From $0 to $100M: The Truth About Capital Raising w/ Hunter Thompson 📈 EP102

Speaker 1 I said, went from struggling to raise my first deal and coming half a million dollars short on my first raise to raising 100 million bucks from hundreds of investors, buying hundreds of millions of dollars of deals, and I feel like I'm just getting started.

Speaker 1 A lot of my day is spent finding people that are very good at what they do and making them realize that to take it to the next level, they have to learn about marketing.

Speaker 2 Ladies and gentlemen, welcome to the Money Mondays. This is a special edition because right now, right this second, we are in the midst of the world's largest toy drive.
10 cities over 16 days.

Speaker 2 But luckily, we have this RV motorhome, which allows us to drive around and find guests like we have for you today. We have the creator of raisingcapital.com.

Speaker 2 His name is Hunter Thompson, and I'm going to deep dive with him about all things money.

Speaker 2 Now, as you guys know, our podcast runs for about 34 to 38 minutes because the average commute to work is 45 minutes. The average workout is 45 minutes.

Speaker 2 So this will be 34 to 38 minutes for your listening pleasure. We're going to cover three core topics.
How to make money, how to invest money, how to give away to charity.

Speaker 2 But with a bit of a twist, because Thompson, Mr. Hunter Thompson, has raised over $100 million,

Speaker 2 I want to ask him some questions about raising capital because a lot of you guys out there might be thinking about starting a company. Maybe you already have a company, you want to scale it.

Speaker 2 So I'm going to ask him all the questions around that topic. But first, we're going to have Hunter do a quick two-minute bio so we can get straight to the money.

Speaker 2 What's up?

Speaker 1 Honor to be here, first of all. Yeah, so name is Hunter Thompson.
I have a background as being a slacker in college and not taking life too seriously, but

Speaker 1 get into the world of business and entrepreneurship. I fell in love with it.
And like I said, went from struggling to raise my first deal and...

Speaker 1 coming half a million dollars short of my first raise to raising a hundred million bucks from hundreds of investors buying hundreds of millions of dollars of deals and I feel like I'm just getting started so stoked to talk about it.

Speaker 2 Awesome. Okay, so someone out there listening is considering raising capital.
Is there a time that's too early? Like when they have the idea phase, is it too early?

Speaker 2 When they have the business plan, is that when they should do it? Should they already have a little bit of sales, 10 grand, 50 grand, 100 grand sales? When is too early?

Speaker 1 I mean, I think when people think about raising money, I think what comes to their mind is like having a really good pitch or like not taking no for an answer or something like that.

Speaker 1 And like the reality is the question about like when you should start,

Speaker 1 I'm thinking like when you should start generating leads to have those conversations. Because even if you know exactly what to say, it's like, who are you going to say it to?

Speaker 1 Maybe your friends and family, but then how far can that really get you? And even if you are from a family that's rich, even those families raise money, obviously.

Speaker 1 So like billionaires raise money all the time. So like there's no time that's too early to start digging the well.
Meaning, how can I generate leads? How can I connect with people?

Speaker 1 How can I warm people up? Even if you don't have a deal yet, now you should be doing that.

Speaker 2 You said a really good point. Just this month, Chris Jenner and Chloe Kardashian raised $4.5 million to do popcorn.
Chloe decided she didn't do popcorn, and so they raised $4.5 million from investors.

Speaker 2 Now, as you guys can imagine, Chris Jenner and Chloe Kardashian are very rich, and they have infinite capital, and they make millions, millions, and millions, millions of dollars per month.

Speaker 2 Why, this is my question, why does someone with that much money, that much

Speaker 2 reach, that much social media power, still want to raise capital from strategic investors?

Speaker 1 Yeah, man. I mean, it's ultimately come down to leverage, right? So most people think of leverage, think of debt, borrowing money, and stuff like that.

Speaker 1 But there's other mechanisms to think about leverage, like what's a higher leverage activity? How can I leverage my business? How can I pursue high-leverage things?

Speaker 1 And so for them, they've got money working for them, but they also want to bring in other money to grow something where they're going to profit on someone else's capital.

Speaker 1 And now, that's what all capitalists do, including the investors themselves, is they want to rely on their brand, their reach to scale this business.

Speaker 1 That, I mean, does anyone think that she's the best popcorn producer out there? Probably not, but she's got a huge audience.

Speaker 1 So I don't know the details of that deal, but I imagine there's someone that's really good at popcorn that reached out to her that said, yo, let's do this thing together. You go on social media.

