Lunch & Learn - Session 4

Hi, thank you for joining the Founder's Office lunch and learn. Today we're going to be talking about founder discovery, asset protection, and the six keys of capital. I want to introduce Candace Powell, also known as Sleuth Dog. You'll understand why that's her nickname in a minute. And Tom Powell, we're going to be talking about how to protect yourself as a founder, how to do it, what to do, specific structural things to really make sure that as a founder, you are putting yourself out there in a safe way. We'll talk about some horror stories. What's, you know, what's gone wrong, what we've seen gone wrong, and then how you can structure to avoid that type of disaster. The number one thing you've got to do that we're going to start with is obvious you've heard it, but it can be a lot easier to talk about and think about. And then when it comes to implementation, sometimes things fall off. But you've got to keep your business separate from your personal. So we'll be talking more about that. We'll talk about what this looks like specifically through banking contracts, trusts, asset protection, all of that. But Candace, why don't you give us a couple horror stories first we're going to start low and then we'll go high.

Yeah. I mean, low being relative, right? Because any time your personal assets, which you've worked for your business.

Are put at risk.

That'S a big deal to each individual founder. So we have, we have founders who've lost quite literally everything that they had. I mean, it's like a bad country song, like wife, kids, dog, house, all of it gone.

And then we've had other people that have lost maybe an asset or two or lost time. Time is such a big one. We only have so much. So I think that's an important piece to take into account, is that we recognize that every time that those personal pieces are at risk, it's a big deal. It's a huge deal. The pain is real, it feels real. It is real. And so we, we really honor that. And it's, it's not this like compare of misery, but what can we do in advance? And I know I've been a founder many times over. I've also bought and sold companies. It is so easy in those early days. And I first to admit, I do it all the time.

Combingly on accident. You're just trying to get things going and you're just going so quick and you're trying so hard and there's things that you're putting personally on the line trying to launch something or you're really believing in your product and so or your project or business or whatever it is, and you are willing to take the risk of a personal liability. And so you're putting yourself on the line to see this business business succeed. And a lot of times it works out great. And then there are other times where you get a scary letter in the mail, you get. Something goes wrong, maybe not even with you, maybe with a partner. And now what you have put in place is at risk. Your personal assets are at risk. Your, your personal. Sometimes freedom, various things can be at risk. So that's what I spend a lot of my day doing, is the sleuthing for the benefit of our founders. I spend a lot of time doing some research, seeing what I can quickly and easily find that could be at risk. How are they holding their assets if I can't find things on our founders? That's a great day. Doesn't happen often.

Why are you smiling?

Because I love the exchange for me last night on someone to deep dive on.

Well, you know, so you know, her nickname, Sleuth Dog is appropriate because what have we been able to find on our founders out there? If we're just doing a Google search, for example.

So it is amazing with the technology that we have today, what we can find on people, including on people that think that they are extremely well hidden. And, you know, with things such as the doi, you know, where you have to divulge where it is, or your mailbox, you use a personal, you know, a private mailbox drop company, and now they want all your data in there. The government's really good about sleuthing around, just like Candace does to say, no, you can't hide anything more. And so it has become incredibly challenging to do that. However, I will start with one very basic thing most founders say. My company, most founders are more like conjoined twins with their business or even one in the same, in that they believe they are one in the same in their business when it suits them. And then when a lawsuit comes up, they separate them or try to separate them. And that, that includes not just businesses, it includes assets. So people will say, hey, this is my house. Oh, but it's actually held in a trust or an irrevocable trust or better, you know, better yet by an LLC held by an irrevocable trust and you're paying rent to it. Which, you know, within that scenario, we've even gone to points where it's like, no, you can't do that. It's like, yes, you can. Here's the legal ways that you do all these various pieces. So relative to Candace's front and center of most of the horror stories, many. Some of them have been hers. Many of them have been hers. Learning an ope, which was learning her father do all these various silly bonehead mistakes. Right. So very first company.

Other people's experiences.

Yeah.

Way to learn things.

