Episode 413: How To Raise Over 300 Million in Funding with Bill Richter

Welcome to this episode of the Million Dollar Mastermind. I'm Larry Weddell. And before we get started, if you want to know exactly how to win again and again, go to Wydell on winning.com webinar now to watch something I've put together for you. Now let's get going into this episode.

Of Million Dollar Mastermind. I'm here now talking with Bill Richter, and we're going to have some fun talking about his experience in life in the business world and making special things happen. And so. Hello, Bill.

Hey, Larry. It's great to be here. Thanks for having me.

Yeah, we're going to have some fun today. And I'm going to learn a lot of stuff because I don't know about, you know, we're not going to. It's not going to be a tech discussion, but it's interesting to get insight into this world. And because you are the president CEO of Cumulo and Cumulo is an American data storage company. And offering products and services help companies manage and keep up with their data. And it's a data world, isn't it? It's amazing.

Oh, it is.

And when you, the people can help you keep up with that, that's a priceless, necessary service. And to start this thing, it looks like you had, let's just go off from there. You had to raise $125 million in funding because you can't go down and buy a computer at the store and say, okay, I'm going to have a. I run a data storage company. No, you got to have farms and piles of this stuff. Right. It's just like, so it's a big hardware investment to kick it off. So talk about, let's just dive into it like that. How do you go about raising $125 million?

Very carefully. Look, the capital that we've raised, and incidentally, 125 million was just the last round of capital. Since our inception, we've raised over $300 million. But the formula is quite simple. The investor community invests according to what they consider opportunity. And when they look at the market that we operate in and really just at the simplest level, the problem that we solve for customers, that becomes an easy investment decision for those folks because they just see so much opportunity. And when we engage with them and we tell our story and we show the actual progress, milestones that we've made, they get excited. And then what we try to do is use that capital very carefully. And just as a little tuning there, most of that capital goes to talent this is a war of talent. We're a software company and building the best software in the world requires hiring great people. And great people cost money. That's where most of the capital that we raise actually goes.

And so talk about, just talk about that a little bit. 300. Where do you go? You know, you get an idea and we'll talk about how you got the idea and the experience on that. But you get to the point where you got to get some money, where do you go?

Well, we're fortunate that, I mean, you know, one of the greatest things about being an entrepreneur in America right now is this is one of the most risk tolerant capital markets in the entire world. And it's no surprise that if you look at the technology companies, the global technology brands, whether it's Google or Facebook or Amazon or Apple, the list goes on and on. Cumulo, I'll put in that list. They're all American based. And that's not just because we have smart people here. It's because there's a confluence of smart folks, aggressive entrepreneurs and capital that understands how to invest in these sectors. And so we, our early stage investors were really great venture capital firms like Kleiner Perkins in Silicon Valley and Madrona Ventures up here in the Northwest and Highland Capital in Boston. And as the years pass, those folks have continued to invest. But more recently, some of the much larger investors, like BlackRock, which has something like $8 trillion under management, has invested in Cumulo.

Good lord, you got blackrock invested?

We do. Wow.

You've got to have your act together to walk into that room.

I bet you do.

Talk about talent. I bet they've got some pretty serious financial talent on board. Pretty skeptical because like all successful companies, I know they've been burned a million times themselves. They all do.

They really put us through our paces. They do a ton of diligence and entry. Interestingly, they have a lot of financial folks, but they have a lot of technologists in those firms now. And that's wise of them because if you really don't get some of the deep technology and the real problems that companies are trying to solve, you could definitely put your money in bad spots. But you're right, Larry. I mean, getting through into those folks and figuring out how to partner with them and raise a lot of capital is the hard work of any entrepreneur, especially a tech entrepreneur.

Yeah, I guess we've gotten past the era where I remember the early 90s. I don't talk about it on this podcast, but my cousin actually was H. Edward Roberts, who invented the personal computer and out of Albuquerque and is where Microsoft came from. Bill Gates and Paul Allen, 20 years old, went from Boston down to work for him. And anyway, so I've been forced to be just by my older cousin, aware of what's going on in the industry, how long. But as a result, you go in. And I spent a lot of time on getting our own websites up and information to the field force and financial services spread out. So as a result, I got more education in that than I really needed. But I'd go in and it's really funny to go in to hear CEOs. You don't be in a board meeting somewhere and the CEO comes in with great assurance and starts pontificating on here's how the industry's going and this works, this or the other. And for someone who knew anything about technology, realize that this is somebody with kindergarten level knowledge spouting like they're Albert Einstein and blowhards basically. And none of the stuff they were saying was right, but they did it with such authority they could get away with it. And that's the way it was pretty much during the 90s. But now you got smart people around you and you can't be a CEO and be that stupid about technology, you know, because how long? It wasn't that long ago before Oprah didn't even know about email. You know, they had a show where, you know, okay, we're going to get Oprah on email. So this stuff has kind of flooded in pretty fast, hasn't it?

