1 00:00:00,000 --> 00:00:08,100 Kevin Mako: Hello, product innovators. Today we learned from one of the leading lawyers in North America for scaling product companies on how to raise your first million dollar funding round. 2 00:00:11,420 --> 00:00:20,380 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors, 3 00:00:20,780 --> 00:00:29,040 Narrator: product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial 4 00:00:29,040 --> 00:00:38,100 Narrator: idea to getting your product on store shelves. We're taking you step by step to build a functional product and scale your product business. 5 00:00:38,280 --> 00:00:47,020 Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses. Now, onto the show. 6 00:00:47,140 --> 00:00:54,700 Kevin Mako: Welcome back, everyone. Today, I'm very excited to introduce Ryan Lewendon to the show. Ryan is a co-founder and partner at the law firm Giannuzzi Lewendon LLP. 7 00:00:54,700 --> 00:00:59,980 Kevin Mako: They have 30 lawyers, 1,500 product companies they work with, and hundreds of finance deals run by them per year. 8 00:00:59,980 --> 00:01:04,360 Kevin Mako: in addition to a number of other legal and advisory services to help scale product companies. 9 00:01:04,560 --> 00:01:11,560 Kevin Mako: Today, Ryan is going to share some valuable knowledge in how inventors startups and small manufacturers can raise their first big fundraising round of $1 million or more, 10 00:01:11,760 --> 00:01:17,240 Kevin Mako: how to plan for it, execute on it, and then spend the money smart when it comes in. Now, on to the episode. 11 00:01:18,580 --> 00:01:19,800 Kevin Mako: Hey, Ryan, welcome to the show. 12 00:01:20,240 --> 00:01:25,840 Kevin Mako: Kevin, thanks so much for having me. I'm really pumped to be here. Well, we're excited today to talk about getting the big dollar financing, 13 00:01:26,080 --> 00:01:34,100 Kevin Mako: talking about raising that money between a million dollars or even up to $100 million as you're starting to scale your hardware business. And it's really important for hardware 14 00:01:34,100 --> 00:01:38,580 Kevin Mako: startups, even to think about this from the early phases, because so many hardware product 15 00:01:38,580 --> 00:01:45,200 Kevin Mako: development companies today grow through financing and they scale through it because you've got inventory and growth and all of this sort of stuff. 16 00:01:45,520 --> 00:01:52,980 Kevin Mako: All that happens after you sell your first few units. And it's really important to think about that as you plan on how you're going to not only 17 00:01:52,980 --> 00:01:58,900 Kevin Mako: get your brand to market, which is the first critical step, but after that, how you actually you're going to grow it into a scalable, sizable business. 18 00:01:59,260 --> 00:02:05,380 Kevin Mako: And you've got a tremendous amount of experience in that today. So first and foremost, give us a bit of insight of how did you get from where 19 00:02:05,380 --> 00:02:13,660 Ryan Lewendon: you were to being a big partner at this big law firm today? Thanks, Kevin. You know what? It's an interesting pathway to get here. I went to school in New Orleans. 20 00:02:14,000 --> 00:02:20,660 Ryan Lewendon: I actually ran a bar in college in New Orleans. And that's where I sort of developed a affinity for consumer goods, but also where 21 00:02:20,660 --> 00:02:29,880 Ryan Lewendon: I started to notice that consumers were looking for more artisanal and sort of smaller batch, smaller made goods. This is sort of in the early 2000s. 22 00:02:30,020 --> 00:02:38,220 Ryan Lewendon: I ended up sort of working at a firm with my now partner, Nick, and we ended up being the first lawyers for vitamin water together. So we were general corporate lawyers. 23 00:02:38,540 --> 00:02:46,960 Ryan Lewendon: The founder's dad was a client of the firm and he said, hey, you know, can you help my son? And Nick and I ended up doing everything for vitamin water. 24 00:02:46,960 --> 00:02:56,200 Ryan Lewendon: So every round of financing, every commercial lease, every broker agreement, distributor agreement, supply agreement, employee incentive plan, every celebrity agreement, I 25 00:02:56,200 --> 00:03:05,440 Ryan Lewendon: think a like 50 cents deal with vitamin water where he had his own flavor and he had equity in the company was like one of the first deals I worked on out of 26 00:03:05,440 --> 00:03:14,060 Ryan Lewendon: law school. And like Jennifer Aniston's deal with Smart Water, which ended up being one of the longest running sort of celebrity partnerships, I think it went on for over a decade. 27 00:03:14,060 --> 00:03:18,700 Ryan Lewendon: We did everything for vitamin water until it sold in 2008 for $4.7 billion. 28 00:03:19,440 --> 00:03:26,440 Ryan Lewendon: And from there, we just realized there was a big white space for people working with disruptive consumer brands, right? 29 00:03:27,260 --> 00:03:35,080 Ryan Lewendon: Lots of people want to work for the conglomerates. You know, lots of people want to work for the big funds. Nobody really wanted to work for the entrepreneurs and the disruptors. 30 00:03:35,640 --> 00:03:43,700 Ryan Lewendon: And we had this great playbook from vitamin water. And we, you know, we realized that we had this aptitude for working with, you know, disruptive. 31 00:03:44,100 --> 00:03:47,380 Ryan Lewendon: and we liked working with people who were sort of bucking the odds. 32 00:03:48,160 --> 00:03:55,120 Ryan Lewendon: And, you know, we went to our first trade show in 2008 and we just sort of had our business cards and we're like, hey, we're lawyers. Do you need lawyers? 33 00:03:55,320 --> 00:04:00,820 Ryan Lewendon: And people were like, well, we're not getting sued. And I'd be like, well, that's not what we do. You know, we help you build your company. We help you raise money. 34 00:04:00,940 --> 00:04:07,500 Ryan Lewendon: We help you build your infrastructure. We helped you take you through a sale. And, you know, we just realized there was such an app. People were like, oh, my God, yeah. 35 00:04:07,840 --> 00:04:14,040 Ryan Lewendon: I had like six employees and I have 68 employees. And my lawyer is a trust in the states guy who's friends with my cousin. 36 00:04:14,060 --> 00:04:22,980 Ryan Lewendon: and they don't know what a distributor does and they don't know what a billback is. And I just need someone with a contextual basis in this industry of consumer 37 00:04:22,980 --> 00:04:28,120 Ryan Lewendon: goods. And we realized we had that. And we left the firm we were at in 2011. 38 00:04:28,620 --> 00:04:38,560 Ryan Lewendon: And we took a little space in the meatpacking district in New York with, you know, Nick, myself and our partner Anthony. And, you know, we had maybe like 25 clients. 39 00:04:39,020 --> 00:04:48,180 Ryan Lewendon: And we just built it out from there. You know, we built it out word of mouth, doing a great job, executing. for our clients over and over. And today we've got 30 lawyers. 