It is. Except for when I was front and center of that person. But it's just why we started the founder's office is because, you know, We've helped over 500 founders in our career, so we, we get to see the complexities of how they set it up. And almost every founder starts the company not with the woohoo, I get to go set up an llc. Yay. Or I'm setting up a corporation. Oh, I'm so excited. They may be excited to call themselves CEO. We see that a lot. Right. So they want to get the corporation or the LLC set up so they can have a title. And for many founders, it's because we're unemployable. But, you know, that gives them that sense that they're doing something. But they quickly go through those legal documents both. And Jackie, you know this because we do have the wind up pro as one of our enterprises as well. Not just in the setup of the enterprise, but many, many enterprises don't succeed. It's not that they're absolute failures. It's that you moved on to something new. And they don't wind them down properly because they are literally a separate entity. They're supposed to live in perpetuity, separate from the person who is the owner of the company. And then wearing the separate hat of I'm the employee and I'm the owner. And as the owner, you even need to get that right. Are you a shareholder? Are you a member? Are you a joint general partner? Are you a limited partner? How does that go in? So we, we, we use our language all over the board.

So that's what I'm hearing. No matter where they're at in their journey. You often say, best time to plant a tree is 20 years ago. Second best time is today. Say they say that these founders have already started their company and they've been in business for 10 years. What would you tell that founder today or. And this advice goes to those that are just setting up, but what are one of the first things they can do to move the needle toward protecting themselves? As a founder, I'm hearing you say language, language Matters, but what else?

And language is hard to change. I mean, even after all this time, I still find that I'm correcting me and my attorneys and my counsel and our own internal teams through all those things because we have such a pride of ownership and we are putting everything into these companies growing. But the first place to start, Jackie, is with some type of a framework and an analysis of where you are and with a somewhat understanding, although very few people know. Where do you want to go and what. What. Let's pierce it in a couple different ways. What happens if a, if a regulator comes in? How does, how do you want to appear to that regulator? How do you want to appear to a litigating attorney on the other side, if you brought investors in, how should it appear to, how should it look to your family if you pass on prematurely or if you have partners within that organization? What if one of them has to go through a divorce or a bankruptcy? Right. Those two things can absolutely impact how that structure of that company was. And you think through those things. You do not want to be thinking of those. When you're getting your first revenue check, you don't think of those first things. It's also why many times second or third founders are more successful because they've learned these things and they set those things up earlier rather than later.

It aligns really well too, with. So we have our six keys of capital. And really, when you're doing this analysis of your personal relationship with your business, I think it really matches up and it's a, it's a task you should do regularly. This is not a set it and forget it type of process. And why? Because we're humans. We acquire things. So we had, we had a founder come in and actually we were chatting with him as a, as a consultant. We're explaining to him what we do. And.

While he's talking, I, we just do a quick little searchy search. He is telling us, oh, yeah, I got it. I am super. I know exactly what you do, because I'm really well protected. And I search him. We find one of his real estate, real estate assets that's owned completely by him and his wife, that it's not protected, it's not in any sort of entity. And I'm like, is this yours? Is this. You know, and, and we were able to find.

He was blown. He was blown away.

He has a whole team of people around him and he still had some things exposed. And so it's because we, we are people that, that we, we, our situation changes every Single year. So this is a yearly piece, but clarity being one, that's a really important piece. Know where you are. Know where you are. And, and that's the first step you can take. You can have a firm like us do this type of work for you and research and, and see where you're at and see structurally if it's aligned, which is one of our other keys. Is there alignment? Does every piece of your personal puzzle and your business puzzle alignment?

