E133: Learn The Five Stages Of Raising Capital And How To Find The Right Investors With Will Sacks

[00:00:00] Ronald Skelton: Hello and welcome to the How2Exit Podcast. Today I'm here with Will Sacks. He is the founder of Fulcrum Venture Accelerator. Welcome to have you on the show today. Thank you for being here. 

[00:00:10] William Sacks: Thanks Ron. Great to be here. 

[00:00:12] Ronald Skelton: Cool. So you're a little bit different from our other, guests most of the time 'cause you play in the realms of venture capital, raising funds and stuff. But I hunted around for a little bit and looked for somebody who had a system of process for that, because I want to look at the parallels between the worlds. So tell us,how you got into venture capital.

[00:00:28] It looks like you, created a company and sold it. So we can talk about that a little bit. But let's just start off with a little bit of the origin story. How did you end up where you're at right now? And then we'll go into, like the meaty details of raising money and how that works.

[00:00:41] William Sacks: Yeah. Well, I guess it all started in college when I, I decided that I hated going to my engineering classes, and I met a bunch of other guys that also hated going to their classes. And we decided to build this solar powered race car and race it across the United States from Chicago to Los Angeles and in the American Solar Challenge.

[00:01:01] And we needed to raise something like $600,000 in order to get the panels, and the titanium, and the carbon fiber and everything we needed to build the car and somebody had to do it. And so I just got on the phones and started calling local businesses and asking them if they wanted to sponsor our team and give us money or materials to build this thing. And so we ended up building it, we raced it. We came in eighth place, which was great for us. We didn't have any major sponsors backing us. And that was my first experience of seeing wow. Like any idea I have, I can go out and enroll other people in the idea and then make it happen. 

[00:01:37] Ronald Skelton: Very empowering, isn't it?

[00:01:38] William Sacks: Super empowering. Yeah. And no matter how big the idea, there's people that have, that can bankroll it. And then I learned about venture capital years later, and I wanted to be a venture funded CEO. I wanted to go take something that I really believed in. Get people who had almost unlimited resources to, to back it and build a company. And so I did that. 

[00:02:00] And that was Kindara, a women's health platform that's still operating today. We, sold it in 2018. And then after Kindara, I, I saw so many other entrepreneurs who had good businesses, but they didn't know how to raise money. And so the businesses would die. And, for your audience, it's actually, this is a great opportunity. A lot of these businesses where the founder can't raise money, have a solid plan. They have product market fit. They have revenue. But because of the dynamics of the market or just how they've been orienting towards raising money, if they don't raise money, they typically die. And so that's, that's why we started Fulcrum because, I really believe that if founders have this skill, then it's a key skill to build a high growth tech startup.

[00:02:45] And also a key skill to raise money for any kind of project. And founders who have this skill have so much more, so many more options and so much more possibility in front of them than founders who don't have this skill. And so we teach founders this strange science and art of fundraising. And, we've helped founders raise over $50 million now for projects in all different industries. And yeah, I feel like we're just getting started.

[00:03:11] Ronald Skelton: It's interesting. I have a little bit of background in there just, for you. I'm sure people on this show have heard this already. I actually, well, was in Silicon Valley for years before I moved away and came, I came back.

[00:03:20] I'm down in, in the northern part of the area. I worked at the startups. I went with, other team members. When we were raising capital, we're in the pitch rooms as one of the tech guys to answer tech questions if the,investors were so tech inclined. Rarely did they actually have questions for me. They brought me in and like a lot of times they, it was like you, you were just in the room in case somebody ask a question that the, the CEO and the other guys didn't, if they ask it a nerdy question, I was there for the nerdy questions, right? 

[00:03:43] Then I tried it myself. I created an online dating site that I don't really wanna talk about too much 'cause I failed miserably. But I tried to keep people honest in their profiles. It was called Honesty First, but, we got featured, we got a little story in the Wall Street Journal. We got featured on TechCrunch. We got some other like, clout, but we couldn't get the, it was a chicken and egg problem. We couldn't get adoption product market fit. So I ran out of my own money, ran out of a couple of investors' money I brought. Was trying to out, go out and pitch. And, it's just after eHarmony had raised like a hundred plus million dollars and all the VCs. I went like, we're not gonna help you compete with those guys.

[00:04:15] To kind of cut the short, they kept telling me like, you don't have a business here. You have a product. You should license your technology to them. When we created technology to keep people on us. After some life-changing events, I don't really wanna chat about too much. We had a reset. Both my parents passed within 18 months, and I kind of took some time off. And in that time it absorbed what they had said to me. So I tried to go back to those guys. The big guys, I can't say who. But one of the, one of the top three online dating sites, entertained my conversation just to tell me like, Hey, we already evaluated that.

[00:04:45] And nobody in our community wants to be kept honest in their profile. That's why you can't get product market fit. Is they all say they wanna do it, but nobody really wants to do it. A hell of a lesson to learn. But yeah, I've been in the VC rooms. I've been in the angel investor pitch rooms. I was qualified for a little while there, probably still am if you look at all my, hard assets like real estate and stuff. But yeah.

[00:05:05] So let's talk about you. According to, I'm just going off what I'm reading on your profiles and on your website and stuff. On your Facebook or your LinkedIn profile. It looks like you systemize this. You have a process you can put people through. So what does it look like to raise capital? Cause I think our audience can take your lessons learned, right. To raise capital to acquire companies the same way that you do it to create them. 

[00:05:29] William Sacks: Yeah, a hundred percent. So we teach a five step process, and I believe any fundraise, whatever you're raising money for, follows these five stages.

[00:05:38] It's kind of like a natural, progression. And actually we use a metaphor from nature of, farming. So the five stages are tilling, planting, watering, harvesting, and closing. And if you know,as a founder or as a entrepreneur raising money, it's crucial to know which of the five stages you're in, because then you know what you should be doing. So tilling is the first stage, and that's getting your mental preparation right. For example, do you believe with every essence of being that this is an exceptional opportunity and that anybody would be a fool not to invest in it? And if the answer is no, you know why? Where's the gap? And how can you learn more, get more people involved, find more influence or power or connections or whatever to make this like a slam dunk in your own mind.

[00:06:28] Because, essentially fundraising is a transfer of excitement and certainty. So if you have folic full certainty, that's going to be the currency that you're gonna trade to somebody then in exchange for their investment. So that's tilling. And then planting is getting all your external preparation right. Which is like your slides, your storytelling, your lists of investors and who's gonna be the right people. And just like fortifying yourself with everything you're gonna need to go out into the raise. So that's tilling and planting. And then watering, the third stage is about finding your lead investor or your anchor investor. So the person that's gonna come in and take a third of the round or more.

