“Should You Bootstrap Or Raise Money?” with Dave Woodward

Hi, everyone.

This is a hard intro for me to record, because today's episode is a tribute. It's a tribute to Dave Woodward, who sadly passed away from a long battle with cancer earlier this week. Dave was the CEO of ClickFunnels, and he was a friend of Capitalism.com. he sent people to our work. He featured us on his podcast several times. And he was very edifying of you. He was edifying of what you're doing in the community, what we as a community have done and the impact that we're having in the world and the way that we're changing the way that capitalism is done. Dave and I only met a couple of times, but he always went out of his way to edify our community, to talk about how impressed he was with everything that we're doing. He checked in on me as a friend. Even in his last days, while he was wrapping things up and focusing on his family, he reached out to me to check in on me. He was just that kind of guy. And if you ever met him, you felt that, too. He was the biggest smile in the room, no matter what was going on. And he always put others first. He ran ClickFunnels this way, too. If you've ever been to one of the ClickFunnels events or you've been impacted by the content or the technology that they've created, it's always been focused on putting the customer first. That was a reflection of how Dave operated in the world. So the team and I dug up this interview that Dave and I recorded together that was about making a bigger impact as an entrepreneur. We talked about raising capital. We talked about impacting your customers. We talked about strategy, we talked about going bigger. And that was how Dave lived. Dave lived to create ripple effects. That's what we do as entrepreneurs. It's what we do as capitalists. It's what we do as business owners. And Dave did exactly that. Dave left ripple effects that will continue on for generations. He did it with his content, he did it with his network, he did it with his company. So we simply dug this up as a tribute to Dave because he was a kind human being who left an impact on our community as capitalists and as entrepreneurs. I want to give a heartfelt thanks to the good folks at ClickFunnels for choosing such a kind leader who put other people first. And I hope that the ripple effects that he created continue on through our community and through all of his customers for generations to come. So if you knew Dave or if you were impacted by his work, even if you didn't know him. This episode is a tribute to Dave.

Dave, wherever you are, I hope they.

Have headphones and that you appreciate this tribute. We appreciate you, dude.

All right, everybody, welcome back. I hope you loved the first episode with Ryan Moran. This one, we're going to spend a whole bunch of time really diving into this concept of bootstrapping versus raising capital. I'm a big fan of the bootstrap thing. I think it's important that you understand how to actually make sure you've got a product that sells. But Ryan's got a really cool twist here that I think you're going to love on the idea of as far as vision and how it ties in to raising money or bootstrapping. So you're going to love this episode. Hang tight and we'll jump right into this one. Welcome to ClickFunnels Radio, where we go behind the scenes and uncover the tactics and strategies to top entrepreneurs are using to make more sales dominate their markets.

And how you can get those same results.

Here is your host, Dave Woodward.

Well, I know that as you take a look at scaling and growing businesses now, so we've talked about this idea of. You, first of all, have to have the vision. And part of that vision, I think, as you just alluded to, is if you can pick the who, it's a lot easier to have a vision on how you're going to actually identify and serve that whole. But so you've got the who. We talked a little bit about this idea as far as who, not how, as far as the people you're gonna be bringing in. When it comes to raising money, this is one of the things that gets super, super scary for a lot of people, myself included. When I first got started, I'm like, I've got to have all these crazy things going. I got to show them all this. I have to sell why they needed to basically give me money. And I'm fascinated to see the way in which you've gone about helping people raise money. So I'd love for you to kind of strap a little bit on that and expound on it.

Sure. So to kind of make this easy, I think Trevor Blake described it to me in the most succinct way. And Trevor Blake is an entrepreneur who has built several pharmaceutical companies or healthcare companies. And he didn't start his first company until he was 43 years old. And within 10 years, he had had three exits totaling $300 million. Today, those businesses are worth $600 million, according to him. I haven't checked his bank balances or anything like that, but this is what he tells me. And his model, he calls it the hub model. It's so similar to what I call the owner's model, it's almost creepy how similar they are. But Trevor talks about casting that vision and then you selecting what agencies or outside partners you would partner with if you had all the money in the world and having conversations with them and saying, if I decided to do this project, would you be open to working on this? And that's often contracted people or it's agencies that are all in one services, which you can find everywhere. Now, you literally don't have to hire anybody. You could just partner with agencies and.

Be good to go.

You can have everything outsourced. Most people don't because they lack the capital. Well, if you can show a vision and a team, even if it's all on paper, you're now liberated to really get behind the vision and the people that you need in order for that vision to take place. That's the role of a founder, and that's how money shows up. That's how capital shows up. When you can say, this is where we're going and this is the team that's going to be in place to make this happen. Now, money has a role. Most people say, I need money so I can build out my vision and get the people. It's not how it works. I was consulting with them with a team here in town, and I'm getting them to separate out their different profit centers at different businesses, then bring in leaders.

