Founder of The Founder Institute, Adeo Ressi unveils the truth about launching and selling a startup in Silicon Valley, and why entrepreneurs should never plan to exit. Adeo reveals some of the crazy sides of founding a venture. As well as powerful advice for structuring your next company and surviving a buyout.
In this episode you will learn:
- When to consider selling your business
- Things that can go wrong with your board of directors
- What to look for in cofounders
- The fundraising process
- Dealing with Silicon Valley
- Patterns of successful founders
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
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Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Adeo Ressi:
Adeo Ressi is CEO of the Founder Institute, a startup launch program that operates in over 200 cities worldwide, and he is a recognized mentor for fast growing technology businesses. He has pioneered innovations in the protection of founder rights, the raising of early stage capital and the scaling of new businesses.
Previous to the Founder Institute, Adeo Ressi has helped to create nearly $2 billion in shareholder value by founding or running nine businesses, including TheFunded, Game Trust, Xceed and Total New York. In addition, the Founder Institute has helped to create approximately $25 billion more in shareholder value by launching over 3,000 technology companies that have raised an estimated $1 billion from investors.
Adeo Ressi previously served on the Board of the X Prize foundation to pursue his interests in space exploration and techniques to motivate human achievement. He studied architecture and spent time living on a commune to explore his interests in designing better ways to live. Adeo is passionate about inspiring people to achieve greatness.
Connect with Adeo Ressi:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrightee. Well, welcome, everyone, to the DealMakers Show. So today, we have on the show someone that I very much respect, Adeo Ressi, the CEO/Founder and then also someone that has done a lot for the founder community especially now with the Founder Institute. So Adeo, welcome today.
Adeo Ressi: Thank you very much. Excited to be here.
Alejandro: Yes, so typically we actually interview founders that have some good stuff to share about transactions that they’ve done either fundraising or acquisitions but you’ve done it all and you’ve done it all several times. So your case is completely different and all of your experience the one that you have. So I guess how many companies have you built and exited by now?
Adeo Ressi: You know there’s defining lines of what’s a company and what’s not a company but comfortably nine, and then probably more if you consider different roles or different types of structure. But where I was the founder and deeply involved, nine.
Alejandro: Got it. Got it. And I guess a lot of people start businesses and really takes a long time to get them all the way to the finish line but I guess what’s this always the strategy to build those companies and sell them on your case?
Adeo Ressi: Well, when I was younger I thought building and selling was a good idea. Now I don’t believe in selling as much. I think that if you want to build something, you should work on something that you don’t want to sell, and in fact, that may lead to you getting offers to sell and I think if you get offers to sell or you have inklings to sell, if you feel that you’re doing the right thing, you probably shouldn’t sell. So a hundred percent of every company that you sell will die. It will die in one form or another and there’s some examples that I’ve seen of companies that have sold and survived for extended periods of time and even improved but they eventually also die. So for example, I sold a company—I sold two companies for what amounted to be approximately a billion dollars when I was younger under the age of 30 and one of them survived for quite some time in excess of 10 years but eventually it was, it died. And so that’s quite a long run but you know the second you sell something to someone else and I bought a lot of companies too so I’ve been on 25 transactions either on the buy side or sell side. And you know the ensuing entity just eventually goes away. The thing that purchases you may go away. The thing that you sold to them will definitely go away. So if you want to build something that’s your legacy, you want to build something meaningful, these days I don’t think of selling as an option.
Alejandro: Got it. Got it. Got it. I mean you were mentioning under your 30’s you were very active and you know I know that you did several initiatives like for example doing a night club with Elon Musk or for example doing the newspaper when you were at school. But I guess when we’re thinking about like what was that significant exit, I believed it was Method Five. So would you mind talking to us about Method Five? How was that experience for you?
Adeo Ressi: Sure. So you know I had before that I sold a company called Total New York to the Tribune Company and when it was in the Tribune Company, it merged with AOL and became AOL Digital Cities and then AOL eventually bought it for just under a billion dollars. So that preceded the Method Five days. In Method Five, we were just one of the many digital agencies in the world and because I have built a fairly large media company before, we specialized in working with fairly large companies, pretty much every major media company in the world was relying on us to help them with the digital transformation to the world wide web etc.