[00:07:06] Or a third of the acquisition price if you're talking about buying a business. Like who's gonna be the whale in the deal? You can still keep finding the smaller fish, and lining them up and getting them warm. But in watering, you wanna find that person who's gonna take a big chunk and that's gonna provide the momentum for you to move into harvesting, which is where you are rounding out the rest of the round. And you're getting all the people that you got excited about and watering into the round and harvesting. And then closing is your final stage when you're actually getting all the documents signed, doing all that, administrative stuff, solving all those problems.

[00:07:39] Crossing t's dotting i's in order to get the money in the bank. And each phase has its own specific tasks and skills and dynamics. And so, we take founders through that process. And if you know which stage you're in, you know what you need to be doing. And if you're doing that, eventually you'll get to the next stage. And if you do all five stages, you'll get to the finish line. 

[00:08:01] Ronald Skelton: It's interesting is I was absolutely confident in that, you know, I could make it work. And one of the second lesson I learned inside of that is I wasn't asking for enough money. I was out raising money. My plan was not grandiose, or what do you wanna call?

[00:08:14] It wasn't big enough for a lot of the VCs. Because I was just looking at, like I said, it is a chicken and egg problem, inside of the online dating site. Nobody wants to be the first lonely soul in a city to be on an online dating site. And then nobody wants to put their profile on one where there's nobody there, right? And I know how some of the other guys are doing it. But because I called, they were creating fake profiles. A lot of these websites were created by, and I won't name the names off, but I know for a fact, that they were. I know the people that did it. But that said, I couldn't do that.

[00:08:42] I just called my website Honesty First. I could, that would be helpful. 

[00:08:46] William Sacks: You see the headline, right? Honesty first dating site full of fake profiles would be like.

[00:08:50] Ronald Skelton: Exactly right? So I couldn't do it. I just couldn't pull myself to it. Not that I would if it was called anything else, but I was just like, I put myself in a corner where I couldn't. That said, I was gonna build like San Francisco, New York first.

[00:09:00] I was gonna target two cities, in a big populated areas and then build profiles for those and then draw and eHarmony just raised a hundred million dollars. So they're like, No. So it's, the reason I bring that whole other thing back up is, is there a sweet spot where like if you're not trying to raise X number of dollars, you're probably not gonna get the number of attention? 

[00:09:17] William Sacks: Yeah, we would say that's part of the inner game. Like the getting to certainty and having a really sound plan. And so the fact of the matter is that there's as many different kinds of investors as there are investments. Like there's people that wanna put $5,000 into an agricultural purchase. 

[00:09:34] And then people that wanna only put a hundred plus million dollars into high growth tech and like everything in between. So I think for any raise you wanna look at finding alignment between the people that you're talking to and the deal that you're presenting, because that's what's gonna determine to a large degree, whether you're gonna get a yes or even like a first, a second, a third conversation. If the alignment's not there, it's not going anywhere, right? It's like dating site. If I'm on a dating site and I'm looking for women, any man who's trying to match with me is not gonna get anywhere. 

[00:10:12] Ronald Skelton: So, I get that. That brought up another lesson I learned instead of there is research who you're gonna go pitch before you go there.

[00:10:17] Because people would accept my pitch. Like, I flew over to Oklahoma, I thought I was gonna move it. I was like, I'll move this tech company into Oklahoma. It's lower cost basis. Bit a little hard, because at the time the technology that I was writing the code and stuff in was top edge and Oklahoma was still like, kind of using windows and T-type of stuff. They were behind the scene as far as pulling people outta school to, write code for me. I was like, I'll figure that out. So I got two, there's only like four or five VCs at the time in Oklahoma. I got two of 'em to accept my pitch. Flew into town, spent the money to come in there, hung out with the parents of course that was fun. 

[00:10:48] But, came into town and, made my pitch and like, Hey, we wanted to hear your story. We liked your slide deck and stuff. But all we, invest in is restaurants and medical devices.I didn't look at like what they had been, and it was on their website. They said yes, so I flew there. So that, making sure that there's a match, like do they invest in, this goes with investment banks too, do they lend too? Because, to, to people in your industry and to your category a lot of these, if you really look at, even like SBA lenders and stuff that are using SBA backed loans, if you look at their loan portfolio, you'll realize they don't, they've never lend to a manufacturing company.

[00:11:20] You bring them one, they're gonna not know what to look at. Or they've never lended to a SaaS company. They don't know what they'll look at there. But if you go to one that's what they do, they know what they're looking at. And it, it's kind of the market, I'm a marketing nerd by prev or by education, I guess you would say. Product market fit. You have a product of a business and you gotta make sure it matches the market. Your investors, the market right? 

[00:11:40] William Sacks: Right. Like opportunity investor fit. 

[00:11:43] Ronald Skelton: There you go. Same kind of like, is this something they'd even invest in? Would this be in inside of their comfort zone? 

[00:11:48] William Sacks: Right. And the check size is important too. Like if you're, so, if you're raising for, like a seed round or a pre-seed round, if you're going to VCs and asking for $50,000 checks, there's not a lot of those guys around. There are a few. Same thing if you're going to Angels and looking for a 500 K check. There's a few, but mostly angels are write you, 25, fifties and a hundreds, and VCs wanna write bigger checks.

[00:12:16] And so you gotta understand that and go to the right people that are gonna write you the check size that you need. And I'm sure it's the same with acquiring a business. 

[00:12:24] Ronald Skelton: It is absolutely. So, let's talk about the rest of the skillset there. You we're talking, now we know we gotta find investors that are interested in, and can stroke the check with comfort.

[00:12:33] It's not a, like in the real estate game, I used to say I never take scared money because, I was really good at raising money for,it's a hard asset, you're security against, so it's a little bit easier to raise money. But you would have people that were like, yeah, I'll loan you the money to buy that house. And you realize it's 90% of their retirement portfolio. Yeah. Like, no, that scared money because the second, you have to, needs a little extra time or something happens, they're scared, right? That's a too significant of a portion of,their resources.

[00:12:59] So, their comfort zone and that, that would be on the angel investor side, I guess, in what we're talking about. But, can they stroke that check and not, not be calling you every day and going, yeah, where's my money? 

[00:13:10] William Sacks: There's a graph that, that we have, which is like on one axis you have check size. And on the other axis you have pain in the ass factor. Right? And so, like, you can guess what it looks like. The smaller the check, the bigger the pain in the ass. A hundred percent. So yeah, just something to be aware of.

[00:13:29] Ronald Skelton: In the real estate world, I'll share a short one with you. In the real estate world, I flew to some, raising capital event and they teach you how to be a private investor.

[00:13:36] I'm like, I'm gonna go to this thing. We have some money to invest, but I'm gonna, everybody in the room wants to, has money to invest. They wanna learn to be a private investor. I'm gonna raise some money in the room before this three day event's over. I left with over 200 k and, commitments for houses. We were lining up to buy, this is for real estate. And, a, pair of, Asian ladies, one I got to meet and her partner loaned us 180, on two houses. It was more later. But man, the day we closed this house, she wired us the money, we closed the house. The day we close it, I get this call going, Hey, I'm in Tulsa, the airport, they're from Dallas.

