Raising capital has no silver bullet. It is sales

Full record of the conversation between Shane Mahi and Jeffrey Fidelman, with timestamps. Transcribed from the recording, so the odd name or word may be spelled the way it sounded.

1. Shane Mahi0:00

   one. So ladies and gentlemen, we are back. So most founders think raising money is about the deck. My guest tonight thinks it's a pipeline. He's run that pipeline for 10 years. Jeffrey Fidelman went from Morgan Stanley and HSBC to a venture fund, then built a company for early stage founders and emerging fund managers with 40 people across the US Canada last year you built software to do it at scale. So, Jeffrey, well, well. Why I should a founder or anybody who's who's to this channel right now stay on the episode for the next 45 minutes to listen to what we have to say

2. Jeffrey Fidelman1:00

   There's no special sauce. There's no one trick, wonder, despite all these cities are around and kind of touting online and and the reality is, is like with anything else, the more you put into it, the more you'll get out of it. So hopefully we'll get into the details

3. Shane Mahi1:16

   of that on the podcast. Okay special sauce. Okay. So if anybody wants to watch, like you've spoken about this topic a lot of times, you can type Jeffery's name in and it will pop up everywhere on YouTube. But you've all done. story on a lot of shows and I want to do something a little bit different today, so I'm going to skip that.

4. Jeffrey Fidelman1:35

   But you started in Residential Real Estate and my career is what did selling houses teach you that Wall Street didn't? Oh man, so I ended up selling all apartments, houses and apartments, but I was in residential sales in New York City at the time. This was before I got into a this industry. And okay, I think that I probably said before but not too often is I'll never forget my first interview and where I ultimately ended up getting a job and working with this individual, walked in and this was while I was still in college, walked in for a just started college and I was wearing like a nice button down nice pair of jeans, I thought I looked nice. And the guy looks at me goes, I can't believe you're not wearing a suit. First thing he says to me on my interview that I went And I ended up getting the job. I ended up learning so much at that job. First of all, got to dress the part. It's always better to overdress than to underdress. Number one, and number two, really what he taught me a lot was around, frankly, how to speak to people. And I know that sounds a little bit crazy, but prior to working in real estate, I'd worked in, I worked in a gym, I worked at a pizzeria, I worked. of the body shop I did like odd jobs but none of them were like professional services based

5. Jeffrey Fidelman3:07

   and when you think about professional services the main part of the job is basically sales like yes I'm selling an apartment but at the end of the day I'm selling my relationship with and then the sale of whatever widget or service thereafter is and that's more of a presentation the sail. The sail is really, like, what a is the initial sale you, you're selling your relationship. You're selling to how a relationship. And I think that has been kind of this, kind of this consistent learning that I've had, in real estate as we grew that real estate business then as I got into finance and into banking that's not to say there weren't a lot of G G just anyone. Your life will be better if you're better at sales. It's not just hey. I have water'll water. Do you want to buy water? Or hey, sell me this pen? You're constantly selling yourself. If you're working in any position. And you have clients or customers or people coming through, you're constantly selling. I think you're selling yourself when you're and you're going to get a new job. You're selling yourself when you're going to get it. want to get married, you're selling yourself, and all of these different permutations of life, not just in business. So I think learning what is the best way to sell yourself is probably

6. Jeffrey Fidelman4:43

   important things you can do just as an element you kind of you know like

7. Shane Mahi4:56

   the personality it took to be in sales I asked you that question is ever since I was a kid, I always argued I was one of those kids who was always in the principal's office. I still remember. this day, the principal told my parents, your kid is going to have serious problems problems when it grows up if you guys don't get on this behavior. But that led on to me being like a I'm not saying it's the greatest thing in the world. I was in a spa, I went through these phases of kind of being able to argue, being able to speak, but to make my point. And then my first big gig was my dad was an investment banker in Goldman Sachs, so he was a VP of investment banking We had a crazy good life and my first sales job was cold-calling for and I didn't do too well at that point I don't think I was hungry enough and then I made my way into Vector Marketing selling cocoa knives and when I started selling cocoa knives I don't know if- I don't know if you've heard of it, but you go to people's houses and you have these $1,500 not sets and I blew up, and people were like, yo, you're really good at this. You really, you really, really know what you're doing. And people were buying these knifesets and it just sort of happened to be, I love the attention. I love being able to convince people to take their selves out of their natural ways and purchase something. where they thought that was really cool. But for yourself, when did you kind of discover that sales was the thing that you wanted to be in and you had the personality for it?

