Max Simkoff On Raising $230 Million To Transform Real Estate With Machine Intelligence

Max Simkoff is the cofounder of States Title which is an insurtech platform that uses machine intelligence to remove friction from residential real estate transactions. The company has raised $230 million from top tier investors such as Foundation Capital, Horizons Ventures, Bloomberg Beta, Greenspring Associates, Fifth Wall, Assurant Growth Investing, Lennar Corporation, SCOR Global P&C Ventures, HSCM Bermuda, and Eminence Capital LP to name a few.

In this episode you will learn:

• Why to stop negotiating deals after 10pm
• Hacking scale
• Fundraising during a crisis
• What Max would tell his younger self before starting a business

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About Max Simkoff:

Max Simkoff is currently the CEO of States Title, a mortgage analytics software company focused on reducing friction and expense for several of the largest pain points across the $1.5 Trillion annual mortgage origination market.

Prior to States Title, Max Simkoff was Founder and CEO of Evolv, Inc., an enterprise predictive analytics software company that he grew from zero to 100+ employees, an eight-figure annual revenue, and added over 20% of the Fortune 500 as customers.

Max Simkoff led Evolv through their acquisition by Cornerstone (NASDAQ: CSOD) in 2014 where he served for two years on the senior executive team post-acquisition as the Vice President of Strategic Initiatives.

Max Simkoff has a BA in History from Northwestern University.

Connect with Max Simkoff:

• Linkedin
• Crunchbase
• Angel List
• Quora

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a pretty interesting founder, a founder that has definitely done it a few times, and full cycle, you name it, and now operating a very regulated space, and I think that we’re going to be learning a lot about challenges, a lot about failures, successes, lessons learned, you name it. So without further ado, Max Simkoff, welcome to the show today.

Max Simkoff: Thank you. Thank you for having me, Alejandro.

Alejandro: Originally born in Portland, Oregon. How was life growing up there?

Max Simkoff: Life in Portland was great. Despite what most people are seeing on the news right now about these crazy protests that are going on outside the Federal Courthouse, and a lot of craziness that is going on in the city, it was a really wonderful place to grow up. As long as you can survive five to six months of rain in a row between November and May every year, the rest of the year is beautiful. It’s just a really great city – great restaurants, great people, plus the outdoors. Really a sublime place to be. 

Alejandro: And this business mindset that you have, was that influenced, perhaps, by anyone in your family?

Max Simkoff: It’s a good question. You know what, this business, in particular, I guess you could say it was indirectly influenced by – my family, for whatever reason, it does have a number of entrepreneurs. My father was basically shamed into being a doctor by his Jewish parents, who had already selected a profession for him I think the day that he was born. Then told him over the next 25 years that that was the only acceptable thing for him to be. He ultimately did become a doctor, but funnily enough, I think he got more enjoyment and found more success in building his own business of medicine, which ultimately, he built some standalone facilities for doing cardiac catheterizations and some pretty innovative stuff. He was an entrepreneur. Both of my little brothers are entrepreneurs in their own right. To answer your question, I think what influenced this business in terms of my upbringing is always seeing that there was a better way of doing things. I learned from my dad, in particular, that most often, when people tell you something can’t be done, that’s usually the point in time that you just make it a challenge. You get some sick enjoyment out of somebody saying, “Oh, yeah. That can’t be done.” “Well, I’m going to prove that it can. You say that problem can’t be solved. I will solve it.”

Alejandro: I hear you. I know that problem well. So, Max, why history? Why did you study history?

Max Simkoff: Why did I study history? I think because I thought it would be interesting, which it was. I look back on the decisions that I made when I was 18, 19 years old about what to focus on in college as it relates to the rest of my life, and I think they were both at the time not super practical, and also, I’m super thankful that I did them. It was about being able to enjoy for one of the last times in my life just being completely consumed by learning and learning things that were fascinating. That was the main reason. I concentrated on modern Asia, which I found to be particularly interesting, especially in the current day, the period from the late 1920s to early 1930s to the present in terms of Chinese history. I thought the development of Indonesia was super fascinating and other parts of Southeast Asia, Vietnam. I did it because it was interesting for the short answer.