Well, we, we have a risk matrix that we do with our team that starts looking at those things, such as memberships, ownerships, and it can be this simple. So for our council that's on. Or. Or accountants that are on here, we often say the attorneys and the accountants often don't talk. And also the leadership group doesn't talk and this. And the spouse doesn't talk. But here's a most simple one, and I get into debates about this, which is if you are a single member llc, and that means you can be with your spouse, so you and your spouse own are 100% members of that LLC, it becomes what's called a disregarded entity. It can also happen with an S Corp, but there's other structures that happen within there. But so you think you have all the protections of the llc. And I'll have counsel sit across from me and say they do. They absolutely do. And I have the accountant saying, this is a great. Because we can maximize tax returns. I said, okay, so we have cases of where the member. The members of the LLC who are also employees of that LLC get into a lawsuit altogether and in front of litigation when they say the IRS sees this as a disregarded entity. Madam and Mr. Juror. So should we believe the IRS or should we believe this person across the way who's telling you it's not a disregarded entity? So all of those past, all of that protection thought is passed, and it's that simple. Of where the people aren't necessarily aligned. And for most people, being a disregarded entity is absolutely fine. It's just where are you in the structure and course of where you're moving through? Where are you on, you know, the estate planning that you want to do? Where are you in privacy that you want to try and maintain? And the ideal situation is, is that, you know, you control everything and own very little. That's a massively wonderful place to be. It's also an incredibly expensive and incredibly difficult place to be. Right? And most people don't want to be there. They like to be. I own this. They like to paint their name on the side of the airplane and the buildings and everything else. They don't really own it. It's not them as an individual. It's true entities.

I want to share a really specific example to give some color to this and to your point, Candice, why it's important to do every year. If you think about getting clarity in this way, it's really like a visual mapping. And if you were to map it out, it's like you're over here and your business is over here, and they each own their own different things, or they should, right? And, like, liabilities are segregated. And there's. It's like. It's like your company is its own little person with a hat on. Like, you are separate entities, separate people. When I was becoming a bankruptcy trustee, the Department of Justice had to do a background check on me, and I had to disclose all of my assets. I did not know. My father has real estate in LLCs, and each year he gifts my brother and I a little portion of those LLCs. So the Department of Justice came to me, and they're like, why didn't you disclose these assets? And I was. You know, I was like, I didn't. I didn't know. My dad didn't tell me, which was the truth. So I end up looking a little silly, a little foolish. But you can imagine how assets move around and transfers can occur and, you know, your property changes year over year, and you may have transferred something and forgot about it, or you may have set it up personally, intending to transfer it to your business, and it just didn't happen. So to your point, about once a year, sit down, map this out. Give yourself the gift of that knowledge and that awareness first. Once you know where you're currently at, then you can better strategize on where you want to go.

So, Jackie, I mean, we're surrounded by some marvelous trust attorneys and litigation attorneys and document control attorneys, as well as. Then on the accountant side of this, is there any one person that knows it all?

Yeah, Tom Powell.

Shut up.

No, no, no. There is not one person that.

I'm surrounded. I'm surrounded by an incredible group of people who we theorize and say, hey, I think this is the way it works. But, you know, it's in Wyoming, or. I was just in. Well, I still am in Arizona, but we were looking. You know, we're talking about one of the properties that's here, and it's like, okay, how does this get held? It depends upon taxation. It depends upon who the members are within that. It depends upon what the legacy trust is, you know, and so, and we have irrevoc trust, revocable trust, all the various pieces that go in there. It's an incredibly complex system that becomes an organization within itself. Right. Not everybody has to do that. But if you do get, you know, above a certain level in wealth, you're going to have many of those structures or you are just totally wide open. The main thing is, is back to your tree. It's so much easier to to set up from the beginning with the end in mind. I think it was Stephen Covey who kind of coined that phrase, which is if you begin with the end in mind, you can build towards that. However, I do want to caution all of our founders and founders advisors that are on this call. You can take all of the time setting it up as opposed to actually getting to work making revenue. So what you need to do is you need to be able to learn the complexity of doing both at the same time. So you're moving along and I think that's critical. Candice and Jackie, both, you said you need to at least have an annual review. We just passed the final tax season of October 15th. We're starting a new tax season. And if you file annually versus fiscal, you have all these other things going on. Taxes should be a year round conversation, as should asset protections. And where are you moving in the company? And another one. I want to take this totally. It'd be unlike me if I didn't. I want to take it totally off track. We know founders have a lot of intellectual property and today's world of AI, it's more important and more valuable than ever to be securing up that intellectual property. So these entities and how they're owned and how they're controlled becomes a big part of that. Right. So that's a whole nother conversation, a whole nother lunch and learn that we have at some point.

