#55 - First Class Intro to Angel Investing with OfferUp Founder Nick Huzar

[00:00:00] Welcome back to Passive Income Pilots everyone, Tait Duryea here with Ryan Gibson. How you doing, man?

[00:00:05] I'm doing great, Tait. Excited for having our listeners listen to another exciting episode.

[00:00:10] Yeah, this was a really interesting one because Ryan and I are deep into the real estate space, but venture capital, angel investing, that is all new to us.

[00:00:20] So we are along for the ride just as you are on this episode. And boy, who better to talk to than Nick Ryan.

[00:00:27] You want to tell our listeners a little bit about him?

[00:00:30] Yeah, have you ever gone to an app called OfferUp and bought something from somebody or maybe perhaps you've sold something?

[00:00:36] Nick Hazar has actually started that company. He was a co-founder and one of the original members that started OfferUp back in 2011.

[00:00:45] And he launched this company. It has over 44 million downloads of the app and it does over 4 billion in transactions every year.

[00:00:55] So he took the company from an idea to a multi-billion dollar company.

[00:01:00] So we're going to hear his story and we're going to hear how some of his early on investors, we're going to hear about his personal journey, some of his failures, some of his successes, what he's working on today.

[00:01:13] He's working on some really interesting things that we'll talk about later in the show.

[00:01:18] And for our listeners who are tuning in, they're thinking, why would I be interested in this?

[00:01:23] One, I think it's a fascinating story.

[00:01:25] But two, we also are helping practical knowledge and insights by explaining what an angel investor is and how could they benefit from investing in a company like OfferUp years ago?

[00:01:38] Or what are some of the downside risks?

[00:01:40] And we're actually going to talk about what an angel is, what a VC venture capital or private equity is and the differences between all those things.

[00:01:48] Some of the risks that are associated with being involved in that.

[00:01:51] And really who can be a VC investor, private equity investor or an angel investor?

[00:01:56] And how that all breaks down.

[00:01:57] But a little bit more about Nick.

[00:01:59] He grew up in the here in the Pacific Northwest where I'm at.

[00:02:02] He went to University of Washington, GoDogs, where he earned a degree in communication.

[00:02:07] He's passionate about using technology to improve people's lives, which he's impacted many people making it easy to sell things much easier than the clunkier version.

[00:02:17] This list that you may have used and he's received numerous awards and recognition, including being named one of fast companies, most innovative companies in 2017 and 2018.

[00:02:28] So with that, let's get to the show.

[00:02:32] Welcome to passive income pilots where pilots upgrade their money.

[00:02:37] This is the definitive source for personal finance and investment tactics for aviators.

[00:02:42] We interview world renowned experts and share these lessons with the flying community.

[00:02:48] So if you're ready for practical knowledge and insights, let's roll.

[00:02:51] Welcome back to the show, everybody.

[00:02:53] I've got Nick here.

[00:02:54] Nick, thanks for joining us.

[00:02:56] Thanks for having me.

[00:02:57] Nick, why you've got quite the story and starting off for up.

[00:03:00] Why don't you give us a little bit of background about yourself?

[00:03:03] How you came to start off or up and the story behind the company?

[00:03:06] Yeah, happy to.

[00:03:07] So I often think sometimes companies are birthed from their own your own frustrations.

[00:03:12] And so offer up was not my first company, but it's definitely been the most successful one.

[00:03:17] And my I had a wife that was working and a daughter on the way.

[00:03:23] And I had a room full of stuff.

[00:03:25] Most people have that junk drawer in your house.

[00:03:27] I have one of those too.

[00:03:28] But I also had a room full of stuff.

[00:03:29] And when my wife said she was pregnant, I'm like, this is awesome.

[00:03:33] So I go into dad mode.

[00:03:34] I open the door and I'm like, kill me.

[00:03:36] How am I going to sell all this stuff?

[00:03:38] And I was like, this is going to take me forever to post on Craigslist.

[00:03:40] There's got to be a better app or something.

[00:03:42] And so I'm looking at my first iPhone, which is the second gen iPhone.

[00:03:47] And there's no Android phone at the time, by the way.

[00:03:49] And I just gesturing like this.

[00:03:51] I'm like, I just want to just why can I just take pictures

[00:03:54] and make this stuff visible?

[00:03:55] Like, well, why is it such an ordeal?

[00:03:57] And then I probably spent five months trying to convince myself not to do it.

[00:04:01] Here I am.

[00:04:01] My last company I was sleeping on an air mattress.

[00:04:05] I moved on.

[00:04:05] There was an investor and a former co-founder running it.

[00:04:08] And so I was like, I got to get a job.

[00:04:10] I don't want to be a deadbeat dad.

[00:04:11] I have a daughter on the way and my wife's working at Microsoft.

[00:04:14] I don't have. I just quit that company.

[00:04:15] So that was my focus.

[00:04:17] But I kept thinking about that and I just kept drawing, mapping out what it could be.

[00:04:22] And I just kept and there was a few apps in the app store already doing it.

[00:04:25] I just thought they were terrible.

[00:04:26] I'm like, these are terrible experiences.

[00:04:28] So I just eventually said, I was looking at the problem space and looking at like,

[00:04:33] how much value is stuck all around us?

[00:04:37] And it just blew my mind.

[00:04:39] I was like, why is this?

[00:04:41] Why is it getting where are homes getting so big?

[00:04:44] But we're having less kids under the storage business.

[00:04:47] Why is 10% of the US population restoring it?

[00:04:49] It's like 25% of US households can't even park in their garages anymore.

[00:04:53] And I'm like, this is crazy.

[00:04:55] And so my conclusion was it's because of time value.

[00:04:59] We all make time value decisions and that's why stuff sits often.

[00:05:03] And so the advent of the smartphone was a game changer because now I no longer

[00:05:10] had to take a picture and connect my USB to my computer, take 15 minutes to upload.

[00:05:15] I could just in 20 seconds take a picture of something.

[00:05:17] And our belief was if we could focus on a very visual experience.

[00:05:21] And by the way, if you look at Craigslist, for example, it's not that.

[00:05:25] Imagine I don't know who designed or Craig Newmark designed to design that thing.

[00:05:29] But imagine going into Nordstroms and you see all the tags first,

[00:05:32] all the text first, then you look at the item like this is the worst shopping experience ever.

[00:05:36] We were building our app and designing the app to be what I call like your lens to local.

[00:05:41] Like I wanted you to just window shop and make it enjoyable from your phone,

[00:05:45] which by the way is a lot.

[00:05:46] And I usually see a lot of apps are like that all day.

[00:05:48] But at the time, like nobody was doing that.

[00:05:50] Like it was a lot of engineering work to pull it off and make it work smoothly.

[00:05:54] So I think that was, like I said, it started from my own frustration,

[00:05:58] which then led to curiosity, which is how big is everyone?

[00:06:01] Have this problem or is it just me?

[00:06:03] And then I realized, wow, this problem is huge.

[00:06:05] And my math was if I could even just get one percent of the market,

[00:06:10] we'd be a big company.

[00:06:11] We're way bigger than that now.

[00:06:12] And so that was the initial kind of spark and the pain point,

[00:06:16] which at the end of the day, I was selfishly just trying to solve

[00:06:19] my own problem.

[00:06:21] And I guess the belief you had to have to was like everyone was going

[00:06:24] to have a smartphone.

[00:06:25] Like we said, we started writing code before there was even an Android phone.

[00:06:28] So luckily that trend continued on and we were able to take advantage of that.

[00:06:33] Nick, can I walk it back a little bit and ask what made you an entrepreneur?

[00:06:36] What drew you to starting companies versus working at Microsoft?

[00:06:40] I am not a good employee, I don't think.

[00:06:42] I don't like being told what to do.

[00:06:44] I'm also pretty creative.

[00:06:45] I think of things very differently.

[00:06:47] So I don't like being put in a box.

[00:06:49] I think I move at a different speed than working in big companies.

[00:06:52] I've worked for very short stints and large companies and that was miserable.

[00:06:56] And I started my first company when I was 22, like six months out of school.

[00:07:00] And so I just felt like I really love building things.

[00:07:03] Like I think of businesses like the most creative thing I could do.

[00:07:06] And so I just I get a lot of joy from starting things and watching them grow.

[00:07:12] And I look at the challenges, just puzzles and it makes things interesting.

[00:07:16] So I don't know.

[00:07:16] I've always had a commitment to myself that I was never going to work for anyone.

[00:07:20] This is 18 years ago.

[00:07:21] I was at T-Mobile and when I decided to leave, I told my now wife that I said,

[00:07:26] I've never worked here for anyone again.

[00:07:28] And we were camping and I took my badge and I threw it in the fire.

[00:07:32] And I was 18 years ago.

[00:07:34] I never worked for anyone again.

[00:07:36] So that's incredible.

[00:07:37] Yeah.

[00:07:38] So how did you when you were building off or you had the idea

[00:07:41] you realize that this is a huge problem and you wanted to build it?

[00:07:44] How did you pull together the engineers?

[00:07:45] He said you were writing code and had you pull the money together

[00:07:49] because that kind of leads us into the conversation we want to have today about

[00:07:53] adventure capital and angel investing.

[00:07:54] That sort of was that process.

[00:07:56] Fortunately, I had a co-founder who used to work with me in my previous startup

[00:08:01] and that startup was barely getting by and he was able to help him make ends meet.

[00:08:06] And he knew I was out there one day I said, I'm exploring this.

[00:08:10] What do you think?

[00:08:11] And started a little slow and then eventually we started really getting into it together.

[00:08:15] And so between the two of us and then I think we found

[00:08:20] a whenever early iPhone developers was like in high school at the time

[00:08:24] and we had talked to his parents, but like nobody was hardly coding apps back then.

[00:08:28] And between I'd say two of us full time and some other part time help,

[00:08:32] we were able to launch the first product.

[00:08:34] Like I did a lot of design.

[00:08:35] I coded all the website myself, but I'm not an engineer.

[00:08:38] So he did all the back and work set up AWS, which back then, by the way,

[00:08:43] it was very risky because everyone used to put things in color facilities,

[00:08:46] build your own hardware.