Alejandro: And talking about interesting – living in a trailer and paying $110 a month. How cool is that, while you’re surfing. How was that experience?

Max Simkoff: Yeah. That was right out of college. I moved to Santacruz and lived in a trailer park with a couple of friends of mine. You definitely pick the highlights like; the highlights were surfing a lot. I don’t have this kind of energy anymore, but we would get up at 5:00 am and surf before work. Then we’d work all day, and then one of us would pick the other one at work, and we would surf until dark. Those are the high points. The low points were, the reason my rent was so cheap was three of us were splitting a single trailer. We rotated. We got to take turns on who got the bed. The runner-up got to sleep on a desk, and last place was sleeping on the floor of the trailer, which, as it happens, was neither a comfortable place to sleep, nor was it particularly safe. This is going to sound horrible, but there were a few nights I remember hearing rodent life uncomfortably close to where my head was on the pillow. Not exactly the fun part of sleeping on the floor of a trailer in Santacruz.

Alejandro: Obviously, a great experience there, and then you moved to San Francisco, and while searching on Craigslist, definitely, the spark of starting something really came up. What was that experience like?

Max Simkoff: We’re talking about a different time. Craigslist was the marketplace for the city. This was early 2003, early 2004. If you needed to find anything, you found it on Craigslist – a job, a sofa, an apartment. I was looking for a job. I was scanning classified ads on Craigslist. I was working as a temp in customer service just to pay the bills. There was a posting from two guys who were starting what was called The Private Equity Search Fund. The concept is you come up with an idea of a company you want to go and buy. You get investors to fund the search for that target acquisition with a modest amount of money that just covers your expenses. Then when you find it, you acquire that business, and you become the management team. What’s crazy is that most search funds fail. They run a search. They don’t find a target acquisition, or if they do, they can’t get the deal done. Much to our surprise, ours was successful. These two guys I met on Craigslist, we ended up running around in search, we found a healthcare services business that was technology-enabled. We bought it for a little of 20 million dollars. Another crazy story – we raised most of the equity for that acquisition in the 45-day exclusivity period between the time when we signed the term sheet and closed. We had nowhere near enough equity to close the deal when we signed the term sheet. We negotiated the price with the principals of the business, and then we frantically scrambled, flying all over the country, trying to raise the rest of the equity. It was an amazing first-time entrepreneurial experience.

Alejandro: And this was a nice segue into your actual first startup. Tell us about how you came up with the idea of Evolv, and how did you bring it to life?

Max Simkoff: Sure. That healthcare services business we bought in Chicago, once we started operating the business, I got close to the hiring process. Most of our employees were frontline, entry-level, primarily, hourly workers in a customer service capacity. I was shocked by how hard it was to hire lots of people at scale, and then have them happy in the job and retained. We had a horrible turnover problem in that business when we started out, upwards of 150% a year. In a part of the company, it was like 200-300 people. So, just working through the challenges of having to hire lots of people and have high turnover. Then we started using some basic data analytics to solve that problem, and that’s what gave me the idea for Evolv. The general premise was, can you use better data analytics in hiring for frontline hourly workers and then seeing the benefits of using better data analytics, what ultimately became true predictive analytics, by predicting which people will be successful and how long they’ll stay before they’re hired. Ultimately, Evolv built a software platform to do that. It was sold to large enterprise clients. We had customers like AT&T, Xerox, eBay, some big companies using our software to hire, and in some cases, like tens of thousands of people a year.

Alejandro: Got it. Also, prior to the acquisition, you raised quite a bit of money as well. Correct?

Max Simkoff: We did. Yeah, ultimately, we raised, I think four rounds of venture funding in that business: Lightspeed, Khosla Ventures, GGV Capital, and VantagePoint.

Alejandro: Got it. There’s one story that was pretty interesting that I would like to touch on, and that is, right before closing the Series A, you had a little of a shouting match with your co-founder, Jim. What happened?