40 00:04:48,520 --> 00:04:49,980 Ryan Lewendon: We've got two locations. We've got 41 00:04:50,800 --> 00:04:58,800 Ryan Lewendon: two floors in the meatpacking district where we started. And then we've got an office in Santa Monica, California, where I'm speaking to you from today. 42 00:04:59,320 --> 00:05:07,240 Ryan Lewendon: And we've got about 1,500 companies in the space that we work with. And they run the gamut, right? They run the gamut from, you know, 43 00:05:08,080 --> 00:05:13,560 Ryan Lewendon: companies like Oatley and body armor and vital proteins and fever tree. And companies are doing, you know, 44 00:05:13,560 --> 00:05:22,920 Ryan Lewendon: a billion dollars in revenues to a couple hundred million dollars in revenues. And then it goes all the way back to, you know, somebody who's really just ideating their 45 00:05:22,920 --> 00:05:32,140 Ryan Lewendon: product right now and is pre-revenue and is forming their entity. And we just see ourselves as like this life cycle council for companies that are being 46 00:05:32,140 --> 00:05:35,880 Ryan Lewendon: disruptors in their industries and, you know, especially consumer goods industries. 47 00:05:36,040 --> 00:05:39,620 Kevin Mako: Sometimes it's funny to see where we got here, but we just built it through doing a great 48 00:05:39,620 --> 00:05:43,460 Kevin Mako: job for these companies that really nobody else wanted to work with when we started doing it. 49 00:05:43,560 --> 00:05:48,520 Kevin Mako: And that's amazing because nowadays, you're doing well over 100 financing deals a year, 50 00:05:48,780 --> 00:05:53,680 Kevin Mako: working with over 1,500 companies, and you've worked with a lot of early stage scaling companies. 51 00:05:53,840 --> 00:06:02,780 Kevin Mako: So your perspective is incredible because you've got to see many different types of these deals come through. And really, you've got to see what works and what doesn't work. 52 00:06:02,940 --> 00:06:12,340 Kevin Mako: So really what I want to focus on today is that life cycle of raising a bigger funding round, that let's say, million dollar and north funding round. 53 00:06:12,340 --> 00:06:17,840 Kevin Mako: So you've got some sales, you're starting to grow, and now you really want to take your business into the big leagues. 54 00:06:18,240 --> 00:06:27,180 Ryan Lewendon: What can you advise our folks to do that are in that position to try and prepare for getting that big league funding? 55 00:06:27,180 --> 00:06:35,880 Ryan Lewendon: Well, there's a lot of things to do to prepare yourself for that big league funding. And there's even more things to do to set yourself up for success through that 56 00:06:35,880 --> 00:06:43,360 Ryan Lewendon: big league funding, right? you know, funding, if you're looking at funding as the battle and, you know, selling your company 57 00:06:43,360 --> 00:06:49,240 Ryan Lewendon: someday or IPOing as the war, you want to make sure that you win the war and not just the battle, 58 00:06:49,540 --> 00:06:57,900 Ryan Lewendon: right? So setting that up, right sizing that round for yourself is truly, truly important. So here's a couple of things to do on the financing side, right? 59 00:06:58,360 --> 00:07:05,740 Ryan Lewendon: First, you got to figure out whether this round of financing is your only round of financing or one of many, right? 60 00:07:05,740 --> 00:07:13,220 Ryan Lewendon: Am I raising a million dollars to take me through profitability whereby I'm not going to be taking it any more equity anymore? 61 00:07:13,820 --> 00:07:19,420 Ryan Lewendon: Or is this one of, you know, 20 rounds of financing that I'm going to need to get myself through an exit, right? 62 00:07:19,580 --> 00:07:26,040 Ryan Lewendon: Do I need, or my capital needs over the next five years, a million dollars or a hundred million dollars, right? 63 00:07:26,360 --> 00:07:35,640 Ryan Lewendon: And that's going to really inform who your investor is, right? Am I taking in, you know, am I raising this million dollars, but I'm going to need a ton more 64 00:07:35,740 --> 00:07:45,380 Ryan Lewendon: money and I'm going to need to sort of bring in a much more sophisticated partner at a certain time. And the investor right now is kind of a stopgap. 65 00:07:45,900 --> 00:07:53,320 Ryan Lewendon: Or am I bringing in this money and this partner is going to take me, this is going to be my preeminent partner all the way through an exit, right? 66 00:07:53,860 --> 00:08:02,240 Ryan Lewendon: More often than not, it's going to be the former, you know, your million dollar round is going to be a predecessor to a $20 million round 67 00:08:02,240 --> 00:08:10,520 Ryan Lewendon: or $100 million. So when you're starting at your million dollar round, you want to get the right investors, right? Who is the investor at that stage? 68 00:08:10,960 --> 00:08:14,900 Ryan Lewendon: Well, first of all, it's someone who understands your industry, right? You want to 69 00:08:14,900 --> 00:08:23,280 Ryan Lewendon: bring investors who understand your industry, who understand your growth trajectory, who understand the issues and the hurdles that you're going to need to overcome. 70 00:08:23,940 --> 00:08:31,480 Ryan Lewendon: The wrong match can really lead to a lot of conflicts as things go by, right? Hey, I brought in a real estate investor into my 71 00:08:31,480 --> 00:08:37,280 Ryan Lewendon: products company, they thought I'd be profitable from the next day. They're wondering why I'm not getting dividend checks. 72 00:08:37,900 --> 00:08:45,840 Ryan Lewendon: I'm operating at a deficit until sort of, you know, until I get to 50 million dollars in revenues. It's a terrible match. It drags you down. 73 00:08:46,220 --> 00:08:53,720 Ryan Lewendon: Operationally, it can be issues, you know, it just, it really hurt. It really stifles your growth, right? So first you find the right 74 00:08:53,720 --> 00:08:59,740 Ryan Lewendon: match. Then you find the right terms. So if this is an early stage funding and you're going to need 75 00:08:59,740 --> 00:09:06,900 Ryan Lewendon: lots more money and you're going to have to give away more of the partnershipy type of terms later 76 00:09:06,900 --> 00:09:14,320 Ryan Lewendon: on like board seats and blocking rights and maybe even a redemption right for someone that's a real industry partner. 77 00:09:14,880 --> 00:09:22,740 Ryan Lewendon: Well, you kind of want to leave the company as blank of a canvas as you can leave it now. You don't want to give away a lot of those rights if someone's not going to be your 78 00:09:22,740 --> 00:09:27,220 Ryan Lewendon: long-term partner, right? You don't want to give a board seat to someone who's going to invest in this 79 00:09:27,220 --> 00:09:36,980 Ryan Lewendon: round, but never invest in any other rounds you're going to need down the line. So you want to structure that round without giving away sort of a lot of the true partnership 80 00:09:36,980 --> 00:09:46,720 Ryan Lewendon: rights that you would often give to a more long-term partner, right? So what does that mean, right? Well, how do I raise the money then? 81 00:09:47,240 --> 00:09:55,700 Ryan Lewendon: Well, I find maybe out of that million instead of getting it from one party, I'm getting it from a number of parties, right? Instead of taking the million from one person, 82 00:09:55,700 --> 00:10:03,700 Ryan Lewendon: I'm taking $100,000 from 10 people, right? I'm sort of what we call passing the hat around. And I'm doing sort of a more benign financing. 