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Will Sacks

Kindara

Will Sacks


Gabriel Flores  0:00  

Hello, everyone, and welcome to the shades of entrepreneurship. This is your host, Mr. Gabriel Flores. Today I am Hill will Sachs. Well, how are we doing?


Will Sacks  0:12  

Here again? Yeah, I was telling you I'm fasting right now. So yep, got me in a very pointed energy, which is great man. It's why why why fasting mask


you know, I like to do it once every quarter or once every year. It's just a way to like clear out the system. It also really focuses my my energy and my attention in an interesting way that I like. It's like my BS meter. My tolerance for BS goes way down is what I noticed. And so the own BS that I'm selling myself becomes more apparent when other people are, are not aligned, that becomes more apparent. So I just like it. I think it's a great practice that everybody could benefit from. No, it makes sense. Yeah, it's kind of you have to really start to focus. But enough about fasting first, who is Wil Sachs, let's go and give the listeners at home a little bio. Sure. So I was born in Toronto, in the 80s.


And went to school in Montreal, I went to McGill and studied engineering and economics. And while I was at school, I met these other folks, these other students who were building a solar powered race car. And so I immediately stopped going to my classes and started just working on the race car all the time. And so we eventually built this solar powered race car, we raced it from Chicago to Los Angeles. And that was like the first experience I had of building something, you know, creating something from a vision, we had to raise a bunch of money, I ended up raising a lot of that money.


So then graduated from McGill, and started a lighting company with a friend of mine, because I'm an environmentalist. And we realized that energy efficient lighting is like the best investment that anybody can make anywhere. It's like guaranteed hundreds of percent per year returns. So we started a lighting company, and ran that for a couple years. And then I eventually met my former partner Katie and I sold my lighting company to my partner and started Kundera because I just got so excited about fertility, charting and the the ability or the potential of what tracking fertility data could do for couples who are trying to conceive or who are trying to avoid pregnancy, or just understand their cycles. And then built Kundera for seven years. And we did the whole Angel venture route and ended up selling it to a women's health company in 2018.


And by then I had moved to Boulder, Colorado. And, and then a few years after we sold it, you know, I took a break, I went to Bali, I made music on the beach and stared at the ocean and recuperated.


And then I started coaching, I don't have to I love it.


Yeah, it was a nice time.


And then I started coaching entrepreneurs, you know, started decided I wanted to get back into it and started coaching entrepreneurs. And that turned into fulcrum, which is the accelerator that I run now. We're helping entrepreneurs raise money, and learn that weird arcane skill of fundraising that nobody teaches you.


And so that just started that started as a first group program. And we've now run six cohorts as of May 2023. And we're enrolling our next cohort. Now, by the time this airs, and we've helped about 100 of our alumni founders raised about $40 million. Wow. And all around companies that are doing something positive in the world, either in human health and well being or technology related to climate change, or culture. We just look for companies that have a positive social mission and that are at this the precede seed stage, and then we help them close their next round. I love it's now let's let's let's take a couple of steps back for the listeners. First, why the name fulcrum.


It's from my engineering background. So a fulcrum lever is one of the elemental machines, I think I can't remember how many there are. There's the screw and the lever and the pulley, I believe, but there are machines that magnify force. And to have a lever, you need a fulcrum. So I thought it was a great metaphor for what we do is we provide a stable point for our founders to magnify their force and and their impact. I like that. I like that now. Now for the listeners that might not be familiar with an accelerator. What is? Yeah, so entrepreneurship is hard. There. It's like


it's an exercise in chaos in a way. And for people who haven't done it before, it's kind of unlike anything else.


And so accelerators exist to make it easier. And when I was building Kundera, we did two accelerators, we did founder Institute, and we did hack accelerator, which was in China hardware accelerator in China.


And they both had a large material positive impact on our on our company. And on my skill set as an entrepreneur, I met investors and other founders and mentors, people who could point me to the path.


