In this exclusive interview on the DealMakers Podcast, Will Herman reveals his own struggles and successes with launching and fundraising for his early ventures. As well as how he fell into investing in startups himself after selling two companies for over $700M, and ended up ultimately writing one of the most important books for today’s entrepreneurs.
Listen into the full DealMakers podcast for the details, and how to get in touch with Will Herman himself to pitch him with your funding opportunity.
In this episode you will learn:
- The transition from operating a private company to going public
- How to focus on the journey with a big vision initially
- The time allocation for fundraising efforts
- The process of running a successful M&A process
- Going from entrepreneur to angel investor
- Types of patterns that successful founders have
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.
The Ultimate Guide To Pitch Decks
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Will Herman:
Will Herman is an active angel investor, corporate director, author and startup mentor. Will was previously a serial entrepreneur, having started 5 companies – mostly successes, but a couple of miserable failures. Will lives and works mostly in the Boston area.
Will sold his last company, Innoveda (NASDAQ:INOV), a supplier of Electronic Design Automation (EDA) software tools to Mentor Graphics in 2002. Innoveda was created when Viewlogic, his previous company, did a reverse acquisition of Summit Design, a public company. Will co-founded Viewlogic (NASDAQ:VIEW) in 1984 and left the company in 1992, a year after the company’s IPO. Will then rejoined the company in 1995 initally as President, then as CEO. Viewlogic Systems was acquired by Synopsys in 1997. One year later, most of the assets acquired by Synopsys were re-purchased by a small team he led via an MBO re-forming Viewlogic as a new private company.
During his hiatus from Viewlogic, Will was first the President of Scopus Technology, a startup supplier of software automation tools in the customer information systems marketplace. Will later helped create Silerity, a developer of high-performance electronics design tools where he was President and CEO. Silerity was purchased by Viewlogic in 1995.
Will is currently a director at JumpCloud and Concrete Sensors. Will is a mentor at TechStars, a fund advisor at Bolt and actively advises about a half dozen individual startups. Previously, Will served as a director of several other public and private companies including, Standing Cloud, Stillsecure, Template Graphics Software, Hall Kinion, Rebar, Lexra, Quintus, Carbon Design, MobileDay, Viewlogic Systems, Innoveda, Silerity, ChannelWave, AccuRev, Bionaut Pharmaceuticals and Zipix.
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FULL TRANSCRIPTION OF THE INTERVIEW:
Intro music playing….
Female: Welcome back to the DealMakers Podcast Show with serial entrepreneur, Alejandro Cremades, bestselling author of The Art of Startup Fundraising and cofounder at Panthera Advisors. In this podcast, we ask our guest about their successful acquisitions and financing rounds.
Alejandro: Alright. Hello, everyone. Welcome to the DealMakers Show. Today, we have a very, very good guest. I think that he’s going to be able to contribute a lot of value. He’s been around the block a few times and he’s also one of the most active angel investors, so Will Herman, welcome. Welcome today.
Will Herman: Thank you so much, Alejandro.
Alejandro: I was very excited to have you on the show because typically we interview founders that have had quite a success at least with one transaction but you’ve had success with several transactions, so how many companies have you built and exited by now?
Will Herman: I’ve started five companies but two of them end up to be miserable failures, total crash and burn, lose-all-your-money kind of failures. Three pretty big successes though, two IPOs, actually both those companies were subsequently sold as well as the third company I’ve started.
Alejandro: Got it. So was it always your strategy really to build those companies and sell them?
Will Herman: No. Funny enough, I never thought about exits when I started companies. I think that actually clouds your ability to execute well and you know I just always thought that hey, we’ll build a cool company. We’ll build a great company here and we’ll see how it goes, and exit is a possibility but it might just be fun along the way. So I never really thought about it but you know the exits themselves obviously bring their own rewards.
Alejandro: Absolutely. So tell us about your story. How did you get started with the entrepreneurial bug?
