Jeremy Neilson's Entrepreneurial Journey

Hello and welcome back to the Owner Meeting Podcast hosted by Multifamily Strategy. I'm Christian Osgood, your channel host today, joined by Jeremy Nielsen. Jeremy started out as a law career and a lot of people who go into law realize that's not exactly what he wanted to do in the conventional sense. So he's going to talk about how he became an entrepreneur and how he bled the work experience and the law degree into a series of companies. I'm actually really excited for this podcast. Jeremy, welcome to the pod. Thank you.

Thanks for having me.

So, for those who don't know you yet, give us the quick overview of Jeremy. Where did you start and where are you at today?

Yeah. Started as somebody that wanted to get a lot of schooling in order to do something cool. I wasn't quite sure exactly what I wanted to do. I wanted to have that toolkit to do big things, maybe CEO of a company or consulting or be an entrepreneur. So went to a lot of schooling that then parlayed into my understanding about myself that I don't want to work for other people. So that, you know—

How long did that take, by the way, between school and realizing like, oh shoot, I don't want to work for other people?

Yeah, it— I kept fighting it over the years, like, no, no, no, like, surely I can work for somebody. But the die is cast on that one, that I am not. I'm not somebody that works for other people. Nothing wrong with that. I've just got this unique, I guess, gene, if you will. So parlay that into different careers, different jobs, all in the private asset investing ecosystem. And today I have a software company called Sallie. It's all around SPVs and providing that structure for people that want to invest into private assets.

Awesome. And for, and for those who are listening, you know, we talk a lot about multifamily, about business, about different structures. We certainly have a lot of fun legal on here. SPV, give us the high-level overview.

Sure. SPV, it's an acronym for Special Purpose Vehicle. And the kind of description there is it's a legal structure that is required if you're going to aggregate other people's money together in order to invest into a private asset. You know, you can, Go direct, which is pull money out of your own pocket and go direct to the CEO or the real estate project or oil and gas, whatever it is. But if you said, hey, me with two other family offices, some other people, we want to pool our money together and then send one check. Maybe you're hitting a minimum, maybe you want to take some carry, lots of reasons to do it. If you're going to pool that money into one vehicle, that's an SPV. And when you do that, you need documents, entity, tax returns, security filings, all that stuff. That's my world. So you find the deal, you find the people, you call me, I take care of the rest.

Well, that's something we talk about on this channel all the time is when you're buying, this is true for business as well, but when you're buying a piece of real estate, you start with the actual opportunity. So you find a deal and you're like, okay, good. This is going to make money for me and can make money for others. I like to line up the debt product so I know, okay, what is our total pool of money here? That remaining equity, that's where you come in and go, okay, what are the equity structures? If this is syndicated, if this is a fund of funds and all, there's a lot of different angles you can take at this. When someone's evaluating a deal, what, so let's, let's keep this in the order of the deal debt equity. They found an opportunity. They have a, uh, bank product shows. We'll go with conventional debt for this, 75% LTV. So they find the last 25% of the money. How do they make the determination, generally speaking? On which equity structure is going to be right for the opportunity they've created?

That's a great question. You know, typically it comes down to the investors around the table, meaning, you know, you may have a particular structure that you want. What I have found is that those people with the money tend to determine what that structure's going to be, right? You, you present to them, hey, it's going to be this way and many times people just accept that. Sophisticated LARC checks, those individuals come with red lines, suggestions. Hey, we're, you know, we're going to go this way. You either take it or find somebody else.

Yep. And that tends to be the case, especially the larger the deals get. Whoever has the money sets the rules. You're going to need to do a little bit of tailoring. It's good to come in with a game plan of this is how I see this working, but they're likely going to come back with, okay, and this is how we see it working. It's the last part of the negotiation. You go through each phase individually, the deal, the debt, and the equity. And the equity, like every other phase, it's a negotiation and it's a give and take.

Yep, absolutely.

