Episode 74: Fundraising and Profitability with Julia Pimsleur

What is that stuff you used to put on bread? It was the jelly. And what was the Fluffernutter? Fluff?

Not fluffernutter.

Marshmallow fluff. Yeah, marshmallow fluff. But a little more chocolate.

I'm not hungry.

It's nougat. Nougat? Nougat.

Is there any profit to be made in Nougat? Well, someday we'll find out. But for now, you're listening to the Profit first podcast.

Episode Nougat or 74.

Ow. Boom. Go Nougat. How can we wreck the Same train like 80 times?

Yeah.

How does that happen?

Well, the engine just kept on going. The train had crashed, but the engine kept rolling forward.

Welcome, everyone, to the Profit first podcast. I'm Chris Curran, the founder of Fractal Recording.

And I'm Mike Michalowicz, the author of Profit first, joined in studio by my colleague Christina Bulldog.

Hello, world.

And you are listening to the Profit first podcast, the only show on the entire Internet that discusses the alpha and omega of profit, every vantage point of being profitable. And today's no different.

That's right.

1.

Revenue is scrumptious, but profit is.

Is just like nougat. Delicious.

Just like nougat. You can hear our show in itunes, on Stitcher, and on our website, Profit first podcast dot com. And by the way, tune in radio as well. Tune in. And. Yeah, so on the website profitfirstpodcast.com you can. You can hear all our previous episodes and see all the amazing guests we've had on the show. And it's just been great.

Oh, my God. Oh, my God. The downloads are only increasing, which is unbelievable. There's only one person not listening to the show.

Your wife?

No, there's two. My wife. My wife does not listen. The other one's Harry.

Oh, yes.

Remember Harry?

Oh, yes. So, Harry.

So what do you been up to?

Oh, I was trying to get you first.

Yeah, I've been traveling like a mad dog craziness. Christina knows it because she books all my travel.

I don't even know what you look like anymore.

I've been. Was that weird? I came back to the office, I'm like, who are you people? And everyone's like, who are you? It was weird. I've been on the road for five consecutive weeks, and next week I head out to Florida again.

Yeah.

Yeah. So it's. It's been pretty crazy, but grateful because I'm traveling to speak on Profit First. So what have you been up to, Chris?

Yeah, well, I just found out today I have in my Studio here at Fractal Recording. I have one little snack table on the side. So when we record a bunch of episodes in a row, like, I have a little snack so I don't, you know, fall off the chair and die, pass out. And now my snack table's full, and I think I need another snack table. Cause I have. Now I have a plate. My wife gave me some lunch on a plate, and I'm like, where do I put the plate?

You need a snack, but you're the.

Only consumer of the snacks, right? I mean, how many snacks does one man need?

Honestly, I have a bunch. And I don't touch the majority of them. Right. Most of them just sit there, and then I bring them back upstairs later.

Well, if you can. If you can send us a picture of it, we want.

Oh, I. I will. I will.

There's ants. There's ants crawling all over our desk.

They're crawling up my legs.

So gross.

As we're talking, Christina started, like, shaking. Like, what the hell you doing? And there's, like, ants covering her. There's something going on here at the studio. All right, guess what we're talking about today, Chris?

Our corporate partners.

Well, we are, yeah. But I want to give the tease. We're going to be talking about fundraising, and we're going to talk a little bit from a gender lens of female entrepreneurs. So we have a very special guest coming on, and I'll introduce her in a moment that's going to discuss it. But, Chris, you are right. First, I want to thank our corporate partners. They are Fundera, Fundbox, nextiva, and T Sheets. And there's. Gosh, there's another company that's so close, like, but we've had this before on.

The tip of the tongue.

There's four stalwarts who are always with us, and then there's always a teaser in the distance.

Oh, really?