I want to visit back. We're going to do a U turn, but I like where you're going with that. That's a whole other webinar. Ride with me for a minute. We're going to go back to. I want to touch on something you said a little bit. Maybe you can elaborate. So we talk about this annual review. First of all, the system. Wow. We live in this incredible space of being able to start businesses and we've got a lot of great structures. This system is constantly drawing founders back into the fold. Everything from your banking to like doi, every boi, everything you said that is all drawing the founder back onto the board. So while we have all these great structures, the system still wants you at risk. The other piece is when you're starting out, you don't always know what it's going to be. And so I've had founders who have, and we work with a lot of attorneys. Obviously we've got an attorney and lots of law degrees on this call today. Spoiler, I'm not one of them.

We. But I will say that a lot of times when founders are getting started, they go to an attorney who's kind of more a Fusion style attorney. They can, they do all the things they're like, here's your sure, here's your trust. I can do your trust and that can get you so far. But at some level you need a very, very, very specific attorney who can help you build the right trust. So what is your advice to someone when they're in that transition period of they fell into the trap of starting out, everything's on the board, they have an okay trust, maybe, but it's not ideal because they didn't go to a specialist. At what point do they need to go and graduate to that next level?

Okay, so I think they're, I'm going to unpack just the trust side as a simple thing. The trusts get more complex the more you want to do with them. So if all you're trying to do is avoid probate, you can do that through a living and I'm going to oversimplify and I give legal advice here so specifically, but you can do that through a very simple trust that you probably can get done for a few thousand dollars with a trust attorney. It doesn't have to be all that complex. The more complex your life gets, such as you have kids and spouses and maybe ex spouses and you have transfer of wealth that you want to do and it becomes more sizable that it's above the, you know, the IRS standards to where you're going to have transfer taxes and then you have also properties that you have to do. And you have to remember that when someone passes away, you've got to be liquid to cover those taxes very quickly. So that also can leave a scenario. That's where those, those entities and trusts become in that is at a minimum a year long type process of getting set up with a lot of interviews, of understanding where you are and where you want to be. And we do not play trust attorneys even on tv. Right. We advise and we are founder advocates within the trust set up. So trying to understand, here's all the ways that it works. This is why Legal zoom or rocket lawyer not to badmouth them at all. But that's not where it is. It may lead you down asking better questions. We belong to again, it doesn't sound like it makes sense, but we belong to a great group on AI, right? Learning the large language models and all the various things. And one of the great things that's come out is being able to do these meta prompts through actually using AI to help us prompt better type scenario. So the number one thing that you should use with your counsel, both your accountants and your spouse and all the areas is ask better questions and then start walking through those. And even as the your errors age and you age, that changes. Right? So I don't know if I answered your question but, but you need to find the by the way, you do not need to overpay for your trust attorney.

You need to just like you don't need to hire the CFO for a 200 million dollar company when you're at 10 million. You need to hire the CFO that has been at 10 million and can help you grow to 50 to 100 million. Right. The 200 million dollar CFO, unless they've been there, doesn't help you. The trust attorney that you've done it for the Rockefellers is not necessarily the ones that any of us need.

And I think the most important add on there is yes and yes and yes and yes. And don't let any of your professional advisors operate in a vacuum. The more inputs, the more minds, the more eyes, ears, voices the better. So it's super important to have whoever you're using coordinating with those in your life that know all the different phrase and you know, strings to tug on.

So Jackie, how often does it happen? I mean I know but I, you know, sometimes I get distorted view on it. How often does it happen that we're working with a founder and then they introduce us because there's some challenge that they haven't been fully disclosing everywhere along the line or there's some opportunity and they bring us into the fold and immediately counsel and accounting gets bristly and the executive team gets bristly.

Pretty much 100% of the time.

Pretty close to it. Yeah, go.

Well, as we're in there a little longer, I think they recognize the value and come to appreciate it and get to a point where it's like wow, could not have done this without you. And so that's to say we, we recognize that everyone's got different expertise and.

We don't want anyone to feel threatened. Right. This is a collaborative, the more the merrier type adventure.

