Roland Frasier & Oliver Schmalholz - How To Create Both Long And Short-Term Wins As An Affiliate

The affiliate model as it is currently engineered is really one of income or what we call a short term model. So thinking about, how do I build wealth and get to be an affiliate? When Oliver and I were talking and brainstorming and we, we just said, oh, well, what if you could do both? What if you could eat your cake and have it too? And so we still allow through that platform, people to sell the things that they own who don't have marketing or want additional marketing through affiliates. Those are called publishers. And we have affiliates that are out there selling the thing. And they get both. Well, they get the option to determine how much wealth would they like to build and how much income would they like to create.

This is an intro. Intro, intro, intro.

Hustle and Float Shark with your boy.

My boy, Matt Wolf. Joe Fear.

Hey, welcome back.

What up, yo? Hi. Today was cool. I would say this episode. Today was cool in general too, but this episode just. Cherry on top. Ding.

Yeah, this is. It's not a normal podcast day. This is actually a special call that we planned. This is actually with two of our business partners and we're talking about a new endeavor that we're involved in. And we thought it would be really cool to just. This is kind of a discussion that we'd have anyway with our partners on this project and discussions that we do have. We actually have a standing meeting with the Unicorn team, which we'll get into what Unicorn is in a minute. But we have a standing call with these guys every Friday. And so this is the kind of conversation we have anyway. We're like, let's record these conversations. Let's put it out on our podcast and let's let our podcast listeners sort of hear what we're up to behind the scenes of this new project that we're really excited about.

Yeah, yeah. And you'll hear it. It's definitely focused on. You mentioned Unicorn. It's this. It's a new entity. It's a new platform we're building out called Unicorn Equity. And this is one of our fun projects. And luckily we're working with two amazing, brilliant minds and it's been really cool. So, yeah, this is the first time we've put something together publicly with the four of us and really explaining. So Roland Frazier is one of the guys there here and he dealmaker extraordinaire, of course. You know, like now he's been doing these challenges online where thousands of people are learning from Roland and all the different interesting deal structures he's doing to buy and sell businesses, get, you know, Majority stakeholder ownership of businesses. So he can actually direct it to, you know, he has this whole plan, can't even cover it here, but countless deals. I asked him how many deals have you done? I lost count. Yeah, it's a lot.

And then, and then we've also got Oliver, small holes on the, on the call and he, he's also a deal maker. He's made some amazing deals where he's earned equity in some companies and had some massive cash outs too. And massive cash outs by doing that. But he's also tech wizard extraordinaire. He knows the software development game and he's the sort of tech guy figuring out all the tech with his tech team on building this unicorn equity platform. So real quickly, why don't you just kind of give the like elevator pitch of what is unicorn equity? The pitch, the other elevator pitch, I.

Mean doors have just closed. The elevator is now mine.

Roland does a much better job of pitching it later in the call. But now I want to hear.

You haven't even heard my pitch. What the heck?

Well, no, a much better pitch than what I've probably given, but probably a better pitch than what you're going to give.

But let's hear it, you jerk. No, so the idea here is. So we're affiliate marketers. Yes. We've been doing that for 10 plus years. That's straight up commission, you know, it's 100% cash commission. It's great, you can do really good stuff there. But you know, we want to actually invest in companies. We want to grow some long term portfolio of assets, companies that we really like. Unicorn gives us the ability to do that. As an affiliate marketer. We don't have to change anything. We're just earning into a company now that we believe and we have this little slider thing that we can actually pick and choose how much cash or how much equity we want to earn per sale. Right. So that's on the promoter side. Of course there's a platform. So there's another side. There's SaaS, founders and software companies who are locating, looking, looking for marketing help. But they're willing to invest a portion of equity in their ownership in their company in exchange of that. But that ownership is deferred into the future. Yeah, like so they're paying out a portion of commissions and a portion of equity and that commission obviously isn't going to be paid until a result happens. So promoter actually does what they say they're going to do is which sell some stuff and then at the same time they're going to pay out in, you know, a liquidity event. So if the company sells or something happens in the that equity, they are then deferring that payment to the promoter at that point. Yeah. So really cool.

Essentially, you know, as you mentioned, we're big affiliates. And so just like a real kind of quick, easy example, let's say that there's a product that's $100. It's a software product. It's a, it's a hundred. It costs $100 a month and an affiliate makes 50% commissions. Right. So the way it would typically work is we would promote it as an affiliate. If we make a sale on it, we'd make $50 per month until that person canceled.

Yeah. Right.

Now with a unicorn equity style deal, there's a slider and we can say, well, okay, that 50% commission that I would normally earn, I want half of that commission to be in equity of the company and half of it to be in cash. So I could set the slider at 50. 50.

Right.

I could set the slider at. When I make a sale, I want to get $25 in cash and I want $25 to be invested into the company as my equity in the company. And you can adjust that slider however you want. So if you really, really need cash, you could say, I want all of my commissions to come to me in cash. I just, if I make a hundred dollars sale, I want $50 in cash on this. You're not gonna earn equity in the company, you're just gonna get the cash. You can also go the other way. You can also say, I've got plenty of cash right now. I want the entire $50 commission per sale to go towards equity of the company. So you can sort of manipulate the sliding scale and earn both cash and equity in the company. Now, Roland and Oliver, once we get into this conversation, they'll kind of explain more of and nuances of the program, but that's the general idea. And then as a software founder, you're getting, basically you're giving up some equity in the company, saving you basically, you know, cash right now, right?

