How do you bootstrap a company to a $175M exit?

the punch line here is $175 million outcome from a bootstrap business is phenomenal if you bootstrapped your business and sold it for $175 million would you go back out and do it all over again but raise 80 million in Venture Capital we never thought about acquisition never even had an exit plan when we built the company like what what happened Point like holy I got all this money what do I do well some Founders are just blessed SL cursed to think big and do big we raised an additional half a million dollars from Mark Cuban yes so we raised $42 million in our first kind of two funding rounds that were super Consolidated and that's what David Hower did our guest on this show where he decides when to bootstrap and when to raise capital and has some big wins just sending a cold email to to meru which I think is it's a fascinating uh strategy from his his perspective welcome back to fundraising demystified today I'm excited to introduce you to David Hower who's joining me on the show today David welcome to the show hey juson thanks for having me David your background is extensive uh believe you mentioned your first company you raised money for was in 2000 which we'll get into in a second here but you've built up in bootstrap businesses I've raised a ton of venture capital I have a phenomenal story and if you can just walk the audience through your very first experience of raising money in the year 2000 and what that what that environment was like yeah so I'll actually step back a little bit because like my first experience raising money was actually from my dad um to raise $1,000 to buy a Dell computer that I wanted at the time um and he it was a really great learning experience because he said like look I could buy you this computer like he he had enough money to do that like we were well enough right um but he said no like explain to me and in essence pitch me a business plan and how you're going to pay this back right so like that was really my first experience raising capital and it was probably I don't know3 or $4,000 at the time for you know a computer that's probably less uh powerful than the the iPhone sitting on my desk right but like that experience I think was what really jumpstarted the understanding of my mind right you asked about 2000 so H happy to talk about that too uh so I was in high school um so I graduated high school in 2000 uh raising capital for a company called return path there was five of us there uh I was on the the original team um I was not super involved in every part of the fundraising so it was a very great learning experience for me like I was able to sit in in a lot of those meetings and I was kind of pitching more of the technical side right so like I was not the person going out and finding the capital providers although we had fantastic partners that we ended up partnering with and raised a significant amount of capital at a very difficult time for me that was a learning experience to see experienced fund uh fundraisers right going through that process and going through the pitch process going through building decks like and for me in high school I was like this is fantastic like can't be better um it also created an interesting challenge like do I go to college or not and ultimately I I decided to go to college because my mom convinced me but it it was a very difficult thing like you know seeing the internet boom seeing what was happening then seeing the challenges but then having this opportunity in front of me and what do I do next how did you get that opportunity I'm I'm familiar with return path there's a lot of you know literature on that fundraise and just the history of the business like how did how did 18-year-old David get a seat at the table there yeah so a good friend of mine James was one of the original Founders I actually went into his office uh probably a year before that maybe a year and a half before that and pretty much said like I want a job uh and he was running a company called the square.com uh it was a social media kind of app for Ivy League graduates so it sounds a lot like Facebook it was just way way earlier um and he had a few other businesses and he said hey like I don't need you here but I need you here and it just started as a job like I I he's like I I talked to him on the phone originally he's like I didn't realize that you were in high school I had a deep enough voice he's like I thought you were much older and I so I worked there for a year and he had this idea and I built out the original software for it so the so the idea of return path is really simple at the beginning like people change email addresses we're going to collect it when you change jobs or move right so or change isps at the time so like we created the partnership with the US Postal Service we started taking and just matching old email address new email address it was really really simple and plain at the beginning but someone like e trade or you know whoever at the time would pay a significant amount of money for that connection no it's a fasinating story has you know raised nine figures and I think sold for nine figures plus so you know great opportunity for a 18y old to get tapped into yeah I think though the problem with that is like it took so long to actually transact that I don't know if it was necessarily a great deal for us as Founders uh and it definitely was not a great deal for the funders right it is a long long haul for that company the ultimately yeah great success it actually sold is doing very well like all of those things are good but the timeline I think was not matched with the expectation of the