[00:14:07] And I'm like, you're where? Like, I'm in Tulsa airport. I wanna see my houses. What? Like, no, you're the bank. You're not your house. Like, so I had to go pick her up. Then she wanted to be us to reimburse her for her flight. She paid like $700, for $800 for a last minute flight. But her investor lady, she was, her girlfriend that was, you know, had the, millions that wanted to get into real estate, wanted her to come look at these houses she just bought. Like, you just loaned money. We had to do this. But then she calls me and says, I'm sending my son out there for the summer. I'm paying for a room. Do you have a room for rent? I'm like, no. And you're like, what are you doing sending him out here for? Oh, he's an intern with you and learn what you guys do so we can bring it out here.

[00:14:43] I'm like, no, he is not. But, I paid those loans off as fast as I could and never borrowed from again. She would call me on a regular, Hey, we wanna do some more houses. Like, yeah, we're good. So that was that, that pain in the, don't borrow money that's from scared money. And don't borrow money from somebody that's just constantly gonna be in your business. Right?

[00:15:00] William Sacks: Yeah. And raise your minimum check size. Like, it's, why do people take 5,000, 10,000, $25,000 checks when it, you could take 50, a hundreds, two hundreds? The dynamics of those relationships are totally different.

[00:15:14] Ronald Skelton: And be honest. Somebody who's willing to give you a $5,000 check, that money means more to them than somebody who's willing to give you a $500,000 check. By the time you can write a stroke, a $500, a $500,000 check, either part of the business. Meaning that you're sold and nearly showing up every day to go to work or you're so geared towards investment and stuff.

[00:15:33] That's not gonna kill you. It's not gonna hurt you that bad. You want your money back. But I've never seen anybody stroke $500,000 to check where if they don't, if that investment doesn't win, that they're catastrophically injured, right. Financially. 

[00:15:48] William Sacks: Yup. So that's a good thing to think about is like, raise your minimum and it'll change your life. 

[00:15:55] Ronald Skelton: So how do you guys, or how do you identify? Like, in the tech world, it's kind of publicized, meaning there's angel investment forums, there's, San Teel, there's like venture capital areas where you could almost go door to door and pitch, right? There's groups and stuff, but as far as identifying, qualified or, accredited investors, what is your process? 

[00:16:18] William Sacks: Yeah. Well, the best introductions, like you can identify them easy. We have lists of all, you can find lists on the internet of 10,000 venture capital funds or angel investors.

[00:16:29] And then you can use tools on the internet to get every, to get all their email addresses. Then you can blast them all with an email and it's not gonna work very well. Because there's no relationship there. So the best way that we've found after years of doing this, is just start talking to people in your network. Start networking. And work your way to people. And the downside, insanely time consuming but the upside of it is that you establish relationships that potentially could last your entire life. And so you really just want to take a meeting with whoever is maybe in the world, in the ballpark.

[00:17:08] And get them excited and transfer excitement and certainty, and then ask them who they know, who you should talk to, and then meet with those people. And one meeting turns into two, those two turn into four. Those four turn into eight, 16. Soon you're at a hundred meetings. And if you've done a hundred meetings, you probably have raised the money you need.

[00:17:24] Ronald Skelton: It's interesting, as I used to use that. Who do you know? But I would be asking somebody I thought had the money. Like, Hey, we're opening, like for the real estate world that's how I raised the money. I'd show up and like, Hey, I'm opening up, another round, we're buying some more houses.

[00:17:36] We're looking for capital. Who do you know that'd be interested in? And I'd give 'em the pitch, right? And they'd go, well, I'm probably interested. Okay, well let's talk. But it was more of a, I approached it as a, who do you know? 

[00:17:49] William Sacks: That's the classic. Like if you want money, ask for advice. And if you want advice, ask for money. 

[00:17:53] Ronald Skelton: Or even like, Hey, I'd want you to, I have a couple of, and if you guys are hearing this, I'm not picking on you at all. I have a couple friends that where we were involved in projects before. And, It's like, I called him up, said, Hey, let's put you on the team.

[00:18:04] Like, I don't know what you're working on right now, but I'm building a team. We're gonna do X, Y, and Z. And they're like, well, I don't have time, but I have funds. I'll help you fund that. What you just said, click. Like, I kind of did that on accident. Give me 30 hours a week of your time, man. I've got this project I'm working on. Like, I don't have the time for it, but it's a great project. I got money. Like, oh cool, cool. I could use money too, so. 

[00:18:22] William Sacks: That's a good one. I like that. 

[00:18:25] Ronald Skelton: So, and it wasn't intentional as I really wanted to, like, there's only four of us I wanted on the, the leadership team of this project. And, I didn't have to have them. But the fun thing with that is, is like now when they invest, do I have their committed attention? Man, if I have a problem, they're gonna answer it, right? So the knowledge I need and the expertise that they would've brought, they're gonna give to me.

[00:18:43] Cause they're financially involved in the business. It's win-win for them and me. They don't need the time, put the time in. But if I do need their sound advice on something, I've got it. Nothing gives you somebody's sound advice more than, a check they stroke.

[00:18:57] William Sacks: Totally. I mean, that's a great thing about raising money from smart people is, as soon as someone writes you a check, you can call them up the next day and be like, yo, I got this big problem. Like, help me solve it. And they're gonna, they're gonna listen and probably help you. 

[00:19:09] Ronald Skelton: Paid advisors,in a different way. Well, I know we're part of the way through this process. We've talked about who do we talk to? What's like, I know there's a transfer of enthusiasm. So what needs to be said with enthusiasm? What's the content that needs to be presented? Is it different for every investor? You gotta kind of get inside of their head and know what they're looking for, or? 

[00:19:29] William Sacks: No, I think it's pretty much the same. It's your own enthusiasm and excitement about what it is you're doing and why you're doing it. And so if you're just super passionate about the business, like in, for your audience, if you're buying a business and you've done your research and you're just super excited about the opportunity it's that authentic excitement about the opportunity. 

[00:19:48] Or if you're building a company because you have some mission, and that's what's driving you. I think it's being excited about that and transferring that. So it's ever authentic because if you transmit authentic excitement, that's gonna resonate with people who are authentically care about what you're doing and this for the same reasons that you do. And then that will produce alignment. And you want alignment because long term, the alignment is what's gonna make sure that everyone gets to the finish line and is happy. 

[00:20:15] Ronald Skelton: There's a scary side of this too, and we'll talk about it. If you have passion and enthusiasm and you can tell a hell of a story, and you havin' a vision in our previous work, a vision that you can get an alignment on, right?