Adeo Ressi: And the business was growing very well. We were growing something like thirty plus percent month over month, sometimes as high as a 100% and we have 60% GNA so it was a business with a lot of kind of an expensive overhead because we had these very talented people working there that needed assistance and HR support and stuff like that. And you know we were charging something like three to four hundred thousand dollars for what amounted to be about two men weeks’ worth of work. So it was really just a business that was printing money. And everyone kept trying to buy us.
Adeo Ressi: We kept saying no. And we were like, “Nope. No. No.” And then finally someone came in and really wrote a ridiculous amount down on a piece—he came in my office and went, “I want to buy you.” I’m like, “We’re not for sale.” So he took a post it note off my desk and he wrote like a ridiculously high number on it.
Adeo Ressi: It would have been ten times revenue. We were essentially like a blended product service firm, you can more – leading towards service and 10x revenue for that type of firm is obnoxious. I still turned it down though. I was like, “No.” He’s like, “Okay, we got to go to lunch.” And so – he actually said, “We got to go to breakfast,” because it was evening.
Adeo Ressi: An older gentleman in his 60s and I was in my 20s. I think it was 28, 6 or 7 at the time.
Adeo Ressi: And we went to breakfast and you know, he’s like, “What can I do to make you accept this deal?” And I was like in my mind, I was like there’s nothing I could – but like if I were to accept it it would look like this which was like totally obnoxious and probably was like 15 or 20 times revenue.
Adeo Ressi: And it would be mainly in cash and like it was so farfetched that I was like sure, he would say no. But he didn’t, he said yes.
Adeo Ressi: So that put me in a quagmire and I ended up selling. But you know still to this day, I think back on that company because it had one of the best cultures in the entire – that I’ve seen of any company anywhere.
Alejandro: Got it.
Adeo Ressi: We had all the modern amenities of launches and all the stuff back in 1997 and 8. We had teams all around the world, right, that were amazing and people would migrate between the different offices and we had corporate housing and all these stuff. And everybody was really—we had the most diverse management team, you know, a Muslim woman, a homosexual man on the management team that would meet multiple times a week. These are like things that people aspire to today and this was 1997. And it was like so it was a beautiful thing and did eventually get bought and it was a reverse merger and we took the ensuing entity public.
Adeo Ressi: You know, in many ways I look back and fondly thinking like, “Wow, that was one of the most special companies I’ve ever seen,” and you know I ended up selling it.
Alejandro: And talking about special and you know what you were saying the culture and all but I think that to certain degree that is engraved in the founding team. So I guess what is the founding team look like that’s your holding you know team initially? What was that picture?
Adeo Ressi: Well, so I ended that one, I was a solo founder on, so I varied in my career between having cofounders and being a solo founder and it wavers back and forth based on you know mostly negative experiences with either situation.
Adeo Ressi: So the previous company that we had sold to the Tribune Company eventually AOL and then it became AOL Digitial Cities, I had a team of four people and you know they did some really bad things. They basically tried to steal all my equity basically.
Adeo Ressi: And you know, right to my face. In fact, they literally came to me and they’re like, “We want to take your equity.” And I’m like, “What?” And you know, I’ve found it. I’ve named it. I brought the team together. I built it. I raised the money. And you know they had made some really bad decisions and I was young and so I made some bad decisions as well, you know. When you’re young you don’t realize that first impressions can last a long time or decisions that you do or behaviours that you take can burn lasting impressions.
Adeo Ressi: So you know I had, they had done some really dumb things and I had threatened to quit and the second that I had threatened to quit, and this is just for anyone out there, never threatened to quit. Either quit or don’t threaten to quit. You know whatever you do, don’t threaten to quit.
Adeo Ressi: And yes, so I’ve lost the credibility with the team and then they used that as a means to try and push me out.
Alejandro: Got it. Got it. Got it. So for example…
Adeo Ressi: It’s a stupid thing, right.
Alejandro: Yeah, I hear and just talking about that because I feel with the past business that I was leading with CofoundersLab, obviously the CofounderMatching was a big one. But what is your take on solo founder versus having a cofounder?
Adeo Ressi: Well, you know I have – so the Founder Institute helps launch between 1 and 2000 businesses a year.
Adeo Ressi: Within that context, we see somewhere around 10% to 20% of those businesses have you know cofounder relationship, sometimes more depending on the year but you know it’s not 50%, right.