Will Herman: So I was in college and I was studying mechanical engineering and I ran in to my first software development class and I just thought, wow, I mean I don’t have to be the hundred millionth person to prove Newton’s third law. I can actually do things the way that I want to do them. And you know, at the time, it was somewhat difficult to get computing resources and I would sneak in the labs and I’d write some software and apps to do this, programs to do that. And then after my sophomore year in college, I applied to dozens of places for a job, you know, who’s going to take a completely inexperienced kid in college and I got a job at a startup which I’ve never even heard of a startup before. I didn’t know what it was. And I joined the startup as a low level coding you know hack and I got the bug, and I actually quit school. I didn’t go back to school then. I went back later. But once I started there and saw the freedom, the Wild West freedom of startups, I couldn’t leave it.
Alejandro: Got it. I mean that freedom is pretty amazing. I remember back in the days for me when you know before becoming an entrepreneur, I was an attorney and I mean it’s a really crazy switch of careers but Corporate America is just a complete different beast. But anyways, Will, talk to us about Viewlogic Systems because I understand that was your first significant exit.
Will Herman: Yes. So I was the cofounder of Viewlogic, one of five us, five of us started the company. It’s a software company that did essential CAD for electrical engineering. So basically like any CAD tool, CAD tool markets are not monstrous and they’re very competitive, generally dominated by just a handful of companies. We came in. We thought we had some interesting unique ideas. We struggled to get funding. We just struggled. It took us a year after we started writing code and writing business plans and getting our acts together to get our first check which was just $50,000. It was a contingent deal that said, “Okay, we’ll give you $50,000 now. We’ll do a little bit more if you reach certain milestones in the next handful of months,” which we did. We did but it was living hand to mouth. We weren’t paying ourselves. We were you know writing code around the clock, you know, sort of a typical garage startup story. We were hardly unique but we were very successful and it’s not so much we had better technology than anyone, we just had a better delivery mechanism. We were on different platforms. We looked at the market differently. We priced a little differently. We were the new guys on the block with some unique characteristics. We took the company public after seven years, seven pretty successful years and then a few years later, we sold it ultimately for about half a billion dollars.
Alejandro: Nice. Nice. So I can say going back to the early days, so you mentioned you were five cofounders, you know I actually, this is a topic that is close to my heart because the last business that I exited was one piece of it was CofoundersLab which the CofoundersMatchmaking was a really big component. And just talking about numbers, what was your experience with having five cofounders because that’s a lot of egos to manage?
Will Herman: Yeah and in fact, it didn’t entirely work out great. There was, you know, without any humors here, I’ll say the team was very good. None of us were the best at everything that we did. We just as a team we worked very hard and we worked for a year before we got funding and stuck together. You know how hard that is, it’s under the stresses there. A few years after we got it going though, the board, our board pushed us hard to upgrade in certain areas. I didn’t really like the idea but we did and a couple of the—two of the team left the company at that time. We also, because it took us so long and it was so difficult to get funding, we ended getting diluted quite a bit. And at the end of the game, we owned a very small percentage of the company.
Alejandro: Got it. Got it. Got it. So I guess one of the things now obviously people are talking about doing IPOs. It’s like the new down round and that’s [exit term 0:07:14] to stay private but back then the thing was to do the IPO. So I guess from your experience, I mean there’s like a ton of reporting and you know being public is completely different, so how did you manage that transition from private to public?
Will Herman: Yeah, funny, the reporting challenges were not that big a deal. I mean we of course even at the time we had heard, oh my god, it’s just so difficult and you become more quarterly focused and we’re already pretty quarterly focused company. It was certainly a pain in the ass to have to go visit large shareholders and fly to New York and do quarterly meetings and things like that. That took a lot of time away from day to day running of the business. You hire a few people to help and you make sure you get it to work. The biggest transition is actually the going from private to public in my opinion especially in a startup world is that you know most of the people in startups get equity and very few people actually do the math on what they’re equity is worth. They don’t know how many shares there are outstanding. They don’t know the capitalization of the company and everybody thinks they’re going to be a multi-millionaire on an exit. The difference between acquired and going public is when you go public you’re an ongoing company. You are running the exact same company with the exact same goals with the exact same people, no changes. You’re just public now. And then people finally saw that their stock is not worthy tens of millions they thought it was worth and there’s a big shake up. It’s a difficult transition financially for people individually.