Yeah.

So you're gonna give up some equity in the company, saving you some cash flow in the short term and get just a army of promoters and affiliates on board, like immediately.

You don't have to worry about marketing as a company if you join. If you're a software company who kind of fits the criteria. Roland, you know, we'll talk about that in the episode. Yeah, you don't have to you have an army of affiliates and promoters who are there to do that marketing work for you. I still think Roland's explanation probably wins, but probably. You can always write if you're listening to us and you think otherwise, if you think we're just the. Just go post in our group and tag Roland or something and go to the Facebook community.

Just kidding.

Sass and Roland. But yeah, that's the model. And I mean, really, this interview. So obviously there's questions that we're asking that we knew answers of, but it's for the fact that we're being an interview. Yeah, interviewers. Which is a weird thing because we're part of the company. So it's like we're asking questions based off of all the things that, you know, other folks have asked us. Exactly. In the course of conversation. So I think it's really cool.

There's some other little nuggets in there.

You're going to.

You're going to hear about some creative deals that both Oliver and Roland have done. You're going to hear about this cool, epic challenge thing that Roland was just working on that's gone really, really well.

And that model right there is absolutely amazing. Look into it. And if you have the opportunity to go join one of them, do it. We are not affiliates. Do it. Yeah, it's amazing. Yeah.

And yeah, we got Roland to tease out a little bit of information about what's coming up with the upcoming Traffic and Conversion Summit. So that information will be in there and you'll also learn about how this whole thing came to be, how me and Joe and Roland and Oliver all kind of got together to do this thing. You'll kind of hear a little bit of that story as well. So lots of really cool stuff in here, and it's gonna be cool.

So we got the notes. There are notes on specifics and things that, you know, there's a lot of little nuances like you were saying. So get the notes if. If this fits you as a promoter. Because, I mean, let's be honest, everyone can be an affiliate. Like, we've talked about that. That's actually one of the most common things we're asked is like, how to be an affiliate marketer or it's like an interest. I know nothing. Well, guess what? Like, any business owner can. So this is probably perfect for you. If you're thinking that whole piece of the business that you don't figure, you don't have figured out. Well, this could be a good one for you. And then also, yeah. If you're a product owner, Software SaaS founder. This could be a good one. So the notes are free for two weeks?

Yep.

And they're at hustleandflowchart.com comp, C O M P. That's hustleandflowchart.com Comp. Or you can text the phone number 38470 and the word comp to that. That's 38470.

And also, if you want to learn more about Unicorn Equity, go to UnicornEquity IO. You can sign up to be a promoter or AKA affiliate over at UnicornEquity IO. So go grab the notes, go get yourself registered at Unicorn Equity, and let's go talk to Oliver.

All right, guys, we're live officially. Thanks for coming here, hanging out with us.

Thanks for having us.

Yeah. So we have a. It's a four person show here. So we got Oliver, we have Roland and Matt and I. So, Roland, you've been on the show. I guess we'll do a reintroduction for folks that have missed the two episodes that you've been on. It's some of the most talked about episodes. And you've been doing some cool stuff in deal making. I mean, you never stopped that. But now you're exposing all the gold, it seems like, with your epic challenges. How's that been going for you?

Good. It's been great. We had to pivot from the live events where we did some training and listened as we did surveys when we went online with a challenge format that Pedro Adeo and Pete Vargas had shared with me then in doing that, polled the audience and they told us what they wanted and had to create a whole new program around it. Similar content, but a lot of content that didn't exist yet. We knew what we wanted to look like. So that's, I think I was telling you guys a few minutes ago. Only finished that just Friday, so that's now officially 100% in the can. But we did it all. We were building the plane as we were flying it because we're on our third challenge now. So we've done one every single month in April, May and June. And it's a regular thing now. We have one for July and August scheduled and are scheduled to go month by month. But it's been really cool and it's been a new way to reach thousands and thousands of people that we would never have reached before. And it turns out to be significantly more profitable than how we were doing it before as well. So it's pretty cool.

Very cool.

Have there been any New developments. Speaking of events that you can actually talk about around Traffic Conversion Summit, are there new developments there that listeners might get a peek onto? What's going on with TNC coming up.

I mean we're full speed ahead assuming that we're going to be good for the 15, 16, 17th of December. So it's been scheduled, confirmed, booked. We have all of the, you know, temperature things that people want to buy and it, you know, it basically incinerates anyone with a fever. So easier. And now. I'm kidding. And just flags people that, you know that, that that might be sick. And then we have, you know, places that you can't come from and all kinds of procedures for sanitizing everything. So it's, you know, we feel pretty good about that if things go in the direction of allowing us to have the event, which currently we believe that they are. So if not, then we'll do something different. I'm sure we would just take it virtual and we do have that all on tap just in case we need to. It's going to happen in December one way or the other.

Gotcha.

Long awaited, but for good reason. Yeah, I can't even imagine running something like that. And just to wrap up over to Oliver, I mean the way that we met actually was through this epic challenge of yours. The first one, which I think you had something close to 800 people in that thing and just alone, I was like, holy moly.