No. Yeah, I mean, so that is the thing. So there's a great sign that I say, you know, see a need, fill a need, but you're not always the right person to fill that need. But if you are the person and you're sitting there and you look for the questions and good get, get better at asking questions. And most founders don't even know what questions ask. I'm going to take this as a total site. This has to do exactly what we're talking about. Yay. I'm sorry, I was going to write about it. I just left a friend who's in the middle of selling his company is going to make an unbelievable amount of money. They do not want to buy the, the building. And I said, okay, here's an opportunity. This is not just to check the box and it's in your LLC already separately over there. I said, here's an opportunity that you have a credit tenant. The doubt now is coming into the building because a credit tenant is going to own the new company as a setup. So just that transaction, giving everything else is equal. Your value of your building just went up, up. And if cap rates are coming down, which I think they will possibly come down as rates come down, your value of your building just went up again. You've got it paid off. You've got a, you've got a whole thing that you're looking at. We want to structure that lease for the right methodologies of whether over the next two, three, four years relative to that buyer coming in. Because now is the right time to be negotiating that. And we probably wanted to move the building out of an, out of an S corp where you hold it into an LLC at this time of the transaction because you'll have kind of a special area. So that's what a founder's advocate is doing. I'm looking around the corners down the road for both opportunities and risk that we have seen in the past and say, okay, here's one of the things you can do with that. As soon as we get this in, you've got a credit tenant. We can go to an insurance company or a cmbs. We can get you a non recourse loan on that property, pull the cash out, add it to what you have overall and you're actually making arbitrage on the building because they're paying rent above the, the interest rate that you pay. I know fancy, fancy finance stuff that I did.

Okay, questions Questions, Questions. Sorry, questions.

Yes.

All right.

So.

How do you prepare for fundraising and investments and qualify their offers without releasing too much startup equity? And how do you legally avoid fines or penalties to prepare and expand an existing company up to 30, 60x?

Jackie.

Let me start. So this is a kind of a compound question and thank you. It's a great question. How do you prepare for fundraising and investments and qualify their offers without releasing too much startup equity? I'm assuming when you say their offers, you're talking about investors. At the founder's office, we work with our founders to really identify the most appropriate and aligned investor avatar. So not everyone is your ideal investor, right? Your investor audience, your investor pool should be very carefully considered in light of what the problem you solve and what the solution is. So first, when you say qualify their offers, we would work with any founder to say know your investor audience. And then once you know your investor audience, you know your investor motivations. And once you know your investor motivations, you can understand what type of terms will be appealing to your investors. So how do you qualify their offers? You essentially don't qualify their offers. You get to drive the offer that incentivizes or motivates the type of investors you want. Does that make sense?

Prepare for fundraising and investments by knowing who your ideal investor is and what motivates them.

And that really does come down through the storytelling and understand what problem you're solving and then aligning with the pro, the investors who've said that and then also align with what your structures you're looking at. I want to go through a point relative to that alignment. It's critical. So let's go just technical. We can set it up through, you know, SPVs, you know, special purpose vehicles and all the fundraising and capital raising is actually off to the side and not actually owned within the overall enterprise. That's not an unusual structure. You can do other times where it's actually selling equity within that. It can be through debt. That could be a type of a, a sal, a shared appreciation loan. It could be simply through a non recourse CMBS loan if it's real estate or there's so many different ways that we talk about what capital alignment is and so getting within there, it's important to understand what is the, what is the purpose and use of that capital and then let's get that aligned. But I will say that there's a tremendous amount of.

Founders and people just in general public that believe that the capital wants to own a majority of the company. And the reality is, is that if the, if the investor is wise and the founder is necessary, you want to do everything you can to keep that founder engaged and involved in that company. Ergo, this is why, whether you like it or not, but why, you know, you've got Elon Musk saying his next, his next bonus could be a trillion dollars. Well, if he makes the investors that much money, why wouldn't you pay him a trillion dollars? We can argue whether that's right or wrong. But it is like you want that founder. We've known that Tesla really works well with that founder. So it's got to be in alignment. A lot, especially seasoned investors, do not want to take that company away from the founder. They want to have aligned goals. So lenders and owners of buildings should have aligned goals. Investors and founders should have aligned goals. And that's probably the most key to that, that capital factor.