Max Simkoff: Yeah, right. My co-founder, Jim Merely, who, just like the records reflect, is not only one of the most wonderful people in the world, he’s actually a much better person than I am. He is still, to this day, a very close friend of mine, so despite what I’m about to tell you, things ended up well. But, yeah, we were closing our Series A with Lightspeed. Both Jim and I were first-time founders. We had agreed that we would divide and conquer on the closing work for the financing. I would do the legal work; he’d do the finance work. He built the financial model, finalized the budget, was managing the cap table. I selected the law firm, negotiated all the principal business terms, managed the red lines network, what have you. The night before we were supposed to close, Jim and I – it was late at night. We were in a shared office. I’ll never forget. It was actually in one of the piers in San Francisco. It was in Pier 9. When I say in the pier, it was like we sublet the space from the Longshoreman’s Union or something like that. It was about as barebones as it gets. We’re sitting there late at night, doing our final closing checklist, making sure the numbers are fit and tied, whatever, and he’s like, “Are the legal docs good?” I was like, “Yep, they’re good.” He was like, “Okay. I’d like to review them.” I said, “What do you mean review them?” He said, “Well, I haven’t read them. I want to read all of them, and I want to make sure I understand them, and I want to see if there are any changes that I want made.” I was like, “Jim, what are you talking about. We can’t make any changes. That time is gone. I’ve been managing that for the past few weeks. I’ve been keeping you in the loop. I told you where there’s material stuff.” He said, “Yeah, I know, but I haven’t read them. Let me –” And we got into a screaming match where I was like, “You can’t do this. You’re going to hold up the closing.” He was like, “You can’t tell me I can’t read the docs.” I said, “I’m not saying you can’t read them, but you just can’t make any changes.” He’s like, “Well, if I can’t make any changes.” I’m like, “What kind of a partnership is this? Maybe we shouldn’t do this.” It was like, at the time when you’re around 25 years old, and you’re screaming at your co-founder – the thought, I’m sure crossed Jim’s mind and mine in the heat of the moment, “Oh, my gosh, is this a good idea?” Then we both went home; we got some sleep; we came back to the office the next day, and it was like, “Are we good?” “Yeah.” Jim was like, “Let’s get the doc signed.” [Laughter]

Alejandro: That’s amazing. So tell us about the acquisition because at one point, Cornerstone comes in, and they have some interest in the deal and closing. What was that process like? 

Max Simkoff: That was an interesting process. I remember; it was January 2014. Cornerstone approached us and said, “I’ve known of you guys. I think this could be complementary to what we’re trying to build from a talent analytics perspective. I would like to talk to you guys about, at the time, what they called a meaningful combination of the businesses, which I later came to learn – it meant mergers – me being super green. I was sitting at lunch with Adam Miller, the CEO of Cornerstone. He was like, “I think we could potentially do something interesting here.” I was like, “Oh, what did you have in mind?” He was like, “I think it would be really great to combine forces.” I was like, “How?” He kind of looked at me and was like, “I’m talking about a merger.” I said, “Oh. I’ve got it. Yeah, of course.” What was really frustrating and unfortunate was we left that discussion agreeing that it seemed like a good idea for them to acquire us. I remember there being some numbers that were socialized afterward that seemed quite attractive. I got on board with it. Then, in the period of two or three weeks after that when they were starting their diligence, if you go back and look at the stock chart, for pretty much any publicly-traded Software as a Service company, at the time, Workday, Cornerstone, Salesforce – the market had a massive correction. These businesses went from trading at like 10x forward revenue, and then in a matter of eight weeks, they were trading at 4x or 5x forward revenue. What happened was Cornerstone very respectfully came back and said, “Look, this doesn’t make sense for us right now. We can’t do it. It’s not a good idea, given what’s going on with the market.” It wasn’t like, “We’ve spent some more time, and we think that maybe we need to negotiate on price.” They were just like, “We’re not going to do it. It’s not a good idea at all.” Now, in the meantime, because they were interested, we had actually had some other interested folks over the years, and we had reached out to them and said, “There’s a transaction that may happen here, and now would be a good time if you’re interested to step forward.” Luckily for us, because we had done that, we had a few other people that we wouldn’t have reached out to who were also then starting diligence, and we ultimately ended up getting an offer from one of them to acquire the company, and that enabled us to go back to Cornerstone and say, “It seemed like you guys were a better partner for us. It felt like it would be a good fit product division and integration-wise. You’ve got to speak now or forever hold your peace.” So they decided that they would actually, in the end, come forward. The terms were different than we initially talked about, given that the market had changed, but it was a bit of a rollercoaster.