So what structures do you find most— I'd be really interested in this— at what deal size do you typically see different structures start playing? Because someone who's a smaller investor, you may have 2 or 3 partners, you're probably just going to do a joint venture, right? You get into those low millions, you might just be into a very standard basic syndication, either 506(b)(c), but like family offices, just kind of go through the different, a quick overview, but go through the different flavors of what are the SPVs and the structures that are the most common at different deal sizes.

Yeah. Well, an SPV is a very broad term or phrase for, it could be a fund of funds, could be considered an SPV, a syndicate's an SPV, SPE's an SPV. Sidecar, dropdowns, funds of one. I mean, they're all the same phrase. And so the structure is typically the same. You're going to go set up a Delaware LLC or LP. So it's the same. The real difference here becomes around the economics. So you got documents and those documents are going to say who's in charge, who does what, who gets what. And so it's been my experience that it doesn't matter what the asset is. And it doesn't matter how much money is being raised, the SPV wrapper, whatever term you want to put on it, fund-to-fund, syndicate, SPV, is used. And so the whole approach then becomes, am I going to be able to do a carry? Do I get a promotion fee? Do I get an org fee? Do I get a backend? Is there going to be a hurdle? Like all this other stuff is really about the structure of the deal. But you're going to use very similar documents. The documents are going to be 90, 5 to 99% the same between all these deals. The, you know, the absolutely structure of that is going to be in this SPV type structure. What I do is I do software that just allows it just to be really simple, right? Like this negotiation off platform or this negotiation around what the structure is, the terms, all that stuff. Now it's time to sign documents. It's time to send in money. It's time to deal with all this paperwork structure, the edge cases. I've built software that anticipates all that and just makes it really easy so that the ongoing admin and the closing of the deal is smooth.

But that's your latest project. That's the Sally, right? Yeah. Oh, that's, that is super cool. So if someone's using this platform, is it designed for end users, for law firms? Where does Sally plug in?

Uh, plays into that person or group that wants to aggregate the investors. So let's say a family office says, I find the deals, or I found this deal, and you typically, one person's leading it. Like they're going to put in, let's say, 50% of the equity, but they're going to invite other people in. Maybe they're going to put in 85%, but they're going to allow for some other smaller family offices, some other smaller individuals to come into the deal. And so they're going to need to do an SPV. It's them that uses a software that launches the SPV that's kind of in charge of the SPV many times. It's the, I, I, stepping back, it'd probably be the group that's actually leading or wants to get a fee. So if a family office says, I found it, I did the due diligence, I'm putting in most of the money, but I've got smaller family office friends, I'm allowing them to come in, but I want to be compensated, be it a promote fee, an org fee, a carry, something like that. They're the ones that are gonna launch this SPV. They're the ones that are gonna be in charge of it.

Oh, that's fantastic. Well, where did you find, when you were, cause this goes back to that entrepreneurial gene, at what point did you go, hey, this is what I want to do and this is the problem I'm gonna solve? Because software, anything is not as easy as it sounds in your head. It's always a huge project and there's a lot of hurdles. Where did you, at what point did you go, this is what is missing and this is how I'm going to attack?

Yeah, so it goes back to, kind of the whole beginning of this SPV thing for me. I had worked at the Utah Fund of Funds. I was hired to do this Utah Fund of Funds thing. It was amazing. It's how I got into the private asset investing experience. It was kind of a government employee-ish and did that for 7 years. I left that and again, my lack of ability to work for other people, I tried to do my own thing and Failed at everything for 2 years. And then one day, one day I get this phone call and it's AngelList. And your listeners may or may not know that group, but they're a big platform out there in the space. And they were brand new. JOBS Act had just been passed. A lot of unknowns and new things coming on online for private asset investing. They called me and they said, can you figure out how to do funds in bulk? I remember I was in the backyard on the cell phone pushing my youngest on a swing and I'm like, yes. I didn't even know what they were asking, but I was like, I'm an entrepreneur.

I do whatever.