I'm going to go ahead, Jackie.

No, I was just going to move to the second part of the question. How do you legally, to avoid fines or penalties, repair and expand an existing company up to 30 to 60x, I'm going to just go, how do you legally avoid fines or penalties? Let's chunk that off there. Regardless of how large you choose to scale, if you choose to 2x, if you choose to 10x, if you choose to 9000x, the you can legally avoid fines and penalties. Going back to alignment. And you know, it's a lot about disclosures, making robust disclosures and awareness, knowing what regulators are looking at, having a reality check around what the regulation landscape actually is. Tom, I can have you jump in there to speak more to that. There's we have a system in this country where there's statutes and laws on the books. How these things play out in real time can be very different from what the system on paper says it's going to do. So I think going back to ope other people's experiences, surround yourself with those that can give you insight on actual experiences. And that along with being very diligent with your data and your disclosures and what you're sharing with those that are investing that in my, in my mind is the best way to legally avoid fines and penalties. But Tom, I'll let you take that further.

I'll take it all the way around and can probably have 14 hours on this conversation. But most likely, if you are in business, you will not avoid fines and penalties even when you are doing absolutely everything right. And that is an unfortunate model of our business structure here in the United States. We have regulations that are at city, state, county, federal levels. And then you have administrative organizations and you have some that will at times say it's cheaper for you to settle with us than it is for you to fight us. And even though we know you're right, but we're going to use this. And then there's a, you know, a point within some of the administrations that they administrative law, that they will do regulation through finding so they can't get the regulations they want, but they'll come in and they'll put so much pressure on there. And there's a whole nother part called regulatory capture, which is a big fancy academic term. But it's the big, big companies. You take a Wells Fargo, you take a B of A, you take a insurance company, an auto company, a sports team, they're able, they are able to control the marketplace because they can actually control the legislations that oftentimes get passed. And so it penalizes the smaller businesses. Eeoc, the Equal Employment Opportunity, you know, sounds great on paper, but it can put a small business owner out of business very quickly. And they didn't even do anything wrong. They just can't afford to fight it. So thinking that you'll avoid it is not necessarily. We do everything with the right contracts and the ability to say no. Having a great data room and being able to prove that you're right immediately, cleanly and say this was our thought process if you need to go to court of law. And again, we have not to get too technical, we have civil law which is like somebody bumps into you in your car and they're going to sue you for bumping into them. And we have criminal law, which is when the federal government says you're a criminal and we're coming after you and you're going to lose your liberty you want to protect. There's different, different levels. Sorry, way too complicated for lunch and.

Lunch.

75 lunch and learns for all of those topics because yeah, it is a lengthy conversation and it is what we have to go down it. And we unfortunately have seen so many of those scenarios play out with so many of our founders at various levels. And sometimes when we're brought in it is pretty far down the line. And so we're working on maybe how we can help kind of structure on the, the aftermath side. We do have a number of questions. I think some of them got answered. So I'm going to try to, I'm trying to filter through and I want to get a couple more in really quick. We kind of talked about the beginning of how you, the, the system wants you to kind of put all of these. They want you on the board.

Right.

So one of the questions is how do you recommend balancing personal guarantee guarantees or collateral with protecting the founder's core assets? We see this all the constantly.

Well, there's, there's sneaky personal guarantees that most don't even think about or recognize which is a. You saved a client here not too long ago, Candace, on a million dollar ongoing guarantee for a lease. They were simply signing a lease for their $55,000 franchise that they had thought that that's all they were investing. But the ability to get the building was subject to them signing a personal guarantee that was going to last 10 years. It's a million dollars that they signed to. Right. So you need to look and understand all those things. Most of those business credit cards that people have, they're not really in the business name. They're actually in the individual credit and on the credit name. Oftentimes when you borrow, those are the things. So the number one way to not have personal guarantees is to get big enough to where they want to do business with the business standalone. And that's usually in the range of about $10 million in revenues. Annual revenues, not always, but that can be also about $10 million in assets is another one in real estate. It's usually at a 60% loan to value or lower. It's when it's a cash flowing asset. So there's lots of different structures to look at but it is principally a major way. And having seen just recently we had one, you know the, the bank sends the notice of default and a summons on mother's day to the spouse for a technical default on the transaction. Meaning they weren't behind on payments, they weren't on anything, but they had the technical default from the bank. Right. And so that's an ugly situation and things you want to try and get out of.