But they get distracted by Chris's snack station there and never sign up. Well, let me introduce our guest. And after you hear this interview, by the way, we're also going to be discussing at the end what we learned from this. So you, listener, get your pen and pencil ready just like we have it. Her name is Julia Pimsleur, and she is the author of Million Dollar Women. Now, this is a book that's the essential guide for female entrepreneurs who want to go big, published by Simon Schuster. Big talk about big. She went big on who she's publishing with, and she is helping specifically women go to the next level. And not only that, Julia has experience Doing this. She is the founder of Little Py. You may recognize that name. It is Language Teaching, a system that teaches language for young children. And she does something that I think that's really remarkable. Julia and I met through EO Entrepreneurs Organization, got to know each other last year back in 2015. And during this process, she's going through the transition of being a full time entrepreneur, growing Little PIM to a full time author, speaker, coach, fully devoted to it. And many people don't make that leap. But I'll tell you, if you want to make an impact on this world as an author, as a speaker, as a coach, you have to go all in. And Julia just did that. Did just that. Julia, welcome to the show.

Thanks, Mike. Awesome to be here.

That's right. The crowd loves you.

The crowd loves you. You see me. I know you've been on lots of podcasts or interviewing you, but do they bring a crowd like we do?

No one brings it like you do, Mike.

Oh, Chris, did you get that?

Did you get that?

There's a clip. There's my clip.

Yeah, isolate that one. Okay, the show's over now. So, Julie, I mean, when it comes to fundraising, isn't that kind of a de facto? Shouldn't everyone be considering fundraising to grow their business?

You know, everyone has probably thought about fundraising, Mike, so you're right in that way. But there are only a few types of businesses that actually should go out and raise dollars. First of all, it's hugely time consuming, so it's not something you want to do unless you really can see where that's going to take your business and how it fits into your master plan. There are really about eight criteria that you would want your company to meet, and you don't have to meet all of them. You need to meet maybe five of the eight if you're really going to go out and fundraise. And I'll just run through them quickly. The first is you have to have a business you're deeply committed to growing and not growing in a small, little like 10% every year kind of way, in a 2x5x10x kind of way, where every year you're making huge leaps. Those are the kind of companies that attract investors. The second thing is you want to have a product or a working prototype. You know, you're past the back of the napkin stage. Unless you've started two other companies that had great exits. You don't want to be out there pitching a company where you can't show the potential investor what you're working on and have them take a little test drive of it. Preferably the third one is you've identified a real problem in the marketplace and you have the best solution for it. Investors are looking for problem solvers, so if you can't show them really quickly how you're solving a problem that's already out there, it's going to be tough to raise capital. Number four is you want to have a business plan that is very clearly thought out and evidence that you have already gotten traction towards that plan. Nothing interests an investor more than hearing, hey, look how far we got without even raising capital. Think what we would do if we had more capital. Those are great conversations to be having. So you want to be able to show your traction. The fifth thing is you need to have a team in place because if you're going to be spending 25 to 50% of your time out of the office raising money, then you got to have people who are minding the shop, right, so things don't fall apart. Few people know this, but when CEOs are out fundraising, studies show that revenues almost always take a hit during that time. So you got to be ready for that. Number six, you want to know exactly what you would do with the funds and how it'll help your business get to higher revenues. If it's just, yeah, we want to, you know, inject some capital because we think we can do better, that's not going to cut it. It's got to be, you know, with this $200,000, we're going to add one full time engineer, we're going to roll out this new product line, and here's how it's going to impact our growth and our profits in the next X number of months. And we're up to seven now, two more things. So you need to have a large addressable market. That's number seven. In other words, there are a lot of potential customers and you have access to them. Not just there could be customers out there, but you actually know how to get to them. And number eight, and this is one where I'm sure you'll relate with me on this one, you have to have a good finance system in place. You have to have a great financial person. They don't have to be a VP of finance yet. You know, some more junior companies that are fundraising saying, do I have to have a full time finance person to go out and raise money? No, you don't. But you have to have somebody who really understands the financial levers of your business and can quickly create spreadsheets sheets for potential investors who suddenly say, hey, show me your customer acquisition costs and show me how much margin you have in each channel. If you don't have those spreadsheets lying around, you got to have somebody who can make them and make them quick. So you don't have to have all eight, Mike. But you want to have like five of those eight.

You don't have to have all eight. Okay, but. So let's go through them. Maybe we'll jump around a little bit. But you said committed to growing. You know, Julia, isn't everyone committed to growing? Isn't that the default of being in business?