[00:08:47] We're like, what's this cloud thing?

[00:08:48] So we were very early in in cloud and so that we took advantage of that.

[00:08:53] And also networking.

[00:08:54] I think in the early days of companies, you just got to network your butt off.

[00:08:57] Like I am not shy from going out to every meeting and I used to have a T-shirt

[00:09:01] that says like developers wanted and I put every coding language that we were using

[00:09:04] and we got an engineer from that for my $25 T-shirt.

[00:09:08] That's such a good idea.

[00:09:09] Yeah, that was just I was just at an event and some guys like,

[00:09:12] I know how to do all that.

[00:09:12] I'm like, great, let's go grab coffee.

[00:09:14] So I think in the early days, you got to scratch and claw, right?

[00:09:17] You got to find ways to talk to customers there.

[00:09:19] You got to do all of it.

[00:09:20] And that's how we were able to get going as we just had a handful of us

[00:09:24] that were scratching and clawing for a long time.

[00:09:27] Where did you grow up?

[00:09:28] Did you grow up around here?

[00:09:29] Yeah, my father worked for Boeing, so I grew up in Kent.

[00:09:32] Oh, nice.

[00:09:32] Okay.

[00:09:33] Growing that network.

[00:09:34] Can you speak to that a little bit?

[00:09:35] I'm always interested in networking and how I do even take that first

[00:09:39] step out there to be at a conference where you're wearing a shirt.

[00:09:42] You just looking up programming conferences.

[00:09:44] I spent a lot of time trying to meet everybody.

[00:09:47] I believe that where your life takes you is through relationships.

[00:09:51] And yeah, being smart, somewhat helpful, but I think it's mostly who you know.

[00:09:55] So I just, I would always get very focused on, okay, what are these

[00:09:58] different events I could go to?

[00:10:00] I'd reach out online and just through one connection, we'd

[00:10:03] lead to another connection.

[00:10:04] Like you just got to keep doing that a lot.

[00:10:06] And that's how I was able to get out in front of people, get out in

[00:10:10] different conferences.

[00:10:11] I pitched every single VC in Seattle.

[00:10:13] I pitched every single investment group in Seattle.

[00:10:16] Like I've done all of that.

[00:10:18] And but it just takes time, right?

[00:10:19] That's there's no way around it.

[00:10:21] Like you just have to put in the time and go do it.

[00:10:23] And if you're building something really big and meaningful and also

[00:10:26] something that's pretty novel, then expect to hear nose all the time.

[00:10:30] Right.

[00:10:30] So you just have to have thick skin and just keep going.

[00:10:32] Yeah.

[00:10:33] As we say, your network is your net worth.

[00:10:35] You make it bigger and the more people you know, that's really why we

[00:10:38] started this podcast is to expand our networks, Tate and I, and also to

[00:10:44] expand the networks of our listeners.

[00:10:46] You listen in, we've got a big variety of guests that we have on and

[00:10:49] it really helps connect the world to different investing.

[00:10:51] But I wanted to get into that VC angle.

[00:10:55] I Tate and I are heavy into real estate syndications in general.

[00:11:00] And that's a new world to our listeners.

[00:11:03] Most of the listeners that come on or listen to our show are they never

[00:11:07] heard of alternative investing.

[00:11:09] And now we're in this even more new arena of VC investing and getting

[00:11:16] angel investors to come participate in companies like offer up.

[00:11:20] Can you speak to how that worked?

[00:11:23] Who you went to when you said you pitched a lot of the venture capitalists,

[00:11:28] you know, what is that?

[00:11:30] I think, you know, when you're going out there and you're

[00:11:32] presenting to people, you're telling a story, right?

[00:11:35] You're talking about why what I was starting with offer up, like,

[00:11:39] why the hell did I start this company?

[00:11:41] And so that's part of when you're getting in there and trying to meet

[00:11:44] with somebody and then you get into this vision of like, where are you going?

[00:11:48] What's this opportunity?

[00:11:49] You see how big is the market?

[00:11:51] How what's the competition look like?

[00:11:53] What's your team look like?

[00:11:54] What traction do you have?

[00:11:55] There's this very common kind of things that most people should

[00:11:59] have at most pitch decks.

[00:12:00] And I think it's about finding also the right investors.

[00:12:03] Like I'd have meetings and a pitch and clearly these are not the right investors.

[00:12:06] I would take the feedback and, OK, thanks.

[00:12:08] But yeah, no thanks anyhow.

[00:12:09] And so I just move on.

[00:12:10] And I would say again, you get a lot of no's, right?

[00:12:13] A lot of people saying, oh, it's too early to have enough traction

[00:12:16] or how are you going to compete with Craigslist?

[00:12:19] I get that every single time.

[00:12:20] And so I think it's understanding of objections and then sometimes

[00:12:24] tweaking them if I did, if I was to hear five of the same

[00:12:27] bits of feedback and I didn't act on that to make my deck better,

[00:12:33] then shame on me.

[00:12:33] So I would always take that and just keep iterating.

[00:12:36] So I always tell people, get out and start pitching all the time.

[00:12:39] Tell everybody because everyone's always worried that, oh, my competition

[00:12:42] or someone's going to kill me.

[00:12:43] No, lack of execution is going to kill you.

[00:12:46] Right.

[00:12:46] So you got to execute all the time.

[00:12:48] And so in the early days, I used to be like that with my founder.

[00:12:51] I'm like, we had a few other competitors that raised millions of dollars.

[00:12:55] I said, I think they're going the wrong direction.

[00:12:56] I said, we just got to work out, work them.

[00:12:58] And we just worked every single day, like every single day.

[00:13:01] I was in my pajamas, like we did whatever it took.

[00:13:04] And luckily we did out execute them and raise more money

[00:13:07] and then became the leader in the space.

[00:13:09] But that's usually in the early days.

[00:13:11] What I think about it is just keep focusing on the product.

[00:13:14] Yes, go tell your story to as many people as you can get feedback

[00:13:17] and keep tweaking your deck.

[00:13:18] If you look the first pitch deck I presented on offer up versus

[00:13:22] the one that actually we'll use to raise their series A

[00:13:24] it looked very different.

[00:13:25] And it was only because I got so many knows and learned from that

[00:13:29] and kept tweaking in.

[00:13:30] But by the end of the day, it was still the same vision.

[00:13:32] It was exactly the same product I wanted to build.

[00:13:34] I didn't change any of that.

[00:13:36] But how I talked about it, how I approached things

[00:13:39] and that was definitely different just through the early, early meetings

[00:13:43] I was having.

[00:13:44] But like I said, I was meeting with angel investors, having coffees,

[00:13:47] having dinners, going to meet with venture capitalists,

[00:13:50] meeting tech stars.

[00:13:52] I would meet with anyone I could to try to see if I could raise

[00:13:56] some funds in the early days.

[00:13:58] So going back to that high school you hired, did you have the money

[00:14:01] to pay them or were you having a scrounge friends to invest

[00:14:05] in the company at that point?

[00:14:07] Nope.

[00:14:07] So one of the things I do in the early days is I try to be

[00:14:11] pretty generous with equity.

[00:14:13] In that case, luckily it worked out very well for him because

[00:14:15] I said like, I can't really pay you, but I can give you some equity.

[00:14:18] You want to work for free and then that worked.

[00:14:20] And I did that a lot with a bunch of early hires where the

[00:14:23] conversation, I think sometimes and people feel like they need to

[00:14:26] raise all this money to pay all these people like these market

[00:14:29] salaries.

[00:14:30] And I just feel like then you're not hiring the right people.

[00:14:32] You need to find people that have the start-up stomach that

[00:14:35] want to come in there, build something great knowing that

[00:14:37] there's high risk and hey, it may not work.

[00:14:39] So I would have, I would flip conversations sometimes with

[00:14:42] their early employees.

[00:14:43] And one of the guys I hired was he's got a college and

[00:14:46] normally it's you ask him, what do you want to make?

[00:14:49] And I asked him, I said, look, I'm not going to ask you that

[00:14:51] question.

[00:14:52] I'm going to ask you what do you need to live?

[00:14:54] And then I'm going to give you a lot more equity, but you're

[00:14:56] not going to make a whole lot of money.

[00:14:57] And luckily that work, he doesn't work anymore.

[00:14:59] So that worked well for him.

[00:15:00] So that's the risk you take, but it shocks me still to this

[00:15:05] day, like I've seen some founders are like starting

[00:15:08] their company having just raised in an early round and

[00:15:10] they're going to pay themselves like a quarter million

[00:15:11] dollars salary.

[00:15:12] I'm like, this is ridiculous.

[00:15:13] What are you doing?

[00:15:14] And so I think they're, I'm not saying you should starve

[00:15:17] yourself entirely, but I think having some skin in

[00:15:20] the game is helpful.

[00:15:21] Can you lay out?

[00:15:22] So that's fantastic, by the way, I love that attitude.

[00:15:26] It's I think Ryan and I can echo that sentiment in our

[00:15:29] businesses.

[00:15:29] We've been very scrappy in the beginning, but what's

[00:15:32] the landscape we wrote down prior to the show Angel

[00:15:35] VCE venture capital private equity.

[00:15:37] What are those things?

[00:15:38] So you said that you were pitching some angel

[00:15:40] investors early on.

[00:15:41] Who are those people typically are they super high net

[00:15:44] worth and they this is what they do.

[00:15:46] This is their thing.

[00:15:47] This is what they like to invest in his early stage

[00:15:49] companies.

[00:15:50] And what are the, what's the difference between Angel

[00:15:52] VCE and private equity?

[00:15:54] Yeah.

[00:15:54] And when we raised money, we raised over $380 million

[00:15:58] dollars that offer up from all of those groups.

[00:16:01] And I think in the early days, like with angels,

[00:16:04] that's what it is.

[00:16:05] It's usually an individual has a high net worth and

[00:16:07] they're excited by something they believe in either

[00:16:10] the founder or the story.

[00:16:11] And so they're like, hey, I'll just, I'm going to

[00:16:13] write you a check.

[00:16:14] And so that's hard.

[00:16:16] Like in the early days of offer up, it was like 25,

[00:16:18] $50,000 checks.