VC Partners 20 years you know it's a it's it's a long time to wait for a Payday um so you decide to go to college um and then you launch a grasshopper uh this business you chose to to boot bootstrap if you just walk the audience through why bootstrapping was your path of choice yeah I think that it was a more natural path for me right like I think that the funding path although interesting and for someone in high school made a lot of sense I just felt more naturally connected with the bootstrapping path and doing the activities myself being Scrappy uh and also I didn't have a ton of money I didn't get almost any money out of the first fundraise so like I didn't have a ton of money to do anything so like the options were rather limited I also didn't necessarily love the lack of ultimate control after fundraising right I I wanted to be in control of my destiny and building grasshopper one of the key things through those 12 years right and we can talk about those different pieces through there was I wanted to build something that I just thought was a great company and that doesn't necessarily match with raising Capital right raising Capital puts you on a path for acquisition and quite honestly we never thought about acquisition we never even had an exit plan when we built the company we just wanted to build something that we loved where we loved being and we were having fun right like that was what we wanted to do and that's not a great path for Capital yeah that's fair and it's I think it's an important thing for a lot of Founders to to reflect on that there's so much sex appeal around metri capital that check mark of validation like oh people believe in me we're going to be a huge success we're be a billion dollar company but in reality there's so much that's of a business that's tied to the founders overall personal identity culture and things of that sort so you recognizing that at such a young age and driving towards for the audience the punchline here $175 million outcome uh from a bootstrap bootstrap business is phenomenal um but I think one of the things is really interesting that process that is missed is we had a funded competitor ring central at the time so like it's a very interesting comparison similar timelines similar products now we went in very different paths we stayed entrepreneur focused small business focus while they went Enterprise and I think that choice is very much influenced by Capital right capital is looking like how do you expand you know arpu and all of these other pieces while we were looking at how do we expand customers they're both valid paths but they're different right and ultimately ring central had an IPO and we sold what is really interesting to look back on now because of similar timelines and everything is the outcome for the founders and the outcome for the founders for us a grasshopper was like 10x the outcome of the founders at ring central after an IPO right so we didn't get the headlines it was hard for us to get pressed even in the process because we weren't sexy we weren't cool we weren't weren't raising Capital at the time but the the ultimate success for the founders of the company at being 10x plus is a huge difference for people to understand and I think having you share this story is going to be extra valuable for our audience because you got to have that outcome from the bootstrap experience but then you start another company and raise Venture H you to see kind of the complete opposite you know experience why why you after raising all that you know having that outcome and having that success uh and you know 10 Xing the performance of say your competitors personally um now I'm sure you ate a lot more dirt in the first couple years you know getting out the crowd but uh then they did but you know as far as the the end who's at the Finish Line you know sounds like you did well but with going on to your next venture I guess what was that well first you exit what goes in your mind like what what happened Point like holy I got all this money what do I do yeah it it was a really difficult time to be quite honest with you my my life didn't change like I don't necessarily care about money I'm quite Frugal I now 10 years later I bought my first new car um so I still live in the same house um now there's a lot of complexities that come with money there's a lot of freedoms that come with money but from an emotional standpoint it was one of the most difficult times in my life um my identity was wrapped up in grasshopper I was that guy that ran grasshopper like that's how people knew me that's how my family knew me friends conferences didn't matter right so that was just gone overnight very difficult to deal with and then I I had to struggle with a lot of issues since then of like do I belong here was that just luck right was that you know did I get lucky or is that something that I built right um thinking about how do I do something next being distracted with a lot of different things my time being filled with others and not being able to say no to them like a lot of those pieces and then emotionally having to really struggle with um this identity crisis combined with you know dealing with childhood uh issues in terms of like I always saw myself as overweight unpopular you know those types of things like how do I deal with that now that I have this time on my hands and one of the other side or the positive side of that was the driving success like people always never expected me to succeed so I wanted to prove them wrong now that I proved them wrong how do I continue driving forward how much therapy did you go through to kind of come through all that like it's