So, yeah, thank you for introducing us to Oliver. And Oliver, I want to introduce you to everyone here now too. You're out in Austin, you're used to traveling, I know that.

Travel full time now in Austin since mid January. And I hope Texas won't be on the excluded list for Texas for traffic and conversion in December.

I mean, it depends, you know, we'll see who's coming and then we'll make those decisions.

Well, maybe you can sneak me in through the back door.

You get the accents. I'll just tell them that you're from, you know, from.

Yeah, originally from Germany, being a serial entrepreneur since my mid-20s. And that's when I discovered early on the power of equity. So became a self made multimillionaire at the age of 27 in telecoms when I got the first long distance license over in Austria when the market opened up. And ever since most of the big chunk income has been all around equity deals. And that led me into look at what could I build next that's really, really scalable where I don't have to do a lot of the fulfillment and that's how Roland and I started talking. And then.

I was almost at the legs event in March. I was already checked into the hotel and got Diana's email. Sorry, end happening. And then we started to do a zoom call. And then when was it? March 30th. We did a four hour strategy session. And since Roland is so quick, it only took 72 minutes to hammer it all out and rest has been history. Great.

That's really awesome. Yeah. And so that's what's interesting is both of you guys have done a lot of deals and like Roland, I know now in that epic challenge, I don't know, it's 175, five different deals or something like that that you put out there. You probably have more. But I remember on, I think the first episode we had here, we were wondering like, do you have a playbook for this kind of stuff? And I think at the time you didn't have a public playbook.

I did not.

We.

I had like eight that I had just kind of thought of for presentation and then I sat down and it kept growing and growing and growing. And so now it's at 216. So we're keep, keep every. Every new deal has a new twist, it seems like. So it's kind of fun.

Yeah. And I think that's what's super interesting. So you guys came together and I don't know where. So this platform unicorn equity came out of this kind of mind meld between the two of you. How did that. I guess back into that there was a camera in that room. I know. Oliver, you had a couple of different types of ways you can build a platform that scales and gives people this ability to make short term and long term.

Sure. I'm a tech guy, so I've always, for the past almost 20 years, everything has evolved around technology. And I always try to leverage third party assets the best, most efficient way. And one of the things I learned early on that recurring revenues back in telecoms, you know, that was my first industry with recurring revenues, you make a sale once and you keep billing and collecting. And that's a very, very powerful tool. And that has been the theme throughout my entrepreneurial career. Focus on subscription products where you only have the sales effort once, it's a lot easier to manage churn but then also leverage distribution channels on a success fee basis only. And that's really the two key ingredients for unicorn. Roland and I looked at a couple other use cases, but this seemed so obvious and I couldn't figure out why nobody else has done it so far. Why you couldn't provide promoters the ability to not just earn the short, but also the long and then develop loyal distribution channels for product owners that don't just promote a product once, but keep promoting it over and over like a shareholder and not like an affiliate that vanishes next week.

Yeah. And that's what's super interesting is when Matt and I learned of the Unicorn Equity model, us as affiliates primarily, it got very interesting and we're like, okay, I could see this because it really is a short term model with affiliate marketing typically. And a lot of folks just feel like that's the long term. This comes with product owners and whatnot. And you have to get in at early stages with these products or have good deals relationship. And that's what piqued our interest is wait, okay, you're thinking of this platform that basically brings those two parties together and kind of manages that transactional portion in the middle without them having to worry about all that. Which I know getting into deals like Roland over there. Yeah. You have agreements for everything. You have all these different, I'm sure adjustments and accounting you gotta get into. So I guess talk about how from your guys's perspective because you guys both have done a ton of deals. Like how is this kind of a different opportunity for folks who are listening here? Because there's a lot of people who promote, you know, software and other products. But then you have a lot of product owners looking for marketing help as well.

Start. I'll start if that's okay. I for, you know. And when we were talking about this, one of the big challenges, because I started in affiliate marketing as well, that was some of the first stuff that I sold was other people's stuff because I didn't have a product and you know, didn't know how to create one at the time. And so I sold other people's stuff. I started with Amazon who paid me a whopping 4% commission. And I'm like, okay, well I'm sending traffic to Amazon and Amazon is making the bulk of the money. And these people whose product is being sold on Amazon are making money and I'm getting a little tiny slice, which was fine when I was learning, but as a business model didn't make sense. And then I tried a couple of other things and I found a great product that was $3,000 product paying a 50% and I drove.