[00:16:20] And it was also a lot of no's.

[00:16:21] I'm going to a lot of meetings trying to build

[00:16:23] a product, trying to build a team and hand to

[00:16:26] mouth feeding for a while.

[00:16:27] We did what they call a in the current market

[00:16:29] is called like a safe note.

[00:16:31] Think of it as just a, it's a very simple two,

[00:16:33] two pieces of paper usually.

[00:16:36] And the benefit of that structure is it's

[00:16:39] just open ended.

[00:16:39] So I could raise 50,000 and then 90 days

[00:16:42] later raise another 50,000 versus doing

[00:16:45] a real equity round.

[00:16:46] Usually what you hear is like series A and the

[00:16:50] challenge, of course, with that is you it's hard

[00:16:52] to price companies early on and you have to get

[00:16:55] everyone around the table at once and someone's

[00:16:57] got to lead and do all the work and then

[00:16:59] everyone's going to eat at the same time.

[00:17:01] And if that doesn't happen, it all falls

[00:17:02] apart.

[00:17:03] So it's interesting because now we're back

[00:17:06] to the camp.

[00:17:06] Now I started off for up 10 years ago and

[00:17:10] doing notes pretty early was common.

[00:17:12] Now that's pretty common even for bigger

[00:17:14] rounds.

[00:17:14] Now people are doing that and it's probably

[00:17:16] just a sign of a, it's more kind of trendy now

[00:17:18] makes more sense given where the market is.

[00:17:20] So those are the two different flavors

[00:17:22] usually of financing.

[00:17:23] The benefit of the note usually is it converts

[00:17:25] when you do a like a real equity raise,

[00:17:28] but it's usually discounted.

[00:17:29] So let's say I'm starting the company today

[00:17:31] and like I want to raise a million dollars

[00:17:34] and say it's on $10 million kind of

[00:17:36] evaluations.

[00:17:37] I'm giving up 10% of the company.

[00:17:39] If I had a note already in there,

[00:17:41] let's say I raise another whatever it was before

[00:17:44] that usually at discount.

[00:17:45] So instead of it being a 10% for the

[00:17:47] note holder when they do the price trap,

[00:17:49] maybe it's 30% discounted.

[00:17:51] So they're only now they convert it like

[00:17:53] 7 million.

[00:17:54] So there's some they're incited to come in

[00:17:56] and then the note also carries those like

[00:17:57] alone usually carries an interest rate.

[00:17:59] So that's typically how it's structured.

[00:18:01] It's a lot simpler paperwork.

[00:18:03] It's easier to do.

[00:18:04] And we survived by the way for two years on

[00:18:06] a note was handing mouths beating,

[00:18:09] having four months of capital in the bank

[00:18:11] was a luxury.

[00:18:12] And that's how we kept offer up alive

[00:18:14] in the first two years because no one

[00:18:16] was funding us like it was really hard.

[00:18:18] Shouldn't say no one, but we were barely

[00:18:20] just scratching and clawing constantly.

[00:18:22] Then so ultimately we did our series

[00:18:24] a probably two years after we started

[00:18:26] the company though.

[00:18:27] If I'm listening to this show and I'm

[00:18:28] a pilot and I make three four hundred

[00:18:30] thousand dollars a year.

[00:18:31] Is it a good idea to find a guy like

[00:18:33] yourself?

[00:18:34] Obviously they would have worked out

[00:18:36] very nicely.

[00:18:37] But is this the pond I want to fish in?

[00:18:39] Is this do I try to find somebody

[00:18:42] like you who's running and gunning

[00:18:44] has a good idea?

[00:18:46] Where would I even find you?

[00:18:47] Would you even want my money?

[00:18:49] What's that look like?

[00:18:51] I think that the challenge playing

[00:18:53] is that I think about it the angel game.

[00:18:55] It is a game of numbers.

[00:18:57] And so for me personally,

[00:19:00] I'm very selective on what I will

[00:19:02] invest in and part of it

[00:19:04] is it's a time thing.

[00:19:06] I think the best companies, if you

[00:19:08] want to break away a company like

[00:19:11] Facebook or something like that is

[00:19:13] that rounds to zero.

[00:19:15] Like the fact that offer up is the

[00:19:16] size and scale.

[00:19:17] And if you think of the probabilities

[00:19:18] that rounds to zero.

[00:19:20] Right. And so there's plenty of

[00:19:22] safer ways to put dollars put in

[00:19:24] the SMP. Right.

[00:19:25] But if you want outsize returns,

[00:19:27] you got to take risk.

[00:19:28] But I also say like writing one

[00:19:30] little check into one thing and

[00:19:31] just hoping that works.

[00:19:33] That would be I think challenging.

[00:19:35] I would say you need to get

[00:19:36] into the mindset of I am going to

[00:19:39] I'm an allocate X amount of capital

[00:19:41] and I'm going to do maybe smaller

[00:19:42] to start like twenty five thousand

[00:19:44] dollar checks or whatever.

[00:19:45] But I'm going to try to do 20 of

[00:19:47] them over the next 24 months.

[00:19:49] And then I'm going to go to

[00:19:50] events. I'm going to go to whatever

[00:19:52] things you do and I'm trying to

[00:19:52] get exposure to these things

[00:19:54] because it's too hard to know if

[00:19:56] it's going to work in the early

[00:19:57] days. There was no very little

[00:19:59] signs other than literally

[00:20:01] 90 days of traction here

[00:20:03] in Seattle that we could

[00:20:05] be installed 147 million

[00:20:07] times and you don't know

[00:20:09] that. And so I think that's the

[00:20:11] risk that that people

[00:20:13] take early on.

[00:20:14] But I think just just going all

[00:20:15] into one thing you could try

[00:20:17] that. But I think it would be

[00:20:19] a little too risky to do that.

[00:20:20] You said that you really refined

[00:20:22] your deck.

[00:20:23] You kept pitching in same thing

[00:20:24] but you had to keep refining it.

[00:20:26] And then obviously you were

[00:20:28] successful at not only raising

[00:20:30] the money but also executing

[00:20:32] on the company.

[00:20:33] What would be the thing that an

[00:20:35] investor would see in a

[00:20:37] potential angel investment

[00:20:39] that would go, aha, I'm going to

[00:20:40] put my money on this one.

[00:20:43] Because once you open up that

[00:20:44] network you might have a lot of

[00:20:45] opportunity to see a lot of

[00:20:47] different companies being

[00:20:48] pitched. But what do you look

[00:20:51] for? What would you see that

[00:20:53] that's the founder I want to

[00:20:54] be with? That's the guy that's

[00:20:56] going to not quit who's going

[00:20:58] to figure out how to hire

[00:20:59] labor that's aligned

[00:21:01] with the company's purpose

[00:21:03] and really explode.

[00:21:05] I answer that but I also wanted

[00:21:06] I thought of one more thing I

[00:21:07] wanted to say too from your

[00:21:09] invested previous question.

[00:21:11] So back to the pilot example

[00:21:13] I would say if you say, hey,

[00:21:15] I don't want to go do all that.

[00:21:17] It's a lot of work.

[00:21:18] Then you could invest.

[00:21:19] You can be a limited partner

[00:21:20] in a fund. So there's a

[00:21:22] handful of funds in Seattle

[00:21:24] and that's what you do.

[00:21:25] Say, oh, I'm going to write

[00:21:26] whatever, $2,500 check.

[00:21:29] Maybe it's a bigger check

[00:21:30] and you're going to pay a small

[00:21:32] fee. But now you have somebody

[00:21:34] that's out there and they're

[00:21:36] investing in all those different

[00:21:37] things. And so that could be one

[00:21:39] alternative for somebody.

[00:21:40] It's just I just don't have the

[00:21:41] bandwidth. I just want to write a

[00:21:42] check to somebody. But I want

[00:21:43] exposure to those types of

[00:21:44] opportunities because

[00:21:46] historically venture capitals

[00:21:47] had pretty damn good returns

[00:21:49] if you're investing in the

[00:21:49] right people.

[00:21:50] Yeah, I did want to be

[00:21:51] clear. This is like a pool

[00:21:53] of startup companies

[00:21:56] yeah that I'd invest in

[00:21:57] managers picking on the

[00:22:00] behalf of the fund. This isn't

[00:22:01] like real estate or anything

[00:22:02] like that. This is specific to

[00:22:04] the types of companies that

[00:22:06] you've founded.

[00:22:07] Yeah, so you might have somebody

[00:22:08] in Seattle and they run a $10

[00:22:10] million early stage like

[00:22:11] seed slash series A fund

[00:22:14] and they're writing like

[00:22:16] 250 to a million dollar

[00:22:18] checks and they're going to

[00:22:20] probably have 20 companies out

[00:22:21] of that and hopefully a

[00:22:23] handful of those have really

[00:22:24] good returns. And that's how I

[00:22:26] think about it. And I would

[00:22:27] also think about it as being

[00:22:29] like a 10 year kind of

[00:22:30] commitment. Like you just that

[00:22:32] money is gone. It's going to sit

[00:22:33] over there hope it does well

[00:22:34] and check in after time when

[00:22:36] that fund kind of matures and

[00:22:38] see where it I think that's

[00:22:40] such great advice because as

[00:22:41] Warren Buffett says right

[00:22:43] invest in what you know. And

[00:22:45] if you're not looking at these

[00:22:46] consistently, it's very

[00:22:48] difficult to know what you're

[00:22:50] looking at. I think one of

[00:22:51] the most likely scenarios

[00:22:53] for people like Ryan and I

[00:22:55] are who don't know the

[00:22:57] space and we're not. What was

[00:22:58] it that you've been to?

[00:23:00] Koretsu Forum Koretsu Forum

[00:23:03] VST, Bunch of Angel Investor

[00:23:05] bunch of companies are pitching

[00:23:06] but I think the most likely

[00:23:07] scenario for the typical pilot

[00:23:09] is a buddy comes to them and

[00:23:10] says hey I'm starting do you

[00:23:12] want to do you want to Angel

[00:23:13] invest in this and they're

[00:23:14] like when they just don't

[00:23:15] there's no context because

[00:23:16] you're not looking at 20

[00:23:18] 100 different decks and

[00:23:19] picking going back to Ryan's

[00:23:21] question. It's sure there might

[00:23:22] be some element that

[00:23:24] really stands out and so it

[00:23:25] makes you say this actually

[00:23:27] looks really good. But if

[00:23:28] you're not looking at hundreds

[00:23:29] of these things it might be

[00:23:30] very difficult to know what

[00:23:32] you're looking at.