uh you know for Founders that haven't gone through the exit experience the you know that kind of post exit Paradox is what you're what you're walking through just that identity loss and you know how your time gets filled thereafter but um you know it sounds like you you know found at least when it comes to business you you found a path uh at least to where you want I found a way to to find fulfillment in life and I think that was the first step along that process because it right after you have this kind of big crash and if you don't find fulfillment I think it's hard to then pick yourself up from there no matter what you're doing if it's therapy not therapy it doesn't really matter like I think you need to First find you know how do I show that I feel good about myself and can accomplish things to build a base to start going out from no it's super crucial and we we talk a lot about just mental health as a Founder because you're often siloed in the world and no one it's hard to have a network of friends that get it you know and know what you're actually going through and it's uh it's an incredibly grilliant process especially before you have success and then ironically when you have success it's it's another you know little problem so I think it's actually harder having success right like and the the most difficult thing is you feel like an talking about it because people are like what are you talking about you have lots of money why are you complaining about anything but I think that it's really an emotional Journey that is quite difficult and hard to share with almost anyone and it's a lot easier to share the other side of that Journey like how hard it is starting a company people can identify with it lots of hours time you know lost thing whatever those pieces are people can easily identify with that it's harder to identify with the emotional side of after success so this is a question I often ask people that have exited you know when you are making the decision to sell it's you know you spent 12 years there you what what caused you to what was like kind of the key points of data that you said you know what it's time to to do a transaction so looking back on it because I get it as question all the time and I think the most important thing for me and understanding now even more so having someone offer ex an excessive amount of money for what I believed it was worth right like so if you're in those shoes or I was in those shoes right I had near perfect information right so like what did I value at this I knew where we were going I knew what we could do I had all the past history I have near perfect information there's no buyer in the world that has that information and if someone is willing to pay significantly more than what I believe it's worth with near perfect information I have to at least entertain it right and I think that was the that was the transaction in my mind thinking through it at the time now looking back on it it's it's a it's a difficult decision because I think that after you have that success you you then Chase again um cash flow right and we see this this again and again with successful Founders is hey we've had this big exit we sold our cash flow business right and now we're looking again for a cash flow business it's this weird Paradox and someone described this to me the other day as Rivers um and reservoirs right and we're always on the other side of that looking over and we're saying wow look at that guy or girl with all those reservoirs tons of money and all the things that they can or cannot do while everyone with reservoirs is looking over at the cash flow people and saying wow look at that I want I want businesses like that so it's this very weird Paradox that we're always chasing the opposite direction it's got to be exhausting I I know exactly what you're talking about uh follow in the Trap myself so you know you exit from grasshopper you're you have some self-reflection what do you do next so the first thing I did was not listen to all the people that told me don't do things right away um so I I wish that I had right and I've given the advice now to lots of people and I'm sure they don't listen to me because entrepreneurs want to discover this for themselves and so I jumped into all sorts of things the good thing is I didn't make big commitments I did make small commitments so I understood the importance of that I still did things right away rather than slowing down um I also spent some time for myself I started practicing yoga six days a week I did teacher training I did all sorts of things for my mind and my body um so that was a nice bonus in terms of that time but really I wish I had listened to people and ultimately what I decided after probably a year and a half was what I wanted to find and do in my life was about learning like the things that most interested me was new Industries new things just like when I came to Grasshopper And we built that like that idea was an industry I had no idea about I didn't know about Telecom and phones or anything else but I love the learning process of it so that's how I identified my next big opportunity in wealth management and uh technology and fintech right like industry I had no real information about besides being a user right and when it came to you know because you're looking a track record you had grasshopper which you then launched charifi through grasshopper which there was another company you you guys did did was that boo tra and came out of grasshopper or did you guys raise money for for chargifi so it was bootstrapped um but grasshopper funded it right so uh it's kind of unfair to say that it was bootstrapped