Should You Bring Investors Into Your Business?

Should You Bring Investors Into Your Business?

Sean: But what’s going to be your advice for me, for example, when I’m faced with these kinds of offers, and let’s just say I’m open to it because I wasn’t open to it when these companies approached me. So, number one, why would I be open to that? What are some of the good reasons why I should be open to that? And number two, should I give them my information, the books that they’re asking for? And why is it that that’s the first thing that they’re asking for, not your three questions.

Jeremy: The best way to approach this would be looking at this from a time travel perspective, which is if you were to invest and receive an investment of several million dollars this year, and in three years you receive, let’s say, $5 million, and in five years receive $10 million, as I say, and eventually receive like $50 million. How big a company is you going to be? That’s really the question, right? Because the truth is if I have a time travel machine and I could be like fast forward and be like, oh, if you take a couple of billion dollars and then later you take a few more rounds as a result of that and you become $1,000,000,000 company. And having only raised, let’s say, $20 million in total or $30 million, I’ll be like, I’ll come back from the future. I’ll tell you, ‘Hey, Sean, take the money. And by the way, that money comes from me,’ right? And then it would be great, you know because then we know that, you know, you’re going to become a $1,000,000,000 company, that your fundamentals of the company are geared well for high growth and high profitability and everybody’s happy. You walk away rich, and a king and the VC are very rich as well for having the investment. Right. So that’s the truth.

Jeremy: The reality is that there’s another time travel where you hop into the machine. Right? And you see we fast forward, right? Receive a couple of million dollars and then you raise a couple more million dollars, that’s to say. And then it turns out that you’re not growing as fast as what the capital requires. Right. And you’re not achieving that thing. And truth is, your trajectory is going to become one of the 30 of the 40 that don’t succeed at 39 or 40 – that failed to achieve a positive outcome for the capital. And at that time travel you see arguments and debates because the VC put money in you wanting you to become $1,000,000,000 company, but you’re failing to achieve it. And so, they argue with you at the board, they are debating with you, you come home and you’re beating yourself and you work harder to try to make it better.

Jeremy: The truth is that would be the advice I’d give to the founders that have that time travel machine. It’s hard to tell, but the truth is the investors don’t also have a time travel machine – that’s why they’re talking to you and trying to evaluate you to see if you can do that trajectory. But it takes two hands to clap. Right. And that’s really, tough. So, the answer is yes. Let’s invent the time-travel machine and let’s find out – you know, unfortunately, we don’t have one yet. It requires the VCs to be self-aware about that because you know, I try to tell you right now there’s a lot of Tier two and Tier three and Tier one VCs who have made bets on the roulette wheel thinking that it would be $1,000,000,000 company. And it doesn’t work out because that’s the name of the game. The difference is that as a founder, you have one spin of the wheel. And for the VC, they have 20 spins on the wheel, right? There’s a very different element of the game and one level, but I’ve also different level expectations and requirements.