I mean. Yeah, I don't know. Jackie served at school pickup and I mean church.

Church, church, church events, Sunday lunch. Yes.

We wanna, we wanna get those untangled as best we can.

Yeah. Okay. Jackie, do you have anything else to say on that one?

No, let's move to another one, a more present one.

We're coming up at the top of.

The time for founders who've been in business 10 years or more. What's one often overlook when it comes to cleanup or realignment?

I'm going to jump back to that visual mapping. I think founders who have been in business 10 plus years, it's easy to get going. And caught up in the spin and the chaos and the forward looking momentum, growing, scaling, and it's worth a 10 minute sit down to look backwards or at least to go, what is my current reality?

Super valuable in terms of cleanup and realignment. But I think, and it's natural, it's human instinct, especially with CEOs, entrepreneurs, founders, you're forward looking, it is drive, it is pedal to the metal go. So I think that's probably the one area that often gets overlooked.

Yeah, these, these entities are set up to protect us, not to bind us. And the last thing most founders want is to be bound.

So oftentimes we find that they're bouncing around making decisions without actually getting the documents to match what it is that they're doing. So they think it in their head, they tell someone on their team, they think that it gets documented into it. It could be. You know, one of the reasons I love LLCs, no matter what state it is, is because it gives so much flexibility for management leadership growth opportunities. And you can do those without having to have a board meeting, right? You can do those through the operating agreements, you can do those through authorizations, you can do those from a number of different ways. In many states they don't require that you have formal board meetings, whereas in corporations you do. You know, in most cases, I'm speaking really with generality, but what happens is what they verbalized, which can still be a contract, did not get written down. So it's like, no, that's been my attempt. It's been six years ago. We've always done it this way, but it never got documented. So that's probably after 10 years is coming back. And by the way, this is the million dollar statement, both from a legal standpoint, I guess, never backdate a document, meaning it's okay in most cases to say in December of 2022. We discussed this and this is the formal documentation of that. This document is effective as of December 1, 2022. Sign today's date and that makes it then in most cases a representative thing that could stand up in that scenario. What you don't want to do is then sign it December 22nd of 2022. And it is actually 2025, because that then is an illegal, improper document executed.

The only exception is when you're writing something and it's like an important date and you write the wrong year, like somebody's birth year, like yeah, I do.

Every time when it comes around to my birthday.

You get your own birth year wrong?

No, I get My birth year right. I get the current year wrong.

Yeah. Like when you're writing something on your birth date, like, here's a check and you write your. Your birth year on it. That's the only acceptable accidental back dating.

So we've got a number of more. We've got several more questions. I'm gonna do just kind of one last one here, but. And then we can close out.

We'll send everybody else out the answers. We'll run them through.

Yeah, perfect.

How do investors view founders who have personal asset protection structures in place? Does it ever raise red flags? I like this one because again, the system's always trying to pull you back onto the board. And so much of what you're raising, especially in the early days, is belief in the founder. So I think that's an interesting question.

It depends. And I would say that someone that wants, if they really go back and they read, you know.

The Merchant of Venice, and they really, as an investor, want to be a character in there who demands a pound of flesh. That is not the right investor that I would ever put anybody with type scenario. Does that mean we want to do business with a.

