S2EP1: We Need to Build Our Own Infrastructure with Cindy Gallop

This is The Capital Flex. I'm Naseem Sayani. This show codifies the capital playbook because no founder should have to learn the hard way. We talk about what really happens behind closed doors, the bias, the breakthroughs, and the things no one says out loud. If you've ever walked into a room and felt the system wasn't built for you, you're in the right place. Welcome to The Capital Flex. My guest today is none other than the formidable Cindy Gallop. I have been a fan for ages. We've very recently become the dearest of friends, which I'm so excited about. And she's joined me here to talk about all things venture and fundraising and all the things that we all love and hate and are going to fix in short order, hopefully. So a bit of an introduction on my good friend. Cindy Gallop is a graduate of Somerville College in Oxford and has over 30 years of experience in brand building, marketing, and advertising. Everyone knows you well, but I'd like to go through the accolades because it's important. She started up the U.S. office of ad agency Bartle, Bogle, and Hegarty in New York in 1988 and was named Advertising Woman of the Year in 2003. She is also the founder of Make Love Not Porn, a social sex tech platform designed to promote good sexual behavior and good sexual values. The core value proposition is pro-sex, pro-porn, pro-knowing the difference. As a result of the fundraising challenges she has encountered, she is raising the world's first and only Sextech Fund, All The Sky Holdings. She acts as a board advisor to a number of tech ventures and works as a personal brand life executive coach and consultant on brand and business innovation for companies around the world, describing her consulting approach as, I like to blow shit up. I'm the Michael Bay of business, which I love. So Cindy, thank you so much for being here today. It is such an honor to have you on The Capital Flex.

Oh, thank you, Naseem Sayani. I'm thrilled to be here.

If you will, for everyone listening, everyone knows you of course, but if you wanted to add a little bit more to your intro, to your background, anything else you want to share, please feel free to.

Sure. I, I mean, I think what I would say is, you know, Make Love Not Porn continues to be my primary focus, but I will make our listeners aware that because of the specific challenge, challenges I face building a sextech platform, that has really defined my product roadmap. And so I have a number of infrastructure products in play, but I'm sure we'll have the chance to come on and talk about those in, in more detail during our conversation. So I'll just flag that up at the beginning.

Okay, perfect. Well, the, and you know, the mission of this podcast is to get into the fundraising stories of female founders, and we all know these, hear these, share these in rooms and over text pretty constantly. We'll spend a little bit of time there, and our conversation, as we talked about, We're gonna futurecast VC and just envision what it might look like once we fix it. But before we go there, I would love to ask you one question that I do ask everybody. If you had to describe your fundraising experience in 3 words, what 3 words would you use? What comes to mind?

Absolutely fucking awful.

I had a feeling, I had a feeling that's what you might say. Say a little bit more. Give us a little bit more.

Sure. So I represent the triple whammy of unfundability. I'm female, I'm older, and I have a sex tech venture. I actually represent the quadruple whammy of unfundability because I am in fact a woman of color. I'm half Chinese. My mother was Malaysian Chinese, but I'm white passing, so I don't, I don't include that in the barriers that I specifically face. But I have to tell you that sex is literally the the final investment frontier. And so anybody operating in my sector just faces challenges that are even greater than females face generally.

Yeah, because it, it is wrapped in stigma still and we don't talk about it and it's, it's, it's shrouded in so much misinformation and, and also it's such a male-led conversation that when women talk about sex, it ends up being something that people get nervous. And uncomfortable and they, they don't want to talk about it because somehow it feels shameful.

Well, I'll tell you what's interesting, Naseem, is the extraordinary hypocrisy that exists in the investor VC world around this. Because, you know, I mean, you mentioned earlier that my background is advertising and I have a sextech venture. The two things that what every tech play defaults to when the time comes to, oh my God, gotta produce revenue, are advertising and sex. And so the latest example of that is a Sam Altman announcing in the past few weeks that he's going to allow ChatGPT to sext, which by the way is a really bad idea.

Really bad idea. It's terrible. Yep.

And B, making a number of noises and, you know, we've seen a number of developments that indicate that, you know, he is leaning on advertising as the way for ChatGPT and OpenAI to generate revenue in a situation where they are absolutely not delivering against the billions that have been poured into their investments. And, and so this infuriates me because, you know, the VCs funding AI are absolutely fine with this, but they will not fund what I do. And, you know, I've, I've been saying for years that sex tech is the next trillion-dollar category in tech. And it absolutely is when founders like me get the same level of funding, support, championing, and door opening that other founders do in more conventional sectors.