Alejandro: Yeah. Got it. Got it. Absolutely and one of the things that you were pointing to is that you know it took you guys a little bit to get the first checks in and we’re talking about years ago so the angel investing and the online platforms and none of that was available. But I guess my question here is what was the capital structure looking from all the way to the end like that financing process to keep the business going?
Will Herman: Yeah, that’s an excellent question. It made me think a little bit too about this recently. So we were ventured funded company. We probably you know, we had a little bit of debt. We finance receivables over time. We were paid, you know, generally, there were annual licenses of software so a little different than the SaaS model we see today, that’s so prevalent today. And so we were able to finance receivables on that when the numbers started getting big, when you’ve got a 150 million, you know, 200 million in revenue you know just 60 days of DSO can be financed so you can get the cash in a little earlier. We were also very keen on getting the cash flow positive this early as possible and it only really took us a few years to get the cash flow positive. We had a couple of rounds of venture capital funding and they’re only primarily to accelerate growth and we actually took a big chunk of money relatively speaking, a big chunk of money within a year of us going public to expand internationally more quickly to developing direct salesforce internationally. So that was basically it. I mean it was venture capital funded company primarily, a little tiny-bit of that you know but that was it.
Alejandro: Got it. So how much during this journey, how much of your time did you actually dedicated to the capital raising efforts?
Will Herman: As you know upfront early on the first few years, it was big chunks of time. I would say you know well in our first year it was at least half our time. After that it starts to drop especially if you’re moving towards cashflow positive position to you know maybe a couple months worth at a time in the second year and then dropping down to you know weeks and maybe a month in the third and then going to cashflow positive. So it’s a lot of time. Especially when you’re a small team, it’s a lot of time.
Alejandro: Yeah. Absolutely. Absolutely. So I guess the next thing that comes to mind is so you did an exit of Viewlogic Systems. It was acquired by Synapses and you were talking about some of the terms earlier but how did this acquisition come about?
Will Herman: At one point, we were looking at the future, you know. Every few months we would sit down as a team, the management team, and we’d try to take you know, try to get ourselves out of the day to day running of the business and stay strategically where we’re going here. We saw that we were leading the curve in many areas but things were changing, underlying technology was changing. We had to stay ahead and it was a time to either get an infusion of capital or potentially you know look at an exit. And I went to my board and I said, “Look, I think we should go explore.” We know we can raise the capital, so no problem. We were a very profitable company at the time, still growing very quickly. But I said, “Let’s go check on what it’s worth to our competition here.” And we hired a banker but really I had all the connections, small number of companies in the business, half a dozen. I knew all the CEOs already and I started making phone calls talking to them about strategically where the industry was going and what we could do together and then a few of them showed interest and then I started of course playing them against one another. And the amount of money that came on the table have got so high that it was very difficult for us to walk away from it.
Alejandro: Of course. It’s interesting that process because you know typically and I’m sure that you advise to your founders the ones that are in your portfolio but typically companies are bought, not sold. So during these discussions, how were you able to approach it so that it didn’t look as you guys were selling but perhaps you know exploring a position that makes sense.
Will Herman: Yes, good question. Yeah, we never put a sale on the table. The idea was always and you know some of these is hardly transparent but some of it is what can we do together. We need to put so much technology at play here. Perhaps there’s something we can do on a joint venture type of thing which was not foreign in our business, joint ventures. And it was more of an exploration of where things could go. This is as I said this is slightly veiled but you don’t want to throw yourself on the altar. You want to try to make—work from a hand of power and we did have power because we were the leader in many areas but also there were other companies bigger than us. So what can we do together that’s you know pretty straight…
Alejandro: Got it. Makes sense. So I guess that from this exit, what was the biggest lesson?