Speaker 1 No one knows us, but we're good at popcorn. You're good at attention.
That's the art and science of raising capital. Let's do this partnership together.
Same thing with Connor, right?

Speaker 1 Same thing with The Rock.

Speaker 2 like it's not the rock and kitchen cooking up that tequila but now they got a billion dollar valuation that's why yeah Logan Paul and Prime Jake with W all these brands Jake's the numbers on Jake Paul's W brand I think it's like 55 million or 60 million or something the first year

Speaker 2 people are only figuring it out man like Logan's Prime is the fastest growing beverage in history like people don't realize the sheer magnitude of these influencer brands yeah Connor got like $650 million for that deal for the anyways

Speaker 2 okay so someone out there is listening they got their business plan they got their financials prepared I do what's called and I recommend calling setting up shop and a couple core things before you raise capital because what if you come to someone like Hunter Thompson or myself and say I want to raise one million dollars and we actually like your idea but you don't have a business plan you don't have financials you don't have the investor documents what if we say yes and you don't have investor documents they don't have their corporation they don't have their bank account like you literally can't even take money from us And I've seen it happen so many times where people pitch me asking me for 100K or 250K or 50K or a Zillow billion dollars and they don't have a bank account.

Speaker 2 They don't have a corporation. And they literally don't have investor documents so that I might like your idea.
You're like, oh, I'm going to sell Money Monday's pillows. That's a great idea.

Speaker 2 Can you send me the investor documents? They're like, well, I don't have those yet.

Speaker 2 When you don't have the setting up shop, when you don't have everything ready for us on a silver platter, you lose momentum, right? You lose excitement.

Speaker 2 people invest what i call momentum investing is we get excited we see the thing money monday's pillows that sounds super cool we want to give you 100k hunter wants to match me and give me you 100k also we want to put in 200 000

Speaker 2 and you don't have anything set up so now when you come back to us three weeks from now like hey my lawyer's got the investor documents and then hunter and i got to review it and that takes a week or two and all of a sudden we're months into it compared to if when you present it to us you're like oh yeah i got my investor documents i'm going to afford you my business plan my accountant made my financials for me if you already have all your ducks in a row we are much more likely to invest with momentum all right hunter tell us the concept of raising capital.com like where did that come from i mean it's an amazing domain name my man and i paid i paid a lot less than most people think because i don't think people understand the opportunity in the space i mean people are only starting to figure it out now basically the idea is

Speaker 1 What you just said is really important because like people make decisions based on emotional connection to the operator that they're investing in. And so, in your example, maybe you think, oh, like,

Speaker 1 Dan's stupid if he's going to invest with someone just because of the emotional connection. It's like, that's what most people do.

Speaker 1 But then they go deeper in due diligence to make sure that you're actually going to do what you say and already have your bank account.

Speaker 1 So, like, what he's saying is super important because you can get that story. You can tell that story in a compelling way, but you got to be buttoned up on the back end.

Speaker 1 But the story is the really important part. We just assume you know what you're doing.
If you don't, we're not going to give you the money.

Speaker 2 What Hunter's also mentioning is it's not just us. So you might get us emotionally excited, but Hunter and I have a lawyer,

Speaker 2 an accountant, and typically an executive or a CEO. I have a CEO that oversees it.
I call it the four horsemen. I have a CEO, I have an advisor, I have a lawyer, an accountant.

Speaker 2 If you can get by the four horsemen, I'm in. I'll wire you to your pillow company.
100 grand, a million, 500k, whatever you want, I'm in. But you got to get past the four horsemen.

Speaker 2 So a lot of times people are like, oh, yeah, I know this really rich guy, Hunter, raisingcapital.com. He's going to love my my deal.
You pitch him and Hunter says yes.

Speaker 2 But Hunter has his version of the four horsemen that are going to look at the paperwork, the documents, and you to vet the deal.

Speaker 2 During the vetting process, you've got to be able to back it up, like Hunter just said, because even though we might emotionally be excited by what you present to us, maybe you pitch us at an event or you pitch us at a nightclub or a restaurant or a business meeting or you catch us in an elevator and you give us an elevator pitch and we're like, yeah, that's exciting.

Speaker 2 We like your pillow company. But you now got to back it up and prove it.
Yes.

Speaker 1 I mean, there's two sides of the equation. One, the people that just think their story is amazing, they think that they're going to present this deal and we're going to be super high buying and do it.

Speaker 1 Other people that are just so obsessed with the nuances and the details of their offering that that's all they really know and they can't tell the story in a compelling and emotional way.

Speaker 1 For me, I was on that side of the spectrum.