Adeo Ressi: Now people bring the equivalent of cofounders on later, right. So for example at the Founder Institute itself I have a cofounder but he really joined quite a bit later. So I’ve been two or three years running the Founder Institute as a solo founder. He had been helping as a contractor and he really stepped up and helped at a critical juncture and eventually earned the title of cofounder. He was there from the beginning, just not in the cofounder role. So my views on it are fairly advanced.
Adeo Ressi: You know I’ve been in every kind of imaginable litigation. I’ve seen every kind of imaginable litigation and etc.
Adeo Ressi: I think that, and in fact I have a team of cofounders like sitting outside my door right now working on a project. So look, you have to be a very strong person to be a founder to begin with, right. It takes a – this is not a 100% of the population can go found a technology company in 2018. My best guess is that 2% of humanity have the core characteristics to be successful starting a company and maybe you can get a third or fourth percentile of people who can just overcome their personal setbacks and become the founder despite you know having low emotional ability to tolerate stress, right.
Adeo Ressi: So you got to be really a strong person to enter this field anyway. And a cofounder is really someone who fills two functions. First, they buttress against the never ending barrage of stress and pressure challenges, etc., and to some extent you brought your Samurai too. They essentially helped you deal with the extremes of starting the company. The other thing that they do and this is really a temporary function is they fill a skill set and it’s not necessarily like, because as a company gets bigger if you’re a programmer and someone else is a marketing person, you know, neither of you will be doing programming or marketing, right?
Adeo Ressi: You may lead teams that do it but you’re not going to be filling that functional void. So really rather than just the straight skill match, I look like a personality match. So I might be of an introverted engineer that likes to solve problems and my cofounder might be more of an extroverted business development person. And so as a team in our company we need some introverted engineering and extroverted business development so we’re going to make that perfect team. So I wouldn’t necessary look at it from a skill, “Oh he’s an SEO guy.”
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Adeo Ressi: “I need a lot of SEO so I’m going to make him my cofounder.” You know, you can be a cofounder with someone for like the rest of your life, 20 years, 10 years.
Adeo Ressi: How long were you in the company when you exited?
Adeo Ressi: Yeah.
Alejandro: I think it was for like six years.
Adeo Ressi: Six years. Okay. That’s relatively quick to an exit. A lot of times it’s taking 10, 15 years until you use an exit. So you could be working with this cofounder for that long and if you think they’re great because they’re good at SEO, you know I promise you that in 10 years from now, SEO won’t even exist. I mean certainly not the way that it is today. That skill set might have no value to your business.
Alejandro: Yup. Absolutely. So I guess now going back in to the transaction, so after you sold to AOL then you move Method Five and then Method Five also is acquired and I believe the terms were around 80 million, is that right?
Adeo Ressi: It was, well, it ended up being much more than that because of the way they structured the deal with assuming all sorts of—they assumed the option plan, all the stuff, so it ended up being quite a bit over 100 million.
Alejandro: Got it.
Adeo Ressi: But really it wasn’t about the price because we ended up doing it for some cash and a lot of stocks. So I come in wanting all cash but because we were going – we did do a reverse merger and take it in to a shell company that we then took public, right.
Alejandro: Got it.
Adeo Ressi: So the ensuring entity ended being worth like over a billion dollars.
Alejandro: Got it.
Adeo Ressi: Which is pretty awesome, and then it collapsed. So literally I would watch like $2 million a day of net worth for a lot of months that wiped away. It was somewhere between $1-$2 million a day for months net worth would just be eradicated. That was fun.
Alejandro: So I guess looking back then, Adeo, for example from this exit, what was your biggest lesson?
Adeo Ressi: Well, I mean that exit was challenging in a lot of ways because you know I had the desire to run the ensuring public company and then the public markets collapsed so that wasn’t viable and it was slated that I was going to run the public company. In fact, that was the plan.