83 00:10:03,840 --> 00:10:09,280 Ryan Lewendon: Maybe I'm doing a safe note or I'm doing a convertible note where I'm not having to give away a lot of these rights, right? 84 00:10:10,060 --> 00:10:18,800 Ryan Lewendon: And then the third thing you can really do. And this sort of informs the other two is you've got to figure out what the story is for the company. 85 00:10:19,040 --> 00:10:25,980 Ryan Lewendon: Why is this round going to be a good deal for whoever's coming in? And I tell people this all the time. 86 00:10:26,520 --> 00:10:32,060 Ryan Lewendon: When you're doing a million to $5 million round of financing, you're going to have to 87 00:10:32,060 --> 00:10:38,460 Ryan Lewendon: tell you're going to have to do the work to tell investors why this is a good deal at this valuation in these good terms. 88 00:10:38,520 --> 00:10:46,780 Ryan Lewendon: When you start raising like, you know, $10, $20, $50 million like in equity, people are going to be more sophisticated. They're going to have a team. 89 00:10:47,000 --> 00:10:52,480 Ryan Lewendon: They're going to dig into your company. They're going to tell you what you're worth, right? They're going to sort of backstop that. 90 00:10:52,480 --> 00:11:01,860 Ryan Lewendon: But when you're like a million to five million, the investors want you to tell them that. They want you to tell them why, you know, coming in at a $20 million 91 00:11:01,860 --> 00:11:10,300 Ryan Lewendon: valuation or a $10 million valuation is a good deal for them. They want you to be able to tell them, hey, look, once I spend this money, if you're coming 92 00:11:10,300 --> 00:11:18,640 Kevin Mako: in at a $10 million valuation, the company's going to be worth $20, right? You're going to double your money in 12 or 36 months or however long that's taking you. 93 00:11:18,720 --> 00:11:28,620 Kevin Mako: They want you to show, to build that mousetrap for them and present. to them and convince them why this is going to be a good investment at this time right now, right? 94 00:11:28,900 --> 00:11:37,060 Kevin Mako: Not in the next round. Don't wait for the next round. You got to get on the bus now because it's leaving the station and the next stop, the ticket price is going to double. 95 00:11:37,140 --> 00:11:41,960 Kevin Mako: That's powerful stuff. It's interesting hearing it from you about raising a million dollars because I know for a lot 96 00:11:41,960 --> 00:11:48,580 Kevin Mako: of hardware startups, they look at the million dollar raises the holy grail. Like, this is the big lease. This is when you've truly made it. 97 00:11:49,020 --> 00:11:52,620 Kevin Mako: But when you're a professional investor and you've been in the game, I mean, you've 98 00:11:52,640 --> 00:11:56,280 Kevin Mako: you, especially as a lawyer, working with all these investors and hardware startups and scale-ups, 99 00:11:57,040 --> 00:12:04,740 Kevin Mako: you see that this is only the first piece of usually many more rounds that come with it. As a hardware startup, it's one of these things where you really have to think long-term. 100 00:12:04,860 --> 00:12:11,300 Kevin Mako: Think of your five or your 10-year plan, not just looking at that million dollars as the holy grail and then that's it. 101 00:12:11,420 --> 00:12:21,100 Kevin Mako: Life is made because that really is just a stepping stone to increasingly better valuations and exponentially more money that helps you scale at such a faster rate than you would, 102 00:12:21,100 --> 00:12:25,840 Ryan Lewendon: which comes back to your original decision, are you're going to raise this million and that's going to be it and you're going to grow your business off it? 103 00:12:26,200 --> 00:12:33,500 Ryan Lewendon: Or is that the first of many rounds? And we certainly see it quite often, especially in the consumer electronics space, that as you 104 00:12:33,500 --> 00:12:39,940 Ryan Lewendon: get your first round, subsequent rounds are right behind it. And a lot of time your investors are actually helping set that up for that next round and whatnot. 105 00:12:40,440 --> 00:12:45,780 Ryan Lewendon: But I think it's really important for everybody to look at that strategic planning and looking further down the line because that 106 00:12:45,780 --> 00:12:49,500 Ryan Lewendon: help address some of these issues very early on in that process. Yeah. 107 00:12:50,540 --> 00:12:56,820 Ryan Lewendon: Understanding your cash needs and your trajectory for your particular product are so important 108 00:12:56,820 --> 00:13:02,980 Ryan Lewendon: to building sort of a network of financings, which helps keep you in the driver's seat, right? 109 00:13:03,640 --> 00:13:09,680 Ryan Lewendon: You know, you can always raise money and, you know, your investor comes in and says, oh, you didn't raise enough. You need to raise more. 110 00:13:10,240 --> 00:13:15,620 Ryan Lewendon: But, you know, when you do that, oftentimes that's at the sake of sales, right? 111 00:13:16,280 --> 00:13:25,140 Ryan Lewendon: undercapitalized, you start to peter off because you don't have enough money to keep the trajectory going. Or, you know, you're doing that at sort of the risk of cutting 112 00:13:25,140 --> 00:13:34,580 Ryan Lewendon: the new investor a much better deal, right? So thinking about starting from where you are and thinking about the next five, seven, 113 00:13:35,180 --> 00:13:42,620 Ryan Lewendon: whatever it is, 10 years, and kind of planning out, what more of my cash names realistically going to be? It's all an estimate, right? You don't have to be perfect. 114 00:13:43,040 --> 00:13:49,580 Ryan Lewendon: But getting a sense of that can help you sort of architect what these rounds look like and who the best partners can be 115 00:13:49,580 --> 00:13:56,350 Kevin Mako: from the get-go. And honestly, that outside of more than anything else, what I've seen, and I've raised 116 00:13:57,210 --> 00:14:03,310 Kevin Mako: probably thousands of rounds of financing with my clients, I think that is one of the 117 00:14:03,310 --> 00:14:12,190 Kevin Mako: biggest indicators of success long-term for people that are able to sort of plan that out and map that out and then execute on those types of financings 118 00:14:12,190 --> 00:14:21,910 Kevin Mako: with finding the right partners on the right terms at the right times is sort of, it's one of probably the three biggest 119 00:14:21,910 --> 00:14:30,310 Kevin Mako: things you can do to end up, you know, to get yourself to a successful exit. Let's talk a bit about those instruments that you mentioned earlier. The safe investment as well 120 00:14:30,310 --> 00:14:35,450 Kevin Mako: as coupon rates, that sort of stuff. Can you just explain those different options for people who aren't familiar with the process? 