[00:23:33] Yeah. Yeah. So your question

[00:23:34] Ryan was like when I look for

[00:23:36] and I think that hands down

[00:23:38] like who is the founder and

[00:23:39] his he or she going to just

[00:23:42] go all in on this burn the

[00:23:44] boats. And I think I've heard

[00:23:45] that from a lot of our early

[00:23:46] angels that just knew that

[00:23:48] from me. That's who I am.

[00:23:49] When I'm committed, I'm it

[00:23:51] and there's no stopping it

[00:23:52] and so that's thing one.

[00:23:54] Do you have resilience

[00:23:55] because a lot of people it's

[00:23:56] too hard and they quit.

[00:23:58] I just think it's too day.

[00:23:59] Right. It's just you.

[00:24:00] I found in the darkest days

[00:24:02] at the last minute a door open

[00:24:04] so I believe in that and I

[00:24:05] believe in manifesting.

[00:24:06] And I just just keep charging.

[00:24:08] So I think that needs to be

[00:24:10] there too. Do they bring

[00:24:11] something to the table more

[00:24:12] than the idea?

[00:24:13] And I've seen this so many

[00:24:14] times. I have this idea for

[00:24:16] blah, blah, blah this tech

[00:24:17] thing. I'm in real estate.

[00:24:19] I'm like you never going to

[00:24:20] do it. Never going to do it

[00:24:22] because the idea doesn't

[00:24:22] matter who cares.

[00:24:23] Can you put it together?

[00:24:24] Can you put a product

[00:24:25] together? Can you put a team

[00:24:26] together? Do you know how to

[00:24:28] hire like all that stuff?

[00:24:29] I think that the idea doesn't

[00:24:31] matter, but you need to bring

[00:24:32] some other element to it.

[00:24:33] So I could offer up like I

[00:24:35] designed the name, the logo,

[00:24:37] the app, I coded the website.

[00:24:39] Right. I brought in the first

[00:24:40] engineers. I worked on the

[00:24:41] pitch deck. I worked on the

[00:24:42] marketing. I talked to the

[00:24:43] customers. I built out our

[00:24:45] sales team. Like I was able

[00:24:46] to do that.

[00:24:47] And then for the things I

[00:24:48] wasn't able to do, I had

[00:24:50] brought other people in the

[00:24:50] team that were really good and

[00:24:52] we're able to do that.

[00:24:53] So you got to find somebody

[00:24:54] that can pull all those elements

[00:24:56] together and have a vision to

[00:24:57] be able to articulate it.

[00:24:58] I think very succinctly.

[00:25:00] That's another thing when I'm

[00:25:00] giving feedback, usually for

[00:25:02] entrepreneurs is when I look at

[00:25:04] their deck and I just want to

[00:25:05] die. I'm like, dude, you got

[00:25:07] to be able if you're going to

[00:25:07] attract people to come on this

[00:25:09] journey, you need to be able to

[00:25:11] articulate it in a way that

[00:25:12] resonates and captures them

[00:25:14] as exciting versus just text

[00:25:16] actor text. Nobody wants to

[00:25:18] read that. So I think those

[00:25:19] are all things that are

[00:25:20] important. You got to be able

[00:25:21] to communicate, build a team,

[00:25:23] have resilience, bring something

[00:25:25] else to the table. And then

[00:25:26] also are you going after?

[00:25:28] Can you compete in the market

[00:25:30] and what's unique to that?

[00:25:31] Without the smartphone, we

[00:25:32] wouldn't be talking like we

[00:25:33] there would be no offer up.

[00:25:34] So that was the unlock that I

[00:25:36] saw. But if we were

[00:25:38] things like you could do on the

[00:25:39] web, then why should we

[00:25:41] exist? Like just use

[00:25:42] great. Remember that specific

[00:25:43] period of time? My first

[00:25:45] phone, smartphone was an

[00:25:46] iPhone two. I just remember

[00:25:48] thinking like I should

[00:25:50] probably be learning coding,

[00:25:51] but it's too late.

[00:25:53] And it's just so cool to hear

[00:25:54] the story of you're on your

[00:25:55] second iPhone and you're like,

[00:25:56] why can't I just take a bunch

[00:25:57] of pictures? Let's go.

[00:25:58] It's just such an inspiring

[00:26:00] story of just taking action.

[00:26:01] And I think to your point

[00:26:02] about sizing up an operator,

[00:26:05] going back to your first

[00:26:06] point about someone who's

[00:26:07] going to go all in and burn

[00:26:08] the boats, like how do you

[00:26:10] suss that out? What kind of a

[00:26:12] question would you ask

[00:26:12] somebody or how do you see

[00:26:14] that through somebody?

[00:26:15] Because everybody's going to

[00:26:16] say, oh, I'm all in.

[00:26:17] And this is what I'm focused

[00:26:18] on. Is there any sometimes

[00:26:20] it's probably there.

[00:26:21] I think the experience to

[00:26:23] like for me, people had seen

[00:26:24] I had actually done other

[00:26:26] companies. And I think

[00:26:27] especially with certain

[00:26:28] investors I've heard we want

[00:26:29] to see that you've done stuff

[00:26:30] and failed. We want to see

[00:26:31] that you've learned.

[00:26:33] And so I think that shows

[00:26:34] a level of resilience and

[00:26:35] you're going to really get

[00:26:37] after it and do it versus,

[00:26:38] oh, I just got out of

[00:26:39] college and I have this idea

[00:26:40] look at my pitch deck,

[00:26:41] fun to me.

[00:26:42] So you haven't done anything.

[00:26:43] The other point that I

[00:26:44] think that I know I focus

[00:26:45] on a lot is are you just

[00:26:46] taking action?

[00:26:48] Because I tend to learn

[00:26:49] from I'll use a good example

[00:26:51] like my wife is wicked smart.

[00:26:52] She's like a 4.0 kind of student.

[00:26:54] So she will sit and assess

[00:26:56] and assess and when she commits,

[00:26:57] it's going to be awesome.

[00:26:59] But I'm already running.

[00:27:00] Right. And so I always say

[00:27:01] if we're taking them out and

[00:27:02] I'm going to beat her to the top,

[00:27:04] I'll probably have some bruises

[00:27:05] and scrapes on me and I'll be

[00:27:07] beaten up, but I'm going to

[00:27:08] probably beat her.

[00:27:09] And I think that in the world

[00:27:11] of companies you learn

[00:27:13] through action.

[00:27:14] So I tend to like I have

[00:27:15] enough it's never going to be

[00:27:16] perfect data and I just start

[00:27:17] going to start running this

[00:27:19] go and just start to figure

[00:27:20] it out and cobble it together

[00:27:22] and things are breaking as you go.

[00:27:23] I like that kind of entrepreneur

[00:27:25] because I think they're going to

[00:27:26] learn faster versus other

[00:27:28] ones I've seen, which is oh,

[00:27:29] I told you about my idea six

[00:27:31] months later I go, you don't even

[00:27:33] have a product. Any prototyping?

[00:27:34] What have you been doing for six

[00:27:35] months? Oh, and researching

[00:27:37] the market. What are you doing?

[00:27:38] So I think that that sense

[00:27:40] of urgency, but through action

[00:27:41] I think I would look for that

[00:27:43] too. Yeah, two things.

[00:27:44] This is how Ryan and I which

[00:27:45] is like, oh, going to real

[00:27:47] estate. No, this is how Ryan

[00:27:48] and I learned real estate.

[00:27:49] We've lost money.

[00:27:50] We've done bad deals.

[00:27:52] We've you got to

[00:27:53] you just got to be in the ring.

[00:27:55] Yeah, part of again, where we

[00:27:57] have this podcast is try to

[00:27:59] shortcut our listeners journey

[00:28:01] so that you can not make some

[00:28:02] of the mistakes that we made

[00:28:03] along the way. But there's

[00:28:05] and that's great. Ryan.

[00:28:06] No, I was just going to say

[00:28:07] we talked about this podcast

[00:28:08] for about five years and maybe

[00:28:10] I'm guilty here, Nick.

[00:28:11] And it was just finally just

[00:28:12] can we just sit down and hit

[00:28:13] record?

[00:28:14] And then here we go.

[00:28:15] We've got a list of the

[00:28:16] podcast five years ago.

[00:28:17] So that's true.

[00:28:20] But the takeaway there is the

[00:28:21] perfection is the enemy have

[00:28:22] done. I loved how you said that's

[00:28:24] just just go and you're going

[00:28:25] to get banged and bruised.

[00:28:27] The other thing too that you

[00:28:28] really said and quickly is I

[00:28:29] want to see somebody who has

[00:28:31] failed before.

[00:28:33] And I think as pilots and as

[00:28:35] investors, we look at

[00:28:37] people who have failed as

[00:28:39] well. You failed at that.

[00:28:40] I don't want anything to do

[00:28:41] with that.

[00:28:42] And I think that is one of the

[00:28:43] biggest mistakes you can make

[00:28:45] is glazing over somebody

[00:28:47] because they've had failure

[00:28:48] before. It's how much you learn

[00:28:50] in the darkest of times and

[00:28:51] when you're failing, that's

[00:28:53] that's the person you want to

[00:28:54] hire. They've gone through the

[00:28:55] mistakes of what

[00:28:57] can happen and go wrong that

[00:28:59] you don't have to deal with

[00:29:00] that failure. They've already

[00:29:01] experienced it. Obviously you

[00:29:02] want to make sure that they

[00:29:03] have the right ability to

[00:29:04] learn from their mistakes.

[00:29:06] Yeah. But I think that's such

[00:29:07] a critical thing.

