L.D. Salmanson is a repeat entrepreneur who has been through spinoffs, acquisitions, and is now building his biggest company yet.
On the Dealmakers Show Salmanson talked about starting his first company at 13 years old, spinoffs, the three boxes you need to check to raise capital from VCs, the number one differentiator between founders and others, real estate data, and crashing the New York Stock Exchange.
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Starting Your First Company At 13 Years Old
L.D. Salmanson was born in the little state of Rhode Island. Then, still very young, his parents decided to move the family to Israel.
He spent most of his youth growing up in Jerusalem. A very diverse city. A melting pot of so many cultures and religions, where you end up knowing everyone in your age group, no matter what their background.
Salmanson says he enjoyed the education system there. Which may have been a lot stronger than it is today.
He lived there when the Iron Curtain came down, and the county saw a massive influx of 1.5M Russian immigrants in the space of a year. It brought in a lot of highly talented professionals and educators. It was during this time that he also met his serial cofounder Ben.
Together they began fixing computers at just 13 and 14 years old. People started paying them for it. Which pretty quickly turned into a big business. They added onto that with building and translating websites to and from Hebrew.
Unfortunately, having to go into mandatory military service meant they had to sell the business. There are exemptions for some academics and athletes, but not for entrepreneurs and founders running a successful company. So, they just had no choice but to sell and merge that venture with another business, and let go.
While serving in the military his friends had been working on a HR company. One that they had been scaling very successfully in highly regulated industries. Including the Olympics, railroads, and aviation.
The software they created in the process turned out to be very valuable. They spun that out into its own company, and then sold it to a larger HR software firm.
At this point Salmanson wanted to declare himself retired. Though still just being 28 years old he figured he needed to find something else to do with his time. So, he pursued his dream of attending Wharton for his MBA.
While getting into Wharton was a lot of work, he says that MBA programs themselves aren’t designed to be that hard. However, he complicated his experience by starting his next company during the program.
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L.D. Salmanson’s next venture focused on financial data. He found a sweet spot and a lot of value in the pre-IPO market. Then developed the ability to transact faster than others thanks to their algorithms, and partnering with a capital source that acted as a huge market maker.
However, during a technical engineering glitch, the firm ended up inadvertently buying the entire stock market, spending billions of dollars overnight and causing a flash crash. Goldman Sachs ended up helping bail out that situation before they sold the company to another firm.
L.D. has continued with the big data theme in his latest startup, Cherre.
Cherre is a platform allowing major asset managers, banks, insurance companies, and other technology firms to connect and compile their real estate data. Then glean very advanced insights from it regarding how to acquire or manage their assets.
The vision is for a single resource for answering complex real estate questions. All helping real estate to be more commoditized, uniform, and in ticker data format. With the expectation that many more big hedge funds will become more active in trading real estate in real time, and in a more liquid fashion.
The 3 Boxes To Check If You Want To Get Funded
To date, Cherre has already raised $75M for its venture.
Storytelling is everything which is something that L.D.Salmanson was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.
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That may sound like it is easier when you have a track record of successfully starting, scaling, and selling companies already. Though for others trying to raise capital for their own ventures Salmanson shared what he sees as the right recipe for a successful funding campaign.
The big part he says is having a really huge business. One that can change the world in some way. Only by going that massive will investors be excited and be able to achieve the returns that they must get.
Of course, while the financial side of that and the return is vital, it has to have a story that the investors you pitch are going to want to tell their friends, family, and partners. For example; how you are going to change the world.
Then, with startups being so incredibly hard, and with so many investments failing, they have to believe that you are going to fight through it, and make it a reality, no matter what challenges hit you in the face every day.
Listen in to the full podcast episode to find out more, including:
- Taking down the NYSE
- How VCs work
- Market makers
- The pre-IPO market
- His top advice for entrepreneurs