because we probably spent a million dollars launching it right now that was internal capital and it wasn't externally raised but that was still I would consider to be Capital raised to some extent right um when we started to spin that out we raised an additional half a million dollars from Mark Cuban which H happy to talk about that process it was quite interesting um and that was really the only Capital Ever Raised until we transacted the company once and then a second time so it's been a very interesting Journey for charifi without typical funding pass so yeah how'd you meet how'd you meet Merk youit how'd you get his money so Mark is a really interesting guy uh he invested over two or three emails uh he he is amazing or someone on his team is amazing at responding to every single email uh I am definitely not important in his in his SK his grand scheme of the world uh but he responds to every email they might be very short including if he's going to fund something or not like his funding Choice was literally yes 500,000 like there was not a deeper conversation we gave him some Pitch material and other stuff uh we then met his team and and things like that but like his choice and that decision-making process was quite simple and direct did you just cold email and you get a warm intro what was the why did you choose him we had heard from someone else that he was very interested in software as a service and we were building something that supported software as of service so like our pitch was really simple hey look soft software as a service is something that you believe is important and you starting to invest there we are the infrastructure for software as a service we're doing billing for companies that that sell this way we think this is interesting like that's the pitch easy enough so and you know it's funny we've had actually multiple guests on the show that have had a very similar story of just sending a cold email to to merue which I think is it's a fascinating strategy from his his perspective I'm sure he's got so many you know pieces of many different eyes across the world um so you've kind of done several other things and you know you obviously did not have a dull career or Life by any means um but I want to talk about vanilla uh vanilla is a company you've you founded you're were a CEO you raised a substantial sum I think what 30 plus million 40 million yes we raised $42 million in our first kind of two funding rounds that were super Consolidated so that was uh mostly Insight Partners but uh another partner as well and then most recently an additional funding round of about $30 million uh 35 uh with Insight leading that as well as a bunch of strategics quick plug for Founders looking for an edge raising Capital companies on thunder. BC have gone on to raise over a billion dollars since joining our Network it's absolutely free just go to join. thunder. BC to get started and if you leave a comment on this video down below with your company's name and the problem you're trying to solve you'll be interested to win a free coaching session with me okay that's it just comment down below now let's get back to the show so I guess walk me through why you started vanilla and why you chose Venture as your path forward and you what was your where were you at with the business when you decided to raise such a large sub yeah it was actually a very interesting Journey so a friend of mine Steve who ran a very large Raa um that that did a lot lot of estate planning for super high net worth individuals had this idea that technology was lacking in this very unique estate planning space came to me with the idea I said like I I love this it's something I want to learn about like in my exit I spent a lot of time learning about my personal Estate Planning and doing very complex things that I wanted to do how can I deliver this to others like so those two things became very interesting to me we built the team in a very bootstrapped fashion although we had capital from the original founders of the company uh as we started to build that out so we had a small team built that team to probably six to 10 people or so before we started the capital raising process and this was a really interesting kind of inflection point for the company and I think we had to decide at what pace we needed to go to market and you asked earlier like why raise capital and I think this is a one of the unique areas where we had to move very very quickly to get big big customers and to get big customers you have to have you know sock 2 compliance you have to have all the infrastructure you have to have this you software built like all those things have to be moving at a really fast clip and I think getting those major customers very very quickly the only way to do that is with significant amount of capital so when you're talking to the Morgan Stanley JP Morgan you know all these companies the speed at which you're moving is super important to push out other possible competitors that may be there so that that I think was really the decision to raise Capital right there and so you and you and your partners made that decision that that was the best path forward um and you guys it's sound like SE to the company you know it's initial Capital to kind of get some validation points I guess what were the validation points and then what was you you know when did you decide to take it to Market and how did you take it to Market yeah so the validation points were one we were able to start selling to small raas um and then two we were able to start building Pilots with the large customers like those were the two important data points that we pushed on