[00:29:09] Nobody I know that's wildly

[00:29:10] successful that doesn't have a

[00:29:12] ton of stories of how they

[00:29:13] failed. If you're not

[00:29:14] failing, then you're not

[00:29:15] pushing enough and

[00:29:17] I'm working on a few other

[00:29:18] ventures right now and

[00:29:20] I'm learning new stuff all the

[00:29:21] time. Oh, damn, that didn't

[00:29:22] work. So what?

[00:29:23] Like do you have to overcome

[00:29:24] that to learn and grow as

[00:29:26] a person?

[00:29:27] But I do think a lot of people

[00:29:28] get comfortable in the roles

[00:29:29] they're in and like us is fine

[00:29:31] and OK.

[00:29:32] But I think in the world of

[00:29:33] entrepreneurship, I'm talking

[00:29:35] about more of a job now, but

[00:29:36] in the world of entrepreneurship,

[00:29:37] I don't think that has a place

[00:29:39] like you need to keep pushing

[00:29:40] and stretching or else somebody

[00:29:41] else is going to come along and

[00:29:43] innovate and they're going

[00:29:44] to start to.

[00:29:45] And I think that's the thing

[00:29:46] that I always am mindful of is

[00:29:48] I'm my growing as a person all

[00:29:49] the time. And yeah, it's

[00:29:51] uncomfortable a lot.

[00:29:52] But I think it's

[00:29:54] a mindset. That's another thing

[00:29:55] too is you control your mind

[00:29:57] and how do you think of failure

[00:29:59] and challenges? I don't really.

[00:30:01] I have no fear, by the way, I

[00:30:02] don't fear anything.

[00:30:03] And so I think when you can

[00:30:04] let that go, then you just

[00:30:06] you can focus on things and

[00:30:08] just keep moving without losing

[00:30:10] sleep over.

[00:30:12] Yeah, so we tackled angel

[00:30:14] investing. So that could just

[00:30:15] be anybody just you could

[00:30:16] you could invest $25,000

[00:30:18] into some random startup and

[00:30:20] you are an angel investor.

[00:30:21] Congratulations.

[00:30:22] Yeah, talk about venture

[00:30:24] capital. Yeah. So venture

[00:30:26] tends to be much larger

[00:30:29] and usually I think with most

[00:30:30] venture companies again, it

[00:30:31] depends on the market.

[00:30:32] Some venture companies will do

[00:30:34] like an idea sometimes

[00:30:36] based on the founder, right?

[00:30:37] The founders have been proven

[00:30:39] and you have this idea.

[00:30:39] I want six million bucks.

[00:30:41] That can happen.

[00:30:42] But usually venture got folks

[00:30:44] want to see some level of

[00:30:45] traction that if they put in

[00:30:47] dollars, what is it going to

[00:30:49] look like over time?

[00:30:51] Versus usually the seed folks

[00:30:53] or the angels sometimes are just

[00:30:54] an idea, right?

[00:30:55] You barely have any traction,

[00:30:56] right? And so I think that's

[00:30:58] the delineation I would think

[00:30:59] about. Also the check sizes

[00:31:01] are much larger.

[00:31:02] You're raising way more

[00:31:03] capital.

[00:31:04] And so when you're taking

[00:31:06] venture dollars again,

[00:31:08] they're looking for meaningful

[00:31:09] returns and you got to as

[00:31:11] soon as you raise 70 million

[00:31:13] bucks, now you have to invest

[00:31:14] in the business and then that

[00:31:15] becomes a whole another animal,

[00:31:17] which is now you're really

[00:31:18] growing, right? You're going

[00:31:19] from a very small number of

[00:31:21] employees to a lot

[00:31:22] and you just have a lot more

[00:31:23] things to deal with.

[00:31:24] And your pro but the benefit

[00:31:26] again is you can accelerate

[00:31:27] what you're trying to do.

[00:31:28] Your profile is now elevated

[00:31:30] so other people can know

[00:31:31] what you're up to, which is

[00:31:32] good.

[00:31:33] And most adventure funds,

[00:31:35] especially the bigger ones

[00:31:36] have like billions of

[00:31:37] dollars, right? They have

[00:31:39] their people or their LPs are

[00:31:40] not limited partners or

[00:31:41] people investing in those are

[00:31:42] not writing them typically

[00:31:44] twenty five thousand our checks.

[00:31:45] They're very high net worth

[00:31:47] individuals, their endowments,

[00:31:49] right? They're sometimes have

[00:31:51] billions of dollars under

[00:31:51] management.

[00:31:52] So there's very there's

[00:31:53] varying levels of scale.

[00:31:54] Some people some venture

[00:31:56] firms will be C day

[00:31:58] and they're writing smaller

[00:31:59] checks. Some will go the whole

[00:32:00] gamut like they'll do all the

[00:32:01] way to a public market and

[00:32:03] they're investing all on the

[00:32:04] way. I think it depends on

[00:32:06] the fund.

[00:32:07] And then the last thing I'd

[00:32:08] say is the other one was

[00:32:09] private equity.

[00:32:10] So private equity is usually

[00:32:12] what I consider it's been

[00:32:14] interesting to see in the last

[00:32:15] decade what's happened.

[00:32:17] We have T-Row price and Tiger

[00:32:19] Global invest in us and their

[00:32:20] private equity companies.

[00:32:21] I remember when they started

[00:32:23] to invest talking with

[00:32:24] their early investors said,

[00:32:25] oh, they're never going to

[00:32:26] invest in you guys are not

[00:32:27] public.

[00:32:28] And I'm like, I don't know,

[00:32:29] like we're having good

[00:32:30] conversations and they ended

[00:32:31] up investing.

[00:32:32] And I think that was just how

[00:32:34] the market when the public

[00:32:35] markets are they were trying to

[00:32:37] get more value by moving into

[00:32:38] private markets, which makes

[00:32:39] sense. But typically they've

[00:32:41] been more public market

[00:32:42] investors because they can get

[00:32:43] their money in and out when

[00:32:44] you're private.

[00:32:46] You got to find some type of

[00:32:47] liquidity and public markets

[00:32:49] are always guaranteed or a

[00:32:50] buyer isn't always guaranteed.

[00:32:52] So private equity, I typically

[00:32:53] think of now as like the

[00:32:54] later stage stuff.

[00:32:56] It's usually where we can

[00:32:57] really add a lot more capital.

[00:32:59] But also I think they're

[00:32:59] looking for a different type

[00:33:01] of return. Maybe they're OK

[00:33:02] just doubling their money or

[00:33:03] tripling their money versus

[00:33:05] the earlier venture

[00:33:06] capitalist or angel investors

[00:33:08] are looking at can I hundred

[00:33:09] X my money?

[00:33:10] They're looking for a different

[00:33:11] return.

[00:33:12] So I think that's the other kind

[00:33:13] of animal that's out there as

[00:33:15] private equity companies.

[00:33:16] But historically they've done,

[00:33:18] like I said, venture and

[00:33:20] private equity in particular

[00:33:21] have outside.

[00:33:22] It's the best investment vehicle

[00:33:24] for the biggest return.

[00:33:25] So your first angel investor

[00:33:28] think about the guy or gal that

[00:33:29] put the first dollar in.

[00:33:31] If you don't mind sharing,

[00:33:32] like when was the first

[00:33:34] when did they actually how many

[00:33:35] years later did they recoup

[00:33:38] their initial investment and make

[00:33:39] a profit?

[00:33:40] So I will give out his name.

[00:33:42] I'll give you a high level, though.

[00:33:44] He was our first hundred thousand

[00:33:45] dollars in on an idea

[00:33:48] on very little traction

[00:33:50] and like barely a prototype.

[00:33:51] Nice.

[00:33:51] Furious and we did a secondary

[00:33:54] and I think he made three

[00:33:56] hundred and forty X's money.

[00:33:58] Maybe more.

[00:33:59] Oh my God.

[00:34:00] When I called him on the phone,

[00:34:01] I said, are you sitting down?

[00:34:02] I said, I want you to remember

[00:34:03] this.

[00:34:04] I'm going to be the best return

[00:34:06] you've ever had in your

[00:34:06] lifetime.

[00:34:07] And I said, we have some people

[00:34:09] that are really interested in what

[00:34:10] we're doing. Would you like to

[00:34:11] sell some of your shares?

[00:34:13] He sold almost most of his shares.

[00:34:14] He still has some.

[00:34:15] And now he runs his own venture

[00:34:17] capital firm and invest in lots

[00:34:19] of other companies. So he did

[00:34:20] extremely well.

[00:34:22] And by the way, after he put

[00:34:23] his money and I had a hard time

[00:34:24] raising for two more years, he

[00:34:25] never put another dollar and he

[00:34:27] wouldn't.

[00:34:28] And so it's OK.

[00:34:29] But he still did very well.

[00:34:32] Well, I want the listeners to

[00:34:33] connect the dots on here is not

[00:34:35] that angel investing is a higher

[00:34:37] return. So I should go do that.

[00:34:39] But the risk profile,

[00:34:41] right? Because I think that we've

[00:34:43] said this on the show in the past,

[00:34:44] but it's just a fact

[00:34:46] that retail investors are

[00:34:48] typically not great at evaluating

[00:34:50] risk.

[00:34:51] If they see this is a 25 percent

[00:34:53] annualized return and this is a

[00:34:54] 20 percent annualized return,

[00:34:56] I'm going to go with that one.

[00:34:57] Typically, unless you are really

[00:35:00] in the space, whether it's

[00:35:01] real estate or VC, angel

[00:35:03] investing, whatever it is, it's

[00:35:04] hard to quantify

[00:35:06] and get a grasp on risk.

[00:35:08] But the reason the returns are that

[00:35:09] high at that stage is because the

[00:35:11] risk is so high.

[00:35:12] So obviously you're wildly

[00:35:14] successful for every wildly

[00:35:16] successful company, there's going

[00:35:17] to be 100 that don't work

[00:35:19] out right? You use all your money.

[00:35:21] It's not like a tangible asset

[00:35:22] like real estate where you're

[00:35:24] always going to be able to get

[00:35:25] something back as long as you

[00:35:26] didn't buy it irresponsibly with

[00:35:28] too much debt can go to zero.

[00:35:29] So anyway, I just wanted to make

[00:35:31] that. Let's talk up here.