Right, right, right. And that even. So deeply problematic because we also were watching, and you, you must know Deidre over at Fertility and all of the controversy and the problems with the censorship around just even marketing a women's health company. Like, we can't say words like pelvic floor, and you can't say menstruation, and you can't talk about pads and tampons because it gets pulled down as controversial. And yet he is over here saying Sam Altman can say that OpenAI, or ChatGPT can text sexed. You know, these two things can't sit next to each other because we're not letting it coexist. And I don't understand why that's okay.

No, exactly, Naseem Sayani. And so this is why, you know, I'm just gonna expand on what I alluded to earlier because my fundraising challenges have led me to take a different path that I never originally intended to take. So just for the benefit of our listeners, I and my tiny team fight a battle every single day, not even to grow Make Love Not Porn, just to keep it alive. Basically because every piece of business infrastructure other tech startups take for granted, we can't. The small print always says no adult content. And that is all pervasive across every single area of the business. I can't get funded, I can't get banked. Earlier this year, Make Love Not Porn was debanked. 3 times in 2 months into H25. Every tech service I need to use to operate a video platform, hosting, encoding, encrypting, the terms of service always say no adult content. My 2 biggest business growth inhibitors are number 1, payments. So PayPal won't work with adult, Stripe won't, mainstream fintech won't. I have to work with the murky subculture of adult-friendly payments who, because anybody adult has nowhere else to go, charge extortionate fees. I pay out 12% of my revenue every month in payment processing fees alone when mainstream is through settleless. And my other business growth inhibitor is what you alluded to, which is that we are banned from advertising and promoting Make Love Not Porn anywhere. We cannot advertise on Facebook, Instagram, TikTok, Snapchat, YouTube, Google, Reddit. Look at what's on Reddit.

Reddit has insane stuff and you can't advertise there.

So I'm a great believer. That when you have a truly world-changing startup, you have to change the world to fit it, not the other way around. If the ecosystem that is meant to enable you to scale and thrive shuts you out, build your own ecosystem. So, so I have a product roadmap for Make Love Not Porn that is focused on infrastructure. So it's at the heart of it is Make Love Not Porn itself, sex tech platform, very hard to raise funding for. Around it, I have an edtech product, a fintech product, an adtech product, and an AI product. And by the way, Naseem Sayani, I did not intend to be an edtech founder, a fintech founder, an adtech founder, and an AI founder, but I am.

All at the same time, right? Because that's easy to do, right?

So the edtech product is, and the point about these infrastructure products is I believe in building solutions to my own problems. That everybody else facing the same problems can use, which in turn make me a shit ton of money, which provides the funding I need to build my core business. So, and the edtech product is in direct response to the fact that parents and teachers have begged me for years to build the 0 to 18 and beyond sex education expansion of what we do. And so I had the idea for makelovenotporn.academy 10 years ago. That's how long investors refused to fund it. But we raised a small amount of equity crowdfunding last year, and we, which enabled us to design and build it. And, you know, listeners, special sneak preview. If you go to makelovenotporn.academy, we have just taken a very bare bones MVP, um, very early stage beta live under the radar to real world tests. And what this is, is it is a global aggregator hub for the best of the world's sex education content that is already out there, but has been blocked, censored, and deplatformed everywhere. So our mission with Make Love Not Porn Academy is to organize the world's information, that sex education information, to make it universally accessible and useful. That's a deliberate paraphrase of Google's original mission statement, organize the world's information, because today in this area, Google is not doing that. The algorithm itself censors. Parents and teachers tell me they search resources they need, they can't find them. So we're building the Google of sex ed. And by the way, Naseem, with a very straightforward goal in mind, at makelove.poor, we operate a 100% human-curated model. Human eyes vet every educator, every piece of content, make sure it's educational, fact-based, non-judgmental. And the game plan is when I prove I can operate a dedicated sex education platform safely and securely, giant edtech company buys it from me for a shit ton of money. Okay. That's that game plan. At the same time as we've just released the Academy, and by the way, we're real world testing. We will officially launch it early next year when we have a critical mass of educators and content. Listeners, when you go to governmentporn.academy, be forgiving. We're still loading on.