Adeo Ressi: So I think that the lesson that I learned is like, yeah, I made a lot of money and I ended up taking that money and joining the board of the XPrize, started working on Space, working closely with Elon and the [0:17:32] of SpaceX and all these interesting things came out of that exit so I certainly don’t regret it. But what I did realize is that you know when you sell something, it’s going to die. And you know no matter what you do, it might live a little bit longer like the 10 or so years for AOL Digital Cities or less like that and it eventually was crushed by the dot com collapse so you know somewhere between months and years, but eventually it’s going to die and if you really love it, you have to have a very conscious decision with yourself about what the net result would be. And by the way, there are things that you can do as an adult leader to elongate and possibly for as long as possible the health of the ensuring entity so that it might be around 10 or 20 years versus one or two years, right. And you know, now that I’m older, I counsel most of my friends on large M&A transactions because I’ve just done a lot of them like 25 fairly sizable deals on both sides of the table. And then I’ve seen countless of it. So there’s a ton of things you can do to get around the escrows and the earn outs and the lock up periods, right, as an entrepreneur that are win-win, right.
Adeo Ressi: And there’s a ton of things that you can do to ensure that the acquirer keeps the entity around in a healthy condition for as long as possible, right. And if you built something that you love, right, that is really valuable, then you know you almost have an obligation to ensure that acquirer keeps it around because I can tell you from a lot experience that unless you proactively think about how to keep the ensuing entity around, it’s going to die a fairly quick death.
Alejandro: Got it. Makes sense. And just as an example, in a company like Method Five, what was the capital structure all the way to the actual sell of the business.
Adeo Ressi: I think I had somewhere between 75% and 80% of the shares at sale. We took a little bit of angel investment and they made like a 1000x.
Alejandro: Got it.
Adeo Ressi: That was one of the best angel investments of a lot of people’s lives. And many of them retired on it which was crazy because I went out to raise money and I went back to these angel investors and I was like, “Hey, I’m back.” And they’re like, “No, I’m retired.” I’m like, “You’re retired on the money that I made you.” They’re like… (inaudible). I don’t know why I retired but I’d like to dip in.” And then we had employees who did rather well on the whole but it was also crazy times back then so a lot of the employees eventually did some things that led to their some financial struggle because people are like trading on margin and doing some crazy things. As a founder, when you sell your business, take your money and put it away, you know. I still have a lot of the money from that liquidity event which is now 20 years ago because I socked it away and you know now I’ve gone through a divorce and some other things so I finally I think it’s gone but you know for about 20 years, I had capital from that acquisition that I just managed well, invested, etc.
Alejandro: Got it. Got it. So I mean nine companies is quite a good amount. So I guess that from that experience and then also from the recommendation that you give to founders that are building hyper growth businesses, what do you typically see in terms of like the average amount of time that one would invest in fundraising?
Adeo Ressi: Oh in fundraising?
Adeo Ressi: Of course it depends on the stage. So you know the longer the company is around, the easier the fundraising becomes unless you’re really screw up which does happen. But you know it can take you when you’re just starting out a solid six to nine months of pounding your head against the wall to raise a measly half a million to a million dollars, right. And when you’re like at a Series D, it’s like two weeks some phone calls, a couple of meetings and you can raise you know, 50, 100, 200 million dollars.
Alejandro: Got it.
Adeo Ressi: So it really really depends on the stage and generally speaking, unless the company is in trouble but you did say hyper growth, it tends to get exponentially easier per stage. So you know the other one that can be a little bit tricky so you know they’re bundling between stages where the effort ramps up again. So angels, super angel, seed, by the time you’re going out for a seed round, it usually it’s friends and family which is easy. First angel round which is super hard. Maybe a second angel round much easier. A seed round easier still. Then you’re going to jump to like a Series A. When you’re going for a Series A, it’s almost like you’re entering a new thing. It’s like a reset button. It’s like going from high school to college. And so it’s much harder. And it might take you again another six to nine months to close the Series A and maybe even 12 because you’re almost like all the things you learn about how to close angels, super angels and seed funds don’t apply to Series A investors. They do a vast amount of proper due diligence which most of the other investors I mentioned before don’t and so just to close the Series A fund, you know if you get them interested and they entered due diligence and you get that due diligence checklist, you know, 90% of founders if they’re lucky have a quarter of it on hand, right. So the rest of it is like resumes of all your employees. And you’re like, well, I kind of have resumes but they’re not really you know, argh. So you got to go and get everyone’s resumes. Then it’s like references for all your tiki management team. So just getting that due diligence checklist together is probably a good few months of work.
Alejandro: Got it. Got it. And I guess going back to your story, Adeo, so after the acquisition of Method Five, you are a few years between obviously with the acquirer you were there, a little bit within and then you went to start your consulting firm and then you went at it again with Game Trust. So can you describe what you guys were doing at Game Trust?