[00:35:32] If you don't mind Nick sharing some

[00:35:33] of the failures, right? You said you

[00:35:34] mentioned you started multiple

[00:35:36] companies prior to offer up and

[00:35:38] maybe they didn't go so well.

[00:35:40] Right? Would you mind sharing a

[00:35:42] couple of stories on maybe

[00:35:44] investors that didn't have a great

[00:35:45] experience?

[00:35:47] Yeah, my last company I started

[00:35:48] before Friendster.

[00:35:51] Do you guys remember Friendster?

[00:35:53] See, no, no, no, no.

[00:35:55] Hold on. I'm going to keep going

[00:35:56] until we hit to where you know.

[00:35:57] What about MySpace?

[00:35:58] Do you remember MySpace?

[00:35:59] Do you remember MySpace?

[00:36:00] You remember MySpace?

[00:36:02] Most people give me that weird

[00:36:03] look on Friendster, which is

[00:36:04] hilarious. So I started this

[00:36:05] company. Friendster.

[00:36:07] So we were

[00:36:09] I was doing networking events like

[00:36:10] big tech events and like in my

[00:36:12] late 20s and saying, we should

[00:36:14] connect online one day.

[00:36:16] And the best example me and my

[00:36:18] co-founder had was looking at

[00:36:19] dating sites. I'm like, there's

[00:36:20] 3,000 dating sites in the world.

[00:36:22] So that's weird.

[00:36:23] I was like, they all work the

[00:36:25] same under the hood.

[00:36:26] They're just reskinned.

[00:36:27] And I said, what if you could

[00:36:29] just build a network because

[00:36:31] working is really inefficient,

[00:36:32] right? You're meeting people all

[00:36:33] the time. And it's all going to

[00:36:34] these events and you know, it

[00:36:36] really it's not always the

[00:36:37] greatest.

[00:36:38] So we looked at these dating

[00:36:39] sites and said, what if we could

[00:36:40] mimic this but then connect

[00:36:42] people on like interest level?

[00:36:44] So you guys are connected and

[00:36:45] maybe there's an area of real

[00:36:46] estate or another one that they

[00:36:47] could have these little so we

[00:36:49] filed a patent around how we

[00:36:50] saw humans clustering and

[00:36:52] built this company around it.

[00:36:53] And we

[00:36:55] raised money from a lot of

[00:36:56] angels, which was painful.

[00:36:58] It was like 50 sub-angels.

[00:36:59] Like I always say that my

[00:37:01] job was raising angel money.

[00:37:03] And then on the side, I had a

[00:37:04] company to try to build.

[00:37:05] It was just painful.

[00:37:06] And so I think it was the

[00:37:08] challenges there was just a lot

[00:37:09] of learnings. It was like

[00:37:11] hiring the wrong people.

[00:37:13] It was the wrong investors,

[00:37:14] quite honestly, like wicked

[00:37:15] smart people. But we had

[00:37:16] people on our board that were

[00:37:17] like, own accounting firms and

[00:37:19] real estate, like awesome

[00:37:21] people. But it didn't really

[00:37:21] strategically help us at all.

[00:37:23] And so we have just a lot of

[00:37:25] I think the wrong team, wrong

[00:37:27] approach, wrong go to market

[00:37:28] as part of it too.

[00:37:29] And we were really freaking

[00:37:31] early. And I remember also when

[00:37:33] Facebook came out, I was like,

[00:37:34] whoa, and like this term social

[00:37:36] media. So sometimes building

[00:37:37] companies, sometimes it is about

[00:37:38] timing. I think in that case of

[00:37:40] that company, we were just so

[00:37:42] freaking early, like so early

[00:37:44] and nobody knew no one's going

[00:37:45] to connect online. It was just

[00:37:47] weird time. And so ultimately

[00:37:49] like we try to we try to pivot

[00:37:50] a few times in good different

[00:37:51] directions. And that didn't

[00:37:53] quite work either.

[00:37:55] Got a guy that was a big

[00:37:56] investor that came in and he

[00:37:57] was literally drinking like at

[00:38:00] work, wasted.

[00:38:01] Like he passed out, I took a

[00:38:03] picture of him, he passed out in

[00:38:04] a board meeting on the table.

[00:38:07] I was like, oh, this isn't fun.

[00:38:08] So, wow.

[00:38:10] Over time, but again, when I

[00:38:11] decided to move on, I realized

[00:38:12] wait, this ain't going to work

[00:38:14] for a number of reasons.

[00:38:15] And then I said, look, I'm not

[00:38:17] going to have anything to do

[00:38:17] with this. I do not want to

[00:38:19] have a partner that's not in

[00:38:20] it mentally and that's not

[00:38:21] going to work. So I told my

[00:38:22] co-founder and him because he

[00:38:24] was very ultimately very hands

[00:38:26] on when he wrote a big check.

[00:38:27] I said, I just I'm going to

[00:38:28] part ways there. Fortunately,

[00:38:29] I learned a lot from that.

[00:38:30] And like I said, I didn't have

[00:38:33] plans on starting off for up.

[00:38:34] It was just a pain point.

[00:38:35] But maybe I just had the level

[00:38:38] to be arrogant or just

[00:38:39] crazy like that.

[00:38:40] I'm like, I'm going to go at it

[00:38:41] again and I'm happy I stuck

[00:38:42] with it after that.

[00:38:44] So yeah, you started the

[00:38:45] Facebook before Facebook, the

[00:38:46] intermediary between my I

[00:38:47] would say the shittiest

[00:38:49] version of Facebook.

[00:38:49] Yes.

[00:38:52] I think the point here is to

[00:38:53] talk about like as successful

[00:38:55] as you are, those investors

[00:38:57] didn't have a 340 X return.

[00:38:59] I would imagine.

[00:39:00] No, so you know, we're watching

[00:39:01] zero on that one.

[00:39:03] Yeah. So it's fun to talk about

[00:39:05] amazing risks that people take

[00:39:06] in the rewards, but also just

[00:39:08] balancing that with the chance

[00:39:09] that you could lose your money.

[00:39:10] Yeah. And a good example

[00:39:13] of a great outcome eventually.

[00:39:14] I think that was great.

[00:39:16] You mentioned Angel.

[00:39:18] If you're an angel investor,

[00:39:19] that's like you're investing

[00:39:20] in an idea and I love that.

[00:39:22] As a VC investor,

[00:39:25] it gets mature.

[00:39:26] More than attraction once

[00:39:27] you're usually sometimes

[00:39:29] attraction at a seed.

[00:39:30] But usually it depends on the VC,

[00:39:32] I'd say. But yeah, in some cases

[00:39:34] that they lean way more on the

[00:39:35] traction.

[00:39:36] Can I ask what qualifies it as

[00:39:37] a seed versus an A versus a B

[00:39:40] series A series B?

[00:39:42] What where do those terms come

[00:39:43] from and what do they mean?

[00:39:44] Think of this as just milestones

[00:39:46] of like where the company is

[00:39:47] at. Like in the early days,

[00:39:49] if you're doing a seed round,

[00:39:50] some cases might not even have

[00:39:51] a company incorporated yet.

[00:39:52] That's a good example or you've

[00:39:54] got very little traction or very

[00:39:55] little team. So you're not

[00:39:57] everything is small.

[00:39:58] Nothing's really been you don't

[00:39:59] always have product market fit.

[00:40:01] Like you haven't always figured all

[00:40:02] of it out when you're doing your

[00:40:03] A is usually like your first

[00:40:05] meaningful, really good size

[00:40:07] check and how you're building at

[00:40:08] your team and you're getting

[00:40:09] more scale.

[00:40:10] And then it just keeps going.

[00:40:11] Unfortunately, sometimes this

[00:40:12] company is a raise series F.

[00:40:14] They just keep front-raising.

[00:40:15] In some case, I don't know

[00:40:16] what Uber did, but Uber is a

[00:40:17] good case. A great example

[00:40:19] raising a lot of capital, but

[00:40:20] also a good story to see

[00:40:22] that thing turn the direction

[00:40:23] that it did.

[00:40:24] And so that's usually how you

[00:40:26] think about it is every time you

[00:40:27] do around a funding, ideally

[00:40:29] you're raising up. It doesn't

[00:40:30] always happen. Right? You can do

[00:40:32] what they call down round where

[00:40:33] it was less than the previous

[00:40:34] valuation.

[00:40:35] But ideally you're raising more

[00:40:36] and you're raising up at new

[00:40:38] valuations. And typically

[00:40:40] when you're doing that, the

[00:40:41] investor or the venture firm

[00:40:43] is they're just owning a

[00:40:44] percentage of the company.

[00:40:45] So I think a good rule of

[00:40:46] thumb is typically 20 to 25

[00:40:48] percent every financing.

[00:40:50] But is it matures?

[00:40:51] You can see it get much lower

[00:40:52] like sometimes they're 10

[00:40:53] percent and things like that.

[00:40:54] But in the early days, I

[00:40:55] would expect to take

[00:40:57] dilution. And this is for

[00:40:59] everybody. This isn't just for

[00:41:01] the management, the employees,

[00:41:02] but also the early investors

[00:41:03] take dilution.

[00:41:04] And so I think that's just

[00:41:06] something people always need to

[00:41:07] be mindful of.

[00:41:08] I used to have an investor that

[00:41:09] said pigs get fat and hogs get

[00:41:10] slaughtered.

[00:41:11] And I love that quote because

[00:41:13] I said if some people are trying

[00:41:14] to protect every little dollar

[00:41:15] in equity, am I you can own

[00:41:17] 100 percent of a million dollar

[00:41:18] business or you can own 5

[00:41:20] percent of a billion dollar

[00:41:21] business? Which one do you

[00:41:21] want? Right? Bill Gates

[00:41:23] probably owns, I don't know

[00:41:24] definitely less than 10 percent

[00:41:26] of Microsoft and I'm sure he's

[00:41:27] just happy.

[00:41:28] Yeah, he's doing just doing OK.

[00:41:30] Yeah, he's doing fine.

[00:41:31] I think Jeff Bezos owns something

[00:41:33] like 16 percent of Amazon.