Yeah, it is in beta, right? They can.

Test it out. Yeah, yeah. But, but at the same time, I, I, I am also in the process of realizing my second product, which is a fintech product. And this is a fintech product because I've said for years publicly I want to build the Stripe of sextech, because the first payments app that welcomes legal, ethical, transparent ventures like mine cleans up. There is a huge market opportunity in so-called restricted business because it's not just sex tech and adult like mine, it's cannabis, it's psychedelics, it's crypto itself, and it's also businesses you, you would not think would be restricted. So in, in the past couple of months, I came across on LinkedIn two separate posts from female founders, each one of whom is building a crowdfunding platform. Stripe has just decided that crowdfunding is restricted business. They'd integrate Stripe at cost to themselves and Stripe had told them we won't work with you. So, so huge. So I, I am working on, um, I've found a partner. We are integrating them into Make Love Not Porn for payments in and also payouts because paying our creators on Make Love Not Porn stars is equally, you know, difficult. And the game plan is we're going to proof test this solution on our own platform, make sure it works for us the way we need it to. Then we're going to turn into a standalone app that everyone else can use. I'm calling it BlockFree. We have a holding feature, blockfree.us. I like the rallying cry, block free us, because I want to free us all the blocks of fintech injustice, but also because we're building this on the blockchain. And again, it's 100% human curated, humanized, vet every applicant, make sure they're ethical, you know, transparent, legal. And again, the path to exit is very clear. When I prove it is possible to take restricted business payments safely and securely, giant fintech buys me for a shit ton of money and that funds the whole business.

Right, right. And now you've built the scaffolding that other companies can use that they don't have right now. And not everybody has to build their own small versions of something with a bunch of money.

Exactly. And also Naseem Sayani, this is, this, this is designed to unlock funding for everybody else because I have to tell you, So I'm one of a whole cohort of wonderful female femtech, sextech founders, and each one of us has struggled to raise funding. But, you know, in dribs and drabs, we have all found investors. Here's the problem. Sextech investors only invest once. And, and the reason for that is, is demonstrated by, I had a conversation many years ago when I was looking for seed funding for Make Love Not Porn. I spoke to an angel investor, a man who had invested in Jimmy Jane, which is one of the first vibrator companies to design really cool vibrators, you know, sell them online. And, and, and this investor had absolutely seen the potential in sextech. And so he'd invested in Jimmy Jane and he had then discovered all of the barriers I referenced to promotion, to distribution, to sales. And he said to me, he said, I'm never investing in this sector ever again. And that's the issue. You know, sextic investors invest once, then their eyes are open to all the barriers. You know, there are no big exits in our sectors yet because it's so incredibly difficult to get to the point where you are a desirable acquisition. And so if I can build the infrastructure that unlocks revenue flow and, and therefore funding for all of us. Then I can hopefully make the sector explode and absolutely be the next trillion-dollar battery internet.

100%. Then it makes the scale so much easier for everybody else. You could take all the barriers out.

100%.

Oh, I love that. That's fantastic. And so in the, in the same way, how, how we think about what venture looks like in the future, because I've, there's so many things that we can, that we have to, that we have to fix, that have to change and And part of what I keep thinking about is there's those, you know, the fund structures are a certain way. It's, you know, it's a 10-year life and it's 2 and 20, and there's certain— some sectors don't line up to typical fund structures in easy— like biotech in particular. You can't fund early-stage biotech because it doesn't commercialize in 10 years. It takes 14 or 15 years. We need a different way to fund early-stage biotech. We also have so much embedded I'm still gonna call it pattern recognition, even though folks don't seem to like that word anymore, but it's just embedded in the system on how people— where signals for success come from and how do we adjust what that looks like. There's also the profile of the investor and how we, given the $83 trillion that's headed towards women in the next 10 years, how we get more women primed to actually know what to do.

With that capital.