Alejandro: And here you have the opportunity to see the full cycle with a business from raising different rounds of financing, all the way to closing an acquisition. What were the top three lessons that you took away from the experience with Evolv?

Max Simkoff: Top three lessons: 1) Don’t invent a market. For all of you founders out there who think that you’re the most visionary, smartest, most future-forward person because you can see what market is likely to happen when your great idea becomes a reality, I am here to take all of the wind out of your sails and tell you that the market always wins. I’m saying that with the humility of somebody who literally invented a market. When we started Evolv, there was no such thing as talent analytics, and there is today, and by the way, it’s a really attractive market. Guess who ended up footing the bill and not reaping the spoils of being early and right in that equation. It was us. We were constantly pushing a rock up a hill, and convincing Chief Human Resources Officers, COOs, CFOs, “You should make more budget to spend money in this category that we’re literally inventing. That was the #1 lesson I learned. There are some amazing founders out there who can invent markets; they’re truly remarkable. But, for me, my lesson was I did not want to invent a market again. I did not want to go convince people that they needed to transact around a solution that didn’t exist to solve a problem that they didn’t yet know that had. It’s much better. I think founders are too afraid of competition. I think competition is a fantastic thing because it validates that there’s a problem we’re solving, and I think I shied away from that a bit too much. That would be the top lesson. 2) The second important lesson I’ve learned, which is super simple and sounds super basic, but learned this from one of our board members at Evolv, a partner at Khosla Ventures. He said to me at the time, and I remember I thought it was kind of a silly thing to say, but over time, it’s become more and more true, which is, “As the CEO of a startup, your #1 job is to make sure that the company doesn’t run out of money.” Again, this is practical advice. A lot of founders will, obviously, think alike, but I just think a lot of founders miss that. They become so focused on things like my job is to set the vision; my job is to motivate the people. No, those are your secondary jobs. You don’t get to do any of those jobs if the company doesn’t have money. The company needs to have revenue that it brings in, less its expenses left over so that you can hire people and build the culture and build vision, or it needs to have money from external financing. But if you don’t have it from either, and you’re not thinking about that, and you’re not paranoid about it, companies do actually run out of money. It happens more often than you’d think. People don’t want to talk about it. It’s horribly debilitating for people. There are lots and lots of people out there who will never join another startup again because their business ran out of money, and they lost their job. That’s your #1 job as a CEO is to make sure you don’t run out of cash. I don’t know what the third would be, but I think those first two are probably the most important.

Alejandro: Definitely, powerful, Max. Then, after the acquisition, you did a bit of vesting and resting at Cornerstone, but you found a good segue into your next business, so tell us about that segue and how did you decide to say, “Hey, I’m going to go at it again”? 

Max Simkoff: Look. I never thought I was going to start another business. I am very thankful to Cornerstone for allowing me a configuration of a role, however nebulous of a role it was at the time. It enabled me to be thoughtful about the kinds of things I wanted to spend my time doing, and I kept coming back to this very perplexing and frustrating experience I’d had in getting a mortgage as a first-time homebuyer. I didn’t understand this process of closing, so why did I have to go to a retail office storefront for a title company and sign hundreds of pages of printed paper documents and find errors in them, not understand any of the information, and then on top of everything else, pay thousands of dollars of fees. It seemed like a real problem, and a problem of the magnitude that was like at thousands of dollars of fees on top of a typical – when most people were getting a mortgage, they’re putting a down payment probably in the tens of thousands of dollars, which is depleting a significant amount of their liquid savings. So, thousands of dollars of fees on top of that meant that if you could remove a lot of that cost and make it less frustrating, it would probably have a meaningful impact on the experience of owning a home. I was shocked. While I was at Cornerstone, and on my nights and weekends, I was able to do some research on the market. So, learning from my first experience of not inventing a market, I was hyper-sensitive to, “Does this seem like a really good idea to solve a problem in a pain point that is just not that much of a market?” I was shocked to learn that the U.S. title escrow market, the network of companies that’s responsible for closing almost quite literally every mortgage that transacts is 21 billion dollars a year just in U.S. residential title closing revenue. I was shocked even more that the big scale incumbent players in this space were super antiquated in how they were approaching every aspect of the business. There was almost no technology. They were using very high barriers to entry, so lots of built-in infrastructural remote. I went down this positive rabbit hole of like, “This is a real problem that needs to be solved. It could make things a lot better. It could be better, cheaper, faster, and those are the best kinds of businesses – and it’s a big market with kind of a weird competitive dynamic. It seems like it’s worth devoting the rest of my career to solving that problem.”