Well, when I started in business 25 years ago, I remember the senior leaders would dictate emails and have their secretaries type them up for them and that sort of defeated the whole purpose of email. So, yeah, we have definitely come a long way.

We had our president and founder, Art Williams, and he had retired about in the early 90s, but it came up about five, six years ago. There was like he was looking for something to do. And I said, you got to find a way to reach people, whatever. So he had an iPad. You know, he's one who didn't even have. He'd use his wife's cell phone. You know, when he needed a cell phone, he'd have the wife hand him the cell phone and she dialed the number and he would talk and then. But it came time and literally this is a guy worth billions. Billions. We'd sit and I said, okay, Art. He wanted to learn how to use iPad and send emails. I said, well, I learned long ago that whoever holds the pen, whoever is doing the input is the one who learns, you know? So I said, so I wouldn't touch it. I made him do it. And I said, take your finger and push that and then go over here and push that. This is a billionaire. But the thing about the billionaires, those suckers learn fast. Pretty soon he had mastered it, and he was firing out emails all over the place, and still is. And so just because they're dumb on it doesn't mean they're going to stay dumb. Because you can get. If you have the right people explaining this stuff to you, you can get proficient. And once people who have experience leveraging themselves and they get. They see how this works, it's like, okay, the gears click in their heads about how they can use it to get the things done they want to do. It's really amazing to see that transformation. But in the era we are now, that just creates the thing for more need for to be able to keep up with all this stuff. And that's where you come in, I guess.

Yeah, look, you know, one. Just listening to you reflect on that. I mean, I think one thing that I always find makes a great entrepreneur is just the sense of curiosity. Old, you know, hasn't done anything, you know, like, to your point, Laird never used an iPad. But if they're curious, if you're a curious person, you can learn just about anything. And in a world that's constantly changing, if you're not curious every single day, then you're probably going to miss out on something. But I find that with a lot of my CEO peers, they're all very curious. They ask a lot of questions. They ask themselves questions. They ask everyone around them questions.

There you go.

I go to the dentist and I start asking the dental hygienist, well, what kind of equipment are you running? Is it old or new? Is this the best brand? You know, what's changed? And like, you know, you just end up learning a lot of stuff in life, doing that.

Yeah. And the thing is that it has to do with people who like to do stuff, you know, they like to learn about it. Like, they want to get involved themselves, you know, and once you learn about things, you're immediately saying, how can I use this?

And.

You just see it time and time again. And now technology is a necessity. Man, I've gone through decades, really, where I said, I don't want to learn anything else. I just want to use and that usually I'll do that for, I don't want to learn anything new. And that'll usually last for like 30 minutes that pledge. Because it's just impossible if you're going to stay current in the world that you're going to be saying. I've never heard that term before. I've never. What's that, what was that word you used? And there's just a whole lot out there that's interesting, exciting and it's evolving and you keep up with it on the cloud Storage. I do photography and art in addition to other on our business. I'll tell you this, I've been into the. I had my own SQL server back in 90.

Not 1990s, but in 90.

Yeah, 1990, yeah, I tell you when it was 1999, 1999, and ran it out of my garage, had $200,000 a year, tech guys in there running it. Had my own email and this and the other. And the company gave me a download of 165,000 fields. I mean 165 fields on 24,000 people every day. And they gave me, it was like two of us that they gave that direct downloads off of the computer, I mean the mainframe because we harassed them so much for. How about this report? We like this report. This report. They said, okay, we give up. We're just going to give you a download every day and you hire your people, you get your equipment and you do re reports. And I, you know, I did that for about 10 years. But that, you know, that's a lot of data and that's back. And you know why, you know, the 2000s and now the same thing. I got lots of photography, you know, portfolio and painting image. But there's so much to keep up with and if you can't get your finger on it, you don't have it. And so with cloud storage, there's no question there's a demand for this. And that's why you see things like Amazon companies like Amazon moving into it. I've got a, I don't know what is one of my younger cousins, husbands who worked in Amazon.

I got to get into this family of yours, Larry. It sounds like an interesting group.