Adeo Ressi: Sure. Well, technically what happened is I was at the acquirer for about a year, started working on Space so I joined the board of the XPRIZE, started investing heavily in Space. Then while doing that I was doing some venture turn around because I was interested in acceleration and incubation back then and I wanted to get my toe in the water so I just started working with different venture capital firms on their portfolio just to see sort of how everything worked a little behind the scenes. And then you’re right, I went in to Game Trust. Game Trust was a fascinating company. We actually made the term gamification. It was – we made the systems that led to the term gamification being created. Gabe Zichermann is a good friend of mine. We were building these systems. It’s like I was showing it to him one day and he’s like he named them gamification. So we had built a fairly large—the best analogy would be like Zinga like we were like Zinga in 2002 and Zinga didn’t really come out until like 2007, 2008, so they were quite a number of years later. They ended up being quite a bit bigger, so lesson learn there, never be the first to market and especially in something like that. But we were also fairly big. We had 20 million monthly unique users and this was back when you had to buy all your own servers, right. So you know there was no Amazon like, “Oh how do we scale? Let’s just, I’ll give some more money to…” I’m like, “No.” You literally were like buying servers and putting them in racks like Rackspace or other providers around the world and like fibre attach storage. So this is not easy to do. We grew really, really big, and then a board war broke out of course. So we had raised a $10 million Series B. It must have been like 2003 or 2004, something like that,which was a huge series B. So the world crashed in 2000. No one was writing checks anymore. To get a 10 million, that would have been the largest financing for a five-year period for that stage because it was really like a Series A plus today because we had just done the Series A and we got a $10 million Series B offer. And kind of a weird thing happen like the dirty little stories of the valley are all true. If you hear something and you’re like, that can’t be true, it probably is true. So all the bad behaviours that went through and like deviousness and everything else.
Alejandro: Right. Right.
Adeo Ressi: You know, the sex party stuff is not true though but all the other stuff, all the business stuff is true.
Adeo Ressi: So Mike Moritz called the investor and told him not to invest.
Adeo Ressi: And then I was like, so they yanked the $10 million deal on day of wire.
Alejandro: And this is Soft Byte, right?
Adeo Ressi: Yeah, it was Soft Byte. Eric Lappo.
Alejandro: Got it.
Adeo Ressi: And so I was meeting, I was like in a ripped t-shirt. I pulled over driving in the office, bought new clothing, put on a new clothing, got back in the cab, went to Eric Lappo’s office. I’m like, “You pulled—what’s going on?” At first I thought he was going to break out the champagne and celebrate and then he told me he’s not going to invest and I’m like, “What’s going on?” He goes, “We have problems in the management, the market and the model.” And this is after maybe six months of due diligence. They interviewed like players and I’m like, you know, “Eric, we’ve been working six months on diligence here. It’s impossible that you suddenly,” and I made a joke, “What’s next? You don’t like my mom? The fourth m.” And to then he admitted that Mike Moritz had called him and asked him to pull out of the deal because he wanted to buy the company. So I hopped on the plane, flew out to California and started nego—and I literally went to the company’s offices and not Mike Mortiz’s office and who’s sitting in the company’s office but Mike Moritz. All the company executives sit down and I start horse trading with Mike Moritz. Now Mike made a really generous offer. It would have been, I mean it was comfortably in the $200 million range, right, but it would have been like probably worth like a billion dollars if some other plans had happened. So it’s like 200 million but like billion dollar bet was in sight because they would buy us and do something, right. So I’m like, “Oh, that’s pretty generous,” but you know sort of fuck you, right, because this is not the kind—at least he’s generous. Put some lube on before you know… So I went back to my board and I’m like, “Well, the deal fell through,” and they’re like, “What?” And I’m like, “Yeah.” “But we’ve got an offer to buy us for a lot of money.”
Adeo Ressi: And they just went nuts. They literally went nut. They thought that I had lied or something. They were like, “What do you mean the deal fell through?” And I tried to explain everything and they’re like, “I don’t believe you.” And so that led to absolute chaos. We ended up turning down the offer.