Speaker 1 I got into the world of real estate at a really good time where, you know, post-Great Recession, mobile home parks were for people that are knowledgeable in the space, trading at 10% cap rates, meaning you could buy a property in cash and it would produce 10% cash flow like month one.

Speaker 1 So this, to me, I got in this world and realized how powerful that was and just was obsessed.

Speaker 1 That was torn property as I was meeting sponsors or operators and like I could see the writing in the wall. This niche was going to explode.

Speaker 1 And so when I get to pitch, the first time I went out to pitch, the language I was using was like as if I was speaking to a bunch of real estate nerds.

Speaker 1 And the reality was I was speaking to like some friends and family, some dentist, some doctor, and they don't even know those terminologies.

Speaker 1 So like the story of raisingcapital.com is I bombed on that pitch. Even though there was $30 million in the room, I couldn't raise half a million.

Speaker 1 And earlier I said I was half a million dollars short. Yeah, on a half million dollar raise, like so I was trying to raise half a million.
I raised zero. I'm texting this girl.

Speaker 1 I'm trying to impress, oh yeah, like I'm going to raise a million bucks. And then I have to be like, oh, like it didn't go exactly as planned.

Speaker 1 Like, yeah, you couldn't have done worse is what you mean. So that was my story.
But then I realized like it's not about just like delivering this amazing pitch about the nuances of the details.

Speaker 1 It's like, how can I get people in the room that are already bought in? How can I tell a story that will connect with their true wants and needs? Not what I think, not what I want, for God's sakes.

Speaker 1 And so it was a long journey, but that's how I kind of, when I started focusing on that, when I started focusing on. If I'm talking to someone, what are their pain points? What are their problems?

Speaker 1 How can I use the vernacular that they're more comfortable with? And then paint them a picture picture of how they can move from where they are to where they want to go using my product.

Speaker 1 And that will work for mobile home park self-storage, you know, buying existing businesses, non-profits, like you name it.

Speaker 1 If the money has to leave their account to go to yours, you got to paint them that story. And so that's kind of what I built my career doing.

Speaker 2 So how does it work? Let's say someone wants to invest through raisingcapital.com or wants to raise money through raising capital.com. How does that work?

Speaker 1 So we don't like raise money for people. We kind of teach them how to raise money and they can raise, like we buy a deal in Phoenix.

Speaker 1 We buy multifamily properties in Phoenix and so if you want to partner with us on a deal we can teach you how to raise money and it's effectively your deal that you're partnering with us on but then other people come to us and they're like you know I've got this I've got this fix and flip business that I've raised a couple million bucks or a couple hundred thousand bucks but like how can I take this to the next level and so usually that next level is us teaching them how to do things like basically marketing, right?

Speaker 1 Attracting leads, nurturing leads, building a brand, attracting attention, because you mentioned the example of of the kind of kardashian story like that's the most pronounced example and they've done it across multiple niches where you just take attention interest buy-in of clients and direct that to here's the bank account right and so that's her first popcorn initiative.

Speaker 1 She raised 4 million bucks on her first go. It has nothing to do with popcorn.
Right. And Mr.
Beast Burgers has nothing to do with burgers. It's all about the attention.

Speaker 1 And so to answer your question directly, a lot of my day is spent finding people that are very good at what they do and making them realize that to take it to the next level, they have to learn about marketing, systems and operations of marketing.

Speaker 1 So, but it's a message that's lost on a lot of nerds. And I'm a nerd too, right? But that's great.
It means you're in a good market, to be honest.

Speaker 2 So over the last three years, I raised $56 million through Elevator Syndicate. I have 970 investors that are all accredited investors.
And I just text them deals once a month or so.

Speaker 2 And it's optional, they can invest if they want to, if they don't want to, I always tell them, say nothing, you don't say no, just say nothing, and we won't bother you again.

Speaker 2 And so, we raised 4 million for this and 6 million for that. We do $3 million to $6 million per deal into companies that are doing $2 million to $20 million in sales.
Okay. That's our requirement.

Speaker 2 Yeah. $2 million to $20 million in sales.
It's mostly been food and beverage brands and consumer products.

Speaker 2 So we raise money for Rise Coffee, BLK Water, Everbowl, Carzon Coffee, Icon Meals, Creatures of Habit,

Speaker 2 and all the same ballpark range. But what's interesting is a lot of these investors can throw in 25K, 50K, 100K.
They don't have to put in a million dollars. They can put in 50K, 100K.

Speaker 2 Our average check size is around 100K. And then sometimes someone will put in 250K or 500K, etc.
But for the most part, it's a lot of 100Ks. But however, at a 970, I only need like 30 to 50 of them.