And so I'm trying to spend a lot, I'm trying to brainstorm on how to move the needle on those things in significant ways so that when we look around in 3, 5, 8 years, we can actually see the whole system working better. And part of, I'm doing my, my parts of it are I'm bringing a lot of insight and resources to female founders in whatever way that I can, hosting sessions, doing education, bringing speakers. And then one thing I've done in a few rooms, and just to get some of our brainstorming going, is in rooms where I'm talking about wealth and women, and it's always half the room is like, oh yeah, absolutely. And then half the room is like blank faces because no one's ever asked them to invest before. And everyone thinks that it's big money. They go, well, I don't have $250,000 or I don't even know where to start. And what I've said a few times, it's gotten the room to kind of sit back and go, oh shit. That's— we could do that is if we wanted to, we as women, we could put $5 billion into the system right now because there in 2024, there were 11 million women in the United States who were older than 35 years old. This is the math problem I take people through. And if even 1% of those women are accredited, That's about 100,000 women. If 100,000 women put $50K into venture today, that's $5 billion. Now, 100,000 might sound like a lot of people, but Rose Bowl Stadium here in LA, which is where I live, holds 90,000 people. Can we fill the Rose Bowl with 90,000 women who could put $50K into venture today? Goodness, I feel like we could. Right? And it starts to become this number that suddenly is achievable. And you go, okay, let's do the Rose Bowl. Let's do other stadiums around the country and let's fill the stadium with women who are putting $50K into venture. Because actually the $50K is not all due today. It's spread out over 4 years. So how, how do we get money to move by way of those kinds of stories? Because if, if we start there, everything else can move with it because now the capital's not beholden By a bunch of dudes, we can actually just decide where it goes ourselves, right?

So what I really want to see happen, Naseem, is I want to see women blow up the current venture capital system and completely reinvent it. You know, I've been saying for years to women, I want every one of us to unashamedly and unembarrassedly set out to make an absolute goddamn fucking shit ton of money. I deliberately articulate it like that because that is how much money I want us all to make. And I explained that I want us to make that kind of money, not just to benefit ourselves, but because when we make that kind of money, we can then use it to fund other women, support other women, help other women, donate to other women. We need to build our own financial ecosystem because the white male one isn't working for us. So, so I would like to see women create their own venture capital system that owes absolutely nothing to the existing one. And I'm gonna give you a different example of what I mean, because this thought was sparked by a conversation I was having with a female friend last week about this precise issue. And we were talking about, you know, what, what is, what is currency for women? Because currency. And wealth means different things to us than it does to men. My thought off the back of this discussion was, so if we were to design our own system of currency, what would that be? In other words, you know, by the way, we do not know that Satoshi Nakamoto was not a woman.

We don't know that, right? I've had that conversation a few times. We don't know.

Yes. But what would the female version of Bitcoin be? What would the female version of crypto be? Because it would not be what is out there right now. Imagine completely reinventing currency through the female lens in a way that creates an ecosystem that is ours, that, that values what we value and that generates what we need to generate and that makes what we need to happen happen. And, and by the way, that's as far as my friend and I got in our discussion. She, she is really interested. She said she wants to take some time to kind of read up and think about all of this. But that is literally how we need to reinvent how the system works. Because when we reinvent how the system works through our lens, it becomes a lot easier to invite women into it because they get it.

Because it'll work. This episode is brought to you by Phoenix Fund Services. A fund administration firm built for fund managers who want more than a back office provider. Founded by experienced fund professionals, Phoenix combines institutional-grade technology with senior hands-on service, giving fund managers the infrastructure, responsiveness, and operational support they need to grow with confidence. Working with Phoenix means you are not just getting a fund administrator, you are getting a partner that understands what matters to you. Timely reporting, a smooth investor experience, responsive communications, and confidence that the operational infrastructure supporting your fund is built and managed properly. That means less time managing the back office and more time where you create the most value, raising capital, supporting investors, and building the fund's portfolio. Visit Phoenix at phx-fs.com to learn more.

Right now. Another dimension of this is also something I've been thinking about for years. And because unfortunately, until I raise the funding I need, I cannot, I cannot, I'm not freed up to actually pursue any of these. But my friend Jana Hristova, I don't know if you know her, she has a wonderful podcast called The Purse.

Oh, okay. I'll have to listen to it.

Yes. And she's all about women and wealth and getting women funded. And I've been on a podcast a couple of times that this idea came out of. Jaan and I having exactly this conversation after one of those interviews. And what we were talking about was something a bit different to what you've identified with women, which is actually there are a lot of women out there with a huge amount of money who have no idea they could be using it to fund other women.

Because they're putting it into philanthropy in spades.