Adeo Ressi: So they started to—my board started trying to negotiate with Mike Moritz. Mike Moritz then took a disliking to them which is known to happen with him. And then he mandated to clear them out as part of the transaction that led to absolute chaos and then a bunch of craziness that I cannot even believe ensued which led me to start TheFunded because I was like these people are all crazy and someone needs to tell the truth about how crazy these people are because their behaviour is unacceptable.
Adeo Ressi: I mean a lot of the investors in the world given to this day lie, cheat and steal and they have the moral compass of a pet rock, right. So they’ll say anything, do anything to get their way. And you know and then I witness this like firsthand because people the amount of crazy nego—like someone hired Elon Musk from my board of directors and put their child on my board. And I was like, “Look, I can help you. Anyone is better than your child.” Literally like I don’t need to have taken any business school classes, you know, any living entity besides your child is better even a fucking sloth will be better than your child for optics purposes because that’s at least cool.
Adeo Ressi: I have sloth on my board. What do you have on your board? I have my son. Oh my god.
Alejandro: So I guess going to that point then, Adeo, how would you I don’t know like recommend now if founders or the Founder Institute as they’re looking at the corporate governance and the structure of the board like what kind of recommendations would you give them based on your experience?
Adeo Ressi: So you know we standardized best practices which is Founder Control and most of the companies around the world now have adopted Founder Control situations where you have super voting shares, you know. We have something called class app stock and their ovations of class app are now the norm in America and various places around the world and we pioneered this concept which is essentially Founder Control. So look, the truth of the matter is as a founder in 2018 and as far back as I’ve been starting companies to 1994, you know, the world is not there to prop you up and give you hugs. The world is there often to take whatever it can in whatever way possible from you, right. So you’re a target. And so your job as a founder is to establish as much defensive controls and protections as possible to ensure that your vision gets achieved in the world.
Adeo Ressi: Right. And you know the more people that you surround yourself with, the greater the—and you must like be very conscious of control. Now there are things like control doesn’t mean like a dictatorial control. I want to be clear about this because control can mean that it’s governance system that leads to good outcomes, right. It doesn’t necessarily mean that you are like in some you know king share being like, “Now go left, then go right,” and like, “You, take that over there.” That’s certainly means of control that’s very popular today, right, but that’s necessarily the right way. There are other forms of control that are very effective such as governance schema which is why crypto is very popular because crypto at the end of the day is a governance schema. There are often a limited number of people that have control in some way over the governance schema but it empowers people on the sides to exert a lot of influence and change the outcomes.
Alejandro: Right. Right. Yup, yup. Makes sense. I guess just to close the loop there, Adeo, how did the chapter of Game Trust finish? So you did an acquisition. That company got acquired, is that right?
Adeo Ressi: Yeah. Well, we sold it for about $50 million and because it was so chaotic, I actually lost a million dollars in the deal. And some of our early angels lost some money too. And you know, it was fine though because it was so bad and you know they did every bad trick in the book like water falling, the distributions based on who is last in. So this company will make over 3x, some people got zero, right.
Adeo Ressi: And you know if you’re in different rounds there will be blended. So it ended up being a solid outcome but it really taught me so many things. That one taught me so many things because most of my exits up until that point had been like so much money that like you know losing a little here and there whatever, right. Like, oh so and so gets a million less than you know whatever the 75 million he’s going to make, whatever, right. No one is like oh, but in this one my people were literally like with knives fighting over scrawny chicken and what you realize is that you really see the—so the first thing that I learned especially in those middle case scenarios is that the cap table means nothing.
Adeo Ressi: Nothing. It was a completely negotiated outcome.
Adeo Ressi: Some people got stuff they didn’t deserve and it wasn’t even—they would threat me, right. They would literally threat me. They’ll be like, “Okay, well we’re not going to vote for it unless we get this, this and this.” And the buyer is like, “I need a unanimous votes.”
Adeo Ressi: So I’m sitting there I’m like, well, you know, of course I said no like 90% of the time but at some point you’re literally trying to walk the paper over. They’re like, “No, I’m going to withdraw my signature unless you do this, this and this.” And that had to last—I mean literally remember I was about to wire the money or send the paperwork and get the wire I should say.
Adeo Ressi: And the lawyer of one of these criminal investor calls me and you know, “Where’s my $25,000. It has to come out, you know. I need to get paid. You don’t pay me…” I said, “Okay,” and this is back when you have [0:39:52]. So I’m like, I’m hanging up my phone and walked through the elevator. And when I get in that elevator, the deal is off. I’m going downstairs. I’m going to Hawaii. Fuck you.