Speaker 2 Right? I need 3 to 5% to jump in, so 30 to 50 of them.

Speaker 2 To put in 100K average, that gets me to my 3 million to 6 million dollar range and then what I do is called hand-to-hand combat once I've raised the majority of it so let's say I'm raising four million and I'm at like 3.2 million then I'll text Hunter like hey Hunter I got 3.2 million of my four do you want to jump in hey Ed Milet hey Andy hey John what Jennifer whatever like I text them and say I've got 3.2 million out of my four

Speaker 2 And that's called momentum investing.

Speaker 2 They feel much more comfortable because they don't want to be the first check.

Speaker 2 And they know that I've now got, let's call it, 27 people to put in the 3.2 now they're in they're excited it's been very effective because for the investors it allows them to get into deals syndicate what a syndicate is guys

Speaker 2 syndication is you could do it for real estate like hunter's talking about you could raise 10 million dollars to to buy like a 30 million dollar property for example you could raise 10 million dollars through hunters crew they go buy an apartment building for example or storage storage units whatever that's a syndication what i'm talking about is a syndication for private equity for you know a beverage company a food brand you could do it for for clothing.

Speaker 2 You can do it for a cell phone company, whatever you're thinking about.

Speaker 2 And syndications allow you to get a group together. I use a company called AngelList.
AngelList does all the back end for me, paperwork-wise, lawyers-wise.

Speaker 2 They deal with all of that part of it because raising capital can be expensive.

Speaker 2 You got to make sure that you utilize a good platform, whether it's raisingcapital.com, whether you're doing it for real estate or for your business, make sure that you have a lawyer involved, an accountant involved, or a platform that you believe in and trust in that has a reputation like an angel list like raising capital.com it's very important because you want to make sure that your paperwork is done correctly to avoid any legal headaches later just because someone's ready to give you 100k you want to make sure that you can receive it properly and then you're going to give them what's called updates quarterly updates preferably

Speaker 2 and you're actually going to follow through and send them their their paperwork along the way and hopefully a distribution and hopefully an exit one day but most importantly is that you're buttoned up paperwork wise all right next section someone raised the money now yeah they went to raising capital.com hunter helped them raise seven million dollars they got the money now how do they interact with their investors to keep their investors happy because deals take time yeah you raise seven million bucks you're not gonna exit for two years three years four years five years six years or never yeah and so during that time how should they be thinking about interacting with investors so

Speaker 1 A couple things.

Speaker 1 One thing, like Alex Trimosi has done some excellent stuff, but one thing that he's done a really great job on that I don't think enough people have put enough thought into into is the concept of time to value.

Speaker 1 Like the faster your clients can see results, the faster you can scale. And if you have a good product and you're getting good results, you should be able to get referrals.

Speaker 1 You should be able to get, in my case, repeat investors, things like that. But what you're talking about is that it's difficult to create those short, quick wins in the game of investing.

Speaker 1 Because if someone gives you 100K, like in our deal that we're about to close, they give us 100K and maybe for the first couple of years, they get like $4,000, $5,000.

Speaker 1 It's a low-risk real estate deal, right? And then in year five, they can kind of see if they double their money, which is kind of our target, right?

Speaker 1 Not our projections, not our promise, but that's our target, right?

Speaker 1 So think about it. An investor to some degree doesn't really know if we can pull it off until five years.
So we don't want to wait five years to like remonetize that client.

Speaker 1 The velocity of your client's money coming into your business is imperative. So what we try to do is shorten the time to value.

Speaker 1 We can't do it by selling the deal faster because in my niche, that doesn't make sense. But like, what else can you do? Okay, well, I can call them the moment that they wire, right?

Speaker 1 I can say, congratulations, welcome to the deal. Just got your wire.
Like, that's an experience. I can send them a gift.

Speaker 1 I can, if we project to send the first cash flow check in three months, which is standard, we can give enough buffers so that we think we can actually send the first cash flow check in 30 days, but we project three months.

Speaker 1 So then that first check comes in. It's not a ton of money, but they're like, damn, I was expecting this to be months.
So we bake stuff like that into our deals.

Speaker 1 And, you know, another thing is the first first couple years are when the emotions are highest and that skepticism is highest. So like we really want to be conservative in that first couple months.

Speaker 1 So that first month, we're beating projections. Second month, we're beating projections.
That's when the referrals start coming in.