So I just said yes. And I had a lot of experience, but I needed to put all those pieces together on the table. So I didn't even think it up, right? Like I wasn't there like, I need to figure this thing out. I just was opportunistic. I said yes. So I figured it out, but I did it all manually first. And then I was like, if I could figure out some software, some processes, some online, I could improve this because at the very beginning, people were handwriting documents. They were typing it. They were mailing me checks, actual checks. I was walking into the bank with a stack of checks. That's how we started doing these SPVs. So how can we make this better and smoother? I built a little bit of tech. It was okay. Then I built more. It was really bad. And what happened was it tripled our work. And you may think that, well, you know, why did that happen? Right? Like, because you were adding some help, some flows, but with SPVs, it is a contained entity, right? So 10 investors or whatever that is, it's a contained box. This is this vehicle. And when you do it in software, that's great. But if you have anybody that squirts out of the software off platform because your software doesn't accommodate that profile, doesn't have side letters, doesn't, you know, add this, this thing, right? Whatever it is, if they kind of squirt out of it, now I've got 80% in the software and I've got 20% outside the software, which is a mess. So now I don't have a source of truth. Exactly. I don't have a place to go. And now I need another process. To combine the two. So I have like an umbrella process. And so I found that I was now doubling and tripling my workload by having partial software. So that was the entire journey of if I could get to the final destination of a four walls complete software package with all the modules, features, edge cases. Then I think I can really, really, really decrease this work. That's kind of been my passion, if you will. And so my last business I shut down, the admin was too much. The software wasn't good enough. I then took what I had been building and just did Sallie. And now it's amazing. I sit and just stare at the software and it just works. I don't have an admin team. I don't need an admin team. I just sit there and stare at it and grin and people, if they saw me, they'd be like, you're weird. But that's just because I've seen what the world is like without an amazing software, and I'm just so pleased that this one works.

Oh, that's amazing. So how, how long has the, has the Sallie project been the, the core project?

I've been working on it for 3 and a half years as, as kind of nothing else but that.

Yeah.

Released it a year ago. So I've got active clients and, and, and constantly working on it now. But, so it's been 3 and a half years since I shut the other one down and just been focused on selling.

Oh, that's awesome. Where did the name come from, by the way?

Yeah, so for me, on a branding basis, I personally have my own kind of requirements, which is you have to be able to spell it if you hear it. I like that. And you need to be able to pronounce it if you see it. So that's kind of my core premise. And then I just spent a lot of time looking for a word around venture or investing, whatever. And so Sally is a synonym for venture, or venture and Sally are synonyms.

Oh, that's perfect. Oh, I, I love that. It, it's simple, it's easy, it's memorable. On a branding standpoint, you really hit all the major benchmarks and it's unique enough where I would never forget, oh, Sally's the software that we use. Oh, that's great. Great naming scheme. What does, what does marketing look like for you on, on software? So, so you officially launched, you're doing nothing But Sally, the focus is on that. What is the go-to-market strategy for a piece of software like that?

Uh, for me, it's just getting people to take a demo. Mm-hmm. That, that's ultimately the goal. And what I have found works best is LinkedIn right now. So, oh, nice. I reach out through LinkedIn connection, hey, I've got something, can I show it to you? That works the best way for me. Um, Email doesn't work as well. Ads haven't worked as well. So, and you know, in private asset investing, in this world, family offices, investing money, it's a trust-based business. So it's going to take some time. The best it will be when your current customers tell their friends about it. That's going to be the best marketing, right? Yep. So until the flywheel really grows and you've got hundreds of clients and it, and it becomes more ubiquitous. Right now it's, uh, the LinkedIn channel is what works best for me.