There's an interesting group, but he worked for Amazon for years and I did not know it, but he said they only make 1% off their goods, their retail goods. You know, they're shipping this stuff all over. You know a grocery store makes like 3% net, but they're like 1% and that's why they, he said that's why they're going into cloud storage and all these other computer services that Amazon's ready to make some money.

And.

It'S a. I said that to say you're in a competitive field.

That's the.

All the big people are, you know, you know, they're forced to. And they can come up with their own funding. Amazon, Bezos, he doesn't have to go out and raise funding. So props to you for going out and getting this thing going. And so talk about why this is the most exciting thing you could be doing in your life right now.

Hey, listen, there's a lot of information online, but there aren't a lot of people who have actually done something. In my case, I've actually built a successful business that's accrued over $5 billion.

In assets under management and has done.

Well even during trying times. Now, if you want to know exactly how I've done this, go to Whiteellumwinning.com webinar Now, I've compressed a decade of learning into five short weeks. Just for those of you who want to give yourself an incredible advantage and are tired of waiting and watching others move.

Yeah, happy to. And I'll just riff on what you just said about, you know, Amazon. And by the way, I worked at Amazon. I remember I'm a longtime Seattleite, so I remember was founded here and I worked at Amazon for a few years. And it's a great company. But you have to remember, you know, when they were getting started off, everyone looked at them and said, well, gosh, Walmart and Barnes and Noble and, you know, you'll have no chance. They can obviously outdo you here. And especially in the world of entrepreneurship and tech, entrepreneurship, fortune favors the brave. And, you know, guys like me live for that. Why is this most exciting?

That is a great, great point. And especially if, you know how basic it was when Bezos started, it was him and one or two other guys shipping stuff out of his garage, and he was one of the one packing. And he tells a story about himself where he said he had a super inspiration. He said, because they were, you know, break his back folding packages on the floor, concrete floor in the garage. And he said he had this brainstorm, you know, like eureka moment. And he told his second in command, he said, I got it. He said, why don't we buy knee pads? And that way when we're on the floor, we won't kill our knees. And the guy said, he said, why don't we just buy a table? So the guys who start this thing don't necessarily start off as geniuses in every aspect of the business, but they start basically. That's where Bezos started because he told the story on himself. And so, but you have to have, you have to have monster courage to be able to go and a drive and to get yourself to launch out like that and to realize, you know, it starts with the first step, you know.

Yeah, that's right. You know, I'll tell you one thing about being an entrepreneur is that, and I've, look, I've been doing this for 25 years. I've been a tech executive for almost 15. I've been a venture capitalist, invested a lot of companies. So I met a lot of entrepreneurs. And you know, one thing I like to say is any entrepreneur, whatever their idea is, is almost always a dumb idea in the sense that, you know, somebody comes along and says, well, I'm going to make an electric car. And you go, that's dumb. If, if people wanted electric cars, Ford would make them or Toyota. You couldn't possibly build one of those things and be successful. Or back to Amazon. You know, the world has a bookstore, has a lot of great bookstores. Why would it need another one? And an entrepreneur looks at that and says, look, you're missing something. I see something you don't see. And then you have to take that kind of, I guess, arrogance, right? Because you have to have a conviction around your idea. Not in the negative sense of that word, but more like the conviction sense. And then you have to be risk tolerant because, you know, there's always a sort of a safer job that is probably going to pay a little bit better and be more stable. And so it's kind of a unique crowd of people that wants to do this. But one Larry, once it gets in your blood and that's then that becomes the only way you can live. And that's what happened to me at some point in my career. And I just, I wouldn't have it other any other way. What's exciting about Cumulo right now is we are at like another dawn of what data is going to do for the world. And I'll just share with you. I know a lot of your listeners aren't necessarily technical, so I'll try to explain this in more lay terms. But if you went back several decades ago, data was mostly just what a few corporations had, the phone company and your company's payroll records and things like that. And you went to an ATM and you interacted with data systems but, but not often maybe did at the office. And then a little bit later, transactional data, data that fits in rows and columns, kind of like your SQL Server had started to be part of everybody's lives. And transactional data, we call it structured data, became prolific in the world. It automated everything and made things go faster for us, and that was great. And then there's this new dawn of data, what we call unstructured data. That's images or videos or genetic sequences. It's real bulky, it doesn't fit in rows and columns, and it literally impacts every person's life from the day they wait, the moment they wake up, to the time they go to sleep. You know, you get up in the morning and you look at your device and you're consuming images or videos or whatever. That's all unstructured data. Larry, you live by the ski mountain. Well, the first thing you probably do is check the videos on the mountain and see what the snow looks like, right? That's a video feed that's all digital and is hosted by a website and broadcast to thousands or tens of thousands of users. The smarter companies now are taking satellite images of the parking lots, of traffic situations, so that they can start to plan their day. You go to the doctor, hopefully just for a checkup, and they take a bunch of radiological images and create patient records. And those are stored and managed and analyzed by the healthcare organization. The vaccine fighters at the front end of, like, the pandemic are using massive amounts of unstructured data to go figure out the next new vaccine to roll out. So every element of our life is now sort of dominated by this influx of unstructured data. And where we come in is the management of that data. Not just storing it, but managing it and getting use out of it value and making it accessible to people was an unsolved problem. And we built software just to do that one specific thing better than everybody else in the world. And it turns out that that really mattered. And that's the exciting thing about Cumulo right now.