And, yeah, so accelerators exists to help startups succeed. And there's like a million ways to do it wrong. And there's only a few ways to do it, right. That's what I've learned after doing this for 15 years. And so if you can, you can partner with somebody to point you at the paths that go, you know, down the ravine into the mud puddle, and don't go anywhere else. It's well worth it to have those paths pointed out to you. So you can stay on the path that's going to take you where you want to go. Yeah, very, very well said. Now, you mentioned also you your team specifically looks at you know, specific entrepreneurs and businesses, who is the typical cohort member for your accelerator program.


Typical cohort member is somebody is the CEO of a mission driven company, who has raised a little bit of money, maybe a few $100,000, or a million, and is looking to raise a seed round of either 1,000,002 million up to four or 5 million. So it's somebody who has already been successful elsewhere in their life. And they've now gotten their business to a point, they need to take that next step of bringing in more professional investors. And they just haven't done it before. So they don't really know how the world works, what to say how to structure the round, how to go about raising the round. You know, it's a, it's a weird thing that only people who go through it can see, you see all the details and how there's so many ways to do it wrong, and only a few ways to do it. Right? Like I said about entrepreneurship in general. And so we help founders who are already successful in other areas of life, and just want to learn how to play the fundraising game efficiently and effectively get through that game successfully. So for for the listeners that might be very unfamiliar, you know, with with the seed round, it kind of explain it. So they're kind of familiar with, what does this all mean? Yeah.


Well, I'll talk about when I started Kundera, so I had a dream of being a venture funded CEO, I thought, how cool is it that I can have an idea,


package it in such a way that it's compelling, and go to these professional investors, venture capitalists, and show them what I want to build, show them my vision, and have them funded? It seems so cool. Because it's like, if I could do that, well, I could build anything I wanted, like, there was no more constraints. At that point, if I wanted to build a rocket to the moon, you know, packages in the right way, could get funded, and now, you know, has been funded with SpaceX, and everything is incredible. So that's what drew me to it is, wow, there's really a lot of power and being able to learn how to have other people support your ideas, because then you no longer have any constraints on on the financial side of things


are so I thought.


And so that's what venture capital is, you know, it's professional investors who are taking a risk on risky ideas that have a large upside. And


so that's what that's what a seed round is, you're typically raising either from angels, which are individuals who are just wealthy and are investing their own money, or venture capitalists who are professional investors who are investing other people's money in the context of a broader portfolio with the expectation that they're going to make an outsize return at the end of five or 10 or 12 years, which is the the lifetime of your normal fund.


Gabriel Flores  9:02  

Now, what what what are some things entrepreneurs should be kind of aware of before going into the venture capital route?


Will Sacks  9:10  

Yeah, so most businesses are not a fit for venture capital, because they don't fit the criteria. So the criteria are, it's got to be highly scalable.


And it's got to be which kind of rank


weeds out any service businesses. So it's mostly technology media and intellectual property.


Hardware is often not funded because even hardware doesn't feel as scalable as as software and in IP. So it's got to be very scalable, and it's got to have a huge upside. So venture investors are typically looking for 100x or 1,000x or 10,000x. And so you've got to be able to make the case that the upside is big enough for the investors to invest in and you actually have to


Go into it as the entrepreneur wanting to produce that level of upside, which is very different than going in and building like a two or five or $10 million company.


And PS, if you build a 10 million million dollar company and you don't raise money, well, maybe you get to take home two of those 10 Every year, which is, you know, a much higher percentage play than raising venture capital and going for the 100 million dollar moonshot.


Gabriel Flores  10:27  

So that's something that entrepreneurs should know, you know, it's a, it's a high risk, high reward path. Yeah, yeah, very true. Now, where would you say, do you see, you know, what is like the hardest part about the venture capital route for the entrepreneur?


Will Sacks  10:42  

I think the hardest part is the a symmetry. In in that the venture capital, investors are doing this all day, every day, for years, and the entrepreneur is doing this, maybe if they're really successful, like 10 times in their career, in their entire career over like, three decades. So


I won't, I'm not gonna say like you're swimming with sharks, but you're, you're bringing a knife to a gunfight, that maybe that's a better idea.


