How To Build Your Business BETTER with Scott Kelly! | The Biz To Biz Podcast

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Hey everybody, welcome to the new episode of B2B Vault, the Biz to Biz Podcast sponsored by NPS One, which is our smart invoicing tool. So if you want to see what it does, check us out, go to the website nationwidepaymentsystems.com and you can check out our new NPS One platform and our invoicing platform. Help you get paid faster. And today on the podcast, we're going to be talking with Scott Kelly, and he has a background in helping businesses get financing. And we're going to talk about how you get financing and all different things around financing for startup companies. As there's— we are in a big startup culture here in 2025, and I think it's going to keep increasing. So Scott, welcome to the show. And thanks for having me on. I appreciate it.

Yeah, thanks again, Allen. Again, Scott Kelly.

I've been—

I've been a deal guy for 35-plus years. I started working on the floor of the New York Stock Exchange in the early '80s, moved to San Francisco in '86, worked as an investment banker taking tech companies public, did that from '86 to '93. And then like many on air today, I started as a founder of my very first startup in 1993. During the internet days and boom in Silicon Valley. And that and two other companies I exited between '93 and 2000. 2000, moved to Arizona after a brief retirement. I started another business in sports and entertainment and sold that business 6 years later. And that's when I launched Black Dog Venture Partners. And essentially where we are, Allen, is we are a business accelerator. We help startup technology and consumer product companies raise funding, scale their business, and eventually exit their business. And since that time, we are launching the firm. We've raised about $5 billion for companies, helped 30 of them exit, and then built a large network of investors of around 13,000 I've done deals with. I actually run VC Fast Pitch, which is our, our pitch event that we connect investors and entrepreneurs. And I'm a podcaster myself with the Emerging Managers Podcast. So that's me in a nutshell.

Okay, so when, you know, I've talked to startup companies all the time, and, you know, a lot of times I see startup companies and they struggle with, like, the two main things they struggle with is sales, like how to make sales, because usually they're not salespeople, they're programmers, or they come from some other background and they've been sunk in, you know, hundreds of thousands or even up to $1 million into a project. And they're trying to figure out like, hey, how am I going to scale this thing? You know, and they've already, you know, but, but they don't understand sales. Like, so sometimes we'll work with somebody, especially a SaaS product, integrate payments, show them how, because anybody who has a SaaS product today, you can tell me what you think about this. You have to make part of the payments revenue in order to make that a profitable company. What do you think about that?

Absolutely. I think the reality is, is that you need to make it as easy and seamless as possible for people to buy your service. And so especially with software companies and SaaS companies, you know, the pay now button has to be clear, prominent, and work 100% of the time.

Yeah, and not just the pay now, it's for like when they sell it and a customer's using that software and they have to accept payments, they need to be part of that ecosystem.

Absolutely.

And, um, so when somebody wants to raise capital, what's the first step that they need to take?

Well, I, I think the first step honestly is to really, really dig deep down and Wonder if you really do need to raise capital. And if it is, you do need to raise capital, what kind of capital is that? Is it, you know, taking on debt? Is it, you know, looking at loans and grants? Is— or is it looking for equity capital? And I think when you go to that route, the first thing you need to do is really what we talked about before. This is sales. So you need a large network and list of potential investors that are specifically going to invest in your type of company at your type of stage. Um, you Companies ask me all the time, you know, when should I start contacting investors when I want to raise capital? And I tell them 6 months ago, because it's important to build that network first. And I think that's step number 1. And then obviously there's all kinds of other steps that we can share, talk about as we go.

And what about like, you know, some companies I talk to and I'll— and I do this for some of them where I become like an advisor, you know, unpaid. And, you know, the deal is you do your payment processing with, with my company, and then I come in as an advisor. You get a certain amount of hours every month, and I, you know, 30 years experience in business, I can certainly lend my, lend my ear and my advice to those companies, like You know, I see a lot of even attorneys and accountants do this too, just to get, you know, a small piece, a small piece of the company and become an advisor. What do you think about that kind of—

well, I think advisors are important for a company because I think, um, you know, the reality is you have to understand as an entrepreneur what your strengths are, but more importantly what your weaknesses are. And if you are a good technical founder and you've got good coding skills or programming skills, you may need to find other people in your network or on your team that understand sales, marketing, accounting, finance, legal. And in some cases you can maybe be able to hire them if you can afford them. But in a lot of early-stage companies, they bring in advisors that can fill in those gaps for them.