Alejandro: Perhaps the business model has changed a bit because there’s an acquisition that happened there that I want to touch on a little bit. But for the people that are listening, what is the business model, and how do you guys make money?

Max Simkoff: Our business model and how we make money is super simple. Our business model is, we use machine intelligence to remove most of the friction, frustration, and expense involving closing a mortgage. We are structured as a title and escrow company. That means we have title insurance underwriter where we write risk for an insurance policy that establishes clear ownership of the property changing hands. A title insurance policy is basically required for almost every residential mortgage transaction that takes place in the United States. We write risk as an underwriter, and we do that using machine intelligence. We do that algorithmically in an instant to replace what companies had traditionally done manually over a period of days or weeks. And then we also manage the entire closing of the mortgage. So, title companies traditionally have done everything from reaching out to the buyer or seller to set up the closing date and time, setting up the notary, printing the loan docs, getting wet signatures, recording the mortgage, doing all the payoffs, paying the transfer taxes, paying the realtor’s commission check – all that stuff that needs to be done and that title companies have done, and we do that stuff as well, except we do it using our machine intelligence platform better, faster, cheaper. The way that we get paid – again, super simple. We get paid per transaction. It’s generally a flat fee for the closing service that we do, and then the insurance policy is based on a percentage of the transaction price. Unfortunately, I know it sounds weird when you say this because it might seem like it’s against my capitalist interests as a shareholder in our business, but unfortunately, the fees that we are allowed to charge – and I say allowed because it’s a highly regulated industry. Unfortunately, those fees in many states are still too high, so we’re doing our best to bring them down, and I’m very proud that we’ve been able to do that in a number of places. Our general premise is, charge a lower rate for a solution that is much better, much faster, and a much more efficient, much more enjoyable customer experience and [26:02].

Alejandro: Tell us about this incredible company called States Title with 25 people that acquire another company that is 170 million in revenue. How did that happen?

