort of predecessors to the software in the form of like Excel sheets, and things I kind of built. I am not a technical guy at all really. I’m a business guy, finance guy to be exact. It was actually very daunting like, “Okay, I’ve got this idea. How do I build this?” First, I spent maybe a month trying to find a technical co-founder, someone who would just signup with me, and build this for me, right? That really was useless, you know?

Joe: Yeah.

Nathan Beckord: If you’re a good engineer, coder, you don’t want to just take a gamble for equity on someone else’s idea.

Joe: Mm-hmm (affirmative).

Nathan Beckord: So I stopped looking for a technical co-founder, and hired a development shop actually, in Poland. I went to a meetup for like designers, and at the end they let you get up with a mic, open mic for 30 seconds, and make a little pitch. I’m like, “Looking for help building this idea I have,” and this guy in the audience is like, “Oh, we’ve got a development shop in Poland that can help you out with companies called Code Quest.”

Nathan Beckord: Still working with them five years later, and so really used them just to build an MVP of the product, which was like $30,000 or something, you know? Kind of out of my savings. And, used that to at least put something in the market, right? As a proof of concept, and then I would go do consulting work, get some money, take that money, put it back into the business to build out more features. It was really slow and painful process, because it’d like … nothing would happen for two months as I’m saving up money, and then I’d put some money into the business.

Nathan Beckord: Eventually we had sort of a … I laugh at it now when I look at it, but it was a working prototype or MVP, that then I was able to go around, and take to investors and say, “Here’s the vision, here’s some proof points, people are actually using this thing.” Eventually raised some money on ourselves, just a little under a million dollars, and used that to actually rebuild the platform, and hire some engineers, and actually build it. Like a proper, a proper-

Joe: Yeah.

Nathan Beckord: … version of the software, yeah.

Joe: Wow, so I have multiple questions here. I think I’m going to go in the order in which I think you can answer them maybe the most easily is what I’m guessing. You mentioned first that you used your own money before, to get a prototype built essentially, and then got investors. How important is it to investors to see that I, the one seeking funding, am willing to invest my own money into this business?

Nathan Beckord: It’s very important I think. Even if it’s not money, if it’s time-

Joe: Mm-hmm (affirmative).

Nathan Beckord: … effort, hustle, you know? I always like to answer this like, put yourself in the shoes of an investor. People are coming at you all day long, 50 people a day knocking on your door, seeking money from you, you know? Are you going to take someone seriously if it’s just an idea and they haven’t put any real either time, blood, sweat, effort, money into it, right? This guy’s not serious, right?

Joe: Mm-hmm (affirmative).

Nathan Beckord: Yeah, very important. You just got to show, versus tell, right? Show me what you’re doing, and I think that’s what it comes down to.

Joe: Yeah, I think that makes a lot of sense, right? Instead of saying like, “Hey, I think I have a good idea. Will you hand me money to do it?” Say like, “I believe in this enough to invest my own time, or my weekends,” if I’m working a full-time job or whatever, “To put time into this.” I think that’s really important. And then, the other thing you mentioned was that it was a slow process. I think that maybe there’s a good takeaway there, because I feel like a lot of people still feel the internet is kind of like a get rich quick playground, right? They hear like, “Oh, Facebook made like a bajillion dollars while Mark Zuckerberg was still at Harvard,” or whatever. Or like Google, like somebody just handed Google a check and didn’t expect like no deals or whatever.

Joe: But, I think that’s an important point. You know what you’re doing, you’re investing your money. And it’s probably going to take longer than you think it’s going to, if you want to do it right.

Nathan Beckord: Totally. A lot of times these overnight success stories that sound overnight, actually had a seven years of buildup before it, you know?

Joe: Yeah, yeah.

Nathan Beckord: Excuse me. And, surprising when people really dig into some of these businesses that are going public. Like, they’ve been around for 10 years or whatever, right? It’s not overnight. In those early days, especially if you’re not a technical … if you’re not the hacker who can code this away-

Joe: Mm-hmm (affirmative).

Nathan Beckord: … 14 hours a day, it’s just going to take longer, you know?

Joe: Yeah, absolutely. I like to think about the Olympics like that. People see the gold medalist, but they don’t see that the gold medalist has dedicated their entire life to getting to the point where they are now an Olympic gold medalist.

Nathan Beckord: Totally, yeah.