obviously we had to build out and understand what the actual size of the market looks like you know what are the other comparables of people who've built out finex for raas in this space and there's actually a lot of great data when you start to look at adapar and you look at a lot of success stories in this very hyperfocused space of the raas right um so it's not it's a very subset of fintech as a whole so when you take those three things one proof points that we can sell some software two pilots in large companies and three size of Market I think those were the pieces that allowed us to raise capital um we sort of went softly to Market with some people that we knew had funded others in this space and venrock was one of the you know first ones that started to really express interest and really partnered with us and said like Hey we're going to build out some of these things together like that was a six-month process we're going to look at what do we actually think Market size looks like together so it wasn't just us pitching we were working collaboratively through some of those things with the data they had and the information until they kind of got committed and they LED that round um plus strategics so there there was two pieces that one venrock leading the round super important you know you need that lead to to push things forward and uh give some signaling to the rest of the market and then to the strategics I think we were able to get some of them engaged that were in Pilot stage that this is going to be their choice now that they funded the company uh and that we can expand our relationship ship much larger than the very limited relationship we even expected at the beginning how did you get in the door then Ro so I think that's the the difficult thing here which is having past success opens those doors so much easier and it and it's unfair to some point right like I actually I struggle with this a lot because I know that like I wrote a book I did this I did that the only reason I had any success was because I could em Mark Cuban and that only happened because of past success right like those things just build and it feels almost like cheating to some extent right because although you've earned it and you might understand that internally it is a sort of like a cheat code right like just having that contact and ability to send a message is better than a cold message and I think venrock fits into that same boat I don't remember who it was exactly on the team but they had a relation ship there they knew them uh we also had a relationship with a board member that had shared funding across three venrock companies so like again all of those little cheat codes got us in the door we still had to do the hard work and actually pitch and make it work but the the introduction part was Far easier than a cold Capital raise as a first-time founder and was denrock all you went to or did you guys get inos went we went we went to a number of different uh Partners they were the ones that showed the most interest and had the most experience in this space at this stage right they've funded I don't know 10 or 15 companies in this fintech space with a deep understanding of Ras so like we weren't explaining and talking about those things we were talking about where we think we're going specifically but we weren't doing the base work because they've already done that right so you bring up something very interesting that I think a lot of firsttime Founders don't understand what interested means there's a misguided conception that found her like oh a VC that doesn't say no is interested uh it's like what were this you obviously they had a this seems pretty clear as far as their background and you know history in the in the space but you know what were the kind of signals that you saw from them that said okay they they get it they're interested so the most important thing for me was asking them asking questions and like deep questions not surface level questions right so for me that signaled they were actually investing the time to deeply understand the materials we were sending to them or the conversations we were having the phone calls whatever it was because these weren't like this the typical questions like these were many layers down to deeply understand like that to me was the most important signal that ultimately did lead to success right like if I look at the that as a filter there was probably two or three others that fit into that bucket and they were again the most interested they ultimately didn't close but the others that had very cursor questions never material Beyond first or second phone call yeah and I think that's important for Founders to realize is like if you're not getting those types of questions it's a usually clear indicator that you know it's better to put your chips in other other baskets and and focus on attention otherly like my first reaction to those questions is like man they don't believe us they don't you know they're questioning the the industry or the sizing or whatever it was it wasn't that they were questioning it because they didn't believe it they wanted to poke holes in it so they could see how much we believed what issues we may not have discovered that they've thought of or or vice versa and how we responded Under Pressure I think is really what they were testing is like hey when we start pushing on this what happens does it fall apart does the team fall apart do they break down or can they stand up and say no like here's why here's how we back it up here's the proof points those types of things yeah I think that's just such a key thing for all founders to realize if you're not