Sign Arizona Banking NDA Fast

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and we're gonna take questions from the audience if you'd like to ask Robert Jill or Kraig questions now's your opportunity to do that the question it's about a value-added investor what is a value-added an investor so I mean for our first investor which was the you know the very consumer focused private equity firm the idea that they understood consumers and how consumers think was was attractive to us as opposed to just dollars the big thing that they did for us was was they had relationships and they they knew people some of whom I wanted to get a meeting with and they got me meetings with and others that they couldn't get me a meeting with I really wanted to meet Howard Schultz and talk about coz he was talking about banning electronic nicotine delivery at Starbucks and I wanted to talk him out of that before that became official and I never got the meeting but they did get me the meeting with dr. Carmona the Surgeon General and and I used to have a philosophy just get me in the room so they were able to do that but you know the big the best is you talk to other companies that they invested in and you ask that question of the CEO what value did they provide you beyond the capital and you know I mean it's hard because if you get the references from them they're going to give you people they're going to sing their praises but you know if you try to figure out you can you don't need them to give you the references you can talk to people based on the internet who they invested in and asked that question what other value did they do they provide I worked with a firm that had immense banking relationships and the business that I was in they actually learned enough about how well we were doing that they opened up more opportunities they were greatest referral service that we saw for years and that was kind of unexpected and I guess now I would expect it because everybody was winning in that situation for me it's the ability to win sometimes you're in the room with investors who are either new or haven't really changed the world and not that I mean that's not that I've changed the world but they have their vision is the next quarter next year or something and what I like is the fact that some of these guys come in was just really big visions and they and no limits on what they think they can do then that translates to all of us thank you more questions right we right here in the front so the question is how do you get a P firm to sign the NDA and talk to you how do you identify them I have a a very unusual perspective on NBA's and if you're a young entrepreneur or trying to get something off the ground do you think you have the greatest idea on the planet the chances are that ten other people have it at the same time and the truth is is that if you walk into an investor who wants to steal your idea he's gonna and then he's gonna say go ahead and come get me right so in my opinion NDA's are not worth the paper they're printed on you need to know who you're dealing with before you sit down and share your idea but don't be afraid I mean everybody has great ideas it's about executions who can execute on the idea I was in a car once in 2006 with a drug you know driver and he shared with me what was Suber he had the idea forever and I went well that's the kind of truth and I guarantee you he now works for uber it's about execution and not the idea so I'll say a couple things I totally agree with Robert on the NDA I wouldn't even bring it up no VC will sign an NDA probably most P frames won't either and it's just a I mean I'm a recovering patent attorney and and I can tell you you know I used to have clients who come in to tell me their idea and they'd say oh I can't tell you you know you might steal the idea you know at the end of the day I think you could take your idea to your number-one competitor and give it to them and they're not going to like deviate from what was there gonna be their next product roadmap and so I agree with Robert if I wouldn't worry too much about that in terms of finding them I was fortunate I so I followed an interesting path which was I went to the analysts in Wall Street who covered my industry for publicly companies and we weren't public but I called them up and I basically said hey I'm gonna be in New York which of course wasn't true I was gonna go just in case I got the meeting with them but I'm gonna be in New York anyhow next you know it's such and such and I'd love to sit down and meet with you and talk to you about you know they were analysts for the tobacco industry so and talked about this new technology electronic nicotine delivery that's disrupting the tobacco industry and they all said yes right because it's for them it's this is their job so I met with you know Goldman Sachs and Wells Fargo and Morgan Stanley and then they were like we'd love for you to come speak at our conferences so then I come speaking at their conferences and who's attending their conferences Fidelity Morgan Stanley and then they hooked me up with all of these one-on-one meetings so in the end I never had I never hired a banker and I never had a CFO like Jill so I I did all of those raises on my own but mostly because they these people were calling me so because I had the exposure but if you wanted to go find them III don't believe in cold calling at all like if somebody reaches out to me I don't know who they are I'm I just think they're lazy like just make go on LinkedIn figure out a way that you're one or two connections away ask that person for an intro and and so same thing here if you think you know somebody you want figure out how you can connect to them in some warm ish way I'm a pretty keep it simple girl so again I'll go back to my dating analogy right where you're not always the prettiest one in the room but there's somebody out there who likes the inside right we all want to think that so again go back to the story and know your story and talk about it and don't be afraid I don't think any good