Joe: Yeah, I think that’s really interesting. And then what you just said eludes to the last question that I wanted to ask around this which is, what was it like being a non technical person working with an agency? I know a lot of technical people listen to this. I do a lot of client work with non technical people, I’m also in the education space so I try to be mindful of that. But, what was the communication like there?

Nathan Beckord: Mm-hmm (affirmative), yeah. Challenging for sure, it was … as a business person you have to I guess, suppress your ego, and eagerness a little bit.

Joe: Mm-hmm (affirmative).

Nathan Beckord: And, kind of learn how to talk about business ideas, and product ideas in a little bit more technical terms. I did have a product manager who was I guess sort of the intermediary between obviously the engineers and me, which was very helpful, right?

Joe: Mm-hmm (affirmative).

Nathan Beckord: I think there’s no way, if I had not had a project manager and I was just interfacing directly with the engineers, it would have been a mess. I will say one of the mistakes I made in the early days is just like, every feature idea that I have, I wanted to like build it in there, and not having that filter of a product manager was a mistake. Gosh, you just have to keep yourself away from messing up the app, you know?

Joe: Yeah, which is like … I mean, that’s I think the most important role of a project manager, right? Is they’re protecting you the client from making sure you don’t blow your budget, or you don’t try to put too much in at the same time to make it a bad app. They should also be protecting the dev team from what’s called scope creep, right?

Nathan Beckord: Yep.

Joe: I’ve worked with project managers who just liked saying yes to the client, and as a result the developers weren’t happy, and the client wasn’t happy. I think that’s an important role the project manager needs to play.

Nathan Beckord: Totally, yeah.

Joe: You mentioned, and so … I mean, you had a bunch of ideas, you were really excited about this. You were working with a project manager, so the project manager I suspect would talk to you, get the features, like the ideas that you had, and then essentially translate them to the development team? Is that about right?

Nathan Beckord: That’s right. The project manager, he and I would sit down, sometimes have a beer, sometimes in front of a whiteboard, and just kind of scope out stuff, and throw stuff up on the whiteboard. Then, he would take it, and I think at the time we were using Gira for this, and kind of turn them into development tickets. We’ve switched to Trello now for a lot of that work-

Joe: Yeah.

Nathan Beckord: … and, a different project manager. But yeah, that’s basically it. He would kind of take the ideas and put them into development tickets.

Joe: Cool, very cool. And then as far as testing goes, was it you doing most of the testing, and did you have other people testing as well?

Nathan Beckord: Yeah. Me, and the project manager, and probably needed to do more of that. I would say that was another maybe mistake, is we put things out to the live, into the universe probably before they were really ready. You’re kind of hoping your early users are patient with you.

Joe: Mm-hmm (affirmative).

Nathan Beckord: And, they’re not always, right? Yeah.

Joe: I mean, that’s really interesting and funny. I mean, it’s something that I feel like every developer, every person building something wants to do, they’ve tested something. I personally am very bad at testing, because I equate it to like building a chair, and then slamming that chair against the wall to see if it breaks. Like, you don’t want to break your chair.

Nathan Beckord: Yeah.

Joe: I can totally level with that.

Nathan Beckord: Not as sexy as building stuff, you know?

Joe: Yeah.

Nathan Beckord: Testing, [inaudible 00:27:10].

Joe: Yeah, exactly. But, it’s the stuff that the users are going to see, so it is important.

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Joe: Moving on actually to that next point, how did you get users? It sounds like it was mostly you in the beginning, you hired this development firm to do the development. Somebody had to do the marketing as well to get people on the platform.

Nathan Beckord: It was mostly me doing that, because I’m a little better at that than development I would say. But we, gosh, we did everything you can imagine. We did a lot of going around to these tech startup conferences like Launch Conference, TechCrunch Disrupt, and a handful of other ones. We’d get a demo table, get our laptop and monitor out there, get some cheap swag, some beer koozie’s or whatever, and kind of hustle on the trade room floor. We put on a couple events related to fundraising, where we’d find a WeWork Space or something, where we could have 100 people in a room, and we’d get a couple venture capitalists to come in as speakers, then we’d sell tickets to people, so we’d kind of build an audience, you know? Obviously for what we’re doing, by throwing on events.