Roughly a million three in revenue to that over a six day period as an affiliate was the number one affiliate, broke records and made several hundred thousand Dollars and immediately realized that all I had done was built someone else's brand. And while I liked getting the commission money, it didn't make sense as a business model for me to continue to be an affiliate person because I wanted to build wealth. And the affiliate model as it is currently engineered is really one of income or what we call a short term model. So thinking about how do I build wealth and get to be an affiliate? When Oliver and I were talking and brainstorming and we just said, oh, well, what if you could do both? What if you could eat your cake and have it too? And so we still allow through that platform, people to sell the things that they own who don't have marketing or want additional marketing through affiliates. Those are called publishers. And we have the affiliates that are out there selling the thing and they get both. Well, they get the option to determine how much wealth would they like to build and how much income would they like to create. And so they can literally do both by having a sliding scale and choosing what percentage of this company's stuff that I'm selling do I want to just get paid on. So I get cash at the same time, can I also get some equity? The answer is yes. Let's say that it's a company that's valued at a million dollars and you sold $100,000 worth of stuff and the affiliate commission was 50%. So that'd be $50,000 worth of really of cash that if you wanted to, you could invest in the company. And it turns out that you can. So instead of taking that as an affiliate commission, you could instead say, I want to invest in the company. And each of the companies that have agreed to be part of this platform have also made available some of their equity to the affiliates that are selling. So it really is awesome because if you want to put all your money into investing in. And the cool thing is these are companies that are growing really fast because they're using the affiliate model, which is a proven growth model. But if you want to just do your effort and get cash, or you want to do your effort and get a piece of these fast growing companies, or you want something in between, then unicorn is the solution.

That's a solid pretty much outline of the model right there. Yeah, because I only wish, like as affiliate marketers, because we've been doing this for, I mean, we've been what, 12, 13 years or so in this model. Roland, when was that deal where you made basically blew up that company by a 1.6.

I think that was about 10 years ago.

10. Yeah, I mean like an affiliate marketing has been around since. I mean, obviously it's just brokering really since the beginning of time. But you know, people familiar with ClickBank and Shareasale and all of these website. Yeah, yeah, they're all just flat commission, typically what, 30 to 50% or something like that.

Yeah, I feel like in the affiliate world too, there's this like feeling of like it not being a real legitimate business too. There's a lot of sort of, you know, I don't really know how to explain it, but I think all of us know what I'm talking about where there's a little bit of negativity around just the concept of affiliate marketing as this sort of like you're building somebody else's brand, you're sending them traffic, you're getting commissions and you just kind of get out and move on to the next thing. And I feel like that's sort of most people's consensus of what affiliate marketing is. And this gives people the opportunity to be affiliates. But also it's sort of by default turning you into investors as well. And I think it adds a sort of element of legit legitimacy to the affiliate marketing world as well.

Correct? Yeah, absolutely.

Oliver, you have some ideas around. Yeah.

Plus it really brings in the shareholder aspect. I mean, the thinking completely changes once you're a shareholder. You no longer think of other affiliates to be your competitor. But if you're actually a co owner, you want this company to sell more. The more the company goes up in value, the more your shares will go up. So you got the snowball effect going on there. I mean, turn the clock back and imagine a company like ClickFunnels. If you're able to get in into a company like that early, let's say at the 10 million valuation. And SaaS products, even in the COVID world are still highly valued at a 10x annual recurring revenue multiple.

I'd say look at, look at if you could be in Amazon, because Amazon grew with a lot of help from the affiliate model.

Right.

And Uber used affiliates to get people to come on and drive to start and then to solicit drivers. So it's like those are, I mean, very legitimate companies. They're not just in the Internet marketing world or anything like that. Like they sell real stuff, grow in a real way. And I think this is also a way for companies that maybe can't afford initially when they're getting started, they can't afford expensive agencies. But some of the top marketers on the planet happen to be affiliates. So if you're looking for super, super fast growth with very, very talented marketers and their teams and they're spending the money to acquire the customer to then send to you, and they're making their money back by the commissions that they make, well, this gives them a chance to be part of you, but also if you're the publisher, but it also gives you a chance to have some of the most brilliant marketers on the planet that you could never afford to hire. And they won't work for anybody for salary because they have their own business doing this. So it's truly just a ridiculously unique opportunity, thus the unicorn right to be able to have as a company this, this, this multiple groups of crazy good, talented marketers that no one could ever afford to hire, effectively working for you for equity and a commission and, and then for them, they can become investors in companies that they might not otherwise have access to because a lot of, a lot of times these are companies that are flying under the radar. ClickFunnels, which Oliver mentioned, launched at our event Traffic and Conversion Summit, I think it was in 2015.

And has grown to be a giant company. And if somebody had the opportunity as an affiliate for ClickFunnels to have a piece of that. Now, as Oliver mentioned again, the valuations on SaaS companies are typically based on revenues. That's a heck of a return on your money. And even if you want to invest just a little bit, you can just say, Well, I want 10% of my commission to go towards this. So now you're able to just start putting a little away. And you're also diversifying your risk because you're not building a brand for just one company, but you can choose anyone from the platform and have your own portfolio of fast growing companies to choose among and then use the analytics to determine how you're doing and maybe where you should double down and where you might want to lighten up. So also being able to access the data of the performance of the offers which you wouldn't be able to otherwise access to make your choice on investing, because that information usually isn't available to investors. So it's such a great look underneath the curtain of these companies as well that you get when you're part of the platform.

Yeah, you mentioned Uber, Roland. The interesting part about Uber is they actually did open up the.

Shareholder program for drivers. But when did they do it? At time of IPO and that was the valuation 85 billion or whatever it was. So all this growth while they were growing like Crazy. The drivers couldn't get in. And then it was capped at a relatively small amount and for sure wasn't tied to the actual performance over the years. And that's super important when it comes to capturing.

The equity potential between the early stage during the seed series a phases, or in the clickfunnels example, shortly after they launched in 2015 and not when they go public.

Yeah, you essentially be a vc.

But.