Well, not even that actually, because, and actually after this conversation Jana and I have decided we actually registered the company in the UK called Ultimate Asset Class, because that, that's what we are. And, and the goal of this company, which would be a for-profit business, would be to persuade women, certain groups of women— I'll come on to that in detail— to actually fund other women by tapping emotional levers, not rational ones. I'll give an example of a target group, you know, this is the woman who married young, stayed home, raised the children, you know, supported her husband as he built a billion-dollar company. You know, the kids leave home, the husband has a mistress, dumps the one, she takes him to court and she gets half of everything. Think, by the way, the UK version of this is Russian oligarchs' wives. Okay.

Yeah.

She is now sitting on billions of dollars. And she is buying 15 Hermès Birkin bags and matching outfits. And, you know, because that's all she knows to spend the money on. And emotional lever for her is he kicked you to the curb. Want revenge? Fund these women, build a billion-dollar empire way bigger than his ever was. And so that, that's a very specific emotional lever that would absolutely trigger, you know, a woman who's treated—

she would redirect her funding.

Yeah, exactly. Then there's another group of women, okay? So these are the women who, you know, joined at the bottom completely male-dominated industries, worked their way up through the ranks. These are the women who are tough enough to make it to the top through the sexism, the misogyny, the sexual harassment, made partner, you know, at the law firm, at the finance firm. They have now retired. They are sitting on billions. Okay. But because it took everything they had to make their way up through the ranks to make partner, to get to that position they retired from, they've retired and they don't know what to do with their money. And, and, and, and the idea of funding female funds has never crossed their minds. And so the emotional leverage for that group of women is, you know, all of that shit that you went through, you know, climbing the ladder in your industry, you can fund female founders who are completely reinventing your industry to change it for the better and yank it out from under the complacent, mediocre white boys who had to deal with every fucking minute of every fucking day. And obviously we're talking law and by the way, The opportunity to reinvent law as an industry is colossal. And, and so again, again, for these women, we are talking about an emotional lever that gives them a reason for why they should consider deploying their funds in this way.

Yeah, it's an emotional lever and it can also connect, 'cause the, the other thing that I also think a lot about is community as a superpower for women because it, it, you put women in a room and create a safe space and give them room to talk and share. And really connect the dots on their lived experience. And you put a lot of those women that became partner at different law firms in a room to talk about that, and they will all move their money together because they all want to get after those incompetent white men together, right? And so we can do that in multiple instances by combining the emotional lever with that community superpower. And actually, design that whole system differently.

Yep. Yep. Yep. And that's because we have all been there. Okay. We've been, you know, I mean, broadly speaking, you know, absolutely had the husband leave for the mistress, you know, absolutely had to suffer those mediocre white men every day of our working lives. That is, that is a completely different, to your point, communal commonality of understanding. Absolutely be leveraged to, to build a new financial, a female financial system.

Yeah. Yeah. And we can do that in so many different ways and have those conversations. And I've seen it work in small instances where we— I've done women and wealth salons in, in someone's home, in their living room, wine and charcuterie. And you just start to talk and you start to hear these stories and the, and the emotional experiences that they're their relationship with their job or their career or their, or with money. And you start to see these alliances form and they, none of them knew each other when they walked in the room, but they leave the room having made a new best friend as a grown woman, which is so hard to do. And all of a sudden now we're having different conversations when we leave. And the more and more we can do that, designing a new ecosystem or a new venture structure could absolutely be possible because we also have different financial tools we could be using. We could be using our retirement assets differently. We could also change what those look like. We could use DAFs differently because women have those things, but they're not activating them.

And, and also to your point earlier, Naseem Sayani, you know, design a financial ecosystem on a completely different timeline. We, boy oh boy, as women, do we ever know patience because we have to operate so much of it. Okay. You know, we are not, you know, the gender that gets instant gratification because nobody wants to give us instant gratification. And also we are the gender that, you know, plots things out along longer timelines. You know, when you've got children, you are projecting out through the course of their lives, you know, and I bring that up because, you know, the venture capital system completely redesigned through the female lens, designed for women, it is absolutely about the time it takes to get the best possible returns.