Okay. So what's the best way to, to find investors? Because I'm sure that this is a question you get asked all the time. Where are all these investors? Where are they hiding, right?

Sure. Well, they're not hiding there. I mean, they're— if they're hiding, they're hiding in plain sight. And obviously there's a lot of online tools that you can use. You know, you've got things like PitchBook and Crunchbase, um, AngelList, and other websites that have angels and venture capital firms and other investors on the platform. LinkedIn is phenomenal. Place to go to find investors. Now, a word of caution is that don't go find an investor on LinkedIn and then immediately send them your pitch deck. You know, it's not about just having a list of investors, it's having a relationship with a list of investors. And that's really the key. There's a lot of places to find those investors. And, and even offline, you know, in everyone's, you know, city or nearby, there is a pitch event, there is going to be an accelerator, an incubator where you might be able to go to events and and network and connect to investors one-on-one. There's, there's a lot of resources. But again, it comes down to not just having a list of investors, it's having relationships with the right investors.

Yeah, you have to find— I guess, you know, when you get an investor, you need— they need to have like this, the vision of like, okay, how are we going to grow this company? What are they investing in? They can't just be digging you out of debt. You know, no.

And I think it's important that when you begin to build your list and network of investors that you understand a couple of things. One, you have to understand you're going to be presenting to investors. You want to invest the time in finding a list of people that invest in your industry and people that invest in your stage of company. Now, a lot of early-stage startups, many listening here,, you know, may see the headlines and the LinkedIn post about companies raising money from venture capital firms. And, you know, the reality is the vast majority of entrepreneurs shouldn't even approach a venture capital firm until they're generating, you know, at least $1 million in revenue. So they should really look to, you know, friends and family, high net worth individuals, and angel investors before they pursue venture capital firms. So I think it really comes down to finding the right investor from a stage standpoint, from an industry standpoint, like you mentioned, a fit standpoint, because in all honesty, a bad investor is worse than no investor in many cases.

Oh yeah, bad investor. They can be like, oh, I want my money back. They're not happy with the performance because maybe they're not familiar with your industry.

Right. Exactly.

There seems to be now like a plethora of websites where people have created SaaS products and trying to sell them all, you know, exit their companies, you know, right, with little revenue. You know, I don't— and sometimes I wonder, I'm like, okay, like I see these companies for sale and I get approached all the time. Hey, why don't you buy this? Like, well, how many customers do you have? You control the credit card processing. If I buy this and it breaks, who's going to fix it? You know, how do people navigate stuff like that?

Well, it really is difficult to navigate, but it takes time. You know, fundraising is hard work. It is a grind. You know, the reality is you're going to hear literally hundreds of potential nos before you get to a yes. And so that's why it's important to do really two things. One, continue to build your relationships with more investors and increase relationship with the existing network. And two, keep building your business. Keep building your business, generate that traction. You know, traction can be in a lot of different forms. It doesn't necessarily always have to be sales and profit. It could be, you know, a waitlist of customers. It could be setting up partnerships or distribution agreements or other things. So, you know, in a lot of cases, sometimes a no with an investor sometimes means not yet or not enough information. And I think, You need to be diligent about maintaining a relationship with everybody you've reached out to ongoing.

So when somebody is looking to bring investors in and let's say you have no customers at all, right, that's kind of hard. But like, where do you see like investors getting interested when someone's got 100 customers and they have a steady, steady stream of people signing up? Like when— what's that matter?

And again, that depends on the investor. There are a lot of investors that invest in pre-revenue startups. Companies that haven't sold the product. You know, there's investors that invest in companies who haven't built a product yet. Um, again, part of that is making sure that you, you're approaching the right investor. You don't want to waste the time of someone who's not interested in investing until you get to X amount of revenue or X amount of sales. Uh, the other thing to consider is begin to, as you're building this network, maybe like we mentioned before, maybe they won't become an investor but maybe they become an advisor to the company and they help you build the rest of your team in order to make you a better investment. Because honestly, for these early-stage, no-revenue startups, the most important thing probably is going to be the team because you don't have anything else to back except the people behind the company at this point.