Will Herman: So the biggest lesson I have from it is you want really good people who know what you don’t know on your side of the table. And what I mean by that is that specifically our lawyers were instrumental in having a good deal get done. It was I mean we had never done a deal this size. We have done a bunch of M&A. We had acquired companies along the way but they were small companies, a handful of million dollars or some stock and this was a big deal and it was our baby. And we had advisors on our side of the table who would say, “No, no, no, no. Don’t do it. Don’t do it that way,” or, “this is the way you got to go,” or, “this is what they’re really saying over there.” And that was critical.
Alejandro: Got it. Got it. So I guess as you look back now and it’s easier to ask this or to say this but would you still to make the decision to sell Viewlogic Systems?
Will Herman: Yes. It worked out. It worked out but not really well. Of course, as you know there’s a longer story here that perhaps we’ll talk about but it was the right thing for our shareholders. It was the right thing for our employees. It’s certainly it was the largest deal done in our industry to that date and actually for some time after that so it was a good deal and I think the acquirer got a lot out of it too.
Alejandro: Right. Right. So the acquisition was 500 million, is that right?
Wil Hermanl: A little over 500 million, yes.
Alejandro: Got it. I mean just out of curiosity, Will, is there any you know car or apartment that you bought as being your first interesting check?
Will Herman: I think I bought a car but that might have used up my entire check. As I said before, it was very diluted at the end.
Will Herman: And keep in mind that 500 million was after the IPO. So we even had the dilution from the IPO so the management team did not own a lot of the company by the time we sold it.
Alejandro: Got it. Got it. I mean once a founder always a founder. So after the acquisition of Viewlogic Systems, you were involved in a couple of projects and then you did something that I found was really interesting. So you got a group and you repurchased the assets of Viewlogic Systems that were acquired by Synapses. So can you talk to us about this a little bit?
Will Herman: Yes, sure, sure. Yeah. A year after the acquisition, we saw that most of the revenue producing product at Viewlogic wasn’t being advanced by Synapses. They were really focusing on a, really on a single product line that was expanding very rapidly. It was an important product line. But two thirds, three quarters of the revenue wasn’t being actively worked on and so we approached Synapses management and we said, “Look, we’d like to buy that back. And it’s clearly not important for you,” and of course which they denied but we can see what was going on.
Will Herman: And we negotiated a deal when we—so we acquired probably 75% of the revenue producing product that we had sold to Synapses for 500 million a year earlier for about $55 million.
Will Herman: So we basically acquired about 110 million of revenue for $55 million.
Alejandro: Got it. So then I guess that after this you go on. You have Innoveda Globe go public and the company was also acquired in 2002 by Mentor Graphics so what was the process to get this transaction coming together?
Will Herman: Yeah, so we actually we took that 110 million revenue when we acquired several other companies. I say many because there was actually a fairly large number. I think it was eight companies along the way including a public company and did what’s called the reverse acquisition. We used their public stock to take us public. It’s an IPO but it’s a little differently done. And we were doing well. We didn’t have the growth rate of the original Viewlogic but we still have very nice growth rate and we had some core technology and some core market share that Mentor Graphics was interested in acquiring. And we went pretty much through the same process we had with Viewlogic. We said okay, we either invest in this thing and put the pedal to the metal or we see if there’s somebody out there who this might be of even more value to than us.
Will Herman: And we went and we talked to actually two companies who were in the space that we were then in in the market. Both were interested acquiring and we basically auctioned it off. That’s actually a bad word. It sounds like we did it for the lowest price. We actually did it for the highest price, ratcheted up the price as anybody knows who sells to competitive bidders. And we did a cash deal actually with Mentor Graphics – the previous deal with Synapses was an equity deal – a cash deal with Mentor that again worked out great for our employees and our shareholders. Many of the employees of the company at the time still work for Mentor many years later. So I think that says that it worked out very well for the employees of the company.
Alejandro: Got it. So I guess as you were mentioning, you had an option, a type of process and I guess that there you have like a funnel where you push people down and then eventually some of them give you an LOI and then from there you move in to the due diligence process. So I guess at the point where you were about to make a decision on who to move with on the due diligence process, how many bidders did you have?