So what do you mean by that?

Well, I think it makes sense to everyone that a lot of this data, through some of those examples I gave, exists, and there's about a thousand more examples, but boy, oh boy, does it pile up. And if it, if it, if it piles up too much and you can't get your hands around it, it either overflows or the systems break or they slow down. It really floods the organization. And so if you can create a very simple solution through software to be able to allow organizations to manage that data at any scale and then reason over it really quickly, their lives change, like from night to day. And that's what we do here at Cumulo.

Give me, give me an example of that with one of your clients or customers, you know, without.

Well, sure, I'll give you a few examples. Let's say you're a hospital. I mean, that's really relevant right now. We read in the papers about how they're, you know, the rooms are surging, they don't have enough capacity. Well, the first thing that a hospital owner thinks about is patient care. Okay, we have to help patients get better. And then the very next thing they think about are doctors and nurses, because it's doctors and nurses that make the patients better. Behind the scenes at a hospital, their IT department might be saying, look, our systems are breaking because there's too many radiological images coming in. And we're either going to slow down the process for the. For the radiologists, we're going to turn away patients, or we're not going to be able to analyze these records and give accurate responses. And so data management can actually get in the way of something as simple as patient care. And so we come in and we say, hey, here's a software solution that's designed to instantaneously solve this problem. It goes from being incredibly complex to super easy. And so for the IT departments of those hospitals, they love to adopt our products. Not only does it make their lives better, it saves them a ton of money. And then in a really real sense, if you're a patient at a hospital, you never want to go and say, well, how's your data management here? You want to say, how's the patient care? Well, patient care gets better if they're able to deploy those resources to frontline workers, not legacy antiquated Systems from the 90s that a lot of the big legacy vendors are selling customers. And that's a big deal for us. It's geeky and it's in the world of IT infrastructure. But when you stop and think about it, it's really important. The same exact thing could be said, for example, for a K through 12, a school district or a university or an oil and gas company. Every one of these folks are like drowning in data. And if you can give them a powerful way of harnessing it and flowing it to the right people and protecting it and making it reliable, it's a big difference. Maybe a good analogy, we like to say around Cumulo is data is the new electricity, and electricity is great when you plug in your lamp. It's not good when it's a lightning bolt and it hits you while you're walking through the Park. So a good thing could have either wonderful outcomes for humanity or very bad ones. And that is very much how data behaves today.

Fantastic insights. And I'm going to wrap this up by just, you know, the points we made a bunch of points for. The points are we'd like to get people's attention that if you're going to be successful, you're going to create clients data inventory stuff and you going to have a data problem like everybody else. And so at least be thinking about that along the way because. And we'll get into this in the next episode. Once you reach the point that you can't keep up with it, that's when things start falling through the crack. And those cracks are where your growth stops because you start losing more than you're gaining. And then you become like you're on a treadmill just to stay even. And so it seems like a boring subject, but it's, it's life or death. And the way I'd look at it and I wrap it up like this is like, I would say, Bill, it's like for entrepreneurs, entrepreneurs have to look at the books. But entrepreneurs are people, persons. They're idea people, they're content creators, they're visionaries and they don't like looking at books. But the thing is, and I've always told people going in business for themselves, look, you're either going to to look at the books, are you going to work, work for someone who will work look at the books. You know, somebody's got to look at the books and know where you are. And so it doesn't matter if you like it. You come up with a simple system. You can come up with people to help you, but end of the day, you're going to be looking at the books if you're going to be staying in business and growing. Thanks so much, Bill.

If you enjoyed what you've heard and are dead serious about finding out for yourself exactly how this works in the real world, I've taken the most valuable business lessons I've learned over 40 years and put them into something for you to watch. Go to Whiteellumwinning.com webinar now in order to move up as fast as possible. I'm Larry Wydell and I run the Million Dollar Mastermind. Go, go, go.