Yeah. Gosh, designing venture capital through a female lens would be like, that's a whiteboarding exercise we have to do and sit in a room with the whole room of whiteboards and figure out what that would look like would be tremendous. What else do we put in that room to figure that out? Like we need, it's the financial structures, it's how we design, how we design the funds would be different. Who the investor is, is different. How we bring, how we bring the money out from people is different. These emotional levers become really important. How we connect with founders is different. Like there's, there's a, probably a whole conversation to be had about How we make sure founders benefit from this structure as well, not just by way of the money we give them, but potentially by also having a stake in the fund itself, because that the communal nature of being part of the fund that also invented, invested in you and the collaboration that that would drive within the fund and the portfolio companies could be really interesting and reinforces that community superpower as well.

The opportunity to do something that I've been talking a lot about for many years, which is the opportunity to reinvent aspirational culture around venture capital and funding. Now, I've talked about this for years, especially to my own industry, advertising, because my industry, advertising, invented aspiration. We made people want things. But we made you want material things. You know, in the Mad Men days, we made you want the right watch, the right house, the right car. Today, you know, I say to my industry, we have a huge opportunity to reinvent aspiration around things that will actually vastly improve people's lives, where the brands that actually do that reinventing then build strong emotional relationships with consumers because of that. And I talk about that across a whole lot of different areas, but in this particular case, we have the opportunity to, in reinventing venture around through the female lens, to reinvent what is considered aspirational about founders and funding. So at the moment, in the white male dominated, you know, VC ecosystem, obviously what is considered aspirational is working 24/7. Sleeping under your desk, you know, sacrificing everything, you know, all of that absolute bollocks. And we have the opportunity to reinvent aspiration around what it looks like when you have supportive investors, long timelines, phenomenal work-life balance. Imagine a public face of venture investing that shows that everyone involved is having a very good time. Imagine that.

Gosh. Well, but things like founder care sitting at the front rather than left behind, where we're thinking about mental health and we're building in executive coaching into term sheets and we're building in childcare into term sheets and we're building in things that make sure that that founder's personal stability and their sustainability as a human is something we're prioritizing. Because, because there's all, there's studies that support all of this, that if that founder stays well and isn't sleeping, you know, underneath their couch or something and not eating well, if they are well, their company is well and revenues deliver on the other side. And we can build that into how we structure term sheets. It, it just can be part of how we think.

And so what becomes aspirational is a completely different type of founder mode.

Mm-hmm. Yeah, 100%. 'Cause we, I've, God, I've been on panels just recently where it was me and there was a, a male VC and he said out loud that once I write you a check, I expect you to be working all the time. It would be very weird to me if I heard that you were taking weekends off.

And I, oh my God. Oh my God. Naseem Sayani.

I looked at him and I was like, crying out loud. Yes, it was insane. I looked at him and then I looked at the crowd and I was like, I need you to sleep. Like, I really do need you to sleep because I need to sleep. So I get it, but my, my founder relationship and what I need you to be is completely different. And, and, you know, we just have different ways of writing checks. And I couldn't believe he said it out loud. I was like, you, you cannot tell a room of founders something like that. I cannot believe it.

God. Yeah. Gobsmacked. Oh, gobsmacked.

God, it was awful. Awful. Yeah.

I love it.

Founder sustainability, I think is. Has to be front and center, and they were already starting to do it. So many of us are already paying a lot of attention to that, that, and that would have to be part of the ingredients that went into it. Absolutely. And then how we think about, you know, the, let's think about how the, the returns, once there's a return event or a, you know, 'cause what gets showcased right now is the IPOs. It's the big bunch of zero IPOs or the big events, and that's what everyone has their eye on. Is that it's only if I get the big IPO have I succeeded. And the, the strategic M&A exits, the quote unquote smaller exits or things like that, don't get the kind of celebrity that the big IPOs get. And we, I would want to make sure that every kind of exit gets attention, 'cause I've had founders ask me, so, but if I get acquired by another company, does that count? Or if it's not, if I don't make an you know, 8-figure paycheck out of it, does that count as an exit? And I said, every single exit counts.

Oh my God. Yeah. Every single exit counts.

It doesn't have to be you made a billion dollars, but you got acquired. That counts as an exit. That's it. But we have to tell all of the stories and say them out loud.