[00:20:27] You can get people, enrolled into your vision. If you get that done, you don't really have to have a very good business. We worked an exact sample of it. That guy raised what? Billions? 

[00:20:37] William Sacks: Adam Newman and the crazy thing. Yeah. That's a crazy story. Everybody should go watch that WeWork miniseries. 

[00:20:43] Ronald Skelton: There's even a podcast that did a really good job on it too. There's a WeWork podcast that just like, five or six, maybe seven episodes. Where they dive into it in deep on, on a podcast version. And it's a great story to listen to when you're driving. And he walked away with the, the one thing that got me on that one is, they paid him to leave. He walked away with a big check. 

[00:21:02] William Sacks: Yeah. And he was almost completely ruined. Like, he almost got nothing. I've heard him tell the story. You can find it on the internet and,they ended up, he got a big payout. And he just raised earlier this year or late last year, a $350 million seed round from Andreessen Horowitz to build this next company.

[00:21:23] Ronald Skelton: I worked for a little while for the SoftBank. One of the companies that I worked for was funded and founded by them. And,earlier on, before they became this behemoth that they became, we had a,thing called ISP Channel that was a, cable modem, internet, and we could do satellite too.

[00:21:38] So we could get remote locations. Back then, the satellite dishes were huge. We could put a big satellite dish and, fire up, internet to places that didn't have it. And, they funded that. And unfortunately the market dried up. We were targeting, small mom and pop cable operators and, turn 'em into cable internet service providers. And the big guys bought 'em all up. So we went from having hundreds of potential customers to having like less than a hundred. Like, one or two, three here and there. So we had no roadmap to profitability. Interesting is they actually offered, I didn't turn, I turned it down at the time. Maybe it was a bad mistake, but they offered, we had a big data center and we had, we hosted a lot of websites at our, on our, thing.

[00:22:14] They asked me to turn it into an ISP and stay. It's like every, they were selling off everything else. Like, Hey, why don't we just, leave the building? Why don't you stay here? Turn this into an ISP and grow it. And, I'd had a job offer to go work at Excite, excite at home at the time. And I thought, I'm gonna go work, help excite grow. And I didn't know that they brought me over there 'cause they, they just seen me liquidate a bunch of stuff at this place and they had it in their mind. I think that they might have to go through the same thing, 'cause within a year and a half of me being over there, we had to liquidate all the equipment 'cause they were in bankruptcy.

[00:22:41] So we got the enthusiasm. We got the story. What else is involved in this? We know who we're, like, I don't wanna say the target. We know who our investor is. We're ready to go. We've got our enthusiasm. We've got a story to tell 'em. What is the rest of the formula here?

[00:22:54] William Sacks: Yeah. So we talk about the three-legged stool or the three major themes or three skills. The first is the inner game, which is the certainty and excitement. The second is the storytelling game, which is telling the story of the raise and the business and the opportunity and what's gonna happen with the money once it gets invested.

[00:23:13] And then the last one is the investor game, which is just learning how to interact with investors and to bring everybody together around the table to get a deal done. And there's a lot of weird idiosyncrasies in that world in that process. And, and they all take practice. And if you get really good at the inner game, the storytelling game, and the investor game, then you can apply the five step process that we already went through and raise around for whatever it is that you wanna raise.

[00:23:40] Ronald Skelton: Then there's all the kind of, kind of what semi-technical legal stuff that goes behind the scene too. Like private placement memorandums and cap tables and. 

[00:23:49] William Sacks: Yeah, then all kinds of different terms. And it's totally asynchronous because a lot of investors do that stuff every day. And entrepreneurs or people buying companies do it only once in a while. You're showing up to a gunfight, bringing a knife to a gunfight. See the analogy to that one?

[00:24:06] And so, yeah, you gotta learn that stuff and know, know the things that'll bite you in the butt. And learn how to navigate all the potential pitfalls and actually get the thing closed in a way that works for you. 

[00:24:18] Ronald Skelton: Did we hit the third leg there? Cause I think I might have jumped in right when you were finishing something.

[00:24:22] William Sacks: Yeah. Well, the investor game is, the thing there is that you want to get people excited before you're actually raising. And you wanna sign on your first mover or your lead or your anchor investor before you start telling people, Hey, I'm raising money 'cause, when you say to somebody, I'm raising money for this, and a lot of times people will say, great, how much do you have so far? And if your answer is, 

[00:24:46] Ronald Skelton: Or who else is involved, right?

[00:24:47] William Sacks: And who else is involved? And if you're like, well, you're the first person I'm talking to. Well, unless that person is a potential lead and loves what you're doing and wants to be the first follower, they're gonna say, okay, well come back when you got more people around the table.

[00:25:01] Ronald Skelton: A lot of people like to follow smart money and not, I think there's fewer people who wanna be that guy. Right? 

[00:25:06] William Sacks: For sure. And it's like a hundred deal, right? There's a hundred followers for every one leader. You find the leaders and you focus on getting them in first, and then once they're in, if you've been doing a good job of getting all the followers excited, they'll jump in.

[00:25:19] Ronald Skelton: What do you think is the qualification or the indication somebody might be a leader? And they're, they've led on other rounds. I know that would be one, but what would you look for if I'm, if you just, you got introduced to an investor and you started going, how is this guy a leader or a follower? How would you make that determination? 

[00:25:34] William Sacks: Yeah. Well, in the venture or angel world, I just straight up asked them. Like, do you lead rounds? In the acquisition world, I think it's looking at what they've done previously, what their check size is. If they're only writing 250 K checks and you're buying a business for a million bucks, well then you know that they're gonna be a significant portion of your round and maybe that, maybe they can be the lead or the anchor.

[00:25:55] Ronald Skelton: Okay. And,any red flags? That's a good one. Any red flags? You see certain behaviors of a, investor or something you're like, okay, run. 

[00:26:03] William Sacks: Yeah. Like when people are going outside the norm of the standards or the conventions of how things are done in a specific raise, that's a red flag. Like it, it either shows you that somebody doesn't know what they're doing or they know what they're doing and they're trying to screw you.

[00:26:21] Or they've, the other option is they've created a new better model. Which warrants a serious look to see if that's the case. Like in the venture world, there's standards for most deals and most deals will fall inside that bell curve. And if somebody is talking about a deal that's way out of the norm, I think it's often, it's often a sign that they don't have the experience that you'd want them to have in order to partner with somebody.

[00:26:46] Ronald Skelton: Okay. I've asked you a few questions at this stage. Is there anything we're missing? Like, what should I have asked in this? What are some key, like, you better probably know this before you enter this world.

[00:26:56] William Sacks: I think it's all like, one thing to just hammer on again, is it's all about relationships. And most investors will invest in lines, not dots. So you're, every time you have a touchpoint with an investor, you're creating a line, right? You're creating dots. Each of those touchpoint is a dot. And then that those dots turn into a line. And if that line is sketchy and headed down, people are unlikely to invest.