121 00:14:35,650 --> 00:14:42,510 Ryan Lewendon: Because those can be very helpful, especially in the early days of fundraising, when you're not exactly sure how to value your company, you may not necessarily 122 00:14:42,510 --> 00:14:49,150 Ryan Lewendon: need to. The point is to get cash in the bank. You obviously have a need. You're looking to raise a million dollars. You see that there's some clear prospect. 123 00:14:49,390 --> 00:14:55,430 Ryan Lewendon: Usually it's around production and sales. And that is a very attractive pitch, especially for a new innovation. So some of the 124 00:14:55,430 --> 00:15:04,710 Ryan Lewendon: things that sometimes scare, especially the first time fundraiser or first time startup in the hardware space is the concept of valuations and putting it together. 125 00:15:04,830 --> 00:15:11,090 Ryan Lewendon: Well, some of the instruments are very helpful with that. So from your perspective, can you just walk through those so that people understand 126 00:15:11,090 --> 00:15:19,890 Ryan Lewendon: and what they are, at least just to put it on their radar. Yeah, absolutely. So look, I mean, just the base and type of financing is usually an equity financing, 127 00:15:20,130 --> 00:15:28,550 Ryan Lewendon: which would usually be a preferred shares where the investors get their money back in some form or fashion before the founder participates 128 00:15:28,550 --> 00:15:37,750 Ryan Lewendon: or a common round of financing where sort of everybody's treated pro rata from the get-go. The issues with those are that you have to pick a valuation for the company almost 129 00:15:37,750 --> 00:15:43,150 Ryan Lewendon: always, right? And a lot of founders, especially earlier on, are very reticent to do that because, 130 00:15:43,290 --> 00:15:47,510 Ryan Lewendon: you know, look, if you're taking your multiple at what you would get when you're mature and you're putting 131 00:15:47,510 --> 00:15:51,530 Ryan Lewendon: it on your sales now, you're, you know, you're not worth very much, right? 132 00:15:52,270 --> 00:16:01,050 Ryan Lewendon: So one way to get around that is to use some type of convertible instrument, which would usually be a safe, which stands for simple 133 00:16:01,050 --> 00:16:08,790 Ryan Lewendon: agreement for future equity or a convertible note, right? Right. And both of those, what they do is they allow you to take money 134 00:16:08,790 --> 00:16:16,230 Ryan Lewendon: in now. You don't pick a valuation now. What happens is the investors in this round put their money in and then 135 00:16:16,230 --> 00:16:24,950 Ryan Lewendon: they convert into equity at your next financing, right? And they usually convert in at a discount to that round of financing or 136 00:16:24,950 --> 00:16:34,530 Ryan Lewendon: some type of valuation count. Right. So oftentimes it will say, hey, look, I'm in a safe and I convert into your next round of financing at sort of the better. 137 00:16:34,550 --> 00:16:40,690 Ryan Lewendon: of a 20% discount or some type of valuation, right? The idea being that if you take in their 138 00:16:40,690 --> 00:16:45,690 Ryan Lewendon: million bucks and maybe you're worth, maybe you're worth $5 million when you take in a million 139 00:16:45,690 --> 00:16:55,550 Ryan Lewendon: dollars, if you can somehow use that million dollars to get yourself to a hundred million dollar valuation, the investors converting in a 20% discount to that wouldn't be too 140 00:16:55,550 --> 00:17:04,630 Ryan Lewendon: happy. So they usually ask for some type of cap on that. And theoretically, that cap should be aspirational to the value that you raise at today, right? 141 00:17:04,790 --> 00:17:12,950 Kevin Mako: So if you think you're worth $5 million today and you don't want to raise money at $5 million valuation, your valuation cap on your 142 00:17:12,950 --> 00:17:20,570 Kevin Mako: state for your note should be aspirational, right? Maybe it's $10 million or $20 million or something higher than you'd be able to raise equity at today. 143 00:17:21,630 --> 00:17:28,030 Kevin Mako: And that's something to steer clear of, right? A lot of times people go out with the convertible instrument. The investors want to 144 00:17:28,030 --> 00:17:36,970 Kevin Mako: negotiate them back to a valuation cap, which they'd raise equity at it. that anyways. And that's not a great deal for you. So convertible instruments, they're great for kicking 145 00:17:36,970 --> 00:17:42,610 Kevin Mako: the evaluation down the road. And then for evaluation cap, you want that to be aspirational for what you 146 00:17:42,610 --> 00:17:49,230 Kevin Mako: would get today. You want it to be above and beyond what you think you would reasonably raise money at in an equity round today. 147 00:17:49,310 --> 00:17:55,950 Kevin Mako: Yeah, if it's done right, it's a great instrument, right? Because the reality is you can't value your company today. And it creates a kind of win-win for both parties. 148 00:17:56,190 --> 00:18:01,750 Kevin Mako: If you're able to scale up substantially, then the investor, they do win well, but it also still leaves you 149 00:18:01,790 --> 00:18:07,050 Kevin Mako: with quite a bit of equity room to sell, which will be much easier to sell at a much higher valuation down the road. 150 00:18:07,710 --> 00:18:12,830 Kevin Mako: And it's a great instrument as well in the reverse for the investor so that when a professional 151 00:18:12,830 --> 00:18:17,550 Kevin Mako: investor later on, let's say you do get your, you go for your now $10 million round, as you 152 00:18:17,550 --> 00:18:24,410 Ryan Lewendon: mentioned before, you're going to have a very strategic, very intelligent investor at that point. They will be pegging a value to your company, most likely at that point as well. 153 00:18:24,570 --> 00:18:30,110 Ryan Lewendon: So what that allows the investor prior to do is to get in at a fair rate according to what a high 154 00:18:30,110 --> 00:18:35,790 Ryan Lewendon: level expert that's putting in big bucks is doing, but also at a discount because they got in early. And that's really a nice instrument. 