And managers for each division of their company, and they will 5x as a result of this change. And the CEO was saying to me, but I don't understand how we're going to get the leader of this division if we don't have the money to hire them. And I said, no, no, no, no, no, no. You go get the leader of that division and that's how you get the money. You put the right person in place. Money's job is to fund and sustain that good work to sustain the service that your business is bringing to the world. So job of money to fund and sustain service to one another. Most of us put the money on a pedestal thinking that's the end result. It's not. It's the fuel. So the way you raise money is to have a really clear vision to put on paper who the people are that will be bringing out that vision. And then I like to make a list of 10 people that I want advice from, because if you ask for advice, you get money. If you ask for money, you get advice.

So you can have me say that again, because I'm going to have you say that again, because I think people screw that up all of the time.

Yes, if you ask for money, you will get advice. If you ask for advice, you'll get money. So 10 people that you'd love to have involved in this project. Take your vision, include those people that are going to be involved, and you say, can you poke holes in this vision for me and ask for advice and genuinely want the advice, Genuinely want the advice, not the money, and then they will give you advice. And if it's. And if your vision is what you believe it is and you have the right team, they'll say, you know, I really feel like I know somebody who would want to invest in this. You won't get down the list of 10 before you have more opportunities and more money than you know what to do with. And so it is. It is not about the money. It is about the vision and about the people, and it is about you staying in the owner's chair. And then the resources start to show up to be able to fund that. Now, with that in mind, you have to be comfortable giving up a piece of this baby that's worth $0.

I work with so many founders and entrepreneurs. Like, I think I want to give up 30% of my business that has never taken a sale before. Really? Like Elon Musk only owns 20% of Tesla and he's the richest person in the world. But your baby that has never sold a thing, you want to keep 100% of that. Tell me how this makes sense now, if you are already running $100 million business that you bootstrapped, raising money may not be necessary. What is necessary is for you to have the vision and the people for you to carry out what it is that you want to bring to the world and create in the world. So to wrap this up, it is about putting the vision on paper, having the right people in place, and then having conversations with people where you genuinely want their advice and the right resources to show up.

That's.

That's how you raise money. You know, I think it's what you.

Don'T look for the money, because I know that. Again, we'll use clickfunnels as an example. When, prior to clickfunnels even getting started, when Todd basically just flew out for the first time with Russell with the whiteboard and getting everything set up as Russell took him to the airport, that was the one thing Todd said is, listen, I don't. If we're gonna do this thing, I want to be a partner. I don't want to be an employee. I want to be a partner. And his first time. Russell's ever taken on a partner before, and he's like, I just. I hate. I want the control. I want 100%. And Russell, every single time he's on stage and funnel hacking live and many times throughout the year, will continue to say it was the best decision he ever did, aside from asking Colette to marry him, which is also a partnership. Which is a partnership.

Right? Absolutely is. And according to the government, it is an equity partnership.

Exactly right. As you know.

And Russell would probably say that he's created more money from having that freedom in that partnership to be able to go and do what it is that he has. Right. So.

What I tell people is your goal is to not control and eat the whole pie. It's to bake the biggest pie possible. When you are trying to control the whole thing, you end up minimizing its growth. And yes, there are outliers to this. Right. Sarah Blakely built a billion dollar company and owns 100% of it. Yes. Right.

There are instances in which this isn't the case. It's very rare that one person controls the whole thing. So a great example of this is my business partner on the last company I built and sold. His name's Matthew. Matthew. And I like to joke that if it wasn't for me, Matt would have built a company that made $2,000 a month in extra income for him to fund vacations. But if it wasn't for Matt, it would have been an idea in my head that never happened. So both of us were necessary. Without him, I am a crazy visionary who's worried about running out of money. And without me, Matt is this amazing executor who loves to pursue ideas that make an extra $10,000 a year.

So both of us are necessary. And guess what? We gave each other half. We sold the company, and he got half and I got half. If it had just been me, it would have been worth zero dollars. And so. And you know what else is. You know what else is interesting, Dave? I work with entrepreneurs who are building companies to sell them, Right. And at the end of their business, when they are ready to go get a multimillion dollar check, when the company is worth the most it's ever been worth, they're completely fine. Giving up 10 to 15% to a broker. Oh, yeah, they're just of course, I'll give up 10% of my company to a broker when they've done nothing to build it. But to give up 15 to 20% to an investor to give you 250,000 to a million dollars upfront when you've done nothing. This. This is what you're wanting. This is what you're wanting to protect.