[00:27:19] And if the line is kind of consistent and heading up, that increases the likelihood that someone's gonna invest in your deal. Exponentially. So I've seen founders send monthly updates month after month, but not be raising money. And in the acquisition world, it could be same thing. You're sending an update every month. These are the deals I'm looking at. I've evaluated this many deals. I'm thinking about doing this deal. Okay, we've done diligence. All right, we're ready to start looking for an anchor. Okay, we've now signed on an anchor. Who else wants in? And, if you've been sending those updates consistently, then it's makes it easy for people to jump in. 'Cause they, there's trust that's been established now. 

[00:28:00] Ronald Skelton: I like that. And I like the thought that came to my mind when you were saying that is that never let 'em see you sweat. Right? You could send a hundred positive statements and you send one negative, like, where you're really down on your luck for the day.

[00:28:09] Don't send that email, wait till another day. 'Cause that one will ruin, you can build trust in, it takes a lifetime to build your trust and a second to ruin it. I think the same thing goes here. We have a young entrepreneur in Tulsa that I was, looking at working with. I set money aside 'cause I really liked what he was building. He was sending me updates. He's ready, he is like, okay, I'm gonna need money, at this particular stage. And then he had a rough spell and he started sending me stuff where like, oh, this isn't gonna work. I think I messed up. And I was, I get on the phone with him, help him. But when it comes kind to stroke that check, I was like, I'll just go buy another house.

[00:28:39] This guy isn't as confidence as he said he was. So I would say, be honest, be straightforward, but be cautious with, sharing your down moments. 

[00:28:48] William Sacks: Yeah. You gotta strike the right tone. You gotta be real, you gotta be truthful, you gotta be hopeful, optimistic. You have to be centered. There's a very specific tone to strike in those emails and interactions. Adam Neumann had that nailed, obviously. 

[00:29:03] Ronald Skelton: Not that I'd ever invested him or anything because, because of his, my gut feeling on what's going on there. But, I might get him on the show sometime just to learn from him, right? It's like, how the hell did you pull that off? 

[00:29:13] Okay. So, where are we at in the process now? We're out there, we're talking to people. We're starting to get nods.It's kind of a carryover from the real estate world where I take verbal, like commitments. Like, I call it my shelf money. I kind of know who's committed to putting money in a deal. I build that shelf of like, okay, now I've got something I've invested. I've got five people that said, yeah, I'll call 'em up. And depending on the size of the deal, I might only need one of 'em, or I might need, three or four of 'em. In the real estate world, that becomes difficult 'cause you can get in trouble real fast for pulling money, putting more money on one deal than you have to do first mortgage, second mortgage and stuff.

[00:29:44] Or you gotta go out and do a private placement memorandum and actually create a security out of it. That said, some of these deals, one or two people can do it, right? Is the same thing here? Do you guys take verbal commitments? Is there some type of paperwork that's done the second they say, yeah, we're interested. Go get a for all along. I know money's not wired right away. There's a commitment process to this. 

[00:30:04] William Sacks: Yeah. It's very similar. You want to get people to commit verbally and then you wanna have that lead or the anchor investor. You gotta get them to convert, commit verbally, and then agree on terms. And then get them to get something signed. And then you go back to all your soft circled other folks and say, Hey, we've got a lead. We've got terms. I'm ready to go. Ideally I've got more interest than I have space in the round and we're gonna close in two weeks. So does that timeline work for you and give people a little bit of FOMO. And then get everybody to, I like to stroke the check. I've never heard that before, but it reminds me of like a golf stroke or a tax stroke. 

[00:30:42] Ronald Skelton: Yeah. Yeah. You get that little signature. They gotta stroke their signature on that check.

[00:30:45] I've had people wait, I haven't call it waste my time in the real estate world. Where like, yeah, they're wanting to invest with me and I'm like, I'm only buying houses. This is Tulsa, man. I'm buying houses for 70,000. Selling them for, 150, by the time we're done. And you find out they couldn't stroke a $70,000 check if they wanted to. 

[00:31:00] William Sacks: Well, I had a guy, and when we raised our seed round and I was raising $3 million. And I had a guy commit to, 800 K of the round. And so then we had like three on the nose committed. So then I went to close.

[00:31:14] And he had an office down in Silicon Valley. I went down to Mountain View. I met with him a couple times and so, talked to him on the phone a number of times and I called him up and I said, Hey, we're ready to close. Did you get the docs and everything? And he said, yeah, yeah, great. I'll send it on Friday. And then Friday comes, there's no wire, no docs. I follow back up, he said, oh, I just needed a little more time. Follow up with him a few days later he is like, yeah, no, I just need a little more time. 

[00:31:37] Ronald Skelton: He's trying to retrade your investment. He's out there trying to raise money to invest in you.

[00:31:40] William Sacks: Exactly. That's what was happening. And then another entrepreneur reached out to me randomly and said, Hey, are you talking to so and so? And I was like, yes. I dunno how they found me actually but, I got on the phone with this other entrepreneur and they said, well, this guy did the same thing to us.

[00:31:54] And so then I had an $800,000 hole in my round. I told everybody else that we were closing. They had the money that it was, a done deal. So then I had to go back to everybody else in closing and say, Hey, we're at 2.2 because of this guy. And I'm gonna figure it out, but I need your help. And Who do you know? Essentially, yes. And we figured it out. We got it done. But it was a stressful couple weeks because I was on a timeline based on what this guy had told me. And everything changed. 

[00:32:27] Ronald Skelton: You know what though? I promise you that you built some rapport with those two other investors. 'Cause they know you got it done, right? Now they've got a lot more belief in you. There's a, it's the epic tale of the hero's journey. You have it, you know something cool has happened. Catastrophe, you recover. It's every movie, every story follows a journey. You doing with that actually has them bought into that story of you next time you, you raise money. 

[00:32:51] As much as it sucked that it happen, it's probably a positive thing you pull on the other end, because, if you gotta win with these guys, they're gonna believe in you more than, they would any other time. They've seen what you, how you behave in, during the adversity.

[00:33:03] William Sacks: Totally. And I had so many investors say like, after Kindara, say like, Hey, if let me know when you're doing your next one. 

[00:33:10] Ronald Skelton: That's cool. That's cool. That's a good thing to, and I write those down. I keep those down. I actually have a little spreadsheet of who, who said, Hey, if you're ever working on something, let me know, I'm interested. Sometimes you can call that out on like, Hey, last time we spoke you were interested. Here's what we're doing right now. Like, do you or anybody you know me interested in this? 

[00:33:24] William Sacks: And it comes down to character, right? It's like when you find somebody who you believe has good character and is trustworthy and tells the truth, and has the skills and capacity, you wanna hold onto those. Everybody, all of us hold onto those people I think as relationships. And we're all in the process of improving our own character and growing. 