So they, they're professionals, they do this all day long, they know exactly what they're looking for, and they'll weed you out in a second. Whereas you're the, as the entrepreneur, you you only building one company, this is your one company, you've got to get this round done, if you want to go on and build what you want to build. And so there's a massive asymmetry there.


Gabriel Flores  11:30  

And that's part of what we do at fulcrum and why I started it, because we try to reduce the asymmetry by just training entrepreneurs on how this works, how to think about it, what to do to what's worked for others, what is sure not to work, so they can avoid all those mistakes and find that path to success easier. Yeah, and I'm starting to see these like unique levels of entrepreneurship. Right. There's there's the entry level, you're just learning about marketing and branding and business plans, marketing plans, operation plans, right? You're just kind of learning about that stuff. Yeah. And then there's the second level right before the venture capital? Well, I think it's like, now you're learning about product development, business development, exit strategy, business planning, right? Strategy, operations, financing, all those fun things. And then you're kind of determining, am I big enough to go or scale that to your point? And it's interesting, you mentioned you're, you're fasting right now. And you basically you cut out the BS, right? And you kind of that's exactly what venture capitalists essentially do. Now, what what would you say? Outside, you know, the intellectual property, everybody's on the same playing field on intellect, let's just say, generically, everybody's on the same playing field from an intellectual property perspective. What what things should entrepreneurs be doing? Right, during that presentation phase, right? They have the venture capitalist in front of them? What are some tactics that they should be thinking about doing to kind of help them get the leg up?


Will Sacks  12:59  

Yeah. Okay, so I'm gonna give you the goal here, this is this is the this is the most important thing that we teach in fulcrum, I say it everywhere I want every entrepreneur to know this.


The most important thing is the process that you run, when you raise money. If you can get 10 different investors interested at the same time on the same day, you're very likely to close your round. If you get 10 different investors interested on 10 different weeks of the year. And by the time it goes over the next week, that first investor is not interested anymore, but you got a new one, you're very unlikely to close your round, your chances of closing your round are basically zero. So running a tight process turns out to be the most important thing that entrepreneurs can do. And unfortunately, most entrepreneurs, when they start off doing this, they don't realize that, like I know, I didn't realize that I kind of learned it just through doing that, wow. If I concentrate all my investor meetings and all my investor interest on a very short period of time, and I make sure that I have a super compelling presentation. And I go in, and I just give it to everybody in a compressed period of time. And I say we're only doing meetings these few weeks. And if you're interested, let me know, because then we'll do due diligence. And then we'll, we'll close. That's the kind of situation that signals to investors, hey, this is a deal I should pay attention to. And in the absence of that,


the signal to investors is, hey, this is a deal I should probably pass on. Because the dynamics of being a venture investor or an angel are I'm going to look at 100 companies. I'm going to dig in on five, and I'm going to invest in one. And so you've really got to be that one. And that one often looks the same to them. It often looks like hey, there's other people that have realized this is a one and everyone's competing. And I'm probably not going to get in unless I really dig in.


So you got to I mean, the first thing is to get to certainty and change whatever you need to change in your business.


so that you are indeed extremely exciting and compelling and investable. And then once you've done that preparatory work to make yourself super compelling, then it's running a super tight process so that you can communicate in the right way to all the investors that you're talking to. And all of that is invisible to entrepreneurs, when they start this process, they're like, Hey, I'm just going to call some investors and


Gabriel Flores  15:20  

see what happens. You know, that's a great point. In fact, I think that's also true, like for any exit strategy, you have it, it kind of comes down to like the operations, right? When when somebody kind of looks at the company and sees a very,


I would say, very difficult operating words, kind of operating around one person, sometimes they were the jack, the jack of all trades, master of none, they were all the hats. Without this one person. And I feel sometimes even large organizations are like this to corporate organizations have this same issue as well. This isn't just an entrepreneur issue, this is also a corporate America where, where you kind of lean on, you know, one person's expertise, sometimes too much. And that tends to be the operations.


That is the impact the entire operation. Now, those are some of the difficulties, what, what would you say? Maybe maybe going back to your case, with let's actually, let's go back to Kindra, your first company? How did our sell that?