Speaker 1 So like, as I'm saying this, like maybe it doesn't apply necessarily to your business, but what can you do to be conservative so that you do over deliver, especially early on in experience, in calling them and sending them a gift and sending a Christmas card and, you know, doing things like issuing distributions faster than you thought now the caveat to this is that when you start to do this stuff you'll see that the numbers change if you're creating buffer the returns are going to be lower right so now it's a balancing act you don't want to make it so low you can't raise the money but trust me if you do the hard work on the front end of selling a deal where the returns are slightly down that investor is going to be grateful in month two and month three and month four and then all of a sudden that dentist you've got that's making a half million a year his 10 dentist friends start coming in and that's how your business scales in the five-year period.

Speaker 1 Otherwise, you've been having to wait. So hopefully that makes sense and it's applicable to other businesses as well.

Speaker 2 Under promise over delivery.

Speaker 1 In short, 100%. But like, think about it, whatever your niche is, if you're watching this out there, think about what way you can shorten time to value for your business.

Speaker 1 Like the quintessential example, even if that thing isn't something you can do infinitely, even if it's just something that only works for the short term, like an example that Alex uses is, you know, when people come into gym launch, they would maybe put them on a crash diet initially to just show them if you do this, it will work.

Speaker 1 That doesn't mean you're going to lose 60 pounds over the next two years, but like if we can get you down five, now I've got your attention, I've got your buy-in, and maybe that's not infinitely scalable, but like at least I've got that quick win.

Speaker 1 And so think about it.

Speaker 1 Whoever meditates on this the most, whoever spends their shower time thinking about this concept more, will win because it's a difficult nut to crack and no one is spending the time doing it.

Speaker 1 Cause it's all about the customer, not about them.

Speaker 2 So in the real estate space, this is super important, guys.

Speaker 2 When you find a deal, you're going to be able to, as he mentioned earlier, leverage. Let's say you find a property that's $10 million.
You don't have to raise the entire $10 million.

Speaker 2 You could raise $2 million or $3 million or $4 million and you can use debt

Speaker 2 with a bank or someone, a private lender.

Speaker 2 But typically, if you're out there thinking about raising money for real estate, you're not going to want to just do one deal.

Speaker 2 Unless it's some huge apartment complex, which is hard to get to that point. A lot of times, you're going to be doing a smaller deal.
It's 2 million, 4 million, 6 million, 10 million, 20 million, etc.

Speaker 2 There's not that many marquee deals outside of apartment complexes and you know, huge commercial properties that are going to be tens of millions of dollars.

Speaker 2 And from a risk factor and from a time factor, a lot of times people don't want to just invest in one deal.

Speaker 2 I would rather give Hunter 100K, 100K, 100K, 100K, 100K in five different deals than 500K into one commercial building. I would.

Speaker 2 I'd rather have 100K of his apartment complex, 100K of the storage storage units, 100k of the trailer park he's buying, an RV motor home park.

Speaker 2 I'd like to split it up because, as an investor, I like to have multiple bets, and I'm still deploying the same 500,000 in the example.

Speaker 2 And so, when you're considering getting into the real estate market, if you're thinking about raising capital in that fashion, just think about not necessarily going for the whale, like going for the, oh my god, I need the holy grail.

Speaker 2 I'm going to go buy like a 200-unit complex right out the gate.

Speaker 2 Buy a fourplex, get a a 16 unit a 32 unit but get like two of them then three of them then four of them then five of them and when you do that your credibility goes up and up and up if you told me that you had six 16 units i would want to invest with you way more than you said you had one apartment complex i would because it's rents and repeat i believe in you now yeah i believe you could do six different deals rather than one deal yeah to me as an investor i would feel more comfortable the whole reason why on the private equity side i raise money for companies doing two million to twenty million it's not that i don't like like a startup company or I don't believe in someone that's just getting going or just did their first million sales.

Speaker 2 It's that if you're already doing 9 million sales,

Speaker 2 well, going from 9 million to 20 million is not hard. Going from 0 to 1 million, super hard.
Like super hard. Very rare.
Going from 9 million to 20 million, that's just gassing on the fire.

Speaker 2 It's been fixing your systems, fixing your processes, adding more leads and ads, hiring more sales team. If you got to 9 million,

Speaker 2 I can blink my eye and get you to 20.

Speaker 2 Literally.

Speaker 2 But going from 0 to 1 million, I can't say that that easy

Speaker 2 zero to one million is really hard and so going out there and buying your first duplex and fourplex and 16 units and things like that

Speaker 2 practice and getting through the paperwork and dealing with banks and building relationships instead of just skipping to what people see online like oh i want to be like grant and go buy a bazillion dollar complex no you don't you don't go literally go look at duplexes fourplexes and 16 units before you decide to go for the you know try to take down the whale anyways

Speaker 2 okay someone raised seven million dollars and they did scale their business. They went from nine million to twenty million, like we just talked about.