Even if you look at that data point, let's say you were a HubSpot affiliate. HubSpot has a affiliate program. And look at what their stock did. Even if you got in at the ipo, you still made multiple times your money since then. But.

Imagine getting in at 10 million valuation and it turns into unicorn. I mean, you're sitting pretty really 100xing your investment. And you can never make that promoting all those cash deals.

Right. This reminds me of Roland. You actually had our. Well, you introduced us. Him to us is Kamal Ravikant on your podcast and he's a vc and it was interesting hearing that side of him because we've chatted with him about his book more than anything. But on his VC side, yeah, I think he was in on Uber and some other huge unicorn companies, but he literally, I think, was at the dinner table to get in that deal or proprietary relationship or strategic relationships get him into that deal. And there's a lot of work to get even to that point.

Yes, and that's a great example. So we just. Because the very first fund that Kamal did, we assisted with funding that fund. And so we participated in that. And we have just had several exits. We just had another one like I think last week. And the only way that you would ever have access to that was if you were friends with Kamal. And the only way that you have access to the deals that you guys are doing or that I'm doing or that Oliver's doing is if you're friends, because we're just doing friends and family stuff. We're not out in the capital markets usually raising because we don't need to because we have great networks. And I think that's the thing is that a lot of. At least in the initial round. So for your seed round, you know, your pre A rounds, you're really looking at never having an opportunity to get in on the ground floor unless you actually know the people and are hanging out with them. So that's what this, this is. This is a really unique opportunity. We're very excited about it. I think it breaks new ground in allow.

And allowing More people access to these otherwise very behind closed doors in dinners and masterminds.

Kind of companies.

Yeah. And the upside potential is so huge too, in the sense that when you look at VC firms, just for the sake of easy math, they might invest in 10 different companies, but only one of them needs to go big for them to make their money back from all 10 of those investments. And it kind of gives you the opportunity to do that as well, in the sense that you can. Can be getting little bits of equity in 10 different companies, and if just one of those companies takes off, it could be a big windfall, potentially.

The goal is that you get a multiple. You should, when you're taking risk, because there's always risk with any deal. You should be able to have the opportunity to get a multiple of return on your investment. And so when you're investing through the unicorn platform, you are getting the opportunity to lose 100% if the company doesn't make it. But, but I tell you what, I think companies that have the ability to access marketing of the caliber that you can through unicorn through the affiliates, is that like, that's a huge advantage. That's a big hedge against failure. So while I think there's a risk with any investment, the risk in investing in a company that's already been savvy enough to come and be part of a platform like this and access these brilliant marketers that are going to drive sales and is very, very unique. And it really diminishes the risk significantly while you continue to have, you know, it diminishes the risk and amplifies the potential upside because you do have all of the support. And by the way, if you're good at what you do, then that's going to cause other affiliates to come in as well, which can only increase sales. So you have the ability to really pour gasoline on the growth of a company by sharing the fact that you're doing this and bringing your other affiliate friends in. And then you guys all get equity in the company and the company's growing and then, you know, they're all. They wouldn't be part of the platform if they weren't interested ultimately in an exit.

Right? Yeah, it's more of a collaborative platform more than anything is this thing.

It really is.

Yeah. You need the other guy or the gal who has the marketing chops to lift up this SaaS company and get them to a point to sell. Now, Oliver, I'm curious about the tech because Roland's talking about the slider and kind of choose your own kind of equity and how that all talk about the tech because I think and even maybe the data like how that's presented because on both sides it's a unique thing that allows promoters to actually have the confidence in doing this. But also SaaS owners having the flexibility of this pooled option.

Sure. It all started back in 2005 until 2012 when it discovered a arbitrage opportunity in the public company space. That was the very, very early days of quantitative analysis. I hired a couple data geeks that would analyze the news impact on U.S. stocks and we put a black box in place that would make decisions a lot faster than any human could do it on a Bloomberg terminal.

And that developed the expertise of analyzing large amounts of data very, very efficiently. I ultimately turned it into a fast play for hedge funds and for news publishers that operate in that space. And during peak times it analyzes a million data points and saves it to the database per second. And so I had to come up with something really, really scalable.

And that expertise that I was able to build since 2005 makes it all possible to really understand analytics, to understand multi sided marketplace. The equity transaction of a public company isn't too much different from a private equity transaction. And being able to put a robust platform that is able to handle multi sides of the market, calculate all the analytics you need. Using AI to make smart decisions out of it.

Is really. I'm very passionate about using technology to build great products and then opening up to the world. So that's what we're doing.

And with all that, basically the ability to process what a million data points a second, which just sounds ridiculous. I don't know what would go into that.

Obviously the link tracking that ties in into link tracking and so on. We're not replacing any of the existing affiliate platforms and software solutions that are out there. We're layer on top of it. So we work quite complementary. If a publisher or product owner already has a platform in place, can be all our layer can be added on top of it and gives an additional level of tracking. So from a conversion point of view, you're able to get all the relevant data points and that ties into.

The.

Transaction pieces that are the basis for the cash and equity.

Performance remunerations.

Yeah, yeah. So with all that, I mean it's then you have the pooled aspect, which is this whole kind of tech thing that's happening behind the scenes. And maybe Roland, you could describe kind of how that works like say with a SaaS company, someone comes in there, a company comes in and says, hey, yes, I want to be a part of the platform. How would that look like with like equity and this model here with commission?