having that level of a two-way conversation if it's a Founder just pitching their heart out and they're like great we'll get back to you yeah it's pretty much Dead on Arrival at that point um so you have an interesting story okay so so so how much was that first round and would you call the the preed seed what would you call that round it was about $14 million sizable uh and and where were you guys in terms of stage of the company like Revenue wise uh we had very little Revenue if any to be honest with you like that was not the determining factor of this Capital raise this was can you get to these large customers and can you convert them over time right like that's what this comes down to um which is not typical for SAS company right like typically you're at that stage you should have two to three million of AR uh we had 100,000 probably maybe 200,000 like it was relatively small this is so important though because it's everyone sees the headlines everyone's like oh these see raise 14 million but like there's there's a calculated bet here it's a go big or go home you got to grab the market fast you got to move fast and somebody Founders you know come to me with these you know idea like oh we want to raise these massive rounds like you're not in that position to command that much Capital you know to you know as far as team track record and the the market opportunity and also the right party uh so actually a fun question asked then is did vrock propose 14 million or did you propose 14 million so uh that was a combination I think it was collaborative like what is it that we're going to need to get to the next stage expecting a capital raise in about 12 to 18 months right now the actual second capital rage came in a shorter period than that uh for a variety of reasons uh inside Partners was very interested in this space they had made co-investments with venrock uh in two other two or three other companies in this very specific space so I think that they were doubling down in their you know thesis in this area so that we probably benefited from an external Factor outside of the company itself so that timeline got Consolidated um but we also in the interim period built more of those key large customer relationships and I think that was again that signal hey like these are the most difficult relationships to build with the large wirehouses the biggest raas in the world like these guys are able to progress on that in a very quick fashion and honestly with software that probably didn't demand our ability to do that so our sales were probably definitely forward of our software ability very small team like a tech team of eight people so we were probably a bit over our skis there but now the team is 150 people and delivering and uh has raised Capital again so has built AR has done all of those other pieces so I think that the thesis is starting to prove out we'll see ultimately and was it about 12 to 18 months that you guys raised that other you know was seven months I think six or seven months it was a very it was very Consolidated yeah hot hot hot hot deal um and you know it sounds like it was inside again that came in and you know just kind of saw the opportunity Double Down had the inside information and you know didn't make did you run did you even run a process for that uh a little bit but not very much I mean it was it was pretty specific at that point yeah it just because to show that the importance of one having the relationship and making it a collaborative decision on the the capital Rays a lot of Founders go it's me versus them you know and I want my terms uh and you know coming from your background bootstrapping for very specific reasons to then you're caught relinquishing control and bringing in Partners you know I guess from your mindset and just how you were thinking about your own personal uh commitment to the company how are things changed for you from say grasshopper days to vanilla yeah so for sure understanding the need for Capital and applying it at the right times so I think that my first experience at return path we didn't necessarily need that Capital at that time and that's probably why the company took 20 years to transact to a success Point outside of just running successfully right I think we could have gone on a different path that would have been more successful so identifying and understanding when capital is needed to move at that extremely fast speed the other realization I had was I'm not always comfortable in that environment of spending $1 million a year in a losing scenario um because for me I just described it as a losing scenario right like while that company is actually winning right like that is the path that company is on and needs to be on to S to to get to a success point right but for me I feel very uncomfortable in that loss right from a p&l perspective even though that's the right choice for the company like so I was making and I think would make would have made even worse decisions over time of not hiring fast enough not spending fast enough not doing those things because my comfort is in profitability and you know positive p&l and building a successful company in that you know uh trajectory and color to the audience you Ste down as CEO after that you know second big round yeah and you just kind of answered why you know that uh kind of uncomfortableness of the hyperscale grow all Cosmo mindset and I think there was someone there was someone better for the company and the trajectory of that company than me and that sometimes is really hard for Founders to admit to themselves one and two to vocalize right like there's a lot of Founders that I know they can admit