That makes sense. When it's, when it's corporate relationship, LinkedIn would be my first thought as well. That is the most lowest cost, highest return, simplest channel to turn on. Advertising for that type of pro— project works, but you would have to spend, like, your, your return on ad spend is gonna be much, much, much, much lower than I would assume on a LinkedIn. So yeah, that sounds like you're going about it right. Definitely a relationship-based product. You had mentioned, uh, we talked a little bit before and you had mentioned that you work with your wife. Now I, people have mixed reviews on this. I've very publicly, uh, my wife does everything well that I don't, and it's a total fluke. She started as a school teacher. I started as a sales rep. I worked at the CoStar Group for years and years and years. Um, so the odds of both of us taking to being an entrepreneur with no background in like no entrepreneur families, no teacher and like sales, you can kind of see how I would make the jump going from kindergarten teacher to entrepreneur. She's amazing. And she rounds out all the things I'm bad at. I'm, I am, I can start a lot of things. I can pitch, get the engine going. You try to keep me in a like repetitive process. I just lose attention. It's so hard for me. That's where she thrives. So when we get into the bookkeeping or overseeing construction projects, she's amazing. Most people aren't that lucky. You had mentioned that you have the privilege of working with your wife as a business partner, which can go, I've heard good and bad. So talk to me a little bit about what it looks like in your marriage, because I'm very curious about this.

So we're not currently working together on the Sally project. It was the last business that we worked together. Yeah. So we did that for, 10, 11 years.

Wow.

And very similar to your story, which was AngelList called. They said, can you figure this out? I said, yes. They immediately sent me some business and I was figuring it out and I was doing it. And I was the, I'm the, I'm the industry expert, right? The SPV, the lawyer. And when you do SPVs and you make these investments, everyone knows, you know, you hustle around to do the deal and then the deal closes. And everyone kind of relaxes, but there's this tail of admin, taxes and reporting and, you know, all that stuff. I was getting these deals closed and I was just throwing them figuratively on the table or on the floor or under the desk and say, I'll just clean this up later. And my wife's like, no, I'm, I'll take that. So she came in and she just picked up all of the post-close stuff and she just like you, detail-oriented. She built the processes, she built the system, she built the reporting, she did bookkeeping, she did HR, she did the financing, she did a mark— she did the marketing. And as you look back, you're like, you know, I didn't do much here, but I did, you know, say yes, right? So I get a little credit there, but she just brought in so much of the value of the business. How does it, how did it work for us?

Yeah, that was gonna be my question is I have, it can work well in the business. Does it also work well for the two of you?

Yeah. So couple things. One was, for me personally, I have an internal personal policy, which is the marriage comes first. So I wasn't gonna allow the business to destroy the marriage. Like we can shut the business down and so long as we have each other, right? You know, romantic ride into the sunset. But we also had to come up with the, is this a business conversation or is this a marriage home conversation? Like we many times would have to pause, timeout, like, am I putting on the husband hat or am I putting on the co-CEO-ish hat here with this conversation? And that was difficult at times, right? And then I'll speak to this as a man. As a man, I loved that my wife, my favorite person in the world, was intimately involved with the thing that I spent all my time with. And what I mean by that is like at night, like we could have these deep, deep, really fun, engaging conversations that were really, really enjoyable. And, um, and I've talked to other husband and wife teams and the wives tend to say that they, you know, in their minds it kind of gets all mixed together and it's not as fun and there's lots of frustrations. But as a man, I'm just like, this is so awesome. It's like, you know my favorite sports team and we love this sports team together. We go to all their games and we know all the stats. I mean, that's kind of how it just felt. And like, it just was so much fun to work with my favorite person and I just, If she got upset, it just rolled off my back. I'm like, I think you're awesome. This is so much fun. I don't care if you're mad. This is awesome.