Well, as far as the calculation, it's just going to depend on us going through our process to determine what are the key performance indicators for the company, how is it doing and then how does that compare to other comparable companies to find evaluation that works and then we agree with that company on the valuation and then we determine the amount of equity that they are interested in making available to people who would be on the platform. And then we have a system for going through and determining that which Oliver could share. But then he would have to kill you because that's a secret thing.

He's an Austin.

But the due diligence process is pretty much what any VC would use. With subscription based products, especially if the billing is through Stripe or PayPal or authorized.net, it's pretty easy to look at revenue growth and churn. Obviously the churn rate is pretty important and we only look at companies that have a product market fit. So the initial risk is already taken out unless it's a founder team that has done it before with a track record.

And then of course, you need the cap tables for each round that is being done. And there's all the admin pieces that you would have to worry about if you were able to have enough personal friends that run those kind of companies to get in. So all the admin hassle that you would have if you did are taken out and you're able to access a dashboard that shows you the metrics and you can even simulate. We're working on a simulation tool based on growth rates and valuation metrics. We're able to see how much can I make off of this investment if XYZ happens?

That's that dashboard. Yeah, we saw a little look of it a couple weeks ago.

It's the visualization that's really powerful. Data can be boring, but it's how you present it and what you make out of it where we're going to put a lot of efforts making it visually appealing and gamify the whole process of making it fun and rewarding.

Yeah.

Now, as a promoter who's earning equity in these various companies, what are some of the ways that I could potentially liquidate my equity? Now, obviously, if there's an exit event, if the company that we have equity in sells, we're going to get our sort of portion of the equity when the company sells. Are there other ways that we can earn money by Having equity in these companies.

Sure. There's quite a few secondary marketplaces out there where you can flip equity positions, especially when it's a portfolio. So we might be looking at bundling early.

Exits at a higher valuation. Or you, our promoters could go to one of those secondary marketplaces for profitable companies. There's obviously distributions, dividends that you'll get as a shareholder of the entity. And then of course there is an IPO event or a exit event. There's a merger and acquisition trigger.

So there's quite a broad range. Once you got a portfolio, I think you'll have quite a few options how you're going to.

You would also have within the platform the potential of having other folks who have acquired interests in the companies or people who haven't yet acquired in this company to potentially exchange their investments within the company, within the platform itself. So maybe you have in a company you've sold 100,000 worth of stuff and put 50k of equity into company A and somebody has done the same thing in company B. Person in company B is interested in exiting. Maybe the people in A would want to trade or maybe some of the other people that are on the platform would want to acquire the interest. And while we haven't gotten through the securities law side of things on this yet, the goal would be that without it being a public platform, that there would be some opportunity to have the ability to exit as well within the platform itself. So that's something that we'll be evaluating as we go forward and cross all our T's and dot all our I's as well.

Yeah, love it. Yeah, super exciting. Because I mean, that's the thing just as affiliates and you know, we were telling how we're doing some deals on the side as well and obviously working with unicorn as well. I mean there's. It can get complicated fast if you're trying to do it all yourself.

And.

For the companies as well. So having the ability to have somewhat of a managed cap table platform for these investors and then to have a platform for investor relations to communicate with them through a platform that's already got everything aggregated in one place. So you don't have to go and use some of the other cap table platforms or investment raising platforms. It's like they all have bits and pieces. But I think unicorn has a much more holistic approach across the entire process and goes from initial investment all the way through investor management, investor relations and the ability to keep people informed of what's going on.

Right. And continue the evaluation updates.

Yeah. It's kind of always like basically support there for all the promoters. That's what's really interesting actually that we've been liking is once getting in there, the affiliates are going to have support. I mean that's one of the biggest topics actually of listeners of this show. They reach out like how do you become affiliate? How do you do that in a long term manner? We do a lot of, it's not just an email but also ads and content and partnerships, second tier even. And it's like okay, if we can equip all of the promoters on unicorn with that kind of mentality, it's just going to help everybody in the long run. Both sides.

Exactly.

And same with the product owners.

Yeah, we're essentially creating evangelists, not just affiliates. We want people that they'll be out there talking good about the product even if they're not getting a commission because they're getting a piece of the whole pie at some point.

Yeah, right, exactly.

And then of course the community aspect as the community grows over time. Look at by Combinator for example, how many startups apply just to get in for the community aspect effect so they're able to network with other successful entrepreneurs and that'll be more and more powerful over time as more and more people join.

Definitely.

Well, let's talk a little bit more on the side of the SaaS creator, the software creator. Now why would a software SaaS founder, if they had the opportunity to give up 20% or so of equity, why would they not just take, take a big lump sum of cash versus using unicorn?