Will Herman: By the time we got to that process, two, only two in that deal. In the Synapses deal, we had more but in that deal we had two, but two very close companies in the marketplace who pretty much knew everything about each other. So they knew what competitive advantage each of the other ones could get, so we were in a good position and of course we let them know what we could about the other one being involved.
Alejandro: Got it. So when it was the time to actually make a decision with the board and say okay, we’re taking this one and go to the due diligence process, did you that with just with one or did you to a certain degree do it with both?
Will Herman: No, we did it with both. Of course, at some point, you have to give somebody exclusive rights. If you want to get, ultimately when you want to get your finely tuned deal at the end of the process, you’re going to give someone, one of them exclusivity for some period of time, which is only reasonable. It’s a trade. But we rode it up until the very end negotiating one against another until one had terms. The dollar amount was not that different between the two offers we had but the terms of the deal were a bit different and we decided that those terms were important to us. The terms that Mentor was offering were important to us so we moved ahead with them giving them exclusivity and of course as you said we went through due diligence with them which was fairly, which was actually pretty painful at the time but nothing changed. The deal did not change through due diligence.
Alejandro: So what was the timeline like here, Will? How long did it take from start to finish to closing the deal?
Will Herman: Geez, you’re pushing my memory here. I would say, I’d say probably four months.
Alejandro: Four months. Got it.
Will Herman: That was from initial contact through negotiation through doing all the legal through due diligence. The acquirer actually decided to take some debt to pay us in cash. It was a choice they had. They had the cash on hand but they wanted to take some debts. So one of the contingencies was that they had time to go and raise some public debt.
Alejandro: Yeah. I mean it’s interesting earlier we were talking about the exclusivity process or time you need to give, normally anywhere between 30 to 60 days where you get to complete that due diligence and then hopefully you know you go in to starting to do the asset purchase and the close. But I mean from personal experience, Will, I mean for me the exclusivity period it’s quite scary because if the deal fall through then you’re literally completely naked and going back to the other one and say, “Hey, you know, we would like to resume the conversations,” they’re going to be like, “Maybe there’s something wrong. Why didn’t they go through with the other guys?”
Will Herman: Oh, I can’t tell you how right I believe you are.
Will Herman: There was a time in fact during the exclusivity period where the acquirer went quiet. And as you know we have so much experience with this. During the exclusivity period, generally speaking, there are people in each other’s offices, all the paperwork is being dumped at a file cabinet, every digital copy of everything is being checked on and so usually it’s a buzz of activity. And we hit a time when it was a week when they went totally quiet. And I don’t think I slept the entire week because as you said you were totally exposed if they walk away. And of course they generally have to find something to break the deal which companies can force but you know there are tough times in there. There’s no question. You are totally right.
Alejandro: Yeah. Yeah. I guess only the founders that have gone through transaction of you know of this nature really understand the level of stress and how you are put to your literally emotional limits you know, with that uncertainty, it’s crazy.
Will Herman: You’re making me relive it again.
Alejandro: I guess, Will, I mean something really, really interesting and you know we see this quite often. We have founders that you know do an exit and you know it’s kind of like pay forward mentality to a certain degree but after doing over 700 million in transaction you decided to go to the other side of the table as an angel investor. So how many investments have you made so far?
Will Herman: Eighty two I’ve made. Eighty two investments and another dozen, probably couple of dozen funds. So lots more companies in the portfolio that are outside of my control.
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Alejandro: Okay and how did you decide to say, “Hey, you know, I’m going to maybe make an investment and like become a first time angel investor?” How did that happen?
Will Herman: I didn’t set out to do it. I decided that I was going to sit on boards and help companies get started and advise and I never really thought about how to you know how money played in to it. But one of the first companies I was advising needed to raise money and I said, “Well, how about for me?” And I wrote a check and that turned out to be a great success, and that was many years you know. I fully believe that you know any really good return in angel investing takes at least a decade so it was much later and I started after that. There was, I had such a great feeling about how to be actively involved in small businesses without actually having to run one on a day to day basis that I started to invest in more companies and develop a way to do my kind of due diligence and to be active and involved in some and passive in others.