[00:41:34] Yeah, Jeff Bezos owns a lot

[00:41:36] more than most people at that

[00:41:38] stage of a company.

[00:41:39] But he did something that was

[00:41:41] pretty interesting is he, I

[00:41:43] think, took down some dead

[00:41:45] or I forgot what he was doing,

[00:41:47] but it was non-dilutive

[00:41:48] equity back in the day.

[00:41:49] And that helped him to take

[00:41:50] have a lot more ownership.

[00:41:52] Interesting.

[00:41:53] So that $100,000 investor,

[00:41:55] sorry to hang on that.

[00:41:57] You value the company at some

[00:41:58] point to give him ownership

[00:42:01] of what he was buying into.

[00:42:02] In the most second grade

[00:42:04] explanation you can give, how

[00:42:05] did you do that? How did you

[00:42:06] assess the value

[00:42:08] of your company at that time

[00:42:10] to determine his ownership?

[00:42:13] What happens and this is art

[00:42:15] in science and typically

[00:42:17] I would say that it's

[00:42:19] whoever your investor is going

[00:42:20] to accept the price and the

[00:42:21] value. You can come in there

[00:42:22] all you want and say, oh,

[00:42:23] my business is a twenty million

[00:42:24] dollar business. And I'd say,

[00:42:25] no, I think it's worth

[00:42:27] ten, take it or leave it.

[00:42:28] So that's your choice of what

[00:42:29] you want to go do there.

[00:42:30] But I think they will

[00:42:31] typically for especially more

[00:42:33] sophisticated investors like

[00:42:35] they know what they're doing

[00:42:36] and what's reasonable.

[00:42:38] Markets also change a lot.

[00:42:39] Like I saw at the last three

[00:42:41] or four years was completely

[00:42:42] beyond it was beyond bonkers.

[00:42:45] I'm like, what are we paying

[00:42:46] for here? These are crazy

[00:42:47] valuations.

[00:42:48] Very company like we work as

[00:42:50] a good example. What the hell

[00:42:51] is this? And so sometimes

[00:42:53] you can see a company

[00:42:56] that will be, I think, overly

[00:42:57] valued and create this FOMO

[00:42:59] from investors and that drives

[00:43:01] the price way up.

[00:43:02] So that can happen.

[00:43:04] But again, I think you're

[00:43:05] from most of the time you go

[00:43:07] in there and you look at some

[00:43:08] of the fundamentals of the

[00:43:09] business. And then you can

[00:43:11] also think about what can it

[00:43:13] become? So like your example

[00:43:14] would be Facebook early on

[00:43:16] lots of users, no revenue.

[00:43:18] So how do you value that

[00:43:20] business? So that's what I

[00:43:20] mean is art and science where

[00:43:22] you look into the future and

[00:43:23] say, man, if these numbers keep

[00:43:24] scaling like this, and then you

[00:43:26] can come up and sometimes you'll

[00:43:27] think of different hypothetical

[00:43:29] business models. And then you

[00:43:30] bring it discounted back to

[00:43:31] present day and go, OK, I

[00:43:33] think it should be worth X.

[00:43:35] So I don't think there's a my

[00:43:37] point is there's not a perfect

[00:43:38] there's not a perfect

[00:43:39] explanation. But that's it is

[00:43:40] a little gray. That's it.

[00:43:42] Who makes those valuations?

[00:43:44] The VC firm that's doing the

[00:43:45] round? Yeah, you can push

[00:43:47] and say, I want to raise in

[00:43:48] this range kind of a thing.

[00:43:49] But if you can get competing

[00:43:51] term sheets, so let's say you

[00:43:52] go to four VC firms and

[00:43:53] everyone gives you a term sheet,

[00:43:55] you're going to see that they're

[00:43:56] all going to be a little

[00:43:57] different than there. And value

[00:43:59] is one thing. I think valuation

[00:44:00] is one thing that matters.

[00:44:02] But there's also a lot of other

[00:44:03] things as you guys know in real

[00:44:04] estate that are even more

[00:44:06] meaningful. Where are the other

[00:44:07] terms that are in here? And

[00:44:08] there's all these different terms

[00:44:09] you can put in any kind of deal.

[00:44:11] And sometimes those things have

[00:44:13] more weight than the valuation

[00:44:14] itself. Like you might say,

[00:44:15] I'm going to take a lower

[00:44:16] evaluation because I just have

[00:44:17] a cleaner term sheet.

[00:44:18] And that's that.

[00:44:20] Yeah, that investor that sold

[00:44:23] some of their shares, basically

[00:44:24] they owned a percentage

[00:44:25] they owned a percentage of the

[00:44:26] company. And then a new

[00:44:29] investor came in and said, hey,

[00:44:30] we're valuing the company much

[00:44:32] higher. And then that's and

[00:44:33] then they decided to sell shares

[00:44:35] and make that excellent return.

[00:44:36] And that's essentially how you

[00:44:39] expect to make money as an

[00:44:40] angel. Is that right?

[00:44:41] Well, that case it was

[00:44:42] somewhat unique because I had

[00:44:44] we had a lot more demand for

[00:44:46] our financing at the time.

[00:44:47] And so we were trying to find

[00:44:49] ways to get some strategic

[00:44:50] investors in. So we did what

[00:44:52] they call secondary. Who else

[00:44:53] is already invested that may

[00:44:55] want to sell some shares?

[00:44:56] So that was very strategic

[00:44:58] and doing that. In other cases,

[00:45:00] it's more of you're just in

[00:45:01] it and waiting, but you're

[00:45:02] waiting for that thing to

[00:45:04] either that entity to get

[00:45:06] acquired or end up going public

[00:45:08] so you can ultimately sell your

[00:45:09] shares. But I think the

[00:45:11] challenge for anyone investing

[00:45:13] in private companies is you

[00:45:14] just know liquidity like

[00:45:15] you're you're just on the

[00:45:16] ride, right? You've written

[00:45:17] your check just right.

[00:45:19] In a public market, you can buy

[00:45:20] and sell or do whatever you

[00:45:21] want. But I think the returns

[00:45:23] are look different.

[00:45:24] If you look at some of these

[00:45:25] companies that have been hugely

[00:45:27] wildly successful, they always

[00:45:29] look a little crazy in the

[00:45:29] early days. And so most people

[00:45:31] like, oh, I can remember

[00:45:33] Amazon when Amazon first went

[00:45:34] public, I guess this thing's

[00:45:35] going to die.

[00:45:36] This guy selling books and

[00:45:38] it's so overvalued, blah,

[00:45:39] blah, blah.

[00:45:40] But if you knew Jeff Bezos

[00:45:42] and you've talked to him and

[00:45:43] he I don't know what he was

[00:45:45] saying or sharing his vision

[00:45:47] that's what turned it into what

[00:45:48] it is today, not the books.

[00:45:50] The books was just chapter one.

[00:45:53] Totally. Nick, you know, what

[00:45:55] you have a lot of experience

[00:45:56] and you've gone through a lot

[00:45:57] you've very successful, had

[00:45:59] some failures. What in the last

[00:46:01] six months have you realized

[00:46:04] that you haven't shared with

[00:46:05] anybody or is new way of

[00:46:07] thinking that maybe you've

[00:46:09] learned that has comes at

[00:46:10] top of mind?

[00:46:11] So I've had a lot of free

[00:46:12] time the last six months

[00:46:13] because I spent four of it

[00:46:14] traveling. I took my kids

[00:46:16] out of school and we traveled

[00:46:17] around the world.

[00:46:18] But what I was doing, so

[00:46:20] sometimes again, if people are

[00:46:21] starting companies, I think it's

[00:46:21] really good to take time and

[00:46:23] just do nothing. And it's

[00:46:24] really hard. But I started

[00:46:25] writing a lot about things I

[00:46:27] was doing or wanting to do

[00:46:28] and trying to think about,

[00:46:29] OK, what am I going to do the

[00:46:30] rest of my life and building

[00:46:31] companies? I love it.

[00:46:33] But then I wanted more of a

[00:46:34] seam. Right. I was like,

[00:46:36] even what's even bigger than

[00:46:37] me. And so I started to get

[00:46:40] real clear on this

[00:46:43] concept of circularity.

[00:46:45] So I'm very passionate about the

[00:46:46] environment. I'm very passionate

[00:46:48] about what's happening in the

[00:46:50] world. And part of it is I've

[00:46:51] had over a decade watching

[00:46:52] billions of dollars of second

[00:46:54] hand goods exchange hands. So I

[00:46:55] can tell you like what stuff

[00:46:56] sells in Arizona versus here

[00:46:58] in Bellevue, Washington. Like I

[00:46:59] have a really good pulse on

[00:47:01] those things. And so I started

[00:47:02] looking at like the biggest

[00:47:04] things for the biggest

[00:47:05] impact I can make as a

[00:47:07] legacy would be focusing on

[00:47:09] circularity. And what I mean

[00:47:11] by that is we live in a very

[00:47:13] linear world for the most part.

[00:47:16] Things come to us and then they

[00:47:17] get disposed and they just get

[00:47:18] gone. But everything we need is

[00:47:21] all around us because we've

[00:47:23] been shipping stuff here since

[00:47:25] the fifth 1950s like post World

[00:47:27] War two, once we started to

[00:47:29] become like a real globalized

[00:47:30] society, think about it like

[00:47:33] all the plastic you need

[00:47:34] every piece of furniture you

[00:47:35] need gold minerals are that

[00:47:37] it's all around us right now.

[00:47:39] The challenge of course is how

[00:47:40] do we unlock it? Like how

[00:47:41] do we create a more

[00:47:42] circular environment? And so

[00:47:44] I think that is the big view.

[00:47:45] I have this my my my vision

[00:47:49] for the rest of my life, which

[00:47:50] is creating circular

[00:47:52] opportunities to make more

[00:47:55] of an impact because I think

[00:47:56] if we want to solve the climate

[00:47:58] challenge, we have to do

[00:48:00] things more locally. And so it's

[00:48:02] everything from spending time

[00:48:04] focusing on things like

[00:48:06] waste management companies and

[00:48:07] it's really there's a lot

[00:48:08] of innovation in that space.