Nathan Beckord: Started to do a little content marketing, and over time our marketing thing has become much more content marketing focused than event driven than it used to be. And then, just kind of reaching out to everyone I know on LinkedIn and other places, and kind of telling them what we’re up to. And usually having to ask like, “Can you introduce me to founders who might be raising money? Can you introduce me to accelerators who might find a use for this?” Things like that.

Joe: Yeah. Wow, that’s super interesting. Mostly the part where you would hold events, you would host events to try to get users. I know that actually, to pull back the curtain a little bit when you filled out the Calendly link, that was specifically mentioned, right? Building events and podcasts as part of a product platform. Can you expand on that part a little bit, and kind of how you realized, “Hey, we should host our own events,” to build an audience?

Nathan Beckord: Yeah, it’s actually a pretty … it was great. We haven’t done an event in a year unfortunately, but we do one called Funding 2.0, kind of the future of raising capital, having some nice grandiose title that intrigues people. But, in the early days it was a great growth hack, because you think about it, right? You maybe paw 500 bucks to get a space, you pay another 500 bucks for pizza and beer. Then, you get a couple speakers who are draws to audience, they’ll usually do it for free, right? Because they want to build their own brand. And then you sell tickets, right? You sell tickets on Eventbrite and stuff like this, and a couple of them, we actually made a couple thousand dollars on the events.

Joe: Wow.

Nathan Beckord: I think one, we made like five grand on something like that. It’s getting our name out there, it’s getting an audience. I think our biggest one might have even been like 300 people.

Joe: Wow.

Nathan Beckord: So you get 300 people in the room, captive audience. They’re there because they’re interested in venture capital, or raising capital. Obviously you’re moderating the sessions, so you’re introducing Founder Suite and what you do, so you’re kind of promoting there at the end. And, you also have their email addresses, because they signed up through Eventbrite. And, you make $5,000 on it, so it was-

Joe: Yeah.

Nathan Beckord: … Now, the caveat is it takes a crazy amount of actual time and effort-

Joe: Right.

Nathan Beckord: … to put on events. I’m making it sound much easier than it is. But, you know-

Joe: Yeah. You can’t just like find an event, and then the next day have it. Yeah.

Nathan Beckord: … Right. It takes a couple months of prepping and planning. And, you’re always worried the week beforehand that the room’s going to be empty, you know?

Joe: Yeah.

Nathan Beckord: It’s like, “Is anyone going to show up to this? Am I going to lose money on this?” It can be pretty stressful, but it can be pretty good too. Yeah.

Joe: Wow. Yeah, that’s fantastic. Especially Eventbrite’s a great tool, Meetup.com is another one where you could probably find an audience in an area pretty quickly. But, I think that’s a great idea, and it’s probably under utilized, especially in an increasingly remote world, right? When you said that you and your project manager would get together in front of a whiteboard I’m like, “You worked in the same room? [inaudible 00:33:25]?”

Nathan Beckord: Yeah.

Joe: I think that’s really interesting, and I think that’s a really cool idea. As we’re coming up on time here, you kind of mentioned Funding 2.0, and I’d love to talk about plans for the future. Not only of FounderSuite.com, but also of kind of venture capital in general, and getting investors. Because now there’s like, I mean there’s like Kickstarter and Indiegogo for example, I think those are probably a different animal. But, then there are also tools where you can get a bunch of, “Micro investors,” quote/unquote, right? But, they’re like actual angel investors. And the term, or the website is totally escaping my … the name is totally escaping me right now, but I know my friend used it to get funding for his startup.

Nathan Beckord: Hmm, was it a crowdfunding platform, or something else?

Joe: It wasn’t crowdfunding in the same sense as Kickstarter and Indiegogo, like I think there were actual investors on there making smaller investments. I really wish that I could remember the name of it, but-

Nathan Beckord: Well, there are-

Joe: … Yeah.

Nathan Beckord: … so you have, there are a number of sites out there. There’s, I can’t even think, there’s a bunch of them. Kickstarter and Indiegogo are interesting, right? They kind of pioneered the crowdfunding model, but it would usually be crowdfund like where you are basically pre-purchasing a consumer product, “I’ve got an idea for a new clock radio,” or whatever the thing is.

Joe: Mm-hmm (affirmative).

Nathan Beckord: Cooler with a radio built into it, or whatever. And you’re backing it, giving the company money, you’re getting the product before everyone else, and some other perks. A whole bunch of other sites have come on and done equity crowdfunding, which is probably what your friend was doing.