[00:33:43] Ronald Skelton: I have a private investor for the real estate world who, he's the guy I could call up at any given time. Like, I used to tell all the closing companies around town, like, Hey, if you gotta deal that bust 'cause somebody can't fund, call me.

[00:33:53] I can probably line up the money within minutes. And I'll just go, if it's a good deal,here's my numbers, here's my math. If it lines up, call me. I'll drive by the house and I'll come to the closing table. I'll be there within an hour. And,I said that to everybody and it only happened like once or twice, somebody call and go, Hey, we got this deal bust. This family really needs to sell this house. The investor can't fund it. Are you really interested? And I was like, yeah, I'd call him up. And, one of my investors, I won't say his name on here, he is a good friend of mine, he just wired the money straight into my account.

[00:34:18] He's like, oh, I'm at the bank anyway, hold on. And he is like, 120 K is all, but he's like, Okay, you have it. And I was like, what? I haven't done any paperwork. I'm sitting here typing up the paperwork for you. We'll do that later. Later he told me, you's the only person I've ever wired money to without having the paperwork done.

[00:34:31] He's a private lender. I said, why? He goes, 'cause I know, as long as your heart's beating in your chest, I'm getting my money back. Whether you make money, lose money or whatever, I'm getting my money back. And, that's just the mentality you want these guys to have. Especially on asset-backed ones. Not everybody gets their money back in, in venture capital. But for a lot of these business transactions where the business is making money and success, they need to have that belief in you and that belief in the companies that you're buying.

[00:34:56] William Sacks: Yeah, a hundred percent. 

[00:37:27] Ronald Skelton: I didn't ask you before we started, where are you located? Are you still in Silicon Valley area or do you just come here when you need to raise capital?

[00:35:02] William Sacks: No, I'm in Nashville, Tennessee, actually. I built, Kindara, the women's health tech company in Boulder, Colorado. And then moved here last year to Nashville. 

[00:35:11] Ronald Skelton: That's cool. I've been through there a couple times. Not that you would ever expect it, but I used to own a Harley. Kinda look like a guy that probably should be gone like, the wife won't let me get another one yet, but eventually I'll get another one.

[00:35:21] Yeah. So cool. So let's jump back into the business of things. What is the closing look like? For us it's loan documents or,shareholder agreements and stuff like that. Depending on if you're giving 'em equity in the company and stuff. What does the closing look like when you get the wire, what does that look like for you guys? As far as.

[00:35:40] William Sacks: Yeah, there's two different, vehicles that people use. So either a convertible note. Also called the SAFE note, which stands for Simple Agreement for Future Equity. So convertible notes are essentially, it's essentially a note that never gets repaid, in most cases. The note just converts into equity later.

[00:36:01] And then there's actually selling shares to investors, which would also be called a priced round. And so you've got your convertible note rounds and you've got your priced rounds. And typically companies will first ish convertible notes and raise on that instrument. And that's nice because you don't need a lot of lawyers involved. You don't need to do it all at the same time. You can raise from people asynchronously. So you can take 25K, 50k, a hundred K, 200k, in on notes. Without a lot of fuss, without a lot of legal.

[00:36:31] Ronald Skelton: Is that the one that came, came about through like Y Combinator or something like that?

[00:36:34] William Sacks: Yeah. Y Combinator invented the SAFE or. 

[00:36:36] Ronald Skelton: They have their docs and everything on their website. You can actually dig through it and look at their, the structure of it and sample docs and stuff. 

[00:36:43] William Sacks: Yeah, exactly. So it makes it easy because it's, you don't have to negotiate that stuff. It's, everyone can just agree on this SAFE and you sign it, wire the money.

[00:36:52] It's easy. And then the priced round is more difficult because you're actually selling shares. You've gotta restate your charter, you've gotta make securities filings with the regulators. You have to be around the table at the, at around the same time, at the same day and get everybody to sign everything and actually issue the shares on one day or a number of days. And so that's, I say that's like being at the park and you're trying to get 10 squirrels to eat outta your hand at the same time. 

[00:37:21] Ronald Skelton: Doesn't sound very fun. I can already tell which one you prefer. Is it SAFE, just more common now?

[00:37:26] William Sacks: It's, if you're raising an early round of under a million dollars and you're not doing a SAFE, it's strange now because, it's become so easy to raise on the SAFE. But if you're raising a round that's over $2 million, you're probably gonna be doing a priced round. If it's over five, you're definitely gonna be doing a priced round.

[00:37:45] So, yeah, it's just more difficult. It's one of the hardest things I've ever done in my life is bring together a priced equity round for a high risk high, because everybody wants to wait. Wait and see where the business is gonna be in three months, in six months. Everybody wants the free option and you have to get everybody around the table at the same time and get everyone to agree and to sign. And so, because it's so hard, most people fail at it. And if you wanna succeed at it, and you haven't done it before, find somebody who has done it and work with them to understand exactly how to do it. Because otherwise it could literally take you a couple years to figure out.

[00:38:21] Ronald Skelton: I don't even like trying to coordinate meetings with four or five people. I hand it over to my assistant, like hey, assistant, I send a message, I got this person, and this person. And the funny thing is, they end up, like my assistant talks to their assistant and finally, a week later we get something on the calendar. But I, that it takes some coordination to find, you know, time where especially 2, 3, 4, 5, or more really busy people can be in the same physical location to signed documents. 

[00:38:47] William Sacks: Right. And with a priced round, you might have a lead that's putting in a million dollars, like for a typical seed round, you might have a lead putting in a million and two funds that are putting in half a million, and then some smaller people that are putting in like 250K or whatever, right?

[00:38:59] So, and then they've all got counsel. So now you've got various lawyers that are getting paid hourly. Like the more hours they spend on this deal, the more money they take home at the end of the day. As the CEO who's quarterbacking this whole thing, you've got the investors who you've gotta keep excited. And then you've got the council who you've really gotta, manage. Because the thing could go on indefinitely the lawyers are making money if they have objections. If your lawyer and their lawyer get in a fight, then those lawyers are both gonna, they could make like 10, 20, 30 k on that fight. It's an insane situation and you've really gotta be dialed as the sponsor or the founder.

[00:39:38] And get to the finish line and be on the phone and call an investor if their council is doing something that's slowing it down and say, Hey, you've gotta tell your council to back off. Because we gotta close this deal. And what your council is asking for is unproductive and unrealistic. And you've gotta do this as an entrepreneur who only does this a few times in their career. Talking to investors who do this multiple times a month for their entire career. So it's a very difficult,

[00:40:05] Ronald Skelton: To some extent, they're expecting that call though, right? If they're doing this regularly, they get that call regularly. 