155 00:18:35,930 --> 00:18:42,910 Ryan Lewendon: So it's somewhat of a win-win for both parties. Something, obviously, you know, you need to, as a listener on the show, research more or reach out 156 00:18:42,910 --> 00:18:46,790 Ryan Lewendon: to somebody like Ryan to understand these instruments more before you're going to raising that first 157 00:18:46,790 --> 00:18:49,870 Ryan Lewendon: million dollars. But these are the instruments that if you're going to start Googling something, 158 00:18:49,950 --> 00:18:55,190 Ryan Lewendon: just get to know them on basic principle because you can start planning ahead based on cash flow 159 00:18:55,190 --> 00:18:58,750 Ryan Lewendon: needs of your company, what you actually plan to do with that money going forward or how you 160 00:18:58,750 --> 00:19:03,970 Ryan Lewendon: could use that money and leverage it into thinking about multiple rounds, not just raising that million and that's the end of the road. 161 00:19:04,590 --> 00:19:08,010 Ryan Lewendon: Yeah. And, you know, Kevin, if you're raising multiple rounds, 162 00:19:08,370 --> 00:19:12,730 Kevin Mako: you know, what's great if you can get over the hump of the early rounds is that the dilution 163 00:19:12,730 --> 00:19:19,230 Kevin Mako: starts to become less and less when you're talking about big valuations, big check sizes, the dilution starts to become pretty minimal. 164 00:19:19,770 --> 00:19:28,650 Kevin Mako: So what's really important is getting those first couple rounds right, right? Not giving away too much equity. And I've seen it a lot of times, 165 00:19:28,750 --> 00:19:36,930 Ryan Lewendon: like people just want the money in, they take a really low valuation. And by the time you get to a viable sort of business, the founders own so little of it. 166 00:19:37,370 --> 00:19:46,510 Ryan Lewendon: You know, they're like, you know, my valuation's great. The funding's great. But I'm kind of an employee at this point because I don't have enough of an equity state. 167 00:19:46,970 --> 00:19:55,450 Ryan Lewendon: And the only way you end up with a good chunk is if you get those first couple rounds right and you're able to, one, get the money on good terms. 168 00:19:55,450 --> 00:20:02,370 Ryan Lewendon: But then two, really execute on that money to get yourself. over and above those valuations that you got to exceed. Let's talk about executing on that money. 169 00:20:02,770 --> 00:20:10,510 Ryan Lewendon: You're telling me a story before the show about a company that did a big round, thousands of units in production, but they didn't go through all the early phase things 170 00:20:10,510 --> 00:20:14,950 Ryan Lewendon: that are very necessary for a hardware company. Just talk on that experience because I think that's very relevant to, 171 00:20:15,050 --> 00:20:24,130 Ryan Lewendon: especially raising your first scaling round and some of the mistakes you can make along the way. Yeah. I mean, you know, in addition to sort of actually setting the financing terms 172 00:20:24,130 --> 00:20:29,490 Ryan Lewendon: and whatnot, there's a lot of things you can do to put yourself in success for a fact. financing, right? 173 00:20:30,010 --> 00:20:38,710 Ryan Lewendon: And one of them is just securing and taking the right steps with your supply chain and your partners from an IP perspective, but also from an operational perspective, right? 174 00:20:39,230 --> 00:20:46,990 Ryan Lewendon: And it's something I help people do sort of day in, day out through my firm. You know, you raise your money, you got to spend it to execute on your plan. We help you do that. 175 00:20:47,890 --> 00:20:55,970 Ryan Lewendon: And, you know, I had, I came in contact with a client who, they had a line extension. It was a really, it was a great product. 176 00:20:56,450 --> 00:20:58,310 Ryan Lewendon: They worked with a co-packer on it. 177 00:20:59,550 --> 00:21:07,830 Ryan Lewendon: And, you know, they wanted to use the co-packered R&D it and create it. They ordered a couple, you know, tens of thousands of units 178 00:21:07,830 --> 00:21:16,130 Ryan Lewendon: and ready for the holidays. And they all came out wrong, right? And the tough part about that is, especially when you're a younger 179 00:21:16,130 --> 00:21:24,730 Ryan Lewendon: company, you don't have a ton of leverage, right? Like, in this case, the manufacturer was wrong. The supplier was wrong. It didn't come to spec. They weren't working. 180 00:21:25,270 --> 00:21:34,110 Kevin Mako: And it was totally their fault. But, like, you know, the smaller company doesn't have. have a war chest to go to like a big long litigation. So you have to work with the folks, 181 00:21:34,210 --> 00:21:42,750 Kevin Mako: right? And that ended up sort of delaying the orders to redo them. It was after the holidays. They missed the season. So in terms of your supply chain, a couple of things. 182 00:21:42,910 --> 00:21:50,780 Kevin Mako: One, you got to get your agreements right. You got to find the right parties. But you also want to make sure that you put the right people in. 183 00:21:50,940 --> 00:21:59,320 Kevin Mako: So using a design firm like someone like yourself to help do the design ahead of time before you go to the co-packer and not sort of conflating those 184 00:21:59,320 --> 00:22:05,060 Kevin Mako: things to save a couple bucks, that can really just put you so far ahead in terms of your growth cycle. 185 00:22:05,520 --> 00:22:12,560 Kevin Mako: And look, like you said, at a certain point, you're going to be raising money based on what you've done, not on what you should or might do. 186 00:22:13,080 --> 00:22:21,780 Kevin Mako: So you want to make sure you execute and you spend that money really wisely and you make sure every dollar spent goes to put it advancing the company and not sort of to 187 00:22:21,780 --> 00:22:28,800 Kevin Mako: mistakes or backtracking or redoing things. That's so powerful because keep in mind when you're going to raise funding, they're looking at the health of your business. 188 00:22:29,060 --> 00:22:35,640 Kevin Mako: And as a consumer product company, really, the primary thing they look at is your product. Is it a great product and does the market like it? 189 00:22:35,760 --> 00:22:42,640 Kevin Mako: You obviously are a small business in the hardware startup space. When you're in that position, you've got to think about, well, what can you show within that 190 00:22:42,640 --> 00:22:49,340 Kevin Mako: limited exposure to prove that you can scale? So we're a big advocate on the show. Get your first 500 units out there. 191 00:22:49,560 --> 00:22:56,260 Kevin Mako: Well, the biggest part of getting 500 units out there isn't just the fact that you show that yes, somebody bought them and you've got this revenue coming in. That is a big deal 192 00:22:56,260 --> 00:23:01,260 Kevin Mako: and that's great. But the other side of it is, is it a well-oiled machine? Do those people like the 193 00:23:01,260 --> 00:23:08,580 Kevin Mako: product? Do they come back to buy it again if it's a recurring revenue product? Do they refer it to a friend if it's a non-recurring revenue product? 194 00:23:08,960 --> 00:23:12,600 Kevin Mako: All of these things come into the quality of the product that you put out to market. 195 00:23:13,360 --> 00:23:15,200 Ryan Lewendon: Presumably, if you're a listener to the show and 196 00:23:15,200 --> 00:23:22,520 Kevin Mako: you've got a hardware startup, it's because you have something innovative, which I think is the first and most important thing as the spark. You're creating something. 