Exactly. And Naseem, are you familiar with theygotacquired.com? No, I'll have to go check it out. Right. Okay. So, so, so for you and all our listeners, go to theygotacquired.com. And sign up for their weekly newsletter. So they got acquired, it was started about 3 years ago now by a wonderful woman, Alexis Grant, who got completely fed up with seeing all those headlines of Silicon Valley billion-dollar exits. She started, they got acquired to, to be a media platform and a resource center to showcase, celebrate, and advise on exits on a spectrum from at the low end, kind couple of hundred thousand to at the high end, 50 million. The point being at every point along that spectrum is life-changing money for founders, which by the way, can fuel your next startup, you know, going forwards. And, and so I came across, they got acquired and signed up right at the beginning. And I found their weekly newsletter an absolute revelation in terms of realizing that anything you start has acquisitional value for somebody. And that there are many different models of acquisition. You know, it doesn't have to be the one people think it is, which is you've gotta raise, you know, you've gotta have this much revenue for this many years. You know, to, I mean, to, um, one of the case studies was a group of founders started something, forgotten exactly what it was, but they launched it one week later, American Eagle acquired it. That can happen. And, and also Alexis does things like she does collections of You know, the other, the other, um, a while back she showcased 15 exits where the companies have no full-time employees.

That's incredible.

And you can still have a really good exit. And, and so I encourage, I mean, all the, um, women I coach, um, and people generally, you know, go to thegodacquire.com, check it out, sign up for the newsletter, because that just gives you a very different sense of what an exit can be. And as I say, it can be your first exit and then you go on to build something bigger. Yeah.

Well, and that, that's great because there's so much myth-busting that gets built into that cuz it's not one formula all the way through. And we just don't hear these stories to know enough of that. I had, I had Kiki from Hey Jane on a, a previous, previous episode and she, and I didn't know this till she said it, she's never had a lead investor. She has raised more than up to, I think, almost $15 million now. And she's been through a Series A, never had a lead investor. She's been able to raise all of her rounds without a lead. And it's because of the momentum, momentum in the brand. It's because of what's going on in the market. It's because she builds incredible relationships with the investors that write her checks. But everyone else has always assumed that there's a lead investor or that you have to have a lead investor, but you don't. You can still raise significant cash without a lead.

No, and by the way, Naseem Sayani, it's so great to hear that because I mean, this is what I found when I was trying to raise funding for Make Love Not Porn, which I have backburnered because it was, it proved impossible, which is why I'm taking the infrastructure route. You know, what I heard regularly was I did actually talk to interested investors. What I heard was, you know, we don't lead, so come back when you have a lead, or who's the lead, because that will decide whether or not we come in. And you know, I love the idea as part of this of, yeah, I mean, you don't need a lead if you have a really compelling proposition, uh, then, then people will get it and they will absolutely, and by the way, obviously Hey Jane has a phenomenally compelling proposition, so all, all power to them.

Yeah. Yeah. I thought it was fascinating. The other part of the infrastructure that we would need to rebuild is the funding offerings that come from the major banks that are meant to support founders in between rounds. So things like venture debt. And other things. And this, because there is, of course, continues to be embedded bias in these things. And, and I found this out quite directly because one of the founders that I've invested called me on a Saturday morning at 7:00 AM, just frustrated and blistering mad because she had been going after venture debt for the last like 6 months. She had just raised a Series A, $8 million. She has like $3 million in revenue already. This was by 6 months ago for this year. And so it's a well set up company, revenue positive, just raised around, and kept getting denied venture debt. The reason being the credit teams don't know the investors on her cap table.

Oh, for fuck's sake.

Right, right. And oh my God, more than half of the investors on her cap table are diverse manager funds, women-led or diverse-led. So because we don't know the investors on your cap table, we cannot approve your venture debt.

And crying out loud, right?

Blows your mind. And she told me, she said, there, this is a system failure. There is something going on here because if they don't know, they don't care about my business metrics. They're making decisions based on my cap table. Now, if, if A16 is on my cap table, I'm assuming they would approve me, but because It's a bunch of, it's a handful of amazing women-led funds. They're not gonna approve me. So, so I started investigating. I did a survey on LinkedIn. I got a bunch of input in from founders who told me about what their experience was. Did they get approved? What were the reasons? And this same reason came up in a lot of those. And then I talked to two friends who work at banks who do venture debt, and both of them said very clearly 100% the credit teams make their decisions based on who's on the cap table because they're anchoring your longevity as a startup based on what they perceive to be the longevity of the funds who have invested in you. And I nearly fell outta my chair. I was like, you have got to be kidding. So now, one, you're discounting the decision-making of those funds. One, two, you're also, until those funds are on their fund 3, 4, and 5. You will never give venture debt to the companies and founders that we are funding. And everyone we're funding is diverse as well. The entire half of the ecosystem is getting left out of these products completely.