it to themselves and then they never vocal aliz it and they get into a really difficult position where the company starts failing because they've not vocalized that issue right and they've not talked about it with their Partners capital or otherwise right so those two pieces I think are very important for Founders to understand which is you have to acknowledge it internally and vocalize it externally and then we were able to go and find the right person to to run that company and do that and did I have to give up equity because of it probably right like who cares if that is the right thing for the company in the long run and most likely my Capital return from an ownership perspective will be much higher because that company will be more successful right so like I think that's the thinking about a bigger pie type scenario than owning a bigger piece of a smaller pie yeah and it's such a struggle again as a Founder you're told that you have to be the leader you're told you have to carry the weight you're told to carry the burden and you have to be the one and and it's just it's a case by casee you know situation and you know you recognize what the next skill level was required to take the company Next Level and you opted to bring in that skill as opposed to try to fill the void that maybe you weren't the right person to do and it's such a such an incredibly difficult thing to do I think there's an important key of timing too right like what timing in my life time and the things I want to do right like maybe I would have been able to do that five years ago maybe I can do that five years from now it it's really about timing and understanding where I'm at today and maybe I develop those skill sets maybe I enjoy doing that later in life I don't know right I'm open to all of those possibilities but the most important thing that's always in the Forefront is what is the best thing for the company today and it's not always me as the founder yep and it should be a self-reflection point for I think you know a lot of Founders to just ask themselves am I in the right seat at the right time just like we do when we hire you know is this the right person in the right seat at the right time and my right person in the right seat at the right time uh and it's just a valuable exercise and support to have with mentors and you Bor to have those productive conversations with but uh you know kudos to you for recognizing that and it seems like it worked out raise another round new se's in place and let's hope that it continues on that path right I do think that it's you have to acknowledge that it's really hard on on your own ego sometime to admit that right and we all have to get over that and kind of get past it and understand that the company is bigger than our ego but like it's easy to say that today but that's really hard so you've stepped down from Manilla obviously big cheerleader shareholder but you since moved on to uh deciding to buy companies instead going back to kind of what you were saying you want to be profitable you want profit and cash flow so you walk me through durable capital and what you guys are doing there and kind of why you decided that was the path for you yeah so I'm thinking very opportunistically um in combination with my goal of learning so again that means new Industries new things uh but buying companies that have a million doll plus IA not adjusted because oh my God the the number deals I see that have a $100,000 EV that's adjusted to 2 million is unreal um so you know really understanding and um looking at new Industries and new things not just fun sexy Industries honestly like looking back at grasshopper I was in a non-fun sexy industry that has produced significant returns to me so I'm I'm quite engaged with that personally um so it doesn't have to be software doesn't have to be any specific industry I'm quite open um and and going very slow like that was one of the mistakes that I made early on was going too fast looking at too many deals looking at the wrong deals I've decided very purposely to slow down and I'm actually only looking at one deal at a time maybe two at the most I'm going much slower through those deals we actually frontload due diligence much earlier in the process where a lot of other people will do a qoe report later on I frontload that and work collaboratively with the owner um through that process and that's how how we get to evaluation so like I think about this differently which means there's a bunch of deals that I just can't participate in right competitive deals fast bidding processes things like that and I'm okay with it um so that that's been my kind of shift of focus and thought around it uh where we're buying is quite open So today we're looking at a cleaning company very random um but has very durable uh results over a very long period of time so fits our model fits our understanding um and we own a few different Assets in the medical space so again these are things that have have long proven history and you know we didn't talk about this but you've also made a lot of Angel Investments and you know personal investments into private companies uh and now there's a very clear direction towards profitable companies I guess what's your you know what what were you doing back when you were making Angel Investments and maybe you still are but you know what were you looking for at there then and now what are you prioritizing with your Capital yeah so the my angel list or Angel uh Investments I should say were again focused on two things one giving back I felt that there was entrepreneurs I wanted to support and sometimes the best way to support them was a little bit