197 00:23:22,540 --> 00:23:24,800 Kevin Mako: that is unique that the market needs. 198 00:23:24,920 --> 00:23:33,040 Ryan Lewendon: It's either solving a pain point or creating an opportunity for your buyer. But in conjunction, are you doing a good job on executing on that? All of this 199 00:23:33,040 --> 00:23:37,000 Ryan Lewendon: then pans into that, really, that first million dollar raise because that's kind of at the 200 00:23:37,000 --> 00:23:41,420 Ryan Lewendon: point where you've shown a little bit of sales or possibly pre-revenue if you're hot enough 201 00:23:41,420 --> 00:23:49,280 Ryan Lewendon: that maybe you've got a Kickstarter campaign that's generated some sales and you can use that to show interest. But really, you're probably selling your first few hundred units. 202 00:23:49,600 --> 00:23:58,880 Ryan Lewendon: You've got some traction, both financially, but also with user reviews, at that point, that's when you're in a really good standpoint if things have gone well to raise that round. 203 00:23:58,980 --> 00:23:59,940 Ryan Lewendon: Now, if things have gone poorly, 204 00:24:00,610 --> 00:24:06,310 Ryan Lewendon: that puts you in an exponentially worse position. Because like Bryant said, you're really using 205 00:24:06,310 --> 00:24:11,070 Ryan Lewendon: your past success to predict your future earnings, which is what the valuation is based off 206 00:24:11,070 --> 00:24:18,890 Ryan Lewendon: of. So it's critically important that even if you're only selling a few units to start, because you're a hardware startup, you must do that well. 207 00:24:19,170 --> 00:24:24,990 Ryan Lewendon: Yeah, we couldn't agree more with that. Kevin. That was awesome. So Ryan, let's talk a bit further down the path. Let's say you've sold some 208 00:24:24,990 --> 00:24:31,670 Ryan Lewendon: units. You've now generated enough interest and hype to raise your million dollar plus financing round. How do you spend that money well? 209 00:24:31,770 --> 00:24:33,970 Ryan Lewendon: There's a couple different things, right? First, 210 00:24:34,630 --> 00:24:43,650 Ryan Lewendon: I would say you've funded your company, build out your human capital, right? Find people that fill in your experience gaps. 211 00:24:43,910 --> 00:24:48,430 Ryan Lewendon: It's super simple, right? But I do find that most people usually 212 00:24:49,410 --> 00:24:53,550 Ryan Lewendon: higher immediately for the things they're already good at. So if you're like, like if you are 213 00:24:53,990 --> 00:24:58,570 Ryan Lewendon: naturally a marketer, they sort of build the marketing team first, right? Or if you're naturally 214 00:24:58,570 --> 00:25:04,530 Ryan Lewendon: an ops person, they build more into the ops, because that's what they understand. But you got to do the other. You've got to do the opposite side. 215 00:25:04,770 --> 00:25:13,850 Ryan Lewendon: Where are my weaknesses? Where are the things I don't like doing? Build into that, hire into that, shore that up so that those things are being covered, right? 216 00:25:14,390 --> 00:25:24,130 Ryan Lewendon: A company that's got great marketing, but the operations are weak, is going to implode. A company that's got a great product that nobody knows about isn't going to go anywhere. 217 00:25:24,550 --> 00:25:29,630 Ryan Lewendon: So you gotta build in, you gotta make a well-rounded team, you gotta put experts around yourself, 218 00:25:30,390 --> 00:25:34,730 Ryan Lewendon: whether that's internal or external in terms of building out your advisory board, right? 219 00:25:35,490 --> 00:25:44,550 Ryan Lewendon: You wanna put people who aren't employees, maybe you can't afford as employees, but you wanna bring them around your company, right? Someone that's done what you're looking to do. 220 00:25:44,710 --> 00:25:49,950 Ryan Lewendon: Someone that's got deep experience in the things that you're, not experienced in, right? 221 00:25:50,470 --> 00:26:00,010 Ryan Lewendon: The crazy thing about these industries is that when you are an entrepreneur and you are dealing with your producers or your investors 222 00:26:00,010 --> 00:26:08,570 Ryan Lewendon: or your retailers, all of those parties have a lot more experience than you. The investors have invested in thousands of companies 223 00:26:08,570 --> 00:26:16,250 Ryan Lewendon: and maybe you've raised a couple rounds, right? Maybe you've exited one company before and this is your second, but they've invested in thousands. 224 00:26:16,350 --> 00:26:25,010 Ryan Lewendon: The retailers have done agreements with thousands of customers, right? And maybe you've sold into tens or hundreds of different accounts. 225 00:26:25,490 --> 00:26:33,890 Ryan Lewendon: The distributors and the manufacturers, they've got thousands of clients. The experience is always not on your side in terms of these, in terms of these, 226 00:26:34,530 --> 00:26:40,790 Ryan Lewendon: any sort of community where a lot of things are sort of outsourced. So put people around you that even that playing field a little bit, right? 227 00:26:41,170 --> 00:26:47,670 Ryan Lewendon: You know, I act in that position for lots of brands because I've done hundreds and thousands of rounds of financing. 228 00:26:47,670 --> 00:26:53,310 Ryan Lewendon: I've sold hundreds of companies and I've helped, you know, thousands of companies build and scale over time. 229 00:26:53,670 --> 00:27:02,190 Ryan Lewendon: You know, I'm someone that serves that role with a lot of businesses, but it doesn't need to be a lawyer or it can be sort of an entrepreneur or can 230 00:27:02,190 --> 00:27:08,590 Ryan Lewendon: be someone, an industry participant. But on the human capital side, put that self around you as soon as you can afford to sort 231 00:27:08,590 --> 00:27:18,060 Ryan Lewendon: of hire people and build a brand and maybe issue people options to sit on your advisory board or whatnot, right? then you want to build out your supply chain, right? 232 00:27:18,600 --> 00:27:19,920 Ryan Lewendon: Look, you've got the funds. 