[00:40:10] William Sacks: And they'll respect the founders that call them and say, Hey, your council needs to back down. We're not agreeing to this. This isn't what we agreed to. And you gotta call your council and the next hour and tell them that this is not material to the deal or in alignment with what was previously agreed.

[00:40:22] And they need to send an email in the next hour because I'm closing this tomorrow. So that email needs to be in my inbox and everybody else's inbox in the next hour. Can you do that? That takes practice and experience to learn. You gotta be like a dog on a bone with getting a deal done. I'm sure in real estate and in acquiring businesses. I'm sure it's the same at the end.

[00:40:41] Ronald Skelton: It is, and it's a little more dynamic because a lot of times there's other sources of funds, right? For us, like I interviewed a guy, a woman yesterday who does property splits. So, if a company you're buying has a real estate and asset, you can do what's called a sell lease back.

[00:40:54] So you can buy the entire company with the real estate attached, and then it's same day you close the acquisition of the company do a sell leaseback of the real estate, the fund part of the deal. We call it like a deal pie or basically you're, if you say, I gotta raise $10 million to buy a company and it's a real estate, the real estate might be worth two or 3 million of that. So I do a sales leaseback, they'll gimme a little bit of a premium, because I'm, committing to a 10 or 15 year lease, right? 20 year lease, 30 year lease, depending on who you're sale leasebacking to. So now, I've got, say it's a $10 million purchase. I've got two and a half million dollars in real estate. They're willing to give you $3 million on a 30 year note on it.

[00:41:31] So I get $3 million from them. Now I gotta go raise seven. And maybe they have tons of assets. I can do an asset loan against the, manufacturing equipment and semis or whatever it takes to run it. And I've got a million from that. Now I gotta go raise, six and you basically create this pie or this selection of funds and then, when you're left with, what do I need to write?

[00:41:50] And the owner finance usually will carry back 30, 40% of it on most cases, they'll carry back something. So now you're looking at, okay, I only gotta raise three. And you go out to your investors and go, Hey, I gotta come up with this. So now you've got this huge dynamic of different people who have, lenders and asset based loans and, real estate investors you're dealing with. So it's dynamic. 

[00:42:11] William Sacks: Yeah. And, do you like it? Is it fun for you that, that stage? 

[00:42:15] Ronald Skelton: It is and I moved to something much simpler. One of the things I did is I realized I move around a lot. And anytime you buy a brick and mortar company or something like that, with all those moving parts, you physically need to be able to go there at the drop of a hat and be there for 60, 90, or 180 days.

[00:42:29] I didn't want to take that on because I have a seven year old and a 12 year old who are, my 12 year old has a hard time building relationships because we moved a lot around when he was in school at the early ages. And it broke my heart when we came here after about three or four weeks I was like, have you made any friends? He's like, yeah, I'm not ready to yet. I was like, why? Because they're all temporary friends. I was like, what? He goes, yeah, we're gonna move in a year or so and I'm not gonna, I won't know 'em anymore. And then he hit me. I was like, I'm gonna quit traveling around so much. So that said, I buy online assets, things I can run from remotely and different things. 

[00:43:00] I still help out with the others, and I have friends that are doing those and I, I, we walk through and I get, get a piece of the deal. I'm just not the guy that has to, when the CEO quits that because he gets mad. I'm not the guy who has to go there and run the company for sixty, ninety, a hundred eighty days until we find another operator. One of those guys are, right? But I think it's, I think it's a better play for me at my age at 52. I don't have 10 more deals in me that I can go out, you know, ideas in me I can go out and try back to back and see which one lands. I don't wanna pull 60, 70, 80 hour weeks to get 'em done.

[00:43:31] You can buy a business that's up running profitable and stuff, and it's already ironed out. It's already systemized. There's standard operating procedures and be the chairman of the board. And I don't believe that it's, anything's passive. You're gonna be actively involved. Real estate's not even passive. That's a big fallacy. It's the big,what you call it? Myth. Passive income is almost a myth in any in industry. Even these guys are, these lenders, these guys, these investors that loan you money. It's not totally passive to 'em. They have to check on you every once in a while.

[00:43:59] There's some mental, exercise that goes through if you know how my investments are doing, right?

[00:44:03] William Sacks: Totally agree. I think the passive income is, it is mostly a myth. 

[00:44:08] Ronald Skelton: Like that, that entrepreneur, you as the, as the entrepreneur, you just raised, $10 million. You have a problem. And you call one of those investors up on is he gonna go, no, I don't wanna help you with your problem.

[00:44:18] I'm passive here. I just wanna collect checks. There's no, like, I think absolutely it's a myth. I think we've covered, like what are we missing here? Like we've covered this topic fairly well, I think.

[00:44:28] William Sacks: Yeah, I think the, maybe the one thing is that for anybody just getting started or wanting to uplevel their skills, that fundraising is a skill.

[00:44:36] Just like marketing is a skill and engineering is a skill and finance and HR and everything. And it's turns out to be the one skill that you can't really delegate or outsource. Sometimes you'll get approached by people saying they can raise the money for you. It's just kind of categorically, no. You gotta, if you're the person putting the deal together, you gotta raise the money. Everyone's gonna want to talk to you. So it's a skill. You can't outsource it. And so you might as well get good at it. And the way to get good at it is to get started and work with people who have done it and can teach you how to do it well. And then if you practice it a few times, once you've done it a few times, you'll have the skill for the rest of your career.

[00:45:16] And then you can go out and do bigger deals. And that's exciting to me. You can keep upleveling. 

[00:45:21] Ronald Skelton: Would you be interested in helping somebody? It's like, Hey, if I've got a $10 million SaaS I'm trying to acquire. Would you help me raise funds to do an acquisition? Would that be something you'd be interested in?

[00:45:30] William Sacks: Totally. Yeah, totally. 100%. I mean, it's something I've wanted to get into for a number of years 'cause I had this, I have the same realization as you, that when you're starting something, you don't have product market fit. You're just talking statistics. Your chances of success are single digit.

[00:45:47] At best. If you are working on something that has product market fit, that has revenue, that has customers, that has a history of a couple years worth of, profits. Your chances of, like you said it earlier when we were talking, your chances of success are high. You actually got a, (you gotta mess it up) screw it up. Yeah.

[00:46:04] Ronald Skelton: It's yours. It's not yours to build, it's yours to mess up, right? 

[00:46:06] William Sacks: It's yours to screw up. So the pitch is like, Hey, I'm not gonna screw this up, versus, Hey, I'm gonna create this thing that's gonna, that's going to succeed where 95 out of a hundred fail.

[00:46:17] So very different pitch. So I've wanted to get into it and it's something that I would love to talk to any, any entrepreneurs about, or people that have deals. We have a whole investor network. And so yeah, would love to, to talk to anybody about it. 

[00:46:31] Ronald Skelton: And I know for a fact I've seen it when I went to the, angel forums and I watched the pitches and stuff, I got invited to go watch some of 'em and stuff.