Well, there's growing and there's growing. Right? Because, you know, we both spent a lot of time around eo, the entrepreneurs Organization. And you'd be surprised how entrepreneurs come in all varieties from, hey, my business is going pretty well. Like, I don't want to change too much. Right. I'm making a couple million a year. I pay myself a nice salary. Sure, I want to grow every year. But they're not looking for, like, mega growth. The entrepreneurs who are running companies where they see the company, you know, doubling, tripling, going to 10 times the revenues in the next few years. Those are the ones that should go out and raise money or.

I see. So lifestyle. So I guess a lifestyle business where you've achieved the lifestyle you're comfortable with, that's not really growing, that's sustaining. These are companies that are looking to grow significantly. Now, what's the right time to look for funds?

Well, either when you already have, like a working prototype. Right. Which we talked about, especially if you don't have a track record where you can show that you already have built and created a success, successful business, you really want to be able to show off the product and the kind of traction that you've gotten already. So that's usually the best time to raise money.

Did you hear Mark Cuban? This was. This goes back many years ago, before Shark Tank was saying that when he invested in companies, he'd only invest in a company that could prove out that they will be profitable, turn a profit after his investment within 30 days. Did you hear that? Or at least that concept? Yeah. So that's why I was going to ask you what do you think about. Is that part of the investment philosophy? Are they expecting a return that quickly? What's the expectation that the investor has?

Well, it depends which kind of investor you're going after. So there's. There's broadly three types of capital you can go after in the fairly early stages of a business. You know, there's friends and family, there's crowdfunding, there's angel investment, and I'm not counting VC because so few companies actually qualify for venture capital investment, that, that sort of a whole other category. But in these three categories of friends and family crowdfunding, which is one of the easiest and now most common sources of capital for people, and angel investing, I think the lowest bar is the first. Right? The friends and family, they already believe in you. They probably have heard you talking about your company ad nauseam because that's what we do when we start a company. And they usually have a slightly less high expectation about when they will get their money back. So that's your first stop really in fundraising. And funny enough, if you try to skip that stop, it can mess you up later. If you go out for angel investment and you didn't raise friends and family, angels will often feel like, well, gosh, you didn't even go to your inner circle about this. Why should I invest? If you don't believe in this enough to go ask your friends and colleagues and former colleagues and friends from college or wherever you might hit up, why should I put money in?

So in a minute, I want to go back and just explain what, I want you to explain what each one of those categories are in a little more detail. But my question to you is, is it prudent to seek out funds? I mean, I always, I seem, it seems like I always hear people saying, I need to raise money, I need to raise money. It seems like everyone wants to or feels they need to, but is that really the case? Is it really prudent to raise money all the time?

Well, again, it depends on what your goals are with the business. If you are going after a really big market opportunity and funds will help you get there faster, then yes, if you're trying to go after a market where you know, if you overspend, you might wind up crashing and burning. Then if you take the example of my company, Little Pim, which teaches foreign languages for young children, it's an at home multimedia method. We were competing with Disney and Leapfrog and Scholastic and some really big players in the kids digital media space. So we needed the funds to have a big marketing campaign and to get out there and get on the radar of these parents who everyone was competing for. So in our case, we raised, actually I've raised all those types of capital that I mentioned earlier. Raised friends and family, I did crowdfunding, I did angel, and I raised venture capital. Those Cases, it was to pursue a larger opportunity than we could have if we had just, you know, kept bootstrapping and self funding.

Okay, so maybe we can tie in your story with Little Pim right here. When you started Little Pim, how did you get started without any funds except for your own? I assume before you went to Friends and family, or did you raise money immediately?

Well, first I created a pilot just with my own money. I probably spent about 30,000 that I gathered from, you know, my husband and my savings.

Real cash.

Yeah. And, you know, my family putting a little bit of money. So we created a pilot, a little five minute video that showed what the series would look like. And with that, I went out and raised 420,000 in friends and Family in order to create the first three DVDs of the series. We ultimately have six DVDs and later raise capital to turn our DVDs into digital downloads so that they could be sold all around the world and seen on any screen, any size, anywhere.

Now, and I'm saying this a little bit in jest, but this is a serious question that Friends and Family, is everyone still friends and family?

Yeah. You do have to think twice because you're going to see these people, right, at every family gathering, every Thanksgiving.