Speaker 2 Yeah, boom, things are going great, but now they need more money.

Speaker 2 Sometimes that's confusing to people. They go see these huge companies like, why does fanatics need to raise hundreds of millions of dollars?

Speaker 2 Why does this company need to raise tens of millions of dollars? Why is Uber and Airbnb and all these big brands that are doing billions of revenue raising more money?

Speaker 2 Well, scale is expensive and cash flow is hard. Let me give you a quick example.

Speaker 2 I had my energy drink back in the days we were in 55,000 retail stores and I was in Costco and I was really excited for Costco

Speaker 2 but their order the first one was only for a couple stores which is still six figures because their stores are big and they buy by the truckload their next order was 2.2 million dollars that means I need to come up with a million dollars so let me give you guys a real example Let's say they order $2.2 million on January 1st.

Speaker 2 That order is for March 1st or April 1st delivery. It's always going to be 90 to 120 days out.

Speaker 2 I still have to pay 1 million-ish out of the 2.2 million to make the drinks and another 50k to 100k in shipping and storage to get the drinks delivered there.

Speaker 2 It goes there March 1st or April 1st. Let's just say March 1st to make it even easier.
It gets there, and now they have net 30 or net 60 terms to pay me.

Speaker 2 And so now, let's say I get there March 1st, they don't actually have to pay me until May 1st. But wait, there's more.
What if my drinks do well?

Speaker 2 And I sell through at like an 18% rate. And they're like, oh, we're going to give you a nationwide order.
We're going to expand to a $7 million order. Sounds cool, right, Hunter?

Speaker 2 Except, they haven't paid me for the first one. So now I'm not due payment until May 1st, right? Five months from the order was January 1st.
So I've been out this million dollars for five months.

Speaker 2 I've been spending money on marketing to help it sell well there, another six figures. I spent 50K to 100K on the trucking, all my staff, the travel, people setting up the

Speaker 2 displays and merchandising merchandising in all the stores. May 1st isn't even here yet.
Now they want $7 million.

Speaker 2 That means I need to come up with $3 million more capital to manufacture for the $7 million order. What am I going to tell Costco no?

Speaker 2 If I say no, they're going to be like, okay, well, we'll just buy Monster Rockstar. Forget you.
This is a real-life example, by the way. I went through this.

Speaker 2 And so, if you have a brand or a business and it's going well, you need more money for cash flow.

Speaker 2 Because you are going to go through this real life.

Speaker 2 You have a clothing brand, a product brand, a food brand, a beverage brand, whatever that's a physical product your cash flow will be very very tight because you're always going to get paid on net 30 net 60 or god forbid net 90 terms

Speaker 2 and that is very hard especially if you do well so hunter that the person that raised seven million dollars took their business from nine million to twenty million How do they go back to their old investors or should they be looking for new investors for their second round, for their series B round?

Speaker 1 Yeah, good question. I'll tell a quick story.
So I was an investor in a company called Thrive Thrive Market.

Speaker 2 I turned them down. I shouldn't have.
Damn. I was supposed to put in 25K in the very, very first round.

Speaker 1 You know, well, yeah, that would have been really good.

Speaker 2 $10 billion.

Speaker 2 Go ahead. Yeah, exactly.

Speaker 1 So my story with them, I actually knew the founder, I know that Nick, Nick Green, and he's a co-founder with Gannar.

Speaker 1 And the reason that they gave us the opportunity to invest is that they got said, they were told no from basically everyone, right? They went in there, like, we're going into the grocery niche.

Speaker 1 We're going to take over. I said no.
And all the VCs were like, whatever. Margins are thin.
Like, get out of here. Like, Amazon's going to eat you.
You know what I'm saying? And I just knew Nick.

Speaker 1 He's a smart guy. He got a perfect score in the SAT.
I liked the niche. And I was like, whatever.
Here's the money. And I feel very fortunate about that.

Speaker 1 Now, I'm not going to go into the details of how the deal was structured, but the point is it was structured by a convertible note that is a discount to the next round, right?

Speaker 1 So I write this check and I'm like, let's go, baby. They launch it.
This is my first time investing in a startup.