So the mindset just makes no sense when you play it out. The only way it makes sense is when you remember that your goal is to build a big pie that's in service to other people. You don't matter. What matters is what you are doing for other people in this overall journey of being an owner. And when you can operate from that place, you end up getting all the money too, and all the resources start to show up for you.

I love that. I can tell you that. It's just so much fun for me as I take a look at the different businesses. I've had so many different businesses in my career. A lot of them made absolutely nothing or lost money. Those that actually did make the most money, though, are those that I had a partner. And it's interesting for me to see you go from that scarcity mindset of man, it's my idea. It's my baby again. I always laugh when I'm watching Shark Tank or anything like that. And you see these people, like, really? You're gonna squabble over that? I'm like, first of all, you don't even. I'm shocked they're even giving you the offer they're giving you. But that's a totally different story. But I think the thing I'm really curious in the last few minutes we have here, and that is we at ClickFunnels talk a ton about this idea of bootstrapping, and it kind of goes against some of the stuff that you're talking about. So I wanted to address bootstrapping versus raising money.

Sure. So, like, I'm a bootstrapper.

Right now. As of right now, I own 100% of capitalism dot com. It just so happens two days ago, I was researching a VC firm that invests in the visions that I'm casting for capitalism dot com. I'm not opposed to bootstrapping. I'm not opposed to raising money. I am opposed to visionless businesses. And if you have a visionless business that is just about extracting money, you shouldn't raise money. You're in extraction mode. When it is time for you to hit the go button on creating a vision, sometimes it's faster to partner with people who take the capital off the table. Because all of us entrepreneurs can relate to a time in which we made a decision that was for the money versus for the long term benefit of what we're here to build. We've all done it right and it's not necessarily a bad thing. But when you can take that off the table and just go build the vision, it happens faster. You build the vision faster, you can de stress the business and the process of being an entrepreneur. So raising money is a wonderful thing when you have a clear vision, a good team and you're not in the capital position to build this business from a place of ease, that it solves those three problems. And when you're operating from a place of ease and you have a team and you have a vision, you're able to become a real capitalist who makes millions and millions, sometimes billions of dollars. Now you can do all of those things. I mean, Gary Vaynerchuk would say move in with your mom and don't spend anything and work 12 hours a day building your passion. That also works. So I am not opposed to or married to either approach. I am married to building businesses that are in alignment with the vision that I want to bring to the world and the change that I want to create and, and never compromising that in order to solve a short term problem. It does not mean I've never done it and never do it. Sometimes I do. I also am open to raising money on all projects in order to liberate me even further to be able to make less and less of those short term decisions. So it is neither one is better. But what is absolutely necessary is that you have the vision and the change that you're bringing about in the world as opposed to how big this is going to be, how much status I'm going to get from this, how much money I'm going to make from this. And those two ideas are what separate that entrepreneur and that owner.

And I love it. Again, going back to scriptural reference without vision that people perish. And I think businesses die. I've seen it happen so many times where the visionary loses that side of their vision and all of a sudden business slows and then it eventually collapses or the competition comes and just gobbles them up. And I think I love the idea. As far as visionless business, I note I wrote down there is to make sure that even with clickfunnels it's one of my biggest focuses for this year is how do you cast a vision that gets us from 150 million to 500 million in the next three years. And it all comes down if I know for myself, if I can't cast that vision, we'll never get there.

That's right. And the only way you'll get there. Oh God, I love this. Is when you can think only about what the customer wants, which requires you to actually think smaller, actually requires you to think about the individual rather than how do I get the 500 million? You have to think about that person who is entering into clickfunnels for the first time, what their goals are and how we create an experience that is so good for them, so helpful for them that they can't help but use us for a long time and tell all their friends about us. And in order to do that, you have to sacrifice things like short term profit. But you end up building a $500 million company. And sometimes when you answer those questions about how do we relentlessly serve that person, you will look at how much retained earnings you have and you say, I think we might need to raise some outside money for that. I think we might need to go get some resources to be able to allow us to effortlessly serve that person. Now you might not have to, but that's where that question comes in. Most people will say, I think in order to raise, I think in order to make a $500 million company, we'll have to raise money.

It's the wrong order of operations. I think in order to create the product that changes that person life, we might have to raise money. That's when you raise money. So a great exercise for this is I like to just try on beliefs.