Every Thanksgiving, you're sitting there across, you know, from Uncle Albert, and he gave you money. Is he saying, hey, Julia, where's my cash?

How's the business going? Well, first of all, you want to set expectations. That is really important to say that, you know, this is not money that you're going to see back in two years or maybe even in 10 years. Right. This is like, usually it's a five to seven year horizon before investors expect to see their money back. The second thing that's important to understand is that no one can invest in your business who's not an accredited investor. And that is an SEC term that means that this person has at least a million in net assets, not including a home, and they're making over $200,000 a year for three consecutive years. The idea being this is not their retirement fund. Right. This isn't the money that they're sending their kid to college with. These are funds that would otherwise be sitting in a portfolio or frankly invested in someone else's company, if not yours. So that's an important piece of the puzzle. And one thing that I think stops people from fundraising sometimes is their concern that they'd be, you know, taking someone's nest egg if it didn't work out. And that's actually not Even legal, to take money from people where it would be their nest egg.

Oh, I didn't know that. Now, you also mentioned crowdfunding earlier. Have you ever participated in that? That's a relatively new phenomenon. Maybe Little PIM didn't do that.

Well, we did. Like I said, I did every type of fundraising. I'm a big believer in. I'm also one of these weird people who really likes fundraising. And I'll tell you why. It's, I loved my product. I still love my product. Not running the company anymore at Little pim, but I thought it was amazing to be able to give parents all over the world the chance to give their kids the gift of a second language. Right. And raise their kids speaking French or Spanish or Chinese. And I was always so excited to invite people in to our world as investors or advisors or other roles. But the investors really become part of your inner circle. I'd email back and forth with them, I'd invite them to events. They'd be the first to know about any new partnership we had. We just signed on with Roku. If anyone listening uses Roku, Littlepym has an entire channel now with all of our 12 languages available. So they really become, you know, your little posse.

Right.

So I always thought of it as very positive. I was not nervous about what would happen because here's the thing. I quit my high paying job to start Little pim. I took a pay cut. I was taking the biggest risk of everybody. So it's not like I was asking them to take a risk where I was, you know, paying myself some big salary. Right. And living on the high. I was busting my chops to make this company successful. And I think they could see that. And they knew that I was totally dedicated. And if for whatever reason, it didn't turn out to be the huge payout, you know, we all expected, it certainly wouldn't be for lack of trying.

Now, what about managing the expectations of these investors? You have some very sophisticated people that do this. It sounds like angel investors, VCs. You have some unsophisticated people who just, they know you, they love you, they want to give you money. I think you have to manage all of them. How do you do that?

That's right. Yes. And that is a really important piece of the puzzle. I will say that of my 35 angel investors, there was one who came back to me two years after investing and said, hey, there's something else I'd like to do with that money. Can I have it back? And I was like, no.

Yeah, we had to do that. Really? So what do you do in that scenario?

That's how I felt. Well, I had to get on the phone with him and have a conversation and say, I'm sorry. I thought I was clear when you invested that the day we sell Little Pim, there will be a huge payout. But until that time, you know, we're not issuing dividends. Like any profits are going right back into the company and you're in the same boat as the other 34 investors. You know, once he understood that, he backed off, but, you know, he probably just forgot or was wishful thinking or who knows what. But you want to make sure in those initial conversations with investors, especially if they haven't done a lot of angel investing, that you're making that all really clear.

So it sounds like regular communication is important.

Very important. And hey, Mike, let's go back to crowdfunding, because this is a really accessible way to start raising money and a great place to start, frankly. So crowd. There are two main types of crowdfunding. One is called rewards based, where you're basically giving people a reward for sending you some money. They are not investing in your company. They're almost like pre buying your product. The most successful, you know, early crowdfunding campaign was for the Pebble Watch. And you know, people would get a Pebble Watch, they'd be the first one to get it, and they sent in, you know, 500 bucks or whatever it was. At Little Pim, we did a rewards based crowdfunding campaign around a book that we wanted to produce that we didn't. We ran out of budget to do the book. We spent our budget and all kinds of other things. And when I said to my team, all right, we're not going to do the book where Little Pim travels around the world and has all these, you know, cute little holiday experiences. A 23 year old on my staff was like, why don't we do a crowdfunding campaign? And my initial reaction was like, oh, we can't do that. We're an established VC backed company. Like, we can't do a crowdfunding campaign. And that's when she showed me, well, you know, Spike Lee's doing a crowdfunding campaign. And Amanda Palmer just raised 1.2 million for her next tour. And, you know, crowdfunding is for anyone and everyone. So she wound up driving a whole campaign for us. She filmed it, wrote the script, set the whole thing up, set up the benefits, and we raised about $15,000 and created this cute Little holiday book.