It's really easy because the lump of cash is dumb money. There's no growth associated with that cash, only cash. So usually what they want to do with that cash because most of that cash is going to go to either dev or it's going to go to marketing. So depending on where they are, they might be getting a bunch of money from people that don't know how to market, that they're going to then go and hire someone who hopefully knows how to market, who's going to be dedicated to their company, who's going to usually be an inferior marketer to someone who is able to market for a living. And so instead of taking that cash from people who are just going to be basically dead equity investors for a one time investment of capital, that then they're going to maybe get some dedicated person who is an okay marketer to go and help hopefully grow the company. They're instead going to directly contract by giving equity to smart money that's actually going to contribute to the growth because the whole reason that that smart money is coming into the company is as a result of selling the product. So they're proving themselves to be smart money on the front before they even have the opportunity to be part of it. And now they're part of it. And they're incentivized to continue to grow the company and sell it. Because not only are they getting the money that they get from being an affiliate, they're getting every time they increase the revenue of that company and the profits of that company, they're increasing the value. So I mean, it's a. It's a virtuous cycle of invest, market, reinvest, grow, market, reinvest, grow. Right? And that's the huge difference. So the ability to actually take the money and know that it's going directly to a marketer that can sell, but you're. You don't even have to do it. You don't even have to give them the money first. That's amazing.

Right?

We don't have to pay them to start because these people are going to do it for us. And in marketing, as you guys know, you've got cpa. Your cost of acquisition, well, your cost of acquisition in terms of dollars is zero up front. And you're only giving them equity in the company as a company when they perform. So, like it's. You don't have to. You need less capital because you don't have to be out the ad cost. And if the ad cost stinks and it's lost, well, the affiliate loses that money, which is why only the best marketers in the world become part of the program. So, I mean, it's really a very special reason to have this team helping you market versus that dumb investor hope they're good marketers kind of mentality.

That's right. Oliver, anything there?

I had an interesting call last week with a billionaire founder of a tech company, and he brought up a very interesting aspect. And he said the geographically dislocated companies that don't even have a chance if you're not located in Silicon Valley or Seattle or Austin or one of those tech centers, you can't even get access to capital. So you might have a great product, but you're located in the middle of nowhere, not in one of those tech centers. So that's completely geographic independence. And then it's also, let's say a product creator has already gotten VC funding, but now they're stuck. They can't get another round because that marketing person Roland talked about wasn't a great hire and they blew through the money and the customer acquisition cost was sky high.

They made might not get another round raised yet. They have an alternative funding source through Unicorn.

They're able to grow their business, their MRR without any risk. We only get paid if we deliver. I mean what better is there?

It's a good point. It's basically everything's deferred, including it's on performance but then the equity is really deferred until something happens in the future. So as a product owner, you know, it's like cool. I don't need to even worry about marketing that's handled is really the whole thing here.

Oliver, earlier you mentioned when it comes to like the product creators, the SaaS founders that there's there'd be some minimum criteria to be a good fit for the platform. What would some of that criteria be? Like what, what would make the good software company for the platform?

Sure. So already an existing product market fit, so you already got 50,000 or more in MRR. So you're not just still trying to build the product but you've already got proof that there's a market out there. And then if you look at the monthly subscription costs, anywhere from 50 bucks a month into the hundreds, 2,000 of dollars. It could even be, you know, agency type services in the social space that have, you know, they typically have four figure monthly subscription rates and that's where long term relationships are really, really important. You don't want to use an agency just four months or two. You really want them to understand your market. And.

So existing product with product to market fit and an audience that's primarily in the English speaking countries.

And so if it's an overseas company, as long as the target market includes the U.S. that's a possibility too. And then it should have the potential to generate 10 million.

Or more in annual revenues. So if it's a very niche product that is really laser focused.

Then we obviously have to look at the market size and whether the product is at. But if it's a broad product that has a broad market, there is typically a great fit and.

We'Ll look at the existing numbers and turn and then do a due diligence and, and that's how the, that leads to a valuation.

Yeah, and it sounds like it's just a conversation. I mean that's the, from the deals we've done. I mean you guys have done a ton of deals too. It's always a conversation. So I'm sure there's always questions for someone coming into the platform. I know we've chatted with some of those SaaS founders and you know, everybody has different things that they're willing to get after. But yeah, when someone really sees, oh wait, the marketing's handled, all this stuff's done, like really, it's just. Okay, we'll figure out the slider like what you were talking about, Roland. And cool, there's the game plan. Now how about on the. Oh, go ahead.

And for product launches, obviously there's opportunities if you want to get big name marketers in. We can obviously give preferential treatment on timing.

The big promoters.

That are on the platform will have early access.

So.

Nice.

Yeah, there's a lot of additional benefits.

How about on the promoter side? Because we've actually some affiliates are. Sometimes they just like the cash. They want all the cash up front and all that stuff. I mean, who's the best promoter for this type of platform?

Well, they can use the slider and just get most of it in cash. So move the slider over and then once they got enough cash, if they want to tweak it, that is for sure possible over time.

Yeah, because that's where I think a lot of promoters.

I guess promoters are all over the board in terms of how they promote. So that's what's interesting. You know, we've, we've talked to people that are just running, you know, paid traffic or content traffic or sometimes, you know, a YouTuber being a promoter influencer. Like seems like those would all fit the mark. As long as they have attention, it's a market fit with the SaaS companies. Is that pretty, pretty accurate there?

Yeah, that's, that's spot on.

Nice. Well, I'm thinking, I mean this is pretty dang cool because. I know. So Roland, how many deals have you done? I mean, have you kept count of. It's like impossible.

Yeah, not anymore.

Yeah, well, just the fact like us trying to handle any like 5 to 7 at any one time can be kind of complicated.