So one time I was in kind of a quiet place, I was alone and I was just journaling about what I want. And I realized that as I was writing this out, I believe that I can be a billion dollar business owner. I believe that I don't know what that business is. I don't know how I'm going to get there, but I believe that I can. And so I said, okay, if I believe that I can, why do I not have the project that I believe is a billion dollar project? And I realized that I had conflict. I believed that the projects that I'm working on now can't be billion dollar projects.

Oh, that's interesting.

Okay, well, so I decided I just want to try this on. What if I believed that what I was working on right now was a billion dollar project? What if I believed to my core that I had a billion dollar company that I was running right now how would I view my business right now if I believed that it was a billion dollar business and all of a sudden I looked at my business, said I wouldn't be doing that anymore. I wouldn't be doing that anymore. I wouldn't be doing that. You know what I would be doing is I would be doing this and this and this and this. And it was all about creating something that was immeasurably valuable to the end user. And when I thought about it like that, it was like the billion dollar vision was right there. I mean it was just right there. And that's when I said I might have to go get some outside resources for this. I don't know that I need outside resources for this, but I might need to go get outside resources for this. I have no problem going out and getting outside capital or resources in order to fund the billion dollar vision that I know that I can run and that I am unique to bring to this world. But it would be a mistake to do that for the thing that wasn't there in order to compensate for a belief that I can't run a billion dollar business. So I'm going to go raise money to justify it. And so I like to just try on these beliefs, see how they feel and see what lens I look at the world and myself when I try on that belief. And if I don't like it, I can take it off and put a new one on because we're capable of that as human beings.

Dude, I love it. I'm smiling from ear to ear on because I literally went through this process about four months ago where we ended up giving away to our. We had business partners and two seven figure businesses. And I was literally having the conversation with Todd and Russell. I'm like guys, I don't think, I think this is more of a distraction for us and it definitely is for our customers. We've now confused the message for our customers. They don't know which way to go. And we literally gave away again just I believe the friendships are more important than the money. I just personal feeling on some of that stuff. And so one of our partnerships was with with Dean Graziosi and Tony Robbins and mastermind.com it was a huge successful launch. It wasn't the right thing for us long term. And so we just gave it back to Tony and Dean. We did a huge launch with a webinar. It was actually a software that Anthony Morrison created webinar Fuel seven seven figure launch. And it just wasn't the right thing for Us going back. And so we gave it back. He gave us commissions for what we had sold but gave it back to him on. On for that.

Amazing.

But because the interesting thing is I rolled into the over the holidays I was thinking of what you just said. I said what's the most important thing for our customers? And for me it was I needed, I need to take over support. I need to run support and I so literally we're. I'm recording this 21st January. We now have 24. 7 support. We now have social media support. We now have a basically these long cues of how long was it going to take to get support. I'm looking at how we can actually implement video support, chat support, phone support.

Good for you.

And it's all because of what you're just saying there as far as putting on that belief of you know what, what do I believe is the most important thing for our customer? So thank you for that. I love the idea of trying on beliefs.

That's beautiful.

Good for you. Good for you Dave. Thank you.

So real quick, I'm sure people are going to want to know where to go. Where do they go send them to.

I mean look, the most affordable and most accessible way that people could interact with me is my book is called 12 months to 1 million. You can torrent it, get it from the library, I don't care or you can get it from Amazon for 20 bucks. I think I make three of those bucks. So have at it. My conference that we talked about at the top of this call the capitalismconference.com and if you go to capitalism.com owner I have kind of a write up about the owner's model that that is talking about the transition from entrepreneur to owner.

I can talk to you for days on end. I appreciate Ryan so much just your time and appreciate all the value you continue to give.

Sometimes you got to get me out to Boise. You got to bribe me with a steak.

Or something to get me out to Boise.

We will get you out. I would love to have you out here. It'd be a ton of fun.

Great. Well thank you so much for having me Dave. I love coming on.

Thanks so much buddy. Alright, so we've decided to do it one more time. Earlier this year we had the opportunity of creating the 2 comma Club Live virtual event. We had over 5,000 people there and they had the opportunity of listening to Russell and some of the other two Comma club award winners roll out exactly what it takes to be able to create a roadmap that helps you get to the 2/club. You can go to clickfunnelsradio.com 2ccl number 2ccl stands for 2/club. Live there, you'll enter in your credit card. The best part is, we don't charge you anything at all. You get to listen for three days to Russell and the other experts teaching you exactly what you need to know. And then at the end of the three days, if you like it, then we charge your card. If you don't, just let us know. We won't charge you a thing. But you get three days of listening from Russell and the other experts helping you create your roadmap to the 2, Club. Just go to clickfunnelsradio.com 2ccl Again, clickfunnels radio.com forward/2ccl See ya.