Joe: Mm-hmm (affirmative).

Nathan Beckord: Where, investors can buy small amounts of stock in a startup.

Joe: Yeah.

Nathan Beckord: That can work. I have thoughts on this. Equity crowdfunding can work if you’ve got one of two things, either something like really unique and novel. Again, I think one of those Kickstarter campaigns was like that cooler with a built in radio.

Joe: Right.

Nathan Beckord: Something that’s like really cool, and people are just fired up about it. Or, if you already have an audience that you can tap to invest in your business, right? Like you’ve got followers for your show. If you were going to crowdfund for your show, you might be able to tap that audience to invest. If you don’t have those two things, I don’t think equity crowdfunding is very compelling. A lot of these sites will sell you on this idea that you just come in, pay them 100 bucks, or 1,000 bucks, whatever it is, post up like a description of your business, and investors are going to flock to you. That doesn’t, that’s not reality. You kind of have to bring your own audience.

Joe: Yeah, that’s a really good point. That’s actually a lesson that I just learned, I went to like a Patreon workshop recently because I’m trying to build up the Patreon for my podcast and I thought just like, “Oh, I’ll post a page, people will pay five dollars a month.” I’m like, but I’m barely telling them about it, I am not giving them any benefits that are worth the five dollars a month, so I think you’re absolutely right about that. AngelList, is that one? That’s the name that just came to mind, where like-

Nathan Beckord: Yeah.

Joe: … Yes, okay.

Nathan Beckord: They’re one of the older, and probably larger equity type crowdfunding … I don’t even know if they call themselves that anymore. But yeah, they are in that category. We actually raised a little bit of money on AngelList, which was great. They’ve evolved a little bit since those days, I don’t know how long recently your friend did it. But, now they’re more helping facilitate syndicates, so if you’re an angel investor you can build out a syndicate, and do deals. I think that’s …

Joe: Gotcha.

Nathan Beckord: Yep.

Joe: Yep. Actually, that’s a really interesting kind of not necessarily reversal, but a direction change. I guess the root of my question is, and I think I probably know the answer to this already. Do you think that platforms like this are eventually going to replace our traditional investors? Actually, let me stop there because we’ve never actually defined types of investors, right? You have, I think they say that the first investors you should go for are friends, fools, and family. Is that right, yeah?

Nathan Beckord: Yeah, sure, right.

Joe: Then is it angel investors?

Nathan Beckord: Yeah, typically angels. Then beyond angels you might have seed funds-

Joe: Mm-hmm (affirmative).

Nathan Beckord: … seed venture funds, and then larger venture funds. Then, as you kind of get way later, you have your private equity firms. There are other entities around there like family offices, that’s usually like an investment team doing deals on behalf of like a wealthy family.

Joe: Mm-hmm (affirmative).

Nathan Beckord: There are some other types of investors out there too, yeah.

Joe: Gotcha. I mean, so do you think that these types of crowdfunded platforms could eventually replace the traditional investment models? Or, do you think that they’re pretty much here to stay because ideas are getting bigger, funding is such an integral part to a startup business?

Nathan Beckord: Yeah, the problem with some of these platforms is, I call it the adverse selection problem. Where, the neediest … so, it’s a marketplace, right?

Joe: Mm-hmm (affirmative).

Nathan Beckord: You’re trying to have startups on one side, and investors on the other. The neediest startups are the ones that often gravitate towards these platforms. Sometimes, kind of let’s be honest, the crappiest startups-

Joe: Yeah, right.

Nathan Beckord: … are the ones that are like, tried to raise money other ways, they can’t. So, they’re now flocking to these platforms. And on the other side of the coin, top tier investors already have so many good deals coming at them, that they don’t need to come to these platforms. In some ways there’s this adverse selection problem where, both sides, you’re sort of drawing in crappier companies, and crappier investors.

Joe: Yeah.

Nathan Beckord: I think that’s a hard thing to break out of sometimes, right? Because, really good startups, and really good investors don’t need these platforms. Yeah.

Joe: Yeah, right. That’s a good point. I mean like, I’m going to use the name that everybody recognizes, right? But, like Peter Thiel isn’t going to be on AngelList, or seed lead, or whatever, you know? Any of these websites, because he’s got plenty going on in his world. And then like you said, right? I mean, the Google story is so interesting to me because the founders were basically like, “We want money, but we don’t really want to give equity.” That worked for a little while, right? Where people just kind of cut them checks to be like, “All right, this is very revolutionary.” Right? They wouldn’t need to go to a website like this because their idea was so revolutionary.