Right. So you mentioned pitch deck a few times. So what should people put in the pitch deck And how—

I mean, a pitch deck should really have some core aspects to it. I, um, I tell everyone, you know, we do pitch events and we have companies put together a short 5-minute presentation with a pitch deck, and I tell them the basics are: what's the problem you're trying to solve and why is it a problem worth solving to a lot of people? Uh, two, what is your solution to that problem and why is it better than any other solution? Is it faster, cheaper, et cetera. Uh, 3, how do you— how are you gonna find your customers and who are your customers? Um, 4, how are you going to make money? Are you gonna be a SaaS model generating revenue every month, recurring revenue? Are you gonna— what are you gonna sell a product? What are your margins going to be? Um, uh, 5, one of the most important things is who's on your team? Because ideas are great, but successful companies have great people that can execute on those ideas. And then finally, you know, I ask— I, I tell everybody, Make sure you know exactly how much money you're going to raise, what you're going to use the money for, your use of proceeds, and what milestones can you accomplish in what period of time. Those are the things that investors want to know. In addition to that, investors want to know about your competitive, you know, analysis versus competitors in the market space. And I tell entrepreneurs all the time, don't use the word, I don't have competition. Okay, the pencil is still competition to the computer. There you have competition, and so don't be so bold. And then secondly, especially as you get closer to getting interest, you wanted to show how you're going to exit this company or how you're gonna get a return of capital for the investors and a return on their capital to investors. So those are the primary things. That you need in your pitch deck.

Yeah, it's interesting. I've gone to a few, uh, there's incubators around town here in South Florida. I've visited a few of them, gone to some of their events and listened to people pitching and, and, and doing things. And sometimes I watch, uh, people doing a pitch and I'm like, uh, what was— I missed the whole point of the product, you know? Like, what's, what's the whole— what's the whole point of the product?

And then, right, yeah, I I mean, the route is you have to tell them what you do, right? Uh, and, and who you're helping. That is very important. Absolutely.

Yeah, it's super important because I've been asked like, oh, as a business owner to be on the panel and then get to ask them questions. And you know, sometimes people aren't prepared to answer all of the, all of the questions. And yeah, I can see where the team is important as they want to know like, okay, your coder, like what did he code before? Where has he been? Worked at Netflix? Like what kind of experience do these people have from, from, from that standpoint, you know?

Right.

And, you know, you didn't put it on the list of things to talk about, but AI, like, how is AI, you know, because we talked about like how there's so many software companies out there, right, as products and all this. How do you see AI in all of the startups? I mean, there's just a ton of AI, right?

Well, I think AI is, is, is— I'm looking at it from both perspectives, from the investor's use of AI and the entrepreneur's use of AI. You know, from an entrepreneur perspective, AI, things like live coding and things of that nature have made it much easier and faster and less expensive for a company to build a product. You know, and I think the reality is entrepreneurs have to realize that they have to change their mindset. Instead of hiring virtually dozens of coders, you might be able to do it in one project manager and use AI to code your product and, and use your other services. From an investor standpoint, investors are now increasingly, especially large venture capital funds, are using AI to do due diligence and determine what companies to invest in. You know, you have to understand the typical venture capital firm, you know, myself, I receive hundreds of pitch decks, you know, every single month. And AI is a tool that they're now using to help sift through, you know, the companies that they want to actually have a conversation with. So I think it really AI is, AI is a revolutionary, you know, model. Um, I think we have to be careful about just putting AI at the end of your name, uh, if you don't really use AI as a resource or a tool or part of your design. But yeah, AI has significant impacts from both the entrepreneur pitching investors and the investors being pitched.

Yeah, because I follow like some, a bunch of different websites where people are putting up their you know, Product Hunt, AppSumo, Future Tools, a few of these sites. And then I just, I'm just like shocked at the, just the sheer number of AI products. Like, I'm like, what, how can all these exist? You know, but then again, you know, like I was talking to a friend of mine who started a SaaS company. He's like, I want to get 50,000 customers. And I was like, you don't really need 50,000 customers. I said, if you were incorporating credit card processing into your product and let's say each customer gave you $500, you made $500 net dollars off each client. I said, if you had 1,000 customers, you know, you take 1,000 customers times, times $500 and that's $50,000 a month, right? I said, and then you take that and you double it. Now you got $100,000 a month. You're at over $1 million a year. So do you really need 50,000 customers to be a viable company? You don't really need— you don't need those, those vast numbers, especially when you're including payment processing and you're into the whole thing. Because that's what I see a lot of people making now is very industry-specific SaaS products or point-of-sale products. Like that. I see a ton of those. Do you see a lot of that coming?