Wow. Wow. And so, okay, so that's reward based.

That's one kind. Right. So that's rewards based. The other one is equity crowdfunding. And this is a little more controversial because it's newer and the SEC is still really grappling with what to do with this because, you know, I said a few minutes. You can only take money from accredited investors. That's an official legal term, an accredited investor. And you always want to ask someone who's considering investing in your company. Right. Are you an accredited investor? You can just look it up online if you forget what the definition is with the million and the 200,000 per year. But with crowdfunding, they are self selecting themselves as accredited investors. And legally you are still responsible if they're not. So there's involved there.

Are you saying they could just say they're accredited, but they're not even close. And then, and then you can get in trouble for that. You the person.

So it's still a little bit the wild west. I'm not, you know, recommending people run out and get do crowdfunding that way. There are some sites that are doing it in a really thoughtful way where it's very vetted. Circle up is one of them. There are actually some women specific sites that are helping to vet investors who really care about investing in women run businesses. And I have a list of those on my website@juliapimsleur.com I have a whole list of funding sources, but that one is a little trickier and I'm sure it'll get sorted out in the next few years. But I know that I like to meet all my investors face to face. So I wouldn't have been crazy about taking money from someone sitting in Bermuda somewhere.

Yeah. Without knowing them. Well, let's go back to the reward base. You decide to do a book, you raised $15,000. Now you got to ship the books to everybody. Do those people stay involved or is it kind of a one time pre order and they're gone?

Well, what I loved about it, Mike, is that a couple of the people who took the thousand dollars benefit because I didn't explain what the benefits were. It was everything from get a book. Right. To have me read your children the book, you know, over Skype, to have your children drawn into the book. So for $1,000 your kids would be drawn into the book and two people took up. So every narcissistic parent, which is every parent, right? Yeah, we just had to find the ones who had a thousand dollars to Spend on it. So what was great for us is that one of the people who came forward had been a longtime fan of little Pym, but we didn't know she existed. Gave her the first opportunity to really show her love and appreciation for the company and do something. So that was amazing. You actually find people come out of the woodwork who are closer to you than you think, and you just never had the chance to pull them in.

So now let's look at it from the lens of female entrepreneurs. Your specialty. Do women entrepreneurs have to approach fundraising in a different way than a male entrepreneur?

Well, you know what got me started on the journey of writing the book Million Dollar Women is that when I went out to raise venture capital back in 2012, I found out that only 4% of venture capital goes into women run businesses. And, you know, up until then, I had been pretty successful at raising money. Had already raised, you know, a few million through this friends and family and angel investing. But this was just a whole other mountain to climb. It was so hard to raise venture capital. And let's be straight, it's so hard for everyone, right? That's not a gender issue. But that 4% number, you know, made me realize I was probably going to have to work twice as hard to get it. And so I did. I spent about 10 months researching, how do you raise venture capital? Let me just crack this nut and ultimately realize that there's really a very special dance that happens. You know, I call it like the fundraising dance around raising vc. And if you don't know that dance, you don't have a shot. You have to really get that dance down. And that's a lot of what I've been doing now is teaching women this dance. But after my 10 months of, you know, blood, sweat, and tears, I did raise 2.1 million for my company. And it allowed us to double our sales the following year to convert all of our products to digital, sell them in 22 countries, really scale up the business the way I had always imagined and dreamed of. And that's when I turned around and said, all right, how do we get that 4% number up? Because this is just not okay. And started training women to raise angel and venture capital just like in my conference room on weekends. And that evolved into a partnership with Morgan Stanley. I've now trained about 60 women, and we've. They've raised over $12 million. I'm super proud of them. It's awesome. Oh, that's inspired me to write the book.