Alejandro: Got it. So I mean 82 investments is quite a good amount. So I guess now looking back, Will, which one of those investments that you’ve made in this type of companies has been you know a company that you’ve been able to really see the journey from start to finish all the way to the finish line and that has been close to your heart?
Will Herman: So many. Well, the most interesting journey was Harmonics Music Systems, the guys who created Rock Band. They just dogged it out. They looked like they were going to die all the time and just kept finding new deals, kept making it work and it gave me – and I kept investing. It kept me making me feel, “Ah, these guys are going to find a way,” and it took over a decade of struggling and finding new contracts and developing new games and then MTV bought them. Viacom bought them in a huge deal and then they did this earn out which I’m usually totally scared of, earn out, that worked out incredibly well. They ended up suing Viacom for not paying up and won many court cases to make a lot of money. It’s an incredible story, great founders, terrific investors, and we all made a bunch of money too. So I guess that’s the one that’s closest to me because of just sheer work, determination, brains to a lot of—and a lot of people on the outside who’ve helped them create that success.
Alejandro: That’s fantastic. That’s such a great story, Will, you know, because as a founder when you are in it, there’s so many days that you think that the world is going to fall apart and it’s all a matter of just staying long enough to be able to survive and to see you know what possibilities, you know what’s possible, no, in the future. So that’s great to hear, Will. I mean you’ve been exposed to so many companies. You are a mentor with very respected organization like Tech Stars. So what kind of pattern, say, do you typically recognize on those founders and that you end up investing in and that perhaps end up being successful?
Will Herman: Well, I don’t think—you know everyone is a little different but there are four things that I look for. One is founders who are interested in building a great team around them. That’s not only cofounders but that’s ultimately the total management team that’s in the company that there are fewer egos involved in that, and founders who know what they don’t know are really valuable. So that’s point number one. Point number two is founders that focus on execution not on their idea as much. I just don’t believe that there are that many unique ideas and that the uniqueness of your idea really isn’t that important. A good team can execute on a mediocre idea and make it great and make a great company. So I’m all about execution, that’s point two. Point three is founders who constantly talk to their real and perspective customers. So many startups are building products, creating services that are meeting needs in their heads, not actual needs. It’s ultimately lack of product market fit is what kills most startups and it’s not funding, it’s lack of product market fit. So understanding what your customers need, want and think is critical, that’s three. And four is I’m just an old school hardwork guy. The person who works more hours is almost always going to succeed or do better than the person who works fewer hours. I just believe in it. I believe those who are dedicated to what they’re doing and are willing to work their asses off to achieve it have a fundamental advantage.
Alejandro: And I love that you’re talking about product market fit, Will, because in many instances founders just go out there, raising money to build a machine as opposed to really raising money to speed up the machine but I guess from your experience, Will, and just for the people that are listening, what does product market fit look like?
Will Herman: What does product market fit look like? So in my view—I suppose there are a thousand definitions of product market fit – in my view, it’s that there is a real need that a large of number of people have and that a company has a product that greatly fills that need. And it’s a problem and a solution and the solution has to be one that the customer actually recognizes as a solution to their problem. It’s less important that the company recognizes they have a solution to somebody else’s problem than the customer has it.
Alejandro: Absolutely. Absolutely. You know one of the things that I love about your story, Will, is that you’ve been a very, very successful but one of the things that you know I’ve been very much present to is how much you’ve been about as well giving back, giving back to founders because you’ve been there, you’ve done that and you know how crazy the journey is and one of the things that—and you’ve done this by doing angel investments, you know, and by being a mentor to all of these programs, and more recently you published the Startup Playbook. So can you tell us a little bit more about this book?