decisions are usually made in fear and so talk to people and share your story and it allows that story to become more practiced and then by the time somebody knows somebody knows somebody then you'll be telling the right person your story more questions short the one thing I would add is look at who's financing other people in your industry or adjacent industries and look at their deal fault those are the people you want to talk to there's it that answer your question thank you more questions I have a question for for Craig I think so we talked about this is a lot of emphasis on people want to protect their patents which is more valuable your patent or your trademark yes why so I mean I was a patent attorney for 10 years and if you asked me at the beginning of my career it was always about the value of patents and I just totally don't think that's the case anymore I think patents I don't want to say they're valueless but they have very little value today and I'll give a couple of examples right no one in this room is not buying an iPhone or a Samsung phone because of their patent litigation and I could take away all of Apple's patents tomorrow and we'd still buy all of their products if I took away their name and so they couldn't call themselves Apple anymore that would be catastrophic to their business if I took away all of Google search patents tomorrow you'd still go to Google and do your search if I took away their name and said they can't call it Google anymore catastrophic so trademark is the real intellectual property value today part of that's because about 10 years ago there was a Supreme Court case that kind of defamed patents where you couldn't really get an injunction anymore and once that was removed as a recourse and you were left with reasonable royalties it just wasn't a reason why people wouldn't steal your idea so the real values trademark and my mentor told me story that that benchmark initially passed on Twitter I think at a twenty five million dollar valuation and then invested it like 250 or 2.5 billion and he said the reason we passed the first time is because we were like there's no IP here like it's just a just a text message with limited by 140 characters like anybody can do that and he said we didn't realize that there was IP it was the trademark that was the name was what was so valuable and we took us a while to figure that out so I think the real value at the end of the day is building a brand building you know you're you know and I think private equity hasn't quite caught up to this yet they still have what I kind of consider the box checking exercise where as your IP what's let me see your patents you know and and it they got a little bit be educated that that's not as important as it once was killed Robert Germany comments that about trade my first patent I believe in trade secrets not trade or not patents and the brand name is everything yeah one day we'll find a brand company here that can help out creating of read any sorry a question from a transactional standpoint they're more annoying but again you know if you really hold to the rule of know what they want and deliver it and the quicker that you can do that the quicker that they're out of your day-to-day hair and that speaks a little bit to the box checking right we we can't deny that that is still a factor and so learn what the boxes are and just go because then you don't hear a lot even from the young hungry ones yeah I mean it's challenging for me I would say because I'll use the family office analogy I always said I've never closed the deal with a family office and part of what's happened to me is you really have two decision-makers you've got that the young hungry person who's running the family office and you've the family and you really have to get two yeses if either one of them have any pause or hesitation the deals not going to get done so what what I much prefer where you're talking to the decision maker I'm talking to the decision maker then you have to persuade that one person to do the deal and then they send their minions to go fill out the paperwork but but it's very challenging with that young hungry person if they don't have decision-making authority I've run into this problem on multiple times even at the private equity side where they're your big greatest champion and then they company know then you get like that sort of sober Monday morning phone call that you know they had the investment committee meeting on Friday and it didn't go so well so that you know that hasn't been a good experience for me I think though I do have a comment the one thing I would add is train the young guy train train him right so that when he does walk into investment committee he knows what the hell he's talking about rather than I checked all these boxes make him the Evangelist but not just the imagine list you know to be excited and a cheerleader may give him meat and potatoes to deliver the message but absolutely invest in training that person thank you for quite that answer your question more questions I have a question for the panel how do you make sure that everyone in your team knows the story chapter inverse how do you make sure that they know it so when someone calls they know what the story they know the why how do you ensure that the team your team knows the why that's pretty easy for us we we have a couple standards and I'll give you the one that I've learned to say without crying so Tolliver D has to be here today because tonight there's a fifteen-year-old gal who's gonna try math for the first time and that is gonna send her down a spiral where she's going to probably create a financial scheme and eventually get caught and we all paired that to make sure that television on in jail yet but she's going to be going to jail it was it was never an issue for me because I really took to heart the adage of hiring people who were smarter than you so I had a team of people that each one of them could have been the CEO of my company and so I was I had no concerns about putting them alone in a room with