That's fantastic. Bouncing back to Your checklist, you said that you have to have an intention or an absolute specific use of funds. So once you get money or prior getting money, you have to specify how you're going to use the funds. You raise a substantial amount of money. I didn't realize this, over $2 million. What are the use of funds? I thought it would just be a boss. I want to market my business. I want to sell to a lot of people. When it comes to raising such a large dollar amount or maybe a small one, what are some of the uses, the appropriate uses of funds?

Sure. So often you'll hear about developing the infrastructure of your business. Like in our case, we had a part time finance person. We wanted a full time VP of finance. We have some pretty complex licensing deals with partners all over the world. And we really needed someone in place who could help us vet those, negotiate them, make sure we were getting the best possible deal out of each one. So staffing is a big one. Marketing, as you just mentioned, another great use of funds, especially if you can show the return on investment there. You don't want the kind of marketing that's sort of like confetti into the Grand Canyon. Right. Like we're going to do a lot of print ads. All right, well how are you going to track that? You know, investors like to see, all right, if we spend $10,000 on search engine marketing, we're going to make 30,000 in direct to consumer sales that month. And by the way, we did it in these past six months. You know, we spent 2,000, we made 10,000. We know if we spend 10,000, we'll make 30,000. They want to see that proof. And that's where having the finance person who can make the spreadsheet quickly comes in handy.

Yeah. Well, I just wanted to summarize why I just heard from you. You're saying basically have, have statistical proof show that you've already done it in your company and that this is an amplification of what's already working. Is that what you're saying?

That's exactly right. I mean, you can think of capital as sort of like the rocket fuel. Right. Like you're already in a plane, you're already cruising in at 30,000ft. But how can you put some rocket fuel in and just go so much higher, so much further, so much faster because of this capital? That's really what the investors want to see. And then a third category might be new products. You know, in our case, we wanted to convert all of our products to digital. That was one of Our use of funds and when they can see how they you'll be able to expand your product line or go into a new market. That can be another really great use of fund funds. Those are just some examples.

I gotcha. The last question I got for you before we start wrapping up here is in regards to finding investors. I don't know any angels. Maybe I have friends and family, but I don't even know how to approach them. Do you have some tips or strategies to finding those investors for your business?

Absolutely, yeah. I mean, you can go online and look on angel list. That's a great place to start. And these are.

Did you say Angie's List?

I'm sorry, that's for the plumbers.

Angel list. Okay.

For the investor, it's angel angel list. And again, this whole list is on my website because those 10 months I spent researching on this, I don't want anyone to have to spend those 10 months. You know, I had two little kids at home when I was doing that. And that was a lot of time away from my family and my business. So it's all up on my website under funding sources@juliapimsler.com so AngelList, you can also go on Crunchbase, which tracks all the investments made in tech companies. And there you can see who invested in a company kind of like mine. And you can click right through to the investor investors and see what's in their portfolio, what kind of companies interest them. But the best, in my opinion is still the face to face. You know, angel investment groups have quarterly meetings. Some of them you can go present, you can go meet angels at various summits. And you know, once you get on that circuit, there are actually a lot of opportunities to go meet angels face to face. And that's probably the best way. Just get into a conversation.

Yeah, I think a little Google search will find an angel group that's right in your area. Julia pimsleur. How can people find out more about you and dig in deeper with what you're doing?

Mike, I'd love to hear from your peeps. I am@juliapimslar.com and I have a whole bunch of resources there for free. I also have ways of working with me as a coach or having me come speak. And I launched a million dollar women masterclass, which is kind of a mini business school to help more women get to the million dollars in revenues. Mark, I have my big mission of getting a million women to a million in revenues by 2020. Are you gonna help?

Oh, yeah. Well, yeah. I mean, I Won't be a woman by then.

Maybe, but maybe we need all the help.

Yeah, yeah, no, I'll help out every way. Yeah, I'll help them with the profit side. And everyone, we're gonna have the links in the show notes. Julia, thanks for joining us.

I loved it. Thanks, Mike.

Thanks, Julia. Yeah. Michael. Michael, share those tweets when he gets back from Sweden.