8. Jeffrey Fidelman6:26

   I don't know if it was, necessarily a discovery, more so of like... I fell backwards into it. And you knowa I always had this kind of like entrepreneurial mentality same always getting into trouble in middle school and high school. Like, in middle school, I got one of the first times I remember getting in trouble was like every Thursday, every Friday, it was like pizza Friday, right? And yeah, instead of it being a school lunch, they ordered like pies of Domino's, I think it was Domino's and pies of pizzas on the line, $1 slice and the line was because it was like a treat for all the kids. Like I went online, I bought like three pies of pizza, and then I stood next to the line and sold a slice for two dollars, you know? And I remember I got in so much trouble by the administration from the school. They called my parents, my mom came in, and literally it was funny. My parents are immigrants. They came from Soviet Union and they're standing. Like they didn't understand why the school was mad at me. This is the fly-in-to-man basically, like nobody had to buy pizza from Jeff. They could have bought, you know, they weighed online and buy pizza. So I think from a sales perspective and it kind of went on from there, the first kind of iteration in my mind was I was pretty good at identifying these like gaps or these arbitrage opportunities where, you know, that's really what sales is at the end of the day. You have something worth a dollar.

9. Jeffrey Fidelman7:57

   figure out a way to sell it for $2 and then make the difference. Whether you're selling a car, a pair of jeans, a pen, what I was saying before, a bottle of water, services for investment banking, whatever it is, it's always X, you're the plus you're the plus Y that ultimately makes the sale. I think fast forward a little bit later, my first job in finance was getting into finance, my first job in finance was the same, same as the same thing, like off of Wall Street, Boiler Room, except I would sell out alcoa, blue chip type of stuff. And I think one of the most important lessons I learned from that was how to deal with rejection. Yes. When you're selling to your point, either door to door or cold calling, 90% of the time, 85% of the time, ' you are going to get a no. Often you're going to get like a f*** no or whatever, right?- in sales and for the outliers that have never experienced, this, God bless them. But for any person who wants to get into sales, or who is in sales, the most, dealing with rejection... I'm gonna get knocked down 72 times, but the 73rd time I stand up, I'm gonna make the sale. And you have to have this thick skin that either you can be a born- with or with enough practice, the skin grows.

10. Jeffrey Fidelman9:29

    epic comes and you're able to deal with this type of rejection. So I think that's really when something clicked in my mind of it's not necessarily that I'm, I consider myself like the best salesman or anything. I just think that I have the conviction and the wherewithal I-I suppose at this point to just deal with so much rejection before getting to a sale. And I think that's for anyone. If like you can horrible at it, you have to adjust it now and again, You have to change. cadence, you have to change what you say, how you say, the jokes you make. But as long as you're consistent for a long enough period of time, I can almost guarantee... to make a sale eventually was there ever a moment where you thought like where you were not necessarily a discovery but when you knew you were actually good so from me was I again I went from New York sold in New Jersey then I moved back to the UK and you are so f***ing boring.

11. Shane Mahi10:30

    don't care if my audience is harvest on it, but they're much less respective, receptive to taking cold calls and like this entrepreneurial spirit that I grew up. with the New Jersey, and that's what I embraced. But the first time I went, it was this crappy company called Marcus Evans, and I was selling financial services, training, courses, two banks, and I was on the, like, I was getting paid less than a McDonald's low wage employee. That's how, like, but I wore a suit and I had gone through, up my life and everything. And it was the first job I had back in like back in a business. And I remember I had three days to practice the script and make these calls and then they said, all right, who wants to make the first class if I can, I'll do it. And I got on the phone and I remember after I finished this, I was. I was calling this Polish-guy and it was the worst cold call ever, right? It was absolutely horrendous, but the whole room was standing there and they were like, I thought you said you didn't know how to call. or like you never knew how to call. And that, like, like, that all moment where I was like, wow, a lot of attention for this. I'm going to keep doing this. That was my first moment. And then I knew I sucked for quite a while and then took on Grant Cardone's books and how to close got worse. And then when I got into a more consultative selling, professional selling, solution selling, persuasion engineering, that's when I kind of refined myself and became a professional seller. But for you, was there ever a moment where you kind of thought like, yo, I am really good at this. And yeah,

12. Shane Mahi12:00

    and you went full force into it.

13. Jeffrey Fidelman12:03

    So when you put it that way, yes. I think that there was kind of a tipping point when I gave the confidence about what I was selling. And it didn't, it happend, right? I built my whole bulk of business cold calling at Morgan Stanley, but I was I was I was cold calling and I was selling Morgan Stanley as the primary and then selling. Then I go to HST. I was doing a lot more there. So I was kind of selling myself as a manager operations than I was the bank. And venture, it was totally different, right? Because you're selling me now and I get to critique you on selling. And I think, I think not even in the first year As I started building my own business, there was definitely a moment where I was on a call, probably a call, like selling our managed service or raising capital, and I felt this flow. I felt like I don't know how to describe it like you're on a river and you're spot on. There's a scene in Wolf of Wall Street where he's talking on the phone and then he I felt kind of like that I felt this like wave of confidence over I'm really I'm I thought to myself like I'm really good at what I do I'm not to try to sell anything around what I don't do, you know, people in sales have always said that