233 00:27:21,180 --> 00:27:28,580 Ryan Lewendon: You've projected where you're going to go. Now you've got to be able to do that. And you've got to be able to make and move enough product in order to do that. 234 00:27:28,780 --> 00:27:38,700 Ryan Lewendon: So build out your supply chain, get your agreements with, you know, your key ingredient or material suppliers, build out your distribution network if you're, you know, if you're 235 00:27:38,700 --> 00:27:47,300 Ryan Lewendon: going to sort of bigger chains so that you're not sort of internalizing everything, right? know that you're sort of changing from maybe you're making 236 00:27:47,300 --> 00:27:53,860 Ryan Lewendon: this in your garage to someone that's making an office or make you know commercializing these things um but build that out and 237 00:27:53,860 --> 00:28:00,060 Ryan Lewendon: you know if you can build it out in sort of a strategic way right like is this supplier my 238 00:28:00,060 --> 00:28:08,320 Ryan Lewendon: lifetime partner for this product or is this supplier a short-term solution for this product right 239 00:28:08,320 --> 00:28:12,700 Ryan Lewendon: and set it up accordingly hey if they're a lifetime supplier i want to make sure this is 240 00:28:12,720 --> 00:28:19,060 Ryan Lewendon: locked in. I've got a contract that says they'll give it to me and I'll buy it from them and it's going to be forever. It's going to be no matter what. 241 00:28:19,720 --> 00:28:26,040 Ryan Lewendon: If they're a short term person, you want to be able to say, hey, look, we're going to be in this for as long as we want. If we decide that 242 00:28:26,040 --> 00:28:34,740 Ryan Lewendon: we want to go somewhere else, we can move. You know, what is needed strategically in terms of those? And then look, in terms of your IP, you 243 00:28:34,740 --> 00:28:42,700 Ryan Lewendon: want to sort of circle, right? Hey, do I have patents on the products that I want to file? Do I have trademarks on them? Do I have trade secrets? 244 00:28:42,720 --> 00:28:47,320 Kevin Mako: that I need to protect, right? Do I need to make sure that the people who are working on it have 245 00:28:48,820 --> 00:28:53,840 Kevin Mako: confidentiality obligations with respect to those, right? Whether it's outsourced supply side or internal, right? 246 00:28:54,220 --> 00:29:01,700 Kevin Mako: Do I have work made for hire agreements with all the people that are contributing to that, let's say the company owns the fruits of this labor and not the other 247 00:29:01,700 --> 00:29:09,680 Kevin Mako: parties, right? Does the person who's manufacturing my product and who will, by almost certainly be sort of updating bits and pieces of it as we go? 248 00:29:09,980 --> 00:29:17,060 Kevin Mako: Do we have an agreement that those updates belong to the company and not the manufacturer, right? Having a line of site and owning all 249 00:29:17,060 --> 00:29:25,190 Ryan Lewendon: that IP and having that IP set up in a situation where at a base, I can give it to another party, right? 250 00:29:25,330 --> 00:29:30,410 Ryan Lewendon: Or at a base, if I'm going to IPO, I can tell investors that this is something that we can hold, right? 251 00:29:30,830 --> 00:29:38,210 Ryan Lewendon: And then even better than that, do I have sort of a competitive moat with these parties, right? Do I have non-competes with them or do I have an exclusionary thing where, look, 252 00:29:38,210 --> 00:29:46,570 Ryan Lewendon: But if I'm doing something really unique, can this producer of it or a supplier of it only give it to me or can they give it to themselves? 253 00:29:46,870 --> 00:29:52,290 Ryan Lewendon: Can they give it to other parties, right? How easy can I make it for my competitors or how difficult can I make it for my 254 00:29:52,290 --> 00:29:58,730 Ryan Lewendon: competitors to come out, reverse engineer it, go find my suppliers and make something similar, right? 255 00:29:59,790 --> 00:30:08,350 Ryan Lewendon: Look, the better you have those sort of competitive modes built on the IP section, the more valuable a company you're going to be inherently. This is amazing advice. 256 00:30:08,810 --> 00:30:16,390 Ryan Lewendon: Whether or not you're even raising an investment round, I think all this advice is very sound in any case. But of course, this comes back to the fact that if you do raise 257 00:30:16,390 --> 00:30:21,010 Ryan Lewendon: that round, you've got really smart things that you can do to spend your money wisely. 258 00:30:21,550 --> 00:30:25,730 Ryan Lewendon: And of course, that leads you either to A, build an incredible business off it, if that's your 259 00:30:25,730 --> 00:30:33,870 Ryan Lewendon: one and done round, or B, I imagine this almost immediately gets you into starting to think about your next round as you're using these elements to show scale. 260 00:30:34,090 --> 00:30:40,690 Ryan Lewendon: And if you are doing that route, If you are planning to do the next round, like how soon after you raise your first million should 261 00:30:40,690 --> 00:30:45,750 Ryan Lewendon: you start thinking about planning for raising that next round? Is there any advice that you have in and around that? 262 00:30:46,110 --> 00:30:53,070 Ryan Lewendon: Oh, totally, Kevin. I think you should be planning your next round before you go out to plan your current one. 263 00:30:53,610 --> 00:31:00,430 Ryan Lewendon: Because what you want to be telling investors for this million dollar round is this is how long this money is going to last me, right? 264 00:31:00,710 --> 00:31:05,070 Ryan Lewendon: That could be six months, could be 12 months, it could be 24, however long it is. 265 00:31:06,190 --> 00:31:12,090 Kevin Mako: when I go back out to raise money, this is what the company will look like, this is how much money 266 00:31:12,090 --> 00:31:15,330 Kevin Mako: I'm going to raise, and this is the terms we think we're going to raise it on, right? 267 00:31:15,850 --> 00:31:22,830 Kevin Mako: You're going to want to tell investors that like, hey, if I'm raising it X, now, when we do the next round, it's going to be 2x, right? 268 00:31:23,370 --> 00:31:30,250 Kevin Mako: And you want to have that sort of mapped out. And you want to understand when I'm taking in this first round, the million dollar round, right? 269 00:31:30,920 --> 00:31:35,960 Kevin Mako: Hey, is this investor, you know, if they're putting in a million dollars, is that sort of, 270 00:31:36,080 --> 00:31:42,280 Ryan Lewendon: are they capped out or do they want to put in five million dollars, but they're putting a million now because that's all I can afford, right? 271 00:31:42,600 --> 00:31:51,100 Ryan Lewendon: You want to start building that list of that next round of investment when you're doing the current one, right? Because execution, sort of building the upswing, right? 272 00:31:51,520 --> 00:31:59,600 Ryan Lewendon: That's what it's all about, building an upswing on valuation, building an upswing on sales, continuing to move forward. That takes a lot of planning, a lot of strategy. 273 00:31:59,600 --> 00:32:09,140 Ryan Lewendon: and you've got to start, a lot of entrepreneurs hate fundraising, right? They like building, they like making, they like marketing, they like selling. 274 00:32:09,640 --> 00:32:12,300 Ryan Lewendon: They don't love fundraising, but it's integral. 275 00:32:13,000 --> 00:32:21,800 Ryan Lewendon: It's integral to your success. You have to do it. Like I said before, if you really hate it, bring someone on the team who's going to help cover that for you, right? 276 00:32:22,220 --> 00:32:28,040 Ryan Lewendon: But you're almost going to be thinking about it constantly until you're very profitable, right? 