Max Simkoff: Yeah, that’s a good question. I still ask myself how we were able to pull that off on a regular basis. I tell you, getting to know the people at the company that we acquired and being able to work more closely with them over the last year-and-a-half, I’m even more in awe of the fact that we were able to pull it off because the people in the business that we acquired have just been incredible, and they’ve driven a massive amount of value for us in accelerating our vision. The way that this came together is, we launched States Title with an initial product in Spring of 2018. Our product was instant underwriting title insurance for refinanced transactions. We started to get some real market traction. The beginnings of what you call product/market fit. Lenders using our product, seeing value from it; we’re starting to produce revenue; we’re starting to build our distribution footprint. Then, we confronted some realities in our business that, again, learning from my first-time founder experience at Evolv, I don’t think I would have realized this as a first-time founder. It’s a second-time founder thing where I was like, “Okay. Business is getting off the ground. It seems like there’s a product/market fit. Where are the biggest existential barriers to this being a big business really fast? How could we grow this to be an amazing platform, at scale, to be affecting tens of thousands, hundreds of thousands of transactions a month?” Instead of the five that we were doing at the start? The team, at the time, when we looked in where we said, “If we’re really honest with each other, our biggest barriers to getting there are distribution-related, they’re capital-related, and they’re licensure-related.” We were in the insurance business; we were in the escrow agency business. That’s a licensure thing, like how can you get licenses across 50 states as fast as possible? It takes a lot of time, especially as an insurance carrier. This company, Lemonade, just went public, and I think many people pointed out that there’s a pretty big premium in their stock price right now that’s based on the fact that they just did this [28:26] to get licenses and full-stack insurance carrier. We were going through the same process. We realized it would take a lot of time and take a lot of money. When I say a lot of money, we calculated it would have probably taken 50 million dollars of additional surplus, literally money we would have had to raise as pure equity, and then just put on the balance sheet and not be able to touch in order to get the licensure we needed. Then, distribution, when we looked at that, the title industry is complex. There are a lot of local market presences that matters, particularly when it related to purchase mortgage business. Big lenders don’t want to work with you unless you have national scale. When we were reflective and honest with ourselves, we said, “The only way you get over that hurdle is if you have it. You either do, or you don’t. You can’t be building it and talking about how you’re going to have it. You just have to have it. When we said, “How would we solve all these problems all at once, we came up with this idea of like, what if we could acquire one of the largest existing title insurance carriers and title agencies in the country. Just to put things in perspective, there really aren’t that many of these companies. A fully licensed, fully capitalized title insurance carrier with an at-scale national title agency, there were six or seven of them that you could buy, and three or four of them were publicly-traded companies, multi-billion-dollar market cap. One of the limited partners and one of our venture investors, Lennar, who has now become one of our best partners or one of our largest shareholders, and they have two seats on our board. They happen to own the eighth largest title insurance carrier and national settlement agency, and we approached them and pitched them on this crazy idea where we said, “What if we could acquire this business from you. We invest heavily in technology to make it amazing as part of our company, and you guys end up being a minority owner of a company that could get a lot larger, a lot faster, instead of being 100% owner of a traditional title business.” Thankfully, they decided to go for it. There’s a lot more that happened to get the deal done, but that was the general premise.

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Alejandro: Well, definitely, a lot more happened, and one of those pieces that happened was you staying with one of the partners that you were negotiating with. So, tell us that story.

Max Simkoff: Yeah. This is a crazy one. When we got into negotiating the actual economic terms of the deal, which got to be quite complex because we were a startup that was acquiring this large business that was profitable. We needed to structure equity in an interesting way. We ended up doing a seller note. They loaned us money to buy the company. A lot of complex economic negotiations, some of them quite sensitive. This gentleman who has become a close friend of mine, who is on our board, Eric Feder, he was the executive at Lennar who was driving this deal and helping the whole thing happen. He said, “Look. We’re getting to a point where we’re discussing a lot of complex stuff, and we also want to feel good. This is a partnership. We’re not selling you a business and walking away. We’re going to be your largest shareholder and going to be on your board. Why don’t you and your COO,” who was driving a bunch of the deal at the time, “come out and spend some time with me and some other of the exec team at Lennar? Let’s do that in a more informal setting.” We went and met them. It was summertime in Colorado. “We can go for a hike; we can have dinner together; we can get to know each other, and we can start working through some of these more complex issues.” We went out there. I remember we met for dinner with Eric, Stuart Miller, who also ended up joining our board. At that time, he has just stepped down as CEO of Lennar and had become Exec Chairman, and Rick Beckwitt, who is the current CEO of Lennar. We all had a great dinner together. Somehow, Christopher Morrison, my COO, and I ended up back – Eric asked us, “You can stay with me. Right?” We thought we’d save money. We don’t have to spend money at a hotel; we’ll stay at Eric’s house. So we ended up back at Eric’s house; it was late at night. I know this is like a common theme now in some of these stories, like the one from earlier. This conversation about these contentious economic terms – by the way, just for advice purposes for any founder who’s negotiating material turns an angle; they should probably never be negotiated after 10:00 pm, in general, with any counterpart, whether that’s your co-founder, or a strategic partner, or whatever. But here it is 2:00 in the morning, and we’re back at Eric’s house, probably had a little too much to drink, just as a side, and we’re screaming at each other about something I can’t even remember now. It’s like some economic term. We were like, “This is ridiculous. We can’t do this this way. This is not going to work.” Finally, there’s a point where Eric is like, “You know, I can’t believe I even let you guys stay at my house.” We were like, “Do you want us to leave? I guess we could get a hotel. It’s 2:00 in the morning.” He was like, “No, don’t do that. I’m just really pissing me off. You guys are staying in my house. I let you stay in my house.” Christopher and I slink off to guest bedrooms and go to sleep. Both of us couldn’t sleep, and we woke up at 6:30 or something – came downstairs. It was another one of these instances where we sit down at the kitchen table with Eric, and he poured us some coffee, and we were like, “Is everything good here?” He was like, “Yeah, we’re good. We’re fine.” [Laughter]

Alejandro: That’s amazing. Max, how much capital have you guys raised to date for States Title?