Oh, nice, nice. I wonder what Barry would say about something like that. Barry. Let me ask Barry. Barry, what would my face look like? Just give me a sense of what my face would look like. Something from out of ancient times. Big mouth, lot of teeth.

That's what.

Yeah, I think that'd be. Yeah, that's what I look like. I agree. All right, in a second, we're gonna recap what we learned here. Christina's got like, literally a page full of notes. So do I. Chris does too. But first, I want to fully appreciate and thank our corporate partners who make this show possible. Fundera, we love you. Fundera is a one stop shop. If you need a loan for your business, Fundera's place to go, they'll shop it for you, come back with the best deal. But I can't say thank you to Fundera without saying thank you to a sister company, Fundbox. They're not affiliated, by the way. But my heart, they're sisters. They really are. I'm getting so for Klempt, I can barely discuss it. Talk amongst yourself. The lima beans. Neither a lima nor a bean. Discuss. So fun box. So Fundbox does invoice financing. So you have an invoice and your client isn't paying it. Or maybe they haven't approached the terms yet, so they're sitting on it. Fundbox will release those funds in its entirety to you right now. Then when the funds do come in, the money comes in from your client, you pay back Fundbox. Plus there's a small service fee and everyone's hunky dory. Cash flow management with Fundbox T Sheets time tracking software. T sheets does have rr. And you're actually saying up. Our new colleague Josh is joining on T shirts. You guys, him up on T sheets. How long will it take you to set up him on T sheets?

Two minutes.

Yep. And within two minutes, we'll be tracking his time.

All done.

Oh, beautiful. And then last company is Nextiva. Oh, we gotta order a nextiva phone.

Yes, we do.

Could you actually put that in your task list? Yeah, Nextiva, the VoiceOver IP phone system. Our office is maybe, technically, if you do the square footage, like 75 square feet. We got six people in here.

It is so packed, like sardines, tiny.

But we had the most magnificent phones system. Every desk has at least one phone, probably two now. And nextiva is doing all of us, all of it for us. And they can do it for you too. All right, Chris, I want to know, man, what did you. Would you learn today? Bret, Tha. What's your number one takeaway?

Yeah, so much. Julia really brought the goods. She mentioned raising funds from family and friends and she also mentioned that if you go to raise funds like or fundraise from other people, they might ask you, hey, did you raise funds from your family and friends? And if you say no, they might think, well, why didn't you? You know, if, if it's your life, if it's your love, why didn't you ask your family and friends for business, for money? Don't they believe in you? And I don't know, I just have to say my family would absolutely never give me a dollar toward anything I would ever do. So I would never.

And I back that decision of theirs.

So I would never put myself in the position of. Because I know the answer is no. So I don't know. I think family, there's a whole nother dynamic there with family. Like for instance, Mike, would you. Because I know you have kids who are, you know, of age where they could be starting businesses. Would you invest in your kids businesses if they came in and asked you.

Good question. A child, probably, but it would, I would gift it to them. Because I'll tell you one thing, if there's an expectation for return, it changes the dynamic. Dynamic. I borrowed money from a friend once and it changed our relationship. My longest term friend and I was the borrower. He was the borrowee, I guess, or whatever. I was the one who received the money, whatever it is, I guess he's a lender, not a borrowee. That was probably part of the problem right there. I didn't even know what the hell I was. But it damaged the relationship. My hat's off to him. He was the bigger man and, and has made our relationship. Relationship addressed the issue with me and, and sustained our relationship and our relationships is flourishing. But it's, it's neither a lender nor borrow be. When it comes to family, I think there's. Or friends, there's a lot of truth to it.

Well, that's why Julia mentioned to set that expectation of return for. What did she say the natural one is I think five to seven years, which I think that's Important to lay out. Lay out everything on the table before you even take the money from them.

I love that feedback and the constant communication. So she has someone come to her, a family member, whatever, saying, I need my money. Money. She was communicating proactively leading up to it, and in the moment, had the hard conversation. Yeah. Interesting feedback. Anything else you took away, Christina?

Well, I have a whole page. I don't know what to tell you. I think my favorite thing that she said, which applies, I think, to everyone, is to love your product. If you're excited about it, no matter whether you need money, if you need employees, that is going to be like a virus. It's going to spread.