Speaker 1 You're going to start laughing where this is going as soon as i send the check they had this like soft launch and start taking off like a wildfire but my round hasn't been established yet so like they're ripping in revenue and i'm like uh-oh like they're gonna have to be the next like gopro for me to make any money now they ended up doing very well but the point is they ended up doing a very large series a one of the most largest in california and then a very large series b now is it that they blew all the money and didn't do well no they were taking off like a rocket ship and so because of that you've got this little fire You're like this little seed fire.

Speaker 1 This is when I invest. And now it's turning into a freaking raging thing.
And you're sitting there with gas and the gas is cash. And you're just, how much can we pour on this thing?

Speaker 1 And so that's what they were doing. And so when they went back to their investors, you know, there's an important distinction between like the people that invest in seed.

Speaker 1 deals like you just mentioned you don't typically do that there's people that's that's all they do right then there's other people maybe closer to you where they they want to see multi-seven figures in revenue then there's other people that are like i only want to see a 100 million or more, right?

Speaker 1 So like sometimes it's a profile thing, but usually you would want to go back to the people that made that early investment for a lot of reasons.

Speaker 1 Sometimes it's contractual, sometimes it's just relationship. Hey, listen, you're the one that gave us our first 25K.

Speaker 1 And so that typically happens. But in the world of like private equity, usually there will be lead investors.

Speaker 1 And those lead investors usually have like a profile based on revenue or EBITDA, which is kind of like net profit. And so that's the story of Thrive Market.
And now they're on a tear.

Speaker 1 I mean, I wouldn't be surprised if they ipo'd eventually you know at a multi-billion dollar valuation they did a really good job but the the margins are thin so it's not like they didn't do well they can turn it off at any time but that's kind of like the story of any business when you're trying to offset taxes when you're trying to buy employees you're trying to hire an onboard for the next year's growth now sometimes what can happen is you implement an aggressive strategy like that and that growth doesn't happen so you're going up up up up up and you bring a bunch of people on take a bunch of software risk and then that growth stops you can bk a company and be net neutral in revenue by trying to be aggressive like that and you know i've learned some lessons like that where i'm just like let's go for it let's take over the industry and you know there's a reason i own raising capital.com right that's the initiative we're going to take over the industry right so i've take i take risks like that and we know though that balance sheet is a indication of of health right right so you got to use that thing appropriately and then raise money when you have to all right so the final chapter.

Speaker 2 They raised the 7 million. They did the 9 million sales.
They scaled to 20 million. They did another round for another $12 million.
They've got real money.

Speaker 2 Why should company founders have their employees, staff, or brand have some sort of philanthropy attached to their brand?

Speaker 1 There's a million reasons. I'll start with one that's like super basic.

Speaker 1 Even if you're 100% self-centered money in the bank account kind of guy, you'll find you'll make more money.

Speaker 1 Just purely economically, you will make more money if you have a philanthropic element of your business.

Speaker 1 Also,

Speaker 1 if you don't have that element and all the people that are more successful than you that you look up to are telling you to have that element, freaking just trust them. You know what I mean?

Speaker 1 If you don't want to trust me, you don't trust anyone, like whatever. But like, there's a reason the people that crush at the highest level do it.
And it's because it's not just the money.

Speaker 1 It's also like the fulfillment element. And we talked in the beginning about how my background is kind of getting a lot of real estate nerds to like tell their story and make it more compelling.

Speaker 1 There's nothing more compelling than helping people, especially if you can tie it into in some way something that's really deeply meaningful for you, whether it's your background, your situation, your family, your community that helped you out.

Speaker 1 It just really resonates with people. And I see it not being like a multiple, like it's so many great people have talked about this, but like you give away a dollar, you make 10 back.

Speaker 1 Now, that's not why you want to give away the dollar, but like I've just found that that's what the economics are. And I'll give you a perfect example.
Like we have an event. It's called Raise Fest.

Speaker 1 It's in Phoenix in a couple of months. And we are going to give away some money to a charity.
And it's like a family-based charity.

Speaker 1 The charities for people like pediatric cancer. I can't even freaking say it because I have a very young son, but that's why I'm doing that, right?

Speaker 1 And so during the event, you know, we're going to write a check in front of everyone. I love it.
Now, is that, like, do I want to do that? 100%.

Speaker 1 But also, I mean, I know that if I write that check in front of everyone, number one, they're going to be way more likely to write that check as well. And also, like, we have a program, right?

Speaker 1 We want people to buy the program. And one way to get that is to

Speaker 1 have them understand that they are investing in someone else. And that gives them confidence to invest in themselves.
Now, just real quick, I want to talk like behind the scenes, like, think about it.