of capital early on in that process but also my time and mentorship ship and help so if I could give that back to the community I was you know successful like that was my return on Capital the other was learning so again I was investing in things that I didn't understand necessarily or learn about um or wanted to learn about I also passed on Uber so if you look at a portfolio that was probably a tremendously bad idea um I I told Garrett that um New York will never allow you to operate like they might just kill you um I I was obviously wrong uh from an Uber perspective but if I look at the whole portfolio it's probably it probably is positive uh from our Capital perspective and that's okay I honestly don't even monitor it uh there are definitely some big winners in there did I make huge investments in them no I don't make a lot of Investments anymore probably two to four a year in a different category usually profitable a million plus ARR and Founders that I want to to help more with my time so I I will give them a capital portion plus my time uh so I'm kind of fully vested in in their success no that's impressive that's that's a huge commitment uh from me being able to put Capital at time and I imagine anyone that's fortunate enough to have you on do track record your visibility and also just something I'm noticing in this colle just like your level of intention and I don't know the right word but like the confidence in your own identity and your contribution and what is the right fit it's just so clear at least so it's portray and uh I think for any founder that has the ability to get an opportunity in front of you and earn earn you on their cap table is uh you know fortunate situation uh yeah I mean and and really I do want to be able to give back like there was lots of people along my journey that gave me their time and focus and without them like you know how would I be here today right and I wish that some of them had given a little bit of capital so that we could have returned that you know directly from a capital perspective but they were very giving with their time and that is like the ultimate thing that was possible that made this possible for me along that Journey so if I can do that again like that should be my number one goal in life um outside of you know personal accomplishment and other things right that's a great way to look at it um David your story is incredible I really appreciate you you know joining us sharing your insights sharing what you went through and how you made certain very difficult decisions uh what would be the best way if someone to follow you or learn more about you or reach out to you what would be the best way for someone to to do so so the best way to to learn more about me and kind of hear the things I'm thinking about and doing is David how er.com I have a weekly email that I send out goes out Thursday so 5:15 this morning went out as as always kind of the three things I'm thinking about across investing business uh you know even kind of not just money but like how do you think about money psychology Family Health all these kind of topics that we all naturally talk about with our friend and peer groups I try to share with a larger group so we have about 15,000 people that get that email every week now and I really enjoy engaging with those people and the the writing process itself but that's how you can kind of hear the things and the stuff that we've talked about today uh I'm probably not as active as I should be on on social media and I'm starting to change that and uh build out some of these uh videos and other things that I've you know done over time and and share them with a wider audience so that's one of my goals through the balance of this year that's great H as a subscriber uh I vouch you for it it's it's definely it catches Me In a Different Light it's just like oh like you know so many even my newsletter it's you know has a very specific theme every single time so it's kind of refreshing to kind of see these you know train of thoughts that you know kind of maybe poke me into a different direction or you know kind of get me to think more critically so uh you know highly highly recommend it I appreciate that we'll put we'll pop it into the description for everyone to to access David thank you so much for joining us thank you Jason for having me I really appreciate it and you know really if anyone wants to reach out my all my contact information is online um I can't always necessarily have phone calls with people but I try to respond as much as I can and do be helpful like I I do try to be helpful as much as I can so if there's something I can do reach out be careful they just might do it all right thank you David thanks Jason thank you for watching today's episode as a reminder I'm your host Jason Kirby I have Bel and sold multiple companies with over 135 million in transactions as either a Founder operator investor across multiple Industries I'm currently the managing director and founder of thunder. BC where we help companies and Founders at all stages navigate what capital to raise and who to raise it from and help improve company's odds of raising Capital if you need help reach out to us at help. under. BC if you like Today's Show please share with your friends give us a like or comment down below and as a reminder this show is public weekly and to get notified new episodes and our newsletter be sure to go to our website at join. thunder. BC and if you sign up today I'll send you a few freebies on how to negotiate a term sheet how to get a free list of relevant VCS and much more that's it no more Shameless plugs thank you and see you next week