Will Herman: Oh sure and you know of course a lot about this with your great book. So the Startup Playbook is a go to resource for any first time entrepreneur interested in creating and building a new start up company. It’s a guide book that covers everything from whether founding a startup is right for you, to how to vet your idea, create your company, build a team, and ultimately launch a successful product or service. We think of it as an easy to read book and an easy to reference book for first time entrepreneurs.
Alejandro: And how did the idea of writing a book come together, Will? Because writing a book, it takes a lot of time, a lot of brains.
Will Herman: Yes, as you know.
Will Herman: It took us a long time, a lot of it because we didn’t know what we were doing. So between my co-author, Roger Pargava, and myself, we’ve started many companies, Roger started even more companies than me and we’ve advised I’d say upwards of two or three hundred companies between us, maybe even more than that. And we started, we recognized that we’ve seen the same mistakes made by so many companies and so many of the mistakes are really pretty straightforward and rather than keeping our scope to advising companies who we meet with, we said well, why don’t we write all these stuff down and can get this information out to more people quickly. And our real goal is to get it out to as many people as possible that’s why we sell the book for 99 cents right now. So it’s you know, we’re not out to make money. As you know, right, publishing doesn’t equate to making money. But to get these basic ideas down so people can optimize their journey. You know the odds are against the founders. It’s just there’s so much that can go wrong and we believe that if we can take a large percent of that, of those errors and issues off the table then entrepreneurs can optimize their path and put their odds, put the odds of success back in their favor.
Alejandro: Got it. Got it. I’d say that’s fantastic, Will, that you’ve done it. I mean with the advice that you give in the book, with all the mentorship that you provide to your portfolio companies as well as to the ones of these different organizations that you’re a member of, I mean if you had to go back in time, Will, what kind of advice will you give to your younger self when it comes to fund raising or acquisitions?
Will Herman: I think that the—that’s a tough one. I’ll break them in two pieces because I think they’re very, very different things. In terms of fundraising, you know, most angels and venture capitalists tend to, and I didn’t know this at the time early on, is that they have models in their heads about what makes a good company and what makes a bad company, what makes a good team, bad team, a good idea, a bad idea. And they’re not uniform. So one you can find, go out and look for people to fund you who have a model that’s close, already closest to what you offer, the kinds of products, the market you’re going at, the kind of team you have, the idea you have and so forth. It will make it a lot easier rather than trying to do a scattershot approach to every VC on the planet. So customize your look. If there still is no one in that set of potential funders that work, don’t hesitate in changing your look if the general feedback you get from funding, from funders is that you don’t have enough experience in your team, go get more experience on your team. Don’t fight at that level. It’s just not worth it. Build the team that gives you the best opportunity to raise money. And ultimately the most important thing is if we find that in general what the advise that VCs are giving small companies is move fast, move fast, move fast. Take more money, take more money. And we believe that getting to where you’re going fast is really important but that doesn’t necessarily mean you should move fast in everything you do. In some things you do if you move slower and do better, then it actually will optimize the amount of time it will take to get to your ultimate goal. So for example, if you get to product market fit early, you will find somebody to find you, right? If you can get to product market fit without funding, you will find somebody to find you. So think about that. I stress to entrepreneurs to think about that and to myself, my younger self, to your original question, if you can get to that point, then everything gets a whole lot easier.
Alejandro: Yeah. Yeah. Absolutely. And Will, I guess for the folks that are listening, what is the best way to reach out to you and say hi?
Will Herman: Our website is startup-playbook.com but you can also find us on Twitter @founderbook, F-O-U-N-D-E-R-B-O-O-K, or on Facebook @thefounderbook, or just look me up on LinkedIn, I’m Will Herman.
Alejandro: Fantastic. Well, Will, it has been an honor to have you on the DealMakers Show and thank you so so much for everything. I know that our founders probably got a ton of value and I can tell you that I did. So thank you so much.
Will Herman: Thank you so much, Alejandro.
Female: You’ve reached the end of another episode of the DealMakers Podcast. For free resources and materials, head over to alejandrocremades.com. Thank you for listening and see you at the next episode.
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