I find the same thing, especially the projects that we're really tied to. So I mean, I have several businesses, but one of them is the, I have a resort called Robinhood Field Resort. I'm going to ask you about your most expensive mistake you've made in your career upcoming here. But my biggest mistake was wrong partnership structure. It ended up costing me well over a million dollars to buy out the partners and then over half a million dollars to fix the resort. I mean, about a $2 million mistake. Fortunately worked and now makes money, but I didn't account for any of that $2 million when we went in. So not good. When we did that though, my wife and I tackled that together and today we both have so much fun. We signed a corporate lease recently, so we have a music venue now on site full-time, multiple concerts a week. We run, it's just, it's become this amazing music thing that it never was before. Getting to do that together, visioning, staffing, and then watching something that became really hard actually become a good thing. It's hard to replace that in your marriage. It's a very unique thing to go through. It's stressful. Yeah. It's hard and you vision it and get through it together. It, it can be amazing. Also. It can break marriages. And then you see that, it seems like that seems to happen as often as not. So it's really fun to hear someone else who, I think it all starts with your principle of no matter what, the marriage comes first. And that's a conversation we had all the time. At the end of the day, if this didn't work and we lost everything, all we know for sure is that we have each other and we can build it back again with less mistakes the second time. We already know how to build it once. And we made the mistakes, which transitions us really nicely. When you are new, you're the dumbest you'll ever be because then you'll learn things, you'll be smarter. What is the highest stupid tax that you paid to be dumber than you are today and get where you are now? Yeah.

It's a great question. I have a strong ability to not regret things and be able to see the value of it. And so there's many things I think about, like be like, that was dumb, or wish they didn't have to do that. But I also look back and be like, I wouldn't have learned something either.

Yes.

We got acquisitions offers that we turned down, which we should have taken if, you know, on a pure money basis. I would say that the, I mean, the idea was the value that we were receiving on the acquisition offer was too low. It's worth a lot more. But if we would've stepped back and just said, what's most important? You get wrapped up in this business, you get wrapped up in the growth, you get wrapped up in the team and the vision and all this stuff. But if you usually step back and say, what's really most important in our lives? Our marriage, our family. I think we would take more offers. We would do things better. If we don't, and then you get third parties like whispering in your ear, like, yeah, you know, this is, this would be amazing, or that's a terrible offer or whatever. And so looking back, I think taking some offers that I should have taken would've been meaningfully beneficial to my wife, my life, my marriage.

Well, that's the thing. All of the, The stupid tax has just become a, it was a phrase we used early on in the podcast. Now people, every time I don't ask the question, we get absolutely destroyed in the comment section. So I actually love paying the stupid tax because it's something that we, you do learn from it. It's never a negative if you growing it better. And so I have a very similar outlook to you. If I didn't buy the resort, I had to find out, and I never in my life earned a million dollars. I had to figure out, okay, to fix this, I had 2.5 years to earn net of taxes, $1 million to solve the problem. So what did I do? I'm like, well, I can try to fix the resort, but it's not going to make, it's just not a million-dollar excess project. So I have to grow my other businesses to a level where I can solve the problem. So if I go back in time, none of my companies would be the size they are because they got as big as they are because I had to do it. I had to earn $1 million. That there wasn't an option. It was do it or don't. I can't say I go back and regret doing that because it made me where I'm at. Definitely, if you could learn from me doing that and I can pay that tax for you, I want to share that on a podcast. Like that's the valuable stuff. And I think that's what you did there is like, okay, it's an opportunity cost thing. Would you generally say as an entrepreneur, are you generally more or less risk adverse? To, if it would just say like the standard entrepreneur, if normal risk tolerance, what side of the table do you usually fall on?

I'm less risk averse than most.

That would, that would make sense.

I would say that if I was not married with a family, I wouldn't be crazy. I'd be off the charts risk-taking. My wife and family center me. They ground me to be like, You need to calm down. Right. And so it's, I think, which is very helpful. I think it's what marriages do for us completely and are, you know, all about our personalities and rub off those rough edges. And so I'm grateful for it. But yeah, if I did not have responsibilities like a wife and family, I would take more risks than I—

On the same train of thought, how do you decide which projects to work on? I see, so typical of people who have a higher risk tolerance. And are entrepreneurial, don't work well for other people, work well with, but maybe not for other people. They all seem to have a habit of starting a million projects at a time, becoming the serial entrepreneur, which any accomplished entrepreneur typically tells you not to do. How do you decide? Like you mentioned, like, hey, Sally is the thing and I've been focusing on it for 3 years. Where do you get the discipline to say, this is what I need to work on, even though I'm sure You have 30 other ideas that you've thought of in this time that you've been going through this.

