2 failed startups, 1 purchase & turnaround, 1 b2b startup rocket 0-1 🚀 +, AMA

@catlady92 YES, my favourite topic. What do you want to know? You give me the business and predicament, I'll try to make free money for you, deal?

Generally, a theme I do in my businesses is create what's called an upside down or negative working capital cycle. Say you own a store that sells shoes, well as you scale you could be in financial difficulty b/c you need inventory and then have a time it takes to sell them. This is working capital intense...with the companies I own I control the capital and have a big head start before I pay out my cost of sales. This company that'll do > $20MM next 12-18 months I started with $0....$0. I did do canvassing, chatting w/ people, advisory work, farted a round for a bit drawing stuff in my man cave. But then when I decided on my business model I just explained it to people, we tried it, and wow it worked. My first SaaS saw 30X cash on their $ and we broke even in 7 months, and it's rolling now and will have created about $9MM in cash flow off $180K or so invested. Plus they got approved for my royalty financing so never need to raise debt or equity again it looks like.

When I started this biz, I sold retainers and then turned around and hired after. I have a 45-day period where we collect before paying out the cost of goods sold. Then when I go finance companies...we keep the $ in my account and disburse to incremental salespeople, who go sell and then the $ from sales goes into our account and we disburse net $ out to partners immediately as it comes in. But we eliminate collections, cycles, and we keep generating more float which in turn funds a capital pool that we use to manage growth (infinity return capital since this is just float we're making big returns on).
 
@coolguy123 You just start. When I was 15 I did eaves, shovelling snow, you name it. You learn by doing and when you 'do' you're already taking steps fwd.

Actually even my company has a 90/10 action rule and it really makes a difference.
 
@subcdedenoc1980 Working on emailemu.com and have been building it for about 8 months. I launched it with the intention of going down the path of only emails and removing the need for people to subscribe to lists.

In conversations with marketers, I heard many of them mention wanting to be able to see the other parts of the marketing pie of their competitors' content, so I created www.dingodive.com to fit that need, but I am at a crossroads.

I'm wondering if I should pivot and build the dingodive or keep going down the email path and try to generate revenue asap as everything is being bootstrapped.

Would love just your general thoughts from someone with your level of experience.
 
@soag Hey man, as a backend marketer, I use Milled.com, but I do like the use case for dingo dive, especially when you can extrapolate sending frequency data as well as the actual email copy/designs.

I think it’s a great way to conduct research, fast.
 
@johnray111 Ahh looks like they are specific to e-comm emails but. good resource.

Thanks! I think I'll probably end up heading down that path an emailemu would become more of an SEO engine.
 
@galileog My company is looking to buy a data or saas company with mid market and enterprise clients in any of:

-media & entertainment

-retail & CPG

-b2b tech

Would look at ebitda negative, but I want to be able to put our SBG distribution and talent behind killer products. The easiest upside is if the net $ retention is high, sales cycles can be high, solution is $25K-$150K starting acv (we run the gauntlet - just opened up a >$2MM deal x 2 at mega banks and one has a deca million dollar budget for a partner of ours. But really we want stuff that sells well. We can fix a bad biz, but we got so busy I'm going up market and seeing things with betters salee velocity and product / market fit. I have 2 acquisition targets on the go but we're early. One in retail, founder buy out who would run it and attach our fire hose to pop sales. Review capital structure and leverage this bank we're making that's in stealth mode.
 
@subcdedenoc1980 I’m 6 years into my first business. I left tech to create my own fast casual restaurant concept. First one kicked ass and we started building the second one right before COVID hit. Revenue for the entire industry is down vs. pre-COVID.

Kind of over leveraged myself using pre-COVID projections and now we’re in a shit ton of debt and no longer cash flow positive.

From my perspective, I learned quite a few valuable lessons in the process and I’m now working on pivoting and creating a tech company in the catering niche.
  1. I’ve heard varying opinions on debt and leverage, but am I wrong for having the mentality that it doesn’t matter if you rack up 500k-1million in debt if you can eventually launch something that makes that back monthly?
  2. Do you change how conservative/aggressive you are based on market rates for funding? Obviously I would prefer not to be in debt but we’re mostly bootstrapped.
  3. What’s your opinion on raising rounds of investment vs. taking it slow and trying to maintain cash flow positivity?
 
@saved_by_angels I have a soft spot for the catering niches b/c I had a company called Party Providers in university that helped pay for school - B2B bartending for events - we piggybacked off of catering companies' existing busy schedule and solved the staffing issue. Small potatoes vs the vision for the stuff you're working on here.

Happy to answer your questions. These are just my personal takes, I'm not an expert or financial advisor so make your own calls based on your own risk tolerance and situation:
  1. "I’ve heard varying opinions on debt and leverage, but am I wrong for having the mentality that it doesn’t matter if you rack up 500k-1million in debt if you can eventually launch something that makes that back monthly?"
A: I need context on what that sort of $ means to you / your biz. Generally, I say take big but calculated swings. The downside is fixed and it is temporary. I like back up plans..but I've borrowed more than this before. Debt doesn't just go away...you have to have a plan. I borrowed > $1MM for a *turd of a company* that I deleted 90% of the revenue in, but the debt was there. But I had organised a debenture note with no personal guarantee and got off the bank while restructuring. Now I own it and it makes $ and the bank wants to lend me large sums for acquisition. Use debt as a tool, but have back up plans and avoid personal risk where possible. AVOID personal bankruptcy, it tags you (never filed but know people who have).
  1. "Do you change how conservative/aggressive you are based on market rates for funding? Obviously I would prefer not to be in debt but we’re mostly bootstrapped."
A: I mean, maybe? Nah...I'm just a "floor it" person. I'm trying to grow a company right now $0 to $50MM in sales in 24-36 months. We are pushing hard rn. The market for funding is coming back but it is rough. Rates are higher, but that is actually something I'm using as an advantage. I don't change how aggressive I am, I actually use the environment to take advantage. If I was buying a company I'd be less excited about debt but I wouldn't let the debt markets themselves slow me down at all. Let it slow others down so you can run them over.

3. "What’s your opinion on raising rounds of investment vs. taking it slow and trying to maintain cash flow positivity?"

A: very hard to answer without more context. I am generally not into VC money. I find investors have an inflated view of value they bring because they are often successful themselves, financially (often not from building real companies). But there are exceptions, and for example I was CEO of a company founded by a Canadian tech entrepreneur before going out and buying companies. He found out I was doing this thing and is coming in for 25%. My thing makes good $ already so we don't need the $ and we are ramping without needing more $. But, he is strategic and brings value in various areas.

I'd avoid pro investors like the plague if I could sub $10MM in sales. you give up way too much equity % to people..what if it works out and you make $100M and gave some randome guy $30M for convincing you that you needed the $ early. What did they do for you, send a referral? That's worth 10%. I invented a new way to fund rapid growth without debt or equity or risk of it screwing you. It's in stealth mode until Q2-Q3 but it fixes this issue and we are going to ravage the best net $ retention portfolio companies of VCs who don't know what they have.
 

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