Will Sacks  16:20  

Yeah, well, it was, it was kind of a crazy situation, because we had, I stepped down as CEO, and we had 123, we had three CEOs in the period of like six months, which, you know, it's not a good sign.


Because obviously, we had to, you know, two false starts. And so we were in a position where our CEO, got sick.


The business was had some specific challenges that needed to overcome. And it seemed like the best deal at the time, like the best option at the time would be to sell their business because we did have some compelling IP. And so we ran a process, and we found a few people who were interested, and then, you know, we dug in with one they dug in with us, and then it ended up going through. So


100% agree that in selling a business, you need to have multiple buyers, it's like you sell it, I think there's a there's a sales saying that is to have one buyer is to have no buyers. And I think that's through in the realm of raising money and also selling companies. And actually, there's a there's a company called quorum who my friend, Mark Cleveland works for who runs competitive processes, or businesses that are that are selling for this reason, because you want to get as many buyers as you can, because then you get into a competitive situation, and then you get the actual market value reflected in the price.


Gabriel Flores  17:49  

How does an entrepreneur create a better value proposition, right to kind of create that allure for investors or for for investors, for investors?


Will Sacks  18:03  

Well,


it's tricky because you want to stay authentic with what your vision is, and what you actually want to build. And so you don't want to bend over backwards and say, like, if you want to build a $10 million company, but you need to say you're going to build $100 million company, you know, that's not a good trade, because it's going to come out at the end of the day, there's going to be a mismatch in values and expectations there. So that said, I think, thinking big thinking, like asking the question, What could I do with $10 million in venture capital? You know, what could be possible? And do I want to take this ride?


And the answer needs to be a resounding hell yes.


And then, and then I think it's like really selling the upside, because the downside is always the same. The downside is they invest in they lose, or their entire investment. So they're always comparing the downside doesn't change, like, it's static. So then you really got it, they're going to be comparing the downside to the upside. So you got to make the upside so compelling.


Gabriel Flores  19:07  

And sell the sizzle of the upside that it seems like a good risk benefit. Yeah, yeah. I completely agree. And you mentioned that kind of the risk benefit.


because entrepreneurship is risky, right? Have there Has there ever been a moment but you kind of mentioned it to the importance of, you know, being truly you have to truly believe in it, right to kind of keep moving forward. But has there ever been a moment for you of self doubt? Yes. All the time.


Will Sacks  19:38  

It's like,


creating a startup like a venture backed technology startup, for me was like a constant roller coaster experience of being on this roller coaster of one day. You know, one day we published this. This article got published and our app went viral, and we became the number one app in the United States for a day. I woke up and checked my phone


We were number one in the health category. And that was like what? And I remember like running into the office and high fiving. Everybody, we're number one, we're number one, you know. And then the next day, like some homeless person, like smashed the window of our office, and I had meetings that I had to deal with, and it was freezing cold, and like the heat broke in our building. And so all my employees were freezing, and they couldn't work. And I had to send them home. And I was like, Oh, this is the worst. Like, wow, there's no facilities guy, like, I'm the facilities guy. There's no HR guy. I'm the HR guy. You know, we had like, 10 people at that point. So it's a roller coaster. And it's, there's totally moments of self doubt. And I think it's Ben Horowitz and his book, The hard. But the hard thing about hard things, he defines a whiff EO, which is excuse my language, we're fucked. It's over.


And he says that every startup, every startup has at least a few WIFIA. Those, those moments when you're like, you know, I just, I think it might be over. I don't know how there's any way we can get out of this. And we definitely had a couple of those Kundera.


And, you know, we made it through and you hear about these stories of some of the world's biggest companies like I'm thinking of Tesla. And Elon Musk tells the story of almost running out of money and raising that round that he needed on the last day, the last afternoon, or the last day that he needed it before they had to liquidate.