anybody going out to dinner with them whatever cuz they were all rockstars and so I think if you if you hire the right people then you know you know in some ways it was it was better for me cuz I was like because I would always brag about my people like oh they were amazing and then I I would hope that I wasn't in the room cuz I because then I knew they would see it and then and they'd be like wow like they've got a deep bench this is like an amazing company like look everyone's more impressive than X so I think if you if you if you really you know take to heart that idea of getting those people who are you know if you if you can take the ego out of it and you know not and want to be the dumbest guy in the room which I was so happy to be on so many occasions then then it's great because then those people are so impressive so a couple things I would say one is so my mentors said look if you're in a fast-growing company you need as the CEO you have to be spending at least 25% of your time recruiting otherwise you're just gonna be underwater and so I thought that was great advice so I spent a lot of time focused on recruiting and I would say in some ways it was not dissimilar to fundraising which is storytelling so you've got to sell them on this vision of what do you how do you want to spend your time right what do you want to do you know we're saving lives right I mean we couldn't market that because that would have been a therapeutic claim that would have gotten us in trouble with the FDA but we all knew it to be true and so I mean to this day and it's a similar story Robert to yours I mean I'm I'm not with enjo anymore and and you know I was able to take some chips off the table but the big upside that like Jules experiencing now I missed out on and I have people to this day you know five six years later coming up to me I was a two pack a day smoker right you a your product saved my life like you say thank you for saving my life like that's it I was I was I'm happy as could be with that so pitching that to people that to come work for us like like you know do you want to go sell widgets or do you want to come change the world it was sort of like I'm stealing that line from that famous thing where Steve Jobs recruited the guy who ended up replacing him who was the Pepsi CMO and it's like you just want to go sell sugared water or do you want to come with me and change the world like it was a similar pitch that I would do with people so it gets back to start with why and I think Jill's got an amazing story to pitch to people to come work for her company like we're out there changing the world like we're making our community a better place that's that's you know to me I rep much rather do that then how'd you like to come make some money I mean that's just to me not very exciting people can go make money elsewhere so I think if you've got a mission and in your mission driven company then that became my biggest recruiting tool and then also these once you get some of these amazing people that I'd bring them along with me on some of these you know I would do that the lunches where I would bring all of these people one of my favorite people who who literally just made a hundred million dollars three months ago where was my head of product development I used to bring him to meetings because he was so colorful and he'd gone from zero to ten million zero ten million and he was at zero again when I brought him on these meetings then he's gone now to 100 and and so and said what one time he was in one of the meetings and one of the people said I just got to ask what what do you mean hero to tend to zero like what happened and he kind of got this big smile and he took the Willie Nelson line he's like well I spent 90% of the money on wine and women and I wasted the rest of course by the way I we found somebody here that can save a CEO 20% of their time with recruiting I think we will talk about that Benko any other questions thank you thank you sir I can tell you it was a disaster like total disaster because you if you don't have a superstar CFO which I never had it's it's really catastrophic as you basically you can't be running your business while you're raising money s the business suffers because you need the money so you have to raise the money and the business suffers so that that's that was the single most challenging aspect of my previous experience and probably the thing that I struggled with the most because it's a it is a all consuming process the fundraising I mean it was probably 85% of my time you know for that for those periods when we were doing that and it's a it's really hard to balance I did a terrible job at it I wish I would say hire someone like gee alright if you have a spectacular CFO then you're spectacular CEO Oh in either case someone that can make sure the trains are running on time then then either the CFO can run the process for you or the CIO can run the company for you while you're running the process but I think you need one of those two I think that balancing that equation you have to go back to the idea that cash is king right so the new we say new role of CFOs it's just not the same anymore back in the day you took almost all month to look backwards right and close the books and it took 20 days to do it you know I mean just that is such a thing of the past and now I would say old-school CFOs are actually complaining that you're required to wear multiple hats versus this is where I've been my entire career and so you have to be able to do it all you have to be able to add to the business and grow in either role whether you're out raising cash because that's your best value or your back mining the store because that's where your value is because the CEO will get split so quickly and then you're not productive if you're only doing 80 percent and killing yourself over it then you're in trouble because you have to know that that cash need is coming rather than dipping down you'll lose traction dad it's your question more questions thank you thank you very much appreciate it