I'm flabbergasted.

Mm-hmm.

Jesus H. Christ.

Yeah. So all of that we have to redo through a female lens as well and say these products don't work for half of the ecosystem. Let's reimagine all of those products as well because they, we just can't access them. Exactly.

And by the way, Naseem Sayani, so nearly 17 years ago when, when I was starting to build Make Love Not Porn, realizing the obstacles I was up against, somebody said to me, Cindy, to do what you want to do, you are gonna have to start your own bank. And I was so frustrated that I went, right, I'm gonna start my own bank. And so 17 years ago, I investigated starting a bank.

Okay.

Which is why I discovered it was impossible. You know, legislation, regulation makes it impossible. But over the years, some people who wanted to help me find investors, um, said to me a while back, Cindy, we bet you could raise funding to acquire a bank. And I went, I love the way you're thinking. I've gotta focus on, you know, my business. But, but I have regularly thought, you know, that, that, that is on my wishlist for the future. And, and if I could acquire a bank, um, my Make Love Not Porn team knows this. I've said to them, if I ever acquire a bank, the first thing we're doing is we are opening this bank up to every single sex worker who's ever been denied a bank account, and you will see how much money we can make. But secondly, I would absolutely use that bank to completely reframe how you support female founders. Mm-hmm.

Oh, 100%. We could completely change. How anyone gets funded or how that funding works, what kind of terms are against it, the interest rates, everything could change to be much more collaborative versus what's— I'm creating the word, but instead of trying to take money from people, we can actually help them grow. And that would be the right way to do it. Goodness. So we are, we are coming up on time and this has been unbelievably interesting and we, we have to go do all of this.

So we have to figure— and, and, and by the way, Naseem, just as something that you referenced earlier, This is what Mackenzie Scott should be giving us billions to make happen. You know, and, and honestly, it's one of the tragedies that her focus is on philanthropy. I mean, what she's doing is wonderful, but she thinks she can only change the world through nonprofits and philanthropy. And, and she's surrounded obviously by advisors who are reinforcing that. And what we've just laid out, um, if anyone's listening and anyone knows—

come and talk to us and fund it. We'll do it.

Send her this episode. Oh, 100%.

I would love to get her. And Melinda and the others in a room and like, let's do this. They have the money to, to underwrite it and they can help us do all of this. And it doesn't have to go only to philanthropy, which I love, and I don't want to tell someone not to do that, but there are so many things we can solve if some of that money came to initiatives like this.

And we can scale the solutions. Yes, yes, 100%.

Goodness. Well, thank you. Thank you for having the conversation with me. And we're going to figure out when we whiteboard this and get Mackenzie in the room to help us get it done. I would love to do that. Is there any parting words for the listeners, for the community, that you want to make sure everyone hears today?

Well, well, I think, you know, I will say, listeners, if you like everything I've talked about, please do support Mindless Nuts.

Yes, I was going to ask you that too. What can we do to help you and help Make Love Not Porn?

Go to makelovenotporn.com, sign up and subscribe to support us. It starts— subscriptions start at $10 a month, eminently affordable. Please go to makelovemoporn.academy, check it out, test it. We welcome feedback. And, you know, Make Love Porn Academy is the Google of sex ed. It's free to access everyone, but we operate a membership model. It's like museums, you know, there's a patron model where you can join as a member to help us, you know, underwrite operating the academy. So please do that. And also we have a partnership with the wonderful Inspire Access, Patrice Brickman's nonprofit. She set up specifically to channel philanthropic capital from DAFs, family offices, foundations, to underrepresented founders with for-profit social impact ventures who otherwise struggle for funding. So you can actually, we have a nonprofit vehicle for Make Love Not Porn: The Academy. You can donate to us from your DAF, you can absolutely give us a foundation grant. And if you'd like to know more about that, please hit up Cindy at makelovenotporn.com.

Wonderful. I love all of that. Thank you again. So appreciated having you here today, and this episode is gonna take off. I'm so excited for it to launch. We will teach everyone what to do, and they're going to come help us build it. So I'm excited. Thanks for listening to The Capital Flex. If today's episode hit home, share it with the founder you love and follow me on LinkedIn for more.