[00:48:09] So for people that think about

[00:48:10] trash, it's not trash.

[00:48:12] It's just value that we

[00:48:14] haven't been able to realize

[00:48:15] very well. But now you've got

[00:48:16] things like AI powered robots

[00:48:18] and there's companies now

[00:48:19] taking that waste stream

[00:48:20] and turning it into value,

[00:48:21] which is interesting.

[00:48:22] That's very interesting.

[00:48:23] Actually, I never really

[00:48:24] thought about that AI

[00:48:26] Oh, yeah, knowledge on display.

[00:48:28] There are so many valuable

[00:48:30] things that people throw away

[00:48:32] just because they don't

[00:48:33] assign value to it.

[00:48:34] But it's very valuable.

[00:48:35] I have another new venture

[00:48:37] I'm working on that is free

[00:48:38] pickup. We will come to

[00:48:39] your house and take things

[00:48:40] for free from you.

[00:48:41] Why?

[00:48:43] Because that doesn't exist today.

[00:48:44] Today, again, America,

[00:48:46] if you want stuff taken

[00:48:48] from your house, you have to

[00:48:49] pay them to take value from you.

[00:48:51] And again, we're not doing

[00:48:53] junk hauling, but we're taking

[00:48:55] things and trying to find a

[00:48:56] sustainable way to

[00:48:57] to sell those things.

[00:48:58] That's another thing that

[00:48:59] we're working on.

[00:49:00] I very focused

[00:49:01] focused on the energy side

[00:49:03] of things. So if you want

[00:49:04] to get to a cleaner

[00:49:06] future, we need to get

[00:49:08] EVs are going to happen.

[00:49:09] That's going to happen.

[00:49:10] And I believe autonomous

[00:49:11] is going to happen.

[00:49:12] So fast forward in the next

[00:49:14] say 10 years or so,

[00:49:16] I think you're just going to

[00:49:17] hit a button and you're going

[00:49:18] to get a couch delivered to you

[00:49:20] from across town for less than

[00:49:21] five bucks.

[00:49:22] Once you remove

[00:49:24] the driver and the gas,

[00:49:26] the economics become very

[00:49:28] different. And I think

[00:49:29] that'll be a huge unlock

[00:49:30] for circularity.

[00:49:31] You'll be able to move goods

[00:49:32] all around the place, all

[00:49:33] around, and you'll be able

[00:49:35] to find new ways to

[00:49:36] to realize value out of things.

[00:49:38] So I think that is that

[00:49:39] needs to happen.

[00:49:40] So anyhow, those are

[00:49:42] I'd say a hand.

[00:49:43] Oh, sorry, the last one is

[00:49:44] really measurement.

[00:49:45] So I've been thinking a lot

[00:49:46] about this climate challenge

[00:49:47] and there's a lot of lofty goals

[00:49:49] and things to do.

[00:49:49] What to do?

[00:49:51] No one's really held accountable

[00:49:52] because no one's really

[00:49:53] measuring it the right way.

[00:49:54] But we can do this

[00:49:55] and we've done this two times.

[00:49:57] I'll give you two examples

[00:49:57] that are interesting.

[00:49:58] Credit scores.

[00:50:00] One bank adopted the credit

[00:50:01] score back in like the 50s

[00:50:03] or maybe the 6th December

[00:50:04] in that decade, I think.

[00:50:05] And then everyone adopted it

[00:50:06] now everyone knows what a credit

[00:50:07] score is.

[00:50:08] When I was a kid,

[00:50:09] we never had nutrition labels.

[00:50:10] Remember how much sugar we

[00:50:11] eat nobody?

[00:50:12] Cooks water when we were kids.

[00:50:14] We drank a pre-sons and soda.

[00:50:17] And then I think it was like

[00:50:18] nineties or something

[00:50:20] like we had to put nutrition

[00:50:21] labels on everything.

[00:50:22] And then everything

[00:50:23] everyone started paying

[00:50:24] attention to calories,

[00:50:25] but we're not doing this

[00:50:26] for the environment.

[00:50:27] And so I think every single

[00:50:29] thing that's out there

[00:50:30] that's made

[00:50:31] should have a simple QR code

[00:50:33] on it.

[00:50:33] And it should break down

[00:50:34] all the elements.

[00:50:35] I'm like, what is this thing?

[00:50:36] What did it take to actually

[00:50:37] produce it?

[00:50:38] Does it have a second life?

[00:50:39] Does it just go into this

[00:50:40] boat?

[00:50:40] Like we need to have that.

[00:50:42] So there's a few companies

[00:50:43] I'm trying to get involved in

[00:50:45] and help them to how do we

[00:50:47] build this in the right way

[00:50:48] and then bring it to

[00:50:50] government.

[00:50:50] Government has to be the one

[00:50:51] that enforces these things.

[00:50:52] So anyhow,

[00:50:54] that was my long way of saying

[00:50:55] what did you hit me?

[00:50:56] You hit the bulls eye there

[00:50:57] where I'm very passionate

[00:50:58] right now.

[00:50:58] And it really comes down

[00:50:59] to circularity though.

[00:51:00] You need to do all these

[00:51:02] things at a system level

[00:51:03] to unlock all these things.

[00:51:04] You can't just do one thing.

[00:51:06] And sometimes I

[00:51:07] think people feel bad like,

[00:51:08] oh, I'm not recycle enough.

[00:51:09] Like great.

[00:51:10] That's one thing you can do,

[00:51:11] but you need to be doing a lot

[00:51:13] more of those.

[00:51:14] And so that's that's my hope

[00:51:15] for the rest of my life is I

[00:51:16] can actually be on my death

[00:51:18] bed and say, man, I actually

[00:51:20] moved a lot of these big

[00:51:22] tectonic plates that actually

[00:51:24] made some level of impact.

[00:51:27] That's so great.

[00:51:27] Really, Nick, I know we're

[00:51:29] up on time.

[00:51:29] I want to be respectful of

[00:51:31] yours, but I have a quick

[00:51:32] two part question here just to

[00:51:33] wrap things up.

[00:51:34] The first one is we

[00:51:36] Ryan and I are doing what

[00:51:38] we can to share alternative

[00:51:39] investments with the pilot

[00:51:41] community and other

[00:51:42] professionals who listen to the

[00:51:43] show.

[00:51:44] Pilots tend to be very stock

[00:51:46] market heavy and they don't

[00:51:47] realize that there's this whole

[00:51:48] world of investment options

[00:51:49] outside of stocks, bonds,

[00:51:51] mutual funds.

[00:51:52] We're big real estate guys,

[00:51:53] but for somebody who's making

[00:51:55] three, four, five, six

[00:51:56] hundred thousand dollars a year,

[00:51:58] do you think that there is a

[00:51:59] place in that

[00:52:01] person's portfolio for V.C.

[00:52:03] And if so, how can they

[00:52:04] learn more about it and get a

[00:52:05] little smarter on it?

[00:52:08] I think it all comes down to

[00:52:09] the again, to the individual.

[00:52:11] If I think about it for myself,

[00:52:13] I'm just naturally pretty

[00:52:14] curious about things.

[00:52:15] So I will explore and try

[00:52:17] to understand and learn these

[00:52:19] things. I would never like an

[00:52:20] investor in a few funds, but I

[00:52:22] understand that.

[00:52:23] Had I not, I might be a

[00:52:25] little bit more reticent.

[00:52:26] So I'd say if somebody's

[00:52:27] interested, they don't just

[00:52:29] write a check, do some homework

[00:52:30] and get comfortable with it and

[00:52:32] then find the right people that

[00:52:34] resonate with you.

[00:52:34] And there's certain funds that

[00:52:36] invest in certain areas and

[00:52:37] certain funds and different

[00:52:38] things. Find those things.

[00:52:39] Are there any books or

[00:52:41] resources that you'd recommend

[00:52:43] to the listeners?

[00:52:44] Not particular around like

[00:52:45] venture capital that like give

[00:52:47] you the guide guidebook.

[00:52:49] You can read plenty of like

[00:52:50] biographies and startup stories,

[00:52:51] but not I can't think of any

[00:52:53] one that's oh, here's venture

[00:52:55] capital and how it works.

[00:52:56] Maybe there is one.

[00:52:57] I haven't read it yet.

[00:52:58] So I think they get out there

[00:52:59] and find things that interest

[00:53:00] to you.

[00:53:02] Then if you can try to talk

[00:53:03] to some people and say, hey,

[00:53:04] maybe you can get involved.

[00:53:06] I think the challenge might be,

[00:53:07] again, depending on the investor

[00:53:09] type, it will be more of

[00:53:11] can you get in and write a

[00:53:12] meaningful check on those spend

[00:53:14] the time? They forgot after a

[00:53:14] huge firm

[00:53:16] and they say, oh, I'm going to

[00:53:17] give you a few hundred thousand

[00:53:19] dollars and I don't have time

[00:53:20] for this.

[00:53:21] So it might be depending on the

[00:53:22] check size, people are looking

[00:53:23] to write, but might be easier

[00:53:25] to find smaller kind of firms

[00:53:27] that are writing smaller

[00:53:28] checks and say, hey, I want

[00:53:29] to be I like what you're

[00:53:30] doing. I love the

[00:53:32] companies you're investing in.

[00:53:33] I give you some dollars to

[00:53:34] manage for me.

[00:53:36] There you go.

[00:53:37] Well, Nick, we really appreciate

[00:53:38] you coming on, sharing your story.

[00:53:39] I had a lot of takeaways and

[00:53:41] I know that our listeners learned

[00:53:43] a lot about the basics,

[00:53:45] right? What's an angel?

[00:53:45] What's a VC?

[00:53:46] What's private equity

[00:53:48] and the role they could play

[00:53:49] or can't play and each stage

[00:53:51] of that and maybe some things

[00:53:52] to think about. So I wanted to

[00:53:54] thank you for coming on and

[00:53:55] appreciate your time.

[00:53:57] Thanks for having me. It was fun.

[00:53:58] Thanks, Nick. Yeah, on to the

[00:53:59] next show.

[00:53:59] Thanks everybody for listening.

[00:54:00] We'll catch you next time.