277 00:32:28,040 --> 00:32:37,340 Ryan Lewendon: you know break even you're still going to need to raise money to build you know so you're going to be fundraising for a couple years and it's an almost constant process 278 00:32:37,340 --> 00:32:44,760 Ryan Lewendon: it just resets itself every so often when you bring the cash in yeah and i'll tell you a lot of people might not like fundraising but i haven't 279 00:32:44,760 --> 00:32:50,340 Ryan Lewendon: met any hardware entrepreneur that doesn't absolutely love the day that check comes in it's almost 280 00:32:50,740 --> 00:32:58,020 Ryan Lewendon: it's a pretty much one hand feeds the other right so yes it's a bit of it's a bit of work but like you said you can bring experts on board to help with this process 281 00:32:58,040 --> 00:33:02,540 Ryan Lewendon: There's a lot of people out there. And Ryan, this is where I want to kind of lead into what you do at your firm. 282 00:33:02,940 --> 00:33:07,720 Ryan Lewendon: Tell everybody about how you help scaling hardware brands and how they can get in touch 283 00:33:07,720 --> 00:33:11,020 Ryan Lewendon: with you if they're in that position where they are looking to start scaling through financing. 284 00:33:11,640 --> 00:33:21,620 Ryan Lewendon: Yeah, look, I mean, my firm, Genuze-Lewended, you know, we do four things, basically, but the biggest one is financing an NMA, right? We do more of it in CPG than anybody else. 285 00:33:21,680 --> 00:33:30,120 Ryan Lewendon: We sell about 20 companies a year. we average about $2 billion to $2.5 billion in exit value. We do about $100 to $200 to $200 rounds of financing. 286 00:33:30,580 --> 00:33:33,860 Ryan Lewendon: We average about $1 billion to $1,000 a billion and a half dollars in invested capital. 287 00:33:34,460 --> 00:33:38,960 Ryan Lewendon: Depending on where you are in your life cycle, right, you're going to have different parties around. 288 00:33:39,280 --> 00:33:45,940 Ryan Lewendon: On the later stage stuff, you're going to have someone like me who's going to help you negotiate the deal terms, 289 00:33:45,980 --> 00:33:53,240 Ryan Lewendon: who's going to be an advocate for the founders in the company, who's going to help you strategize on what things to put in place now to keep you 290 00:33:53,380 --> 00:34:03,320 Ryan Lewendon: in a position of power and parity and set up for success later on down the line as you bring in more participants into this company, as you bring in investors and advisors 291 00:34:03,320 --> 00:34:09,060 Ryan Lewendon: and parties who, you know, weren't there from the beginning, obviously have complete alignment with you 292 00:34:09,060 --> 00:34:16,420 Kevin Mako: on some issues, but on some issues don't, right? You're going to work with me and an investment banker, right, who's also going to help 293 00:34:16,420 --> 00:34:22,140 Kevin Mako: sort of help you put a story together, help pitch the company to other parties, investors 294 00:34:22,140 --> 00:34:29,140 Ryan Lewendon: and help sort of coach you on doing investor meetings with them and management meetings to help bring in that bigger round of financing. 295 00:34:29,520 --> 00:34:36,220 Ryan Lewendon: On the earlier stage of stuff, it's much harder to find help with the fundraising. It's harder to find the investment bankers. 296 00:34:36,360 --> 00:34:46,280 Kevin Mako: The checks don't really make sense in terms of what you're doing. So it's important to sort of bring in advisors. In the earlier stage stuff, we operate in both 297 00:34:46,280 --> 00:34:51,920 Ryan Lewendon: those roles in some sense, where we're helping you strategize, we're helping look at your company, 298 00:34:52,140 --> 00:34:58,580 Ryan Lewendon: We're helping you sort of stress test and gut check some of the terms, the valuations, 299 00:34:58,780 --> 00:35:08,620 Ryan Lewendon: the financing, you know, what would be comparable against market, just from our view of doing so much work here, and then helping you sort of put in place the controls and 300 00:35:08,620 --> 00:35:16,740 Ryan Lewendon: the terms that will help you get the round closed, but will help also set yourself up for success down the line and the subsequent rounds. 301 00:35:16,740 --> 00:35:26,380 Ryan Lewendon: You know, how can I structure a board today to set myself up to kick. can to continue to keep board control later on through some of the 302 00:35:26,380 --> 00:35:32,460 Ryan Lewendon: terms and some of the levers and some of the police, you know, those are all sort of case by case in fact specific situations, 303 00:35:32,920 --> 00:35:39,500 Ryan Lewendon: but, you know, we use our sort of experience of doing hundreds of rounds of these every year to say, look, these are the different things you could use. 304 00:35:39,760 --> 00:35:45,440 Ryan Lewendon: This is, these are the types of investors you're going for. These are the types of things they'll reasonably accept. And here's 305 00:35:45,440 --> 00:35:50,260 Ryan Lewendon: how you put these things together to sort of get financed, but also get financed in a way that 306 00:35:51,400 --> 00:35:59,640 Ryan Lewendon: continues to set yourself up for control and success later on down the line. That's super helpful. Ryan, what's the website they can go to for those that are listening 307 00:35:59,640 --> 00:36:04,820 Ryan Lewendon: in? And of course, as always, I will put all the show links in the bottom of the show notes episodes. You can just click through and listen through there. 308 00:36:05,000 --> 00:36:14,680 Ryan Lewendon: What's that website and how can they find out more? Yep. The firm's website is glllaw.us. So www.g.g.llaw.us. You know, 309 00:36:14,760 --> 00:36:20,400 Ryan Lewendon: you can find me on LinkedIn at Ryan Lewendon. And, you know, please reach out if you have any questions. You can shoot us a note. 310 00:36:20,760 --> 00:36:27,500 Ryan Lewendon: I'm happy to set up a call and talk to anybody about any of the issues they're faced. Amazing. Ryan, thanks again for all of your time and effort. Great nuggets on the 311 00:36:27,500 --> 00:36:31,240 Ryan Lewendon: show today and really looking forward to talking to you again. Thanks and take care. Thanks so much 312 00:36:31,240 --> 00:36:36,040 Narrator: for having me, Kevin. Bye-bye. Thanks for tuning in to this episode of the product startup podcast, 313 00:36:36,700 --> 00:36:43,000 Narrator: the show that teaches you what it really takes to bring your product to market and turn it into a big success. 314 00:36:43,240 --> 00:36:49,020 Narrator: This podcast series is brought to you by Mako Design + Invent, the original and 315 00:36:49,140 --> 00:36:58,580 Narrator: firm in North America to provide global caliber in-to-end physical consumer product development to startups, inventors, and small product business clients. 316 00:36:58,920 --> 00:37:04,420 Narrator: If you're looking for product development help on your invention, head over to MakoDesign.com. 317 00:37:04,720 --> 00:37:13,240 Narrator: That's M-A-K-O Design dot com for a free consultation from one of Mako Design's Ford Design Studios from coast to 318 00:37:13,240 --> 00:37:15,960 Narrator: coast. Thanks for listening and see you next time.