Max Simkoff: I should probably know this exactly – 220 million-ish.

Alejandro: I see, yeah, over 220 million. The last trench, which was about 123 million that you guys did – that recently closed in May this year. How crazy was it to raise that during a pandemic?

Max Simkoff: That was definitely stressful. I’m mostly thankful – in life, you work hard, and then you get some luck. You like to think that you earn your luck. I certainly was not impressed enough to know what was going to happen on the microenvironment. These were conversations that we started having in the November timeframe. We added some investors in the winter, Horizons, Ventures out of Hong Kong, Eminence Capital out of New York, Hudson Structure Capital Management, and actually that was smart, I think, on their part in that that was as things were really starting to fall apart. We all had conversations about, “How much conviction do we have that in the environment that we were likely going to be facing, that this is going to be one of the best businesses out there?” Clearly, I had conviction because this is my whole life. But what was reassuring was – and we didn’t know, but we had a sense that in a world where people needed to go and work remotely, and doing this overused term digital transformation becomes more important, our business was basically accelerating ten years overnight. Our biggest obstacles, even with the scale that we had and with the customers that we had – big lenders using us at scale. The things we were still running into were things like, “I wish they could sign documents digitally, but did they really want to change their processes? There’s some regulatory red tape.” Then, all that stuff disappeared. It was like, “We have to do this now. We have to do it for every transaction,” and we were the best equipped to enable. It was definitely a hair-raising time to be closing a round, but I do also think that it was – like most things in life, it in some ways made even more sense that it was happening at that point in time. Our industry needs to change, and we’re the company that’s going to change it. So, fortunately, we got it done.

Alejandro: That’s amazing. One of the questions that I ask the guests that come on the show is if you had the opportunity, Max, of going back in time and having a chat with your younger self, perhaps that younger Max that was coming out of college and was thinking about starting something. Knowing what you know now after being at it a few times, and your successes, your failures already learned, what would be that one piece of business advice that you would give to your younger self before launching a business and why?

Max Simkoff: You know, it’s funny. My advice would be, do nothing different. The reason why is – and this gets to personal preference. I’m not somebody who things regret is a productive emotion. That’s maybe a very controversial thing to say. Everyone has their own personal opinion, and they’re entitled to it. I think regret is a very unproductive and, in some ways, – it’s a question like, I am proud of what I’ve done. I’ve made a ton of mistakes, and every one of them, I think, was the right mistake to have made at the right time to help me be who I am. And hopefully, to become a successful long-term steward of a company that’s going to change our industry. I don’t think I could have done that if I hadn’t of made the mistakes that I did in the order I made them, doing the things that I did, so I’d go back and tell myself, “You know. It’s going to be a rough ride at times, and there are going to be problems, and you’re going to make mistakes, and you’ll learn from them, but those are all the right things to do. Don’t second-guess yourself when you’re making those decisions.

Alejandro: Got it. Very profound. It’s like the butterfly effect. Sometimes, when you change something, something different that could be even worse opens, so I can get that. Very cool. Max, for the folks that are listening, what is the best way for them to reach out and say hi?

Max Simkoff: Connect on LinkedIn. When I get emails or connections or requests from people that are relevant in the industry and trust and connecting, I generally accept them. Reach out directly – believe it or not, you could fill out the I’m Interested form on our website, and you’ll get a response within an hour or two. Those would be the two things I’d say, short of giving out my personal email.

Alejandro: Max, thank you so much for being on the DealMakers show today.

Max Simkoff: Thank you, Alejandro. It’s been great talking to you.

 

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