I think really right now, the reason I can focus, or it helps me, one is experience, right? So I've gone through that scattered and this, that, this, that, and seen ultimately where the real value came from. You know, looking back, it tried and tried and tried. The real value came from this core. The core product. The other thing right now is that Sallie is in its infancy and just like a human baby, I really need to nurture that and I can't find myself distracted. And so, once Sallie gets to be a toddler or a teenager, I'm sure my brain will start to freak out a little bit more, more ideas, more distractions and whatnot. But right now, every time I try to turn my head, right, this child cries, if you will, and needs attention. And so I'm staying head down, very disciplined on it. So both experience and just the stage kind of requires me to be head down.

The best manager I ever worked for, his name's John Hickman with the CoStar Group. Worked for him for years. Right when I started the job, he, he used almost the exact same line. He's like, hey, for the next 90 days, make this job your baby. Just, just for 90 days. Live, breathe, eat, sleep CoStar. And what it'll do is for the rest of your career, you'll have all of the knowledge and you'll do unbelievably better. And what ended up happening is my pay from any prior year, and I'd worked for the company for years. Doubled and it never went back from that point. I went from making about $125,000 to about $250,000 in sales consistently for the remainder of my time there until I started my companies. I took that and I still teach people this. When you start a project, make it your baby. And so there's a perfect analogy that speaks to me incredibly, but your baby, your company's an infant. Sure, you can have twins or triplets, but I don't think most people are looking to do that. It's much easier to have one kid at a time. As a father of one with another one on the way, I'm super grateful that we're not going into twins or triplets. One at a time is easier and which it means you get more focused time and attention. Your odds of success are the highest if you can focus on one project at a time and then maybe later you have a mature company and now you can do something that vertically integrates and now you can have company that complements each other. Where I see people's businesses fall apart is they do too much too early. And that almost near zero success rate, or they try to do unrelated projects. There's no vertical integration. You do one company and they're like, oh, this AI stuff's cool. I'm gonna start an AI company. And oh, we did really well at selling that. Maybe we should do a sales agent. Like I see people with this weird hodgepodge of businesses and all of 'em are like kind of okay.

Right.

Or you can do one thing excellently until it can stand on its own and then add to that ecosystem, which is Yeah, I, I, it's fun hearing that, you know, you get all sorts of different mindsets on the, on the podcast. It's fun hearing a very mature and measured approach from someone who does have a high risk tolerance and I'm sure has a million ideas of things that you could be doing. I appreciate, I appreciate that deeply. That's a great takeaway. If someone wanted to find you, you said something in this podcast that like resonated with them, uh, they're interested in the Sallie software and maybe that's exactly what they're looking for in their company. How would they find you and how would they find Sallie?

LinkedIn, obviously talked about it. You can find me on LinkedIn. Sallie.co is the website. And then I also have a YouTube channel called All Things SPV. So if you want to nerd out on legal and entity creation and legal documents, I do a podcast, not podcast, YouTube channel on all the nerdery around SPVs.

Oh, well, we love that. And if you're listening to the podcast wherever you listen, this will also be posted on the Multifamily Strategy YouTube channel. We love nerding out. I like nerding out about real estate, which means we also talk a lot of legal there. So I'm guessing you have found the right audience. If you guys want to hear more about this, Jeremy obviously goes much more in depth than I could because he has the legal background. So check out that, check out the YouTube channel that'll be linked below as well as sally.co if that is a good fit for exactly what you're looking for. Jeremy, thank you so much for joining us today, man. It's been awesome having you on.

Thank you. Thanks for the conversation. Loved it.

Absolutely.