Uncouth operating offshore founder that's ready to take $400 million? Whoops. Did we have somebody like that in our past scenario? You know? Yeah, no, that you need. You want to have scenarios and do. I will close out with this, though. Every single contract. And Jackie and my legal team knows this. I always say the contracts are only as good as the people that are behind them and your willingness to litigate, to enforce it. So in most cases, what hopefully your contract is doing is writing down the rules of the game and engagements, and you're getting those down so you can follow that all the way through the life cycle of whatever that partnership is, whether it's marriage, whether it's a, you know, joint venture, whatever it is, that's where it is. And then you have the ability to come back and say, hey, things have changed. But if the person doesn't have integrity or the person's just always in litigation, then that's probably someone that you need to understand. If they acted that way with somebody else, they're going to act that way with you. And so don't be surprised if they're a scorpion or a frog. Right. So that, that's the same.

I was thinking the same thing. If it's, if it's a red flag to the investor, that investor may need to be a red flag to you of how much of your, how much of your Flesh do they want?

Well, we have, we had a couple of these actually come up at times where in, you know, finding out where the investor got their money. They're like, oh, I invest in companies, then I sue the company and then I get a big windfall. And I'm like, why did you take that investment?

They just told you they're going to be suing for the investment. At the end of the day, this is their operating model. Right. So we're getting told to wind up here. Jackie, you want to take it into the. To the close out here, baby?

All right, I got you, sleuth dog. I really want to sing, but I'll save that for another. I'll save the hook for another webinar. Hey, are we having people coming back with a problem?

What are we having a women, Are we having a women talk finance next week? Aren't we at our live event or is that, is that getting postponed?

Yeah, yeah, no, we're gonna do it next week. So. Okay, a couple things go to foundersoffice.com. founders is plural. Foundersoffice.com. there's two things there you can check out. One, info on the Capital Edge Summit. It is last minute, last days heading into this next week, we're in an event, we're doing two and a half days of action packed content, teaching the six keys of capital, getting founders capital ready. If you can hop over to Lake Tahoe next week, join us. The other thing on the website, and there's the QR code. Thank you, Mike. The other thing on the website on the founders office.com is a little button that allows you to upload your pitch deck. And on a complimentary basis, we'll take a look at it, we'll kind of examine the components of it and give you a little boost with storytelling. Thank you again. There it is. That's the little button. Upload your deck to your question. Tom, next week at the Capital Edge Summit, we're going to do two things. One, you're giving the keynote talk that is going to be live streamed to the webinar to the Lunch and learn webinar your talk. Well, I know I don't know how the box. How are the Brady boxes on yours?

You guys are this way.

I'm pointing at him this way.

Okay, so Tom is giving a keynote that will be live streamed behind the scenes at the Capitol Edge Summit that will be live streamed for the lunch and learn next week. Candice and I are also doing a live taping. I was just about to steal Bailey's thing. I was like, san Jose, San Jose. I won't do that. Candice and I are doing a live taping of our WTF podcast. And we're going to talk about. I don't know that we want to put the words right and wrong on it, but not all capital is created equal. So we're going to dive into capital and alignment within some of our guests.

That are coming out on that for our. Because it's not just YouTube. Well, it is YouTube. That's plenty. But who. We have some other female entrepreneurs and founders that are going to be there as well. Right. Going through this. We do.

Gary Sanchez, who founded YOS Learn your why. He's going to be speaking on the why. And I believe all guests get a complimentary Y assessment.

They do.

We've got Jim Gadette, who's just a powerhouse. And we're really excited to. And I'm like.

Because I think I need to keep up with her.

I will. I will never. Like, I'm not packing anything because I just. I acknowledge right now there is no keeping up with Jen.

Good day. We have a lot of.

What about Betsy? Bestie Betsy.

Betsy's coming.

I'm so speaking on the blind spot multiplier. Yeah. Super excited for that.

Yep.

We've got. We've got Kevin Peterson, who runs the SAS sastermind. I believe he's going to be one of our panelists as well. And that'll be really fun.

So, yeah, I know I'm missing like a couple. Really great.

We're missing every. A bunch of people.

I'm missing a bunch of people. You put me on the spot.

We've got.

Come to the event and you'll find out.

Chris Jarvis. Yep, he'll be there. I think he's. He's got some of his books that we. Yeah, we've got a lot of great people. It's going to be a really cool room. So we're excited.

Thanks for joining us. Come next week, you'll see behind the scenes at the Capitol Edge Summit.

Thank you.

Bye.