Yeah.

It's so, like, if you believe it's same thing here in profit first, everyone that works here believes in it because it works, works. But, like, it's just. It's contagious. And it's easy to. To kind of get people on board.

With it, you know, I almost want to scratch out my tip because yours is better. It is the ultimate sales technique. And raising money is selling. You gotta sell the idea. My takeaway was toward the end, she says, you know, you're already flying a plane. Now put in rocket fuel. That was kind of a great analogy for me. Many businesses aren't flying the plane yet. They're not even off the ground, and they're trying to get rocket fuel. That's the wrong time to do it. Make sure your business is already flying high.

Have the proof?

Yeah, have the proof. God, you're on fire.

I know.

Oh, my gosh. Dude, you should see his office. She redid the entire office in the last two days.

Really?

Yeah. We're expanding. We need more space, and we need a better layout. She changed our. Our KPI board, our. Our morning meeting. We have our key performance indicators on the wall. She's redone everything. Everything's redone. It's awesome.

Did she provide little snack tables for every desk?

That's next.

That's common. We do have a snack bar. Ish. But there's nothing on there. So for tea, there's coffee. All right, we better get rock and roll in here. You want to start wrapping this up, Chris, with your.

Yeah. I just want to say to. To actually to Julia, and maybe to you, Mike, that I actually have an idea for a business which is. It would be similar to Shark Tank, but a different take on it and, you know, done over the web. And, like, I don't know, I just have this idea. I have a cool name for it. I don't know if I should say it because people might steal it. It.

But then keep it.

Keep it in your head anyway.

I mean, just.

But it's one of those ideas where, you know, literally I couldn't do it without a bunch of like either a lot of help or a lot of money. It just because it would take a lot of effort and I don't have that because I'm involved with my own business. So those are. What do you do with those ideas, Mike? You just file them away and wait.

On them or, you know, I, I am a believer of go all in on one thing thing. And if you have another idea, find someone else that's willing to go all in on it. And then you can be a partner in it. But you can't run two businesses simultaneously. So maybe you can find someone else that wants to go all in on it. You know, I'm a co owner in a manufacturing business. I'm there, I fly out there maybe four times a year for a couple days. But there's a guy, Paul, who's all in. That's his full thing. And the business is flourishing because of that. If you have another idea, maybe that's the way to do it.

Right?

Yeah. Cool.

So by the way, don't forget, you can subscribe and listen to our show and itunes and Stitcher and tune in radio. And if you have any questions about podcasting, definitely ask me. Fractal recording.com is my website. And Mike, profit first professionals is is.

That's what I do.

30,000Ft and gaining rocket fuel. So tell me about it.

And we're not seeking investors. We are seeking you, the entrepreneur who wants help to improve the profitability in your business. Why? Because you can come to our website and we will hook you up with an accountant or bookkeeper or business coach. That's the three types of members we have that will help improve the profitability in your business, give you the internal rocket fuel that's already there. They'll expose it to you. So here's the one thing you gotta do. Go to profitfirstprofessionals.com right now. Go to the find button, click on that, fill out the form, and we'll hook you up. Oh, and talk about hooking you up. You know who's coming on next week? Michelle V. Lo.

She's awesome.

She's awesome. She's one of my best buddies. She's going to share insights on her implementation of profit. First, she implemented it into her organization, which is a membership organization, has the highest degree of profits they've ever experienced as a result.

Crazy.

Oh, and one thing, Chris, I want to do. Putting you on the.

Yeah.

On the hook here. I want to read. You know, I usually take shout outs. I got a. A flame. I mean, someone just came in. I want to read it on air. I mean, just lit me up. I want to read it on air. Maybe you can contort my voice so it's like one of those mystique hidden voices, you know, where it's like we can't tell you what his real name.

Is, but transfer $2,000.

Yeah. Go to the mailbox down the street, circle around three times, remove your underwear, and then quickly take the money and run. Like, that's the type thing I want to do.

All right, well, thanks, everybody, for listening the Profit first podcast. Thank you, Mike. Mike. Thank you, Christina. Thank you, Julia. And thanks, of course, to Obi Ron Kenobi, who is. His presence is always with us. All right, see you guys.

See you.

Sam.