Nathan Beckord: Yeah, right.

Joe: Awesome. Yeah, well Nathan, thanks so much for your time, I really appreciate it. I do need to ask my favorite question, which is do you have any trade secrets for us?

Nathan Beckord: Trade secrets? Oh, interesting. You know, I think that’s a good question. I think trying to figure out things to do for your business, to grow and market, that are scalable is the hardest thing to do, but what you’ve got to do. I’ll give an example of this, we were doing events, right? Events are awesome, but they’re actually pretty hard to scale beyond that say, 200 people. Once you go beyond like a 200 person event, you’ve got to get professional caterers, and you’re not just ordering pizza. You’ve got to-

Joe: Right, you need event insurance probably, a whole bunch of other stuff. Yeah.

Nathan Beckord: [crosstalk 00:41:25]. It’s so much stuff. It gets much harder-

Joe: Yeah.

Nathan Beckord: … once you get larger. Events are hard to scale. You’ve got to hire people to man the door, and all kinds of stuff, right? And so, how do you figure out ways to scale, that aren’t going to break the budget? I think like, I love your show, and we’ve got a show that’s a little in the same vein called How I Raised It. It’s a podcast-

Joe: Nice.

Nathan Beckord: … about how to raise capital, you know? And that’s been scaling, and that’s fun because it’s like, there’s not the limitations that you have with an event. Same content, same audience, but it’s a more scalable type of model, where it’s a podcast versus an event. I think that’s the trade secret is just like, always betting on how can I put my time and money into things that are scalable, basically.

Joe: Awesome, I love that. I will certainly link to that show, and then we could probably get like a little cycle going where you talk to people about how they raised it, and then I … send them over my way, and vise versa.

Nathan Beckord: How you built it, exactly.

Joe: Awesome, awesome. Thank you for the kind words, I really appreciate that. I’m going to link to the podcast, and to FounderSuite.com. But, is there any other place that people can find you?

Nathan Beckord: That’s pretty much it. I mean, we’re moderately active on Twitter, but not very active, and it’s just @FoundersSuite on Twitter. We do have a pretty good YouTube channel, Founders Suite as well. And Facebook, we have a funding hacks group on Facebook. And then-

Joe: Nice.

Nathan Beckord: … Yeah, just the podcast, How I Raised It on the usual places, iTunes, and Spotify, and stuff like that. That’s about it, otherwise FoundersSuite.com.

Joe: Fantastic. I will link to those, and everything that we talked about in the show notes over at HowIBuilt.It. Nathan, thanks so much for joining me, I really appreciate it.

Nathan Beckord: Thank you so much for having me, I enjoyed it too. It was a fun chat.

Joe: Thanks so much to Nathan for joining us this week. I love his story, I love that he used his own money to build a minimum viable product, which he needed to get funding, right? I loved that, I loved that he said something that has been echoed since the very first episode of the show, overnight successes are not ever overnight. Then, we talked a little bit about his plans for the future, and his trade secret was trying to figure out things to do for your business to scale and grow is hard, but it’s extremely important. I’m going through this right now. There is a lot I want to accomplish in 2020, including taking my business to the next level, and planning all that is very difficult.

Joe: I said this, this morning as I record this. I said this morning that it’s an art form to be intentional, and I think that gets to the root of what Nathan was saying here. Thanks again for his time. Thanks again to our sponsors as well, they are Ahoy, Cloudways, and Pantheon. Definitely, definitely check them out. If you liked this episode be sure to like and subscribe in Apple Podcasts, or wherever you listen to podcasts.

Joe: Now, as we approach the end of season seven and I’m gearing up for season eight, I have some plans to be more intentional, and I want to hear from you. If there’s a topic that you are interested in, or a question that you have, you can go to HowIBuilt.It/Feedback. It is an extremely simple form, just your email address, and the feedback you have. The email address, just so I can write you back, and maybe get more information. But, I really want to hear from you as I gear up for 2020. Once again, that URL is HowIBuilt.It/Feedback. It will be in the show notes for this episode, which you can find over at HowIBuilt.It/146. Until next time, get out there and build something.