Speaker 1 If you're thinking about, okay, there's these people in the audience, they only have so much money. Are they going to run out of money on the charity thing?

Speaker 1 They're not going to want to, it's the opposite. It's like they're making that commitment.

Speaker 1 Like, i want to do this for someone else that's way more powerful to most people than even doing it for themselves so that's my view on the whole charity thing like i view it as both a fulfillment thing but you know from a business standpoint i've just seen it work miracles and so you know that's i know it's a big part of your business and you're a business guy as well but i'm sure you kind of feel similar to what i just outlined yeah so when someone's out there is Considering the next steps, we're going to 2025.

Speaker 2 You can feel the economy shifting. You can feel the new energy.

Speaker 1 you can see stock markets up cryptocurrency through the roof like you see money is flowing in the right direction and people are excited yeah they're making this decision to finally go out there and raise money what would you tell them before they actually approach their first investor you know in the beginning you mentioned like what's going to happen if you go tell a really compelling story to dan and you got this pillow company and now you've got it and you got the meeting and it's amazing and he wants to give you the 100k to me that sounds like someone that didn't have good mentors you know because a good mentor would never let that meeting happen without you being prepared so like from my perspective now is a great time to lean into the mentor side of things and there's a whole world of like how to get good mentors and how to get them to give you your time and all that stuff but at the end of the day it's like if you can show someone that you've got insane momentum and that you're going to accomplish amazing things with or without them,

Speaker 1 that's when your mentors will show up. The moment that you're DMing Dan, being like, hey, my pillow company, my pillow company, can I get 10 minutes of your time? I'll take you out to coffee.

Speaker 1 Bro, Dan doesn't need coffee. Like, I don't need coffee.
Like, we, we, but we are thirsty for killers and momentum. And like, that's our freaking, what's the opposite of kryptonite?

Speaker 1 Like, that's what we want to see in our DMs. Like, this kid or this, this guy, this girl, they're freaking racing their motorcycle as fast as they can.
They're going 150.

Speaker 1 And I bet if I just give them this little secret sauce, they're going to be able to go 180. Because in the back of our mind, like, we're competitive people.

Speaker 1 I want to compete over when that person writes a book, I want to be asked to do the forward. You know what I'm saying? And so, like, you inspire that by creating your own momentum.

Speaker 1 I'm crushing it, I'm crushing it. And I listened to all your shows and I picked up on these nuances about it.
When you have good mentors,

Speaker 1 you're getting buttoned up, and they're going to help you with all the nuances, like legal documents, pitch deck, how to talk to investors. That'll just, that'll just be part of that journey.

Speaker 1 So, that's my, that's my goal, man. And don't start too, don't start too late.
You can never start too soon.

Speaker 2 Where can people find you? Check out everything about you and your world.

Speaker 1 Raisingcapital.com is the company. Raisefest.com is the conference.
If you want to check out my book, RaisingCapital for Real Estate.com.

Speaker 2 That's great. And on your personal social?

Speaker 1 Yeah, Hunter L Thompson underscore IG. And then the Hunter Thompson king of capital on YouTube, which is brand new.
So go over there.

Speaker 2 All right, guys. So it's really important, as you know, for you to talk with your friends, family, and followers about money.

Speaker 2 We all grew up thinking it's rude to talk about money and I think and I'm sure Hunter thinks the same thing that's rude and almost ridiculous to not talk about it it's reality you have bills you have debt you have credit cards you have insurance you have car payments you have mortgages and so many things that go on that are all financially related that you need to know about and we grew up thinking that's rude to ask about rent or should I lease or should I buy or how much I ask for a salary what is a normal salary and what are benefits like we need to talk about these things so that's why the podcast has been doing so well is because you guys are out there sharing you're commenting you're subscribing you're forwarding the clips to your friends it's really important to have these discussions with the people around you consistently money is going to be around forever and during that time you do not want your friend your employee your daughter your like the people in your circle to have these situations or mistakes that happen because you just didn't tell them oh don't get that credit card that's a 29 apr or if you are going to get it make sure you're making your payments don't rack up debt oh that college you're going to is 46 000 a year for four years.

Speaker 2 How are you going to plan to pay for that? Like, have real discussions to prevent people from having these problems rather than trying to talk to them about it later.

Speaker 2 So, check us out at themoneymondays.com. We will be with you every single Monday.
We have not missed it for well over a hundred episodes in a row now.

Speaker 2 I'm super excited to keep going with you guys on this mission. But commenting, subscribing, following, check out everything that Hunter just mentioned of all his different domains.

Speaker 2 Check out his social. We will see you guys next Monday.