And so I think you got to be ready for the windows. And of course, like, sometimes it actually is over. And you got to say, well, you know, I learned a lesson. And I'll do better next time. And I'm not going to make that particular mistake again. And sometimes it's totally out of your control, like something happens with the market, we just enrolled our last cohort in March. And two weeks before our enrollment date with like our cut off for applications, Silicon Valley Bank went under and rocked the entire startup world, everybody was freaked out and like, what's going to happen is this, the end is this another 2008, everybody got really scared to do anything. And so it affected us affected us a lot.


Gabriel Flores  22:14  

And so stuff like that is totally out of stuff can happen is totally out of your control. And you just got to be flexible and roll with it. Yeah, in fact, I think that's a great time to kind of tell folks that are listening, of the importance of an exit strategy truthfully, because you kind of mentioned it with your with your first company, sometimes your CEO got sick. Sometimes it's life issues that may kind of force you to kind of get out of that game. It's not because you're wanting to you're ready to sometimes something that happens in life. In fact, if you go back and listen to the former episode of exit strategy, Jessica Fiachra, vich, she talks very much about that a lot of times people have to exit their organization, because of a life changing moment. Now what what you also kind of mentioned, you know, having the wherewithal to kind of know when it's time to fold,


give some entrepreneurs advice that maybe are holding on a little too long. What, when can when should they know? I think this is the hardest question to answer. in entrepreneurship.


Will Sacks  23:16  

It's, it's so hard, because


you got to check your belief, you know, take it back to first principles and check your belief and be like, Alright, what do I believe to be true? What are my learning from the market? And,


you know, is there a path forward to the vision that I see that I want to create? And if there is, then you should, Oh, is there a path forward? And is it worth? Is it going to be worth it to get there? And if the answer to those questions are yes, then I think keep going. Because it's like so many entrepreneurs quit. It's like, you quit before you get over the next hill, and then your destination is over the next hill. But you didn't know it, because you couldn't see it from where you're standing.


So I think a lot of people quit too early. And a lot of people hold on and it's really hard to know which is which. But it really comes down to like, you know, we're here to play this game of life and like, do you want to keep playing the game that you're playing? And do you see that that winning the game is worth it?


And if if it stops being worth it for a whole number of reasons.


Then either you know change your context and get back into a spirit of play or maybe it is time to do something else?


Gabriel Flores  24:34  

What would you say if anything, is easy about being an entrepreneur?


Will Sacks  24:41  

You get to do what you want when you want


as feels pretty easy, right? There's nobody telling you what to do. If you want to stay in bed all day. Blow off all your meetings, you know you can do it.


What else is easy about being an entrepreneur


Uh,


I mean, that's the main thing. And I think a lot of entrepreneurs are entrepreneurs for that reason, because they want that freedom. Also, I think creating, you know, you to create stuff and try it out. Like it's, it's way easier to create something and try it out than in any other profession probably.


And I love that, like, I love coming up with new ideas for products or services, and then just on the fly, like testing them out with our founders and seeing if seeing if they love them seeing if they provide value. Or not. That's that's a great part about being an entrepreneur for me.


Now, what advice would you have for aspiring entrepreneurs or current entrepreneurs, folks that are currently in the entrepreneurial world, aspiring entrepreneurs is just you got to do it. You know, I, sometimes I come across people that are like, I want to start a business, but I don't know, you know, just try it, you can always go back to having a job, there's no, you're not really risking anything, people think I'm gonna lose my career, and I'm never going to be able to come. No, you only lose your career after you've been doing it for like 15 or 20 years, I think. And then at some point, you're like unemployable, and you're just got to be an entrepreneur.


But if you want to just jump in and do it for a year, and see what it's like, you're not really risking anything, you can always go back, everyone will take you back, you're like, Yeah, I tried to start my whatever company and decided it wasn't for me, people will take you back, and you'll probably come back at a higher salary. Because you now have that entrepreneurial experience.


For current entrepreneurs, I've some advice would be, you know, if you're just starting out, your only goal is to find product market fit.


You don't need to hire people or spend a lot of money on lawyers or formation or really anything until you figure it out, do I have something that people love and that are willing to pay pay for.


And then once you have product market fit, that's like a momentous occasion in the story of every company, because now you have a business, before you have product market fit, you don't have a business, even if you have 20 employees $5 million of venture capital in the bank, and an office and a nice logo, and everyone's got t shirts and nice couches and meeting rooms, whatever, if you don't have product market fit from my perspective, you don't have a business.