Yeah, it is very prevalent. I think you're absolutely right. I think as an entrepreneur, you have to, one, figure out all the ways you can generate revenue from your customer and to get to revenue as soon as you can, even before you pursue investors, because that does two things. One, it reduces the need for capital. And it improves the prospects of getting capital at a better valuation or better terms. So I think, you know, you're absolutely right. You know, having payment processing and all these things integrated, you know, the reality is if someone's going to get in the way of the transaction and charge a fee, it might as well be the entrepreneur.

Yeah. The other thing that, you know, we always talk about with people is, you know, we— and I see it in a lot of discussions— is embedded finance. You know, uh, being included inside. Because if you're selling something to businesses, you know, you want to have embedded finance. And that's one of the things I complain about to all the people I do business with. I go, look at Stripe and Square and PayPal and QuickBooks and all these companies, and they've all embedded, you know, payroll, embedded loans, embedded— although the loans are predatory interest rates and things like that. They're not— that's not like an investor. But, you know, you have to think about how your product, what other businesses you can connect your customers with, like you said, and get more revenue from those customers. So when you talk about, you know, when you're talking to somebody and you're saying, what are the dos and don'ts of raising capital from investors?

Well, I think the dos I mentioned before is do your homework while you build your list to make sure you have a good pitch deck and a good data room or deal room where you have all your due diligence information that investors are going to require. That could be the bios of your key members and your key team, your intellectual property, trademarks, your marketing plan, all of those things. So your pro formas and your financials so investors can make a a smart decision. Those are the critical dos. I think the critical don'ts is, as I mentioned before, don't start with nobody to contact and don't build relationships first. You know, do not— if you, if you think it's going to work, you cannot be farther from the truth. Do not connect with somebody who says venture capital, angel investor, or investor on their LinkedIn profile. Connect with them and immediately put a pitch deck in their inbox. I delete them all the time. I probably have 5 of them while we're doing this podcast. Build relationships first. Don't build— don't burn your relationships from the get-go. And then the reality is the last thing is the other don't is don't stop building your business while you're trying to raise capital. I tell everybody, you need to paint the race car while you're driving the race car, um, because again, those are the things that investors are going to look at.

So when, when, you know, you mentioned trademarks, and, uh, I get emails every day, oh, somebody's trying to trademark your name. I found that those are scammy, but I would— I went on to the trademark website, right, to go look at it. And I don't— I mean, forget— I know right now while we're talking on this podcast, there's a government shutdown. But besides the government shutdown, I saw there was a 2-year waiting list to get a trademark.

Well, I think it is important if you have something that is proprietary you want to protect your intellectual property, whether that's patents, trademarks, copyrights, things of that nature. But I can tell you two things. You know, one, it does— you're going to have to do that search in advance. Two, the reality is you have to be careful you're not violating someone else's trademark when you get going, because that'll— they'll shut you down right away. And the reality is that's where bringing in smart advisors, bring in a smart trademark and IP attorney to help you make sure you do it right the first time. It's like a lot of things. If you don't do it right the first time, it's going to be more expensive later on.

Oh yeah, I've seen that. We had a client one time and they got sued because they were selling these knives and the knife had this logo on it that the guy made. He swears he made the logo and somebody else had a knife with a very similar logo. It wasn't exactly the same, but their law— they must have had some good lawyers because they got his whole business shut down.

Yep, absolutely.

And, you know, or the name is taken and it's a, you know, like a national company, right? And they have their, you know, their name filed, you know, probably 20 years ago. It was probably easier to do than it is now. Right, because I see how many, like, are failed, like, in the— when you go looking, especially like my company, pay, you know, Nationwide Payment Systems. Super hard to get, like, payment systems. Like, it's a known word, so they really kind of like narrowed the, uh, narrowed that down. You know, you'd have to come up with a unique name. That's why you have names like Google, Yahoo, things like that, right? Absolutely.

Well, obviously, you know, probably one of the bigger ones, more famous ones, is when the Beatles had Apple, or Apple Record Label, and Apple, the tech company, you know, went after them hard. You know, it's, it's something you got to protect because the reality is you don't want to be several years or several months into your business and this name and this building this brand and all of a sudden you got to change it. Uh, so those are things that are important and those are risk factors that investors look at and risk factors you have to have an answer for as an entrepreneur.