And I'm sure you're doing like, I know you're 20s at a time sometimes.

Oliver, I know you're doing some other deals on the side and then we could start wrapping this up here. Here. So there was another deal you did recently that is equity and you told us about it before.

Yeah. In the SaaS space. And that really allows me to have a decent sized development team.

That cranks out those great.

Tech solutions. And.

That was a deal that had three components. Monthly retainer, plus rep, share and equity.

I talked on A Frolan session here a couple of weeks ago.

On his accelerator, dissecting the deal and going through an actual case study. Well, as it turns out, I was able to upgrade that deal into a seven figure guarantee heat deal here a couple weeks ago. And then last Friday the CEO of that company calls me and they finally launched this week. They built a great new media distribution platform and said, hey, can we adjust our numbers for next year? Can you add a few more things? So it went up another 50% on the F share part. And that's something that his previous company.

That he was involved in had revenues in the hundreds of millions of dollars. So obviously it's not a small play he's doing here.

Even once you got your foot in the door, you can still do upgrades. These are the best deals. The short with monthly cash flow, a rev share component, and then the equity piece.

Well, Roland, I know thanks to you, you've opened our eyes to just deal making in general. And it's fricking fun.

It's so much fun to watch what you guys are doing too. It's really, really cool.

Well, thank you. I mean, now, I mean, it's just. It's just cool to. I mean, obviously we've been talking about unicorn a lot, but all of us are involved in the thing and I think it's just like, I don't know, it's like a play pin or something of deals and you have both sides. So I know Matt and I are all constantly in software. We promote software primarily as affiliates. So it's like it allows us to play on both sides. But really I feel like so many other people can do the same and just jump right into it.

Any last words, I guess on this before we wrap up?

No, I think we covered a lot of ground. But I mean, if Roland has any parting words before he has to jump off here, or any last thing you want to say about the unicorn platform or anything you're working on, feel free to share.

I just think it's very well named because I think it is unique and I've never seen anything like it. And I think it provides. Provides an unprecedented opportunity for people who are otherwise limited to only generating income to also have the opportunity to generate wealth. And that's pretty exceptional.

Hey, what's a good episode that they should go listen to on your Business Lunch podcast?

Mine? Listen to the one with Oliver. It hasn't been released yet, but I would just go to Business Lunch and Google the or search the Oliver episode. And that's a pretty Good.

Good one.

Very cool. Yeah, that might be out by the time this comes out.

Hopefully.

We'll see.

We'll time it out. Yeah. Oliver, how about you? Any parting words?

Well, it's unprecedented for me as well, to do business with, you know, three bright guys.

Roland, Joe, and Matt. It's a pleasure, you know, working with you as a team on this, and I'm super excited to turn this into something really, really big. And. And so same. Thanks a lot for being part of it and thanks for having us today on your podcast and sharing the message with the world.

I'm very excited to be working with two of you. I just want you guys to.

We'll decide who.

Do you know who you are?

Well, yeah, we didn't even chat it out, but unicornequity IO is the. Pleased to find it. And I'm sure that was in the intro, too. And we'll record in a minute here. Thank you, y'.

All.

It's great to bring everyone together and have a good one.

Thanks, guys.

Thanks. Bye. Bye. Hey, hey, hey. Thank you for listening to that episode. This is Joe Fear. I'm sure you probably already knew that, and Matt is not here right now, but I'm pretty sure he enjoyed the episode just as much as you and I did because, you know, he went into the production of. Of making that thing right along with me. So thank you very much, and I want to give a quick shout out to our buddies over at Easy Webinar. These guys have been supporting us for a while, a long time, and Casey Zieman is just a super good guy all around. He's actually been on the show before. He's the founder of Easy Webinar. So if you look up Casey Zman on any podcast platform you're listening to, go check him out. Go check out his backstory, what he's all about. You can look learn a lot about webinars as well. And right now, Easy Webinar, these guys are actually hooking you up with a great trial. It's a completely free trial to test out their software, Soup to nuts. Check it all out and see if it's a good fit for you. If you go to easywebinar.com hustle, that's H U S T L E. If you didn't know how to spell hustle, there you go. So if you go to EasyWebinar.com hustle you can go grab a free trial. And EZ webinar literally lives up to. To its name. It's super simple. I mean, super Easy. And it does all the stuff that you're looking for in any kind of thing with webinars. I mean, they literally cover every single type of webinar you possibly can do. So from live to automated to scheduled at specific times and all these crazy features in between, can't even list them all out. I'll be here way too long. They give you a ton of advanced analytics. What's working, what's not. During your webinar, based off all these actions, you'll see see who attended, how long they stayed, if they clicked the offer or if they didn't. Basically, you're going to make more money and you're going to work less with this thing and you're going to create better relationships with the folks that are listening because it's a good experience. You want to give that good experience along with some great content, of course, and a killer offer if that's what you got for them. So go try it out yourself. Go check out easywebinar.com hustle. That's easywebinar.com hustole. Alrighty. Righty. So that is the end of this episode. Thank you so much for listening to this episode, enjoying it. Hopefully you did. I'm pretty sure you did, if you lasted this long. And go check out Easy Webinar when you get the chance. And we will talk to you next time. Bye bye.

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