But once you get product market fit, now you have a business, because you've unlocked value, you found a way to produce value in the world that didn't exist previously where people are paying you $5, but they're getting $50 of value.


So once you get to that point, now things change, because now you have a business. And now you get to get to go on the adventure of actually building an organization that's going to deliver that value ongoingly. And so I see it as these two phases, like before Product Market Fit after product market fit. And if you think you have product market fit, but you don't, you're just going to scale up and run out of money.


Gabriel Flores  27:56  

So I think that's a that's a key distinction that I want people to be thinking about. No, that's a great point. In fact, I'm reading this book right now playing to win. It's the marketing book marketing strategy. And it's talking about orielle, the brand the face product brand, right. Back in the past, you know, they had, it's owned by


Procter and Gamble, I believe it is. And so back in the past, you know, it was kind of an older, you know, woman's kind of brand 55 and older. They were in the targets in the Walmarts of the world, but they didn't feel like they had the right target market because their product, other products that were next to him could sell for $50 A bottle, but they're, they're at the Macy's. Right. And so they kind of restructured and rebranded. They kind of removed the Revlon oriental, and I think it just became orielle They made the sleeker bottle, kind of up there up their ingredients, you know, made a little bit fancier, and now you're starting to see them being able to sell their product at $90. To your point, they created value. Right? They Yeah, they essentially re marketed themselves being healthier. And folks that are interesting enough to they also did a cost analysis. And so they originally a market it's like okay, they saw that sell sold very well at 1299. It didn't sell well at 1599. And it sold great at 1899. Right, because there was this, you know, you know, just general in your, in your mind. The folks again at the targets of the world were willing to say okay, I can all buy it at 899. But the Macy's of the world's weren't. Right. But then you had the folks at 59 Nine it was still too cheap for the Macy's of the world now too expensive, the targets of the world. But at 99 was perfect because it felt like the target folks were like, Oh, I'm getting a very high class, high quality product. Where are the Macey folks in the world? Like I'm actually getting a very good product for a very good price. You know, it's in that pricing is so weird. It's so crazy. It's so crazy. And I love reading this books and interviewing folks like you just because I


I hope folks that are listening are also taking note and truly writing this information down because this is free knowledge that we're trying to provide for you. But it's also an opportunity to really learn what it takes to succeed because as you mentioned earlier, as well, you don't have to quit your job. I've been doing the entrepreneurship route for about two and a half years now, I still have a career in healthcare, I'm still focused in health care world, just started a nonprofit still running the podcast, we still got a lot of things going. But it's kind of like, learning all these skills. Throughout this process. I have also actually benefited me and my, you know, professional career as well, to your point, right, sometimes you can leave and come back and get paid more, or you can stay and get paid more hopefully as well.


Ya know, what, where can folks find you? Where are you at online?


Will Sacks  30:52  

You can find me fulcrum venture accelerator.com. So if you just Google fulcrum venture accelerator, you know, you'll find us. We're on we just started an Instagram. So I think our handle is the fulcrum HQ. You can find us on YouTube, got a bunch of videos on there about how to build a company how to raise money.


Gabriel Flores  31:14  

But yeah, that's the best place to find me. Perfect Google fulcrum fulcrum venture accelerator and you'll find this or folks that are listening. Another great way to find this information is to subscribe to the shades of entrepreneurship newsletter. Nice little great time to plug that go and visit the shades of e.com. And you can subscribe to the newsletter there. We will have wills information as well as fulcrum information on there as well on the website. So after this episode airs we'll have a transcription of this episode. We'll thank you so much for your time, very informative and educational. I really do think that you provide a lot of great insight for entrepreneurs, you have a lot of great experience in the venture capital world as well and I'm loved to chat with you after the show. See what see what else we can kind of work together with so those folks that listen at home please visit me at the shades of e.com You can also follow at the shades of E on LinkedIn, Twitter and Facebook and Instagram. Thank you and have a great night.

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