Yeah, there's definitely any time you're in business, you know, there's a risk. I always say, you know, one of my friends early on in my career when I was a chef and, and even I take that to this business that I'm in now for 25 years, no guts, no glory. And you know, you're going to— if you want to go do something, you just have to go all in and do it. But you got to be— you have to do everything the, you know, the right way so that you're protected and you don't fall for scams, because I'm sure there's a lot of investor scams out there too.

Sure. You're absolutely right. You've got to do your due diligence on the investors as much as they're doing due diligence on you. Absolutely.

Yeah, because there's always contracts to sign and paperwork and things like that. So exactly, you want to sign something and all of a sudden somebody else owns your company. Sure. Because of some promise that you made that you didn't know that you made, right?

Well, that comes down to my point in the beginning is do your research while you're building your list and relationships.

Yeah. So if you were going to give, you know, 5 main tips, I'm a starting up a new company, what are the 5 main tips that you would give somebody?

First tip is build something you can sell as soon as possible because sales, selling your product or service is the best source of capital that you can acquire. Number 1. Number 2, build your list and relationships with investors before you begin a fundraise. 3, have all your due diligence information available for investors to make a decision. Have all the information they need to make that decision. 4, understand that traction is important. You have to keep moving forward because even if you don't get a yes from an investor in the beginning, if you continue to build traction, make movements,, you will eventually find the right investor, uh, with your traction. And then the final tip is don't give up. You know, the reality is, um, the vast majority of businesses fail over the, uh, over a 2-year period from starting. So you have to be able to grind it out. You have to live on a ramen budget. You have to be the last person to get paid when you're building this person, not the first person to be paid. But the reality is, you know, being an entrepreneur is a, I think, one of the great things that we have in this country. But again, it's hard work. You have to have a tough skin. You have to be willing to say no and you have to be willing to keep going.

Yeah, you definitely— any time when you're involved in sales, you're going to hear no a lot and then you're finally going to get that yes. And the yeses are golden, you know?

Exactly.

Those yeses are golden. So if people want to get in touch with You, Scott Kelly, at blackdogvp.com. That's your website?

That's my email address. Yeah, my email address is scott@blackdogvp.com. The website is blackdogventurepartners.com. If you'd like to pitch your company to investors, you can reach out to me and sign— go to vcfastpitch.com. You can find me on LinkedIn and all social media channels at Black Dog CEO.

Okay. And do you have any, like, resources on your website for people?

Absolutely. Anyone listening in, if they send me an email again to Scott@BlackDogVP and they put a startup toolkit, I will send them a link to all the startup tools that I have, including a pitch deck template, a glossary of terms that investors are going to ask you, and all kinds of other resources free of charge and that entrepreneurs can use to build their company right and have a more successful fundraising opportunity.

Oh, that's awesome. We're going to definitely put all that in the podcast notes so people can, you know, free tools is important, you know. So I want to thank Scott for coming on the show today. This is a really cool subject because I think startups is like a big thing going on in our economy right now. All kinds of different startup companies are popping up everywhere, whether they're SaaS, AI products, you know, there's a lot going on in the, in the world of business today. Would you agree with that?

Absolutely. It's, uh, I think it's one of the best times to be in business, and it's one of the best times to become an entrepreneur.

Yeah, I'm— I love being an entrepreneur. Someone asked me one of the things why I want to own a business and one of the 5 things they had on their thing was— on their list was spend more time with your family. That might not happen at the beginning, but that's the fruit of the, you know, when you, when you reach, when you reach your goal, that's what you end up with. You end up having, right, better quality.

And I tell people all the time, you have to work harder than everybody else to have the lifestyle that no one else has.

Exactly. All right. Well, thanks for everybody tuning in today to B2B Vault, the Biz to Biz podcast. You can follow us on Spotify, Apple Podcasts, YouTube, and any other apps that you listen to podcasts on. We're on all of them. And again, if you want to check out NPS One, visit our website and we can set you up with a demo. You can get in touch with Scott, go to Black Dog venturesventurepartners.com. Email Scott and you can get your startup toolkit. I might just email them just to see what it is. That sounds pretty cool and helpful to a lot of people that I talk to sometimes, so I'm going to definitely use that as a resource. Peace out, everybody. Carpe diem, and thank you for tuning in.