[00:46:37] And, they invest in everything. Like there were people there in to pitch, real estate transaction. There were people in there that were pitching acquisitions. Like they already had a company and they wanted to acquire a competitor. And they heard it and some of them got funded. So, the same investors that are out there doing seed rounds and stuff like that, and the same investors you have very likely would be interested in hearing some of these deals too.

[00:46:59] 'Cause it's a little bit safer for 'em. Especially in this uncertain, yeah. A lot safer. Yeah, sorry. A lot safer. I'm trying to be nice here. A lot safer for them. And in this uncertain economy, safer investments are a little more what people are looking for right now, so. 

[00:47:12] William Sacks: Yeah. I mean, it is totally different return and risk profiles. And so if in a, if you're allocating your resources, prudently, you should really only be putting 5% or less of your investment into the high risk, high reward stuff, and you should be putting high percent of your investing into the high percent percentage that you're gonna.

[00:47:34] So any angel investor, you really gotta make like 40 angel investments. For, to be sure that you're gonna get a good return on one or two of them that's gonna make up for the 35 that don't return anything.

[00:47:47] Ronald Skelton: Yeah. And the difference is, you invest in two or three guys acquiring companies, they're all gonna probably make, you might get one that messes up, you're gonna all probably gonna make money.

[00:47:55] You're just not gonna get the unicorn where you put a hundred dollars in and get a million dollars out. And there's some big wins to be had. 'Cause if the guy's doing it right and he sell and, he grows it and sells it to a higher tier strategic acquisition, like a competitor buys it. Or a private equity buys it, the multiples go up. What people pay mom and pop guys for their business are two to three x in most industries. Maybe four x in some. SaaS was crazy last year, but it's kind of calming down too right now. And then you get to the private equity side and it's almost twice that. That's just common. And you get into public companies buying you and it's like they're, they'll write checks bigger because if you look at their, price to earnings ratio, they can add, 10, 25, 30 million.

[00:48:35] You gotta be bigger, you gotta be $25 million company or something. But if they can add $25 million to a $150 million company. And they're trading at, 30 x. Writing you a check for 10 x isn't gonna blink an eye 'cause they get 30x, price to earnings the next day. So there's a game here that's an arbitrage game that's being played by these acquisition entrepreneurs. That should be really intriguing to all the private equity investors. 

[00:48:56] William Sacks: Yeah. It's really fascinating and it's cool to, to be on this show and have this conversation with you to just knit the two worlds together a little bit and see how there's so many similarities. 

[00:49:06] Ronald Skelton: It is. And I always look for like who's doing something at a higher level that we need to drag down to us. The venture game, it's higher risk, it's higher, reward. It's also lot more money flying back and forth. How do we get some, reach out into that world a little bit and go, Hey, we got a safer bet over here with us.

[00:49:22] William Sacks: I mean, are there funds that's an interesting question. Are there funds that do just this, that aren't private equity, but are like, between that and the individual investors? 

[00:49:32] Ronald Skelton: Absolutely. I've had a few of those guys on the show. There are individuals that will go out and raise private funds, like their own funds, and do acquisitions.

[00:49:40] I had like one, one's in my space, right? They're a little bit bigger than I'm at right now, and they're gonna probably stay bigger than me 'cause they're going, they're growing pretty quick. It's called treasure hunters. They raise money, they raise rounds 3, 4, 5, $10 million rounds. Acquire, online content sites. Problem with that, the reason I'm not going down that money and doing a private placement rent and raising a big seed round to do what I'm doing is, they have to have liquidity in three to five years. And some of these assets are just cash cows. I wanna hold on long term. So I'm doing kind of a little bit different.

[00:50:09] I'm doing a, have you ever looked at, the book? I think it was Myers as a wrote. It was called Slicing Pie. But, basically the way we're doing the structure and it is, they get paid back their money and then get, still get a piece of equity on the back end. So it's kind of a loan with equity. Then I don't have to sell it three to five years because they're looking for liquidity. 

[00:50:28] William Sacks: Right. And that's the rub is that if you're amalgamating a bunch of people into a vehicle, those people are gonna want liquidity at different times. And so then you gotta manage that. 

[00:50:36] Ronald Skelton: I did find a, a company that, we refer people to now that actually has their securities license to do secondaries. Which is rare to find. So a private, a capital company that basically helps you raise, they do everything from crowdfunding to,raising capital, from, a million to, 50 to a hundred million, like, or more. But they actually have the securities license that trades secondaries.

[00:50:56] So people that work with them, for those listeners who know what that means is, when you do private equity with somebody, he's locked into you until you have an exit event. Unless somebody has the ability and network to sell secondaries and a securities license to do something. So investors using that vehicle can actually go, Hey, I need out, and they can go to him and they can put that on a secondary market.

[00:51:17] They built a market for. They have investors and somebody can buy that position in that startup or that, that business that you bought. Not very common. Like there are very few people out there, there are very few companies that get all the securities license they need to sell secondaries. Mainly 'cause there's not a big market for it. So you have to build the market and get your license. So I do have one that's done that. So All right. How do people get a hold of you? What's the best way that you want people to reach out for you?

[00:51:41] William Sacks: Yeah. Well, you can email me if you want. I'm william@fulcrumventureaccelerator.com. Or you can go to fulcrum venture accelerator.com and,send us a message or reach out. You can read about our programs there. If anybody is raising for, some of these acquisition deals. I'm interested so, wanna learn more about it. So yeah, reach out. 

[00:52:04] Ronald Skelton: That'd be fun for somebody to do work with you 'cause you've got the experience, you know everything and you're learning something all the place. So you're gonna have a little more enthusiasm helping them naturally 'cause it's something you're interested in. I think it'd be a win-win for somebody.

[00:52:15] William Sacks: And, I should say I work, I do work one-on-one. Mostly we do group programs with groups of 20 entrepreneurs at a time. But I do work one-on-one with folks, only four at a time. And I have one opening right now. So if anybody wants to snag that, gimme an email. Shoot me an email. 

[00:52:29] Ronald Skelton: Awesome. And last thing. If somebody can only remember two or three things from the show, what would you want 'em to walk away with?

[00:52:35] William Sacks: Fundraising is a transfer of certainty and excitement. The way that you get certainty is by doing your research. Talking to the right people and assembling that altogether so that you get to certainty in yourself. The way that you get excitement is by being authentic. About what's really meaningful to you. And then combine those two things and that's gonna be your secret sauce and your superpower to get whatever deal you wanna get done, done.

[00:53:00] Ronald Skelton: Well, Will thank you for being on the show today. I think I've had a blast and I learned a lot today. 

[00:53:05] William Sacks: Yeah. Thank you, Ron. It was a great conversation and I would love to come back sometime.

[00:53:09] Ronald Skelton: Okay. Then we'll call that a show.