Adeo Ressi: And you can call me back and say that you’re in. For when I’m in that elevator, Hawaii, here I come and I just hang up. And I walked to that elevator, I hit the button and he called me back and he’s like, “Okay, sorry. Forget it.”
Adeo Ressi: I was like alright, deal is done. Send it off and 50 million just went in to differentpeople’s hands on a totally negotiated….
Alejandro: Wow and then after that, you went to launch TheFunded which is an amazing website for user member back in the day when I was starting to do fundraising. I would review all the different comments on every firm. And then you went on to launch the Founder Institute. So for those that are listening that are not familiar with the Founder Institute, what is the Founder Institute?
Adeo Ressi: We help people who are thinking to start a company go from what I call zero to one. Zero is you probably have an idea. You may still have a day job, maybe you’d quit and got started. One is you have an incorporated with a product, team and traction, right. We can get you pretty far along in three and a half months intensive. It takes about 30 hours a week to do so so you can do it while you’re in a day job. But basically, we consolidate about 12 to 18 months of procrastination and dilly dally down to about three and a half months and you come out of it with again an incorporated company, the beginnings of a product, team and traction, usually have sold stuff and we do it through a culmination of mentoring, structured assignments of building your business, to build your business, and peer support. And we’re in 250 cities. We create anywhere between one and 2000 new technology businesses a year. Our vision is we empower communities of talented motivated people to launch impactful and enduring startups.
Alejandro: Got it. Got it.
Adeo Ressi: And it’s the best, man. Like people want to buy the Founder Institute all the time because we have one of the largest holders of private equity in the world. The business is doing quite well. And you know I love running. It’s like a dream. So it’s one of these things where if you say like what would you do with your–I couldn’t even imagine doing anything else. It doesn’t mean it’s perfect, right, you know.
Adeo Ressi: It’s still a business, right, so it has its ups and downs, problems but it’s amazing.
Alejandro: That’s fantastic.
Adeo Ressi: We’re really helping people to realize their potential on the planet.
Alejandro: Yeah, no, absolutely. I’ve followed you, guys, since the early days when we were building our business which was also founder driven. And you know what you, guys, have done is really remarkable. So I guess, Adeo, just to close the loop here, if you have to go back in time after all these experience and you were able to speak with your younger self, what advice would you give yourself about the entrepreneurial journey?
Adeo Ressi: It’s harder than you think.
Alejandro: That’s what you’ll tell yourself? Fantastic. So I guess…
Adeo Ressi: Because what am I going to do, probably I’ll do it all again…
Adeo Ressi: … so I want to go and just be like you know the only other thing that I might add to that is like and you know when you’re in the depth of one of those dark spots, it will get better.
Alejandro: Yeah. Yeah.
Adeo Ressi: That sort of an encompass in the harder than you think.
Alejandro: Of course.
Adeo Ressi: And you know I can tell you how many times I was sitting on a plane or dadada, “Man, this business is going to go out of business,” and like and then it did, right, so you know. That’s just the nature of business.
Alejandro: That makes so much sense. You know I remember during the bad days I always told myself that clouds are always temporary.
Adeo Ressi: That’s a great piece of advice. I mean as an older person who’s been an entrepreneur for most of their adult life, I can safely say that you’re going to hit some of these really, really tough spots when you’re like there’s no way and like fast forward a year later, and you know you’ll be in a completely different place like it never happened, so to some extent patience in the entrepreneurial world is a bit of a virtue.
Alejandro: Yeah. Absolutely. So Adeo, you’ve been generous. So I guess for the people that are listening, what is the best way for them to reach out and say hi?
Adeo Ressi: You can just send me a tweet @adeoressi, pretty easy. I checked it. I’m not the biggest—I checked social media about as much as I check email. I sort of have some email things I focus on growing the Founder Institute and opening new cities around the world. But yeah, @adeoressi onTwitter is probably a great way. This was lovely. Thank you for your time today and thanks for the good questions. I wish everyone was as prepared as you for an interview.
Alejandro: Amazing. Thank you so much, Adeo. It was lovely to have you on the DealMakers Show.
Adeo Ressi: Thank you.
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