14. Jeffrey Fidelman13:34

    there, there's a power of no, we do what we do and nothing else. And that's kind of a mistake. There was a I mean maybe 70 years ago at this point a couple years after starting this business not even day one after starting this business we're at You. Know. You know actually like if you're not buying what I'm selling then you don't know enough I'll educate you a bit, but otherwise like I'm on to the next one And the moment it turned to that, is the moment I saw a significant change in our own business development processes, our business development processes, and our business in terms of growth. And I think it's a matter of, yes, dealing with rejection, yes, knowing what to say, I went to say it, whatever. But there's a sense of self-confidence that you, you just need to, to break through spe, a certain glass ceiling. And then, And everything thereafter is, well, I, you can throw any question at me, you give me a moment to think. about it, but I'll give you a response because I've been doing this for so long because I'm an expert because I have expertise and it's kind of like, you know what I'll say and I'll pause it there. I don't want to monologue, but someone told me at spear I started at Morgan Stanley when I was 20 years old. And obviously a lot of my clients were a lot older than me at the time. One of of the senior partner pulls me aside and he goes Jeff, in order to be successful with this, you can either have experience or expertise.

15. Jeffrey Fidelman15:05

    You don't have any gray hair, so you can't rely on experience. You better be the smartest f***ing person in the room.- Mm-hmm. You better have the expertise. And I think that's what I started leaning towards and now fast forward, you know, 20 years later, I've got, I keep it short, but I have gray hairs on my beard. And now I can kind of lean on both because I focus so much on the expertise that over time. you're doing the same thing for a time. Yeah, it makes sense. So when you were upon at the fund, what did you see from the investor side that made you want to switch sides? Chaos. And I know it sounds like why would anybody want to do this? And that's why so many people don't go into capital raising and they go later stage. Like at Morgan Stanley, someone calls you, they're making $100 million of revenue or of e or of per. profit every year, by the time you call your third or fourth investor, the deal is funded. Right? It's very simple. When you go and what I saw kind, kind of being in venture, venture capital and seeing how a lot of those, those are capital, it was not even organized chaos. It I was just chaos. They were using spreadsheets. They were calling. not following up correctly, they were not keeping in touch with investors and they were getting frustrated. Really from the perspective that I had, just a, I remember left a right hand brain but I'm

16. Jeffrey Fidelman16:40

    more like mathematical and logical in the way that I think. So seeing this complete lack of structure made me think of why can't we build a managed service for raising specifically for these earlier companies and old you know I speak to they are missing this process structure and it's it's just as simple as that right it's I saw the white space that I can bring structure into it certainly certainly with the managed service we have and that's why we kind of did that and now launching kind of a separate software as a service company to do that and or like those yeah getting dug out or teeth yeah

17. Shane Mahi17:31

    I feel that we're doing the same thing. We're taking this. We about execution you no longer have to worry about I can tell. So a lot of systems and structure and process, it does free up a lot of time. And I remember there's a book called The Gold, the Gold by Eli Goldrat. I don't know if you remember this book. It's called the Gold by Eli Goldrat. But it's all about through per. And I remember when I was building my first agency in 2020, and I hit my first [...] and and then we got to [...] in the second year, never ran a business in my life. Take Dunlap, he's a big mentor of mine. And he said, go, he goes, Shane, what you have is a mess. Tell me if you can, from point A, from the moment somebody, somebody visits your website, I'll first call to the moment they pay you, what does the buying cycle look like? And I was, like, it happens like this. He goes, yeah, but what does your team see this as? And I couldn't explain it. And he said, go read this book, EOS Traction by Gino Wickman. And that helped me explode because just the quadrant of being able to... identified data process, issue, vision,

18. Shane Mahi19:02

    and whatever the other components were. Once I got that in line, it's like I understood everything. It made a lot of sense. Where did you come from? truly what it is that kind of you read or discovered for that

19. Jeffrey Fidelman19:30

    not as much on the as much on the managed service like the managed service side. What I recognize is that I started as a service provider as a service provider. It's me helping with some decks, some models, some models, helping kind of approach investors on behalf of our clients, and then I slowly started looking at what can be replicated over and over and over again. What can we build once and sell twice, so to speak? service business than turning that into a product ultimately. And the thought that I had and the reason why we kept kind of innovating our business. strategy was that, that built the services entirely on me. If I don't eat, sleep, go if I don't Anything? There's still 24 hours a day, seven days a week, right? That's it. So we thought logically speaking, okay, how do we turn this into an engine that we can drop and just change the oil and change the gasoline, but otherwise it's the same engine going into each of the companies. And it really what Fundraise as a service is. It's, we have, let's say a skincare company raising five million, a space rocket company raising $60 million, a fund manager raising $150 million.

20. Jeffrey Fidelman21:00

    million dollars, every single client operates the exact same way on our end from a mandate perspective. The only difference is the investors were targeting and then also the copy, right? Like what we're actually saying and we're writing to those investors. But the structure and the systematized approach is exactly the same regardless of industry, regardless of capital raise, size and stage and anything else. And then the idea around that was, I'm and. This is kind of selfish, I'm still running most of business development. I'm still heavily involved in the business, maybe not day to day, but every other day type of involvement. How can we take the next step and kind of like disconnect me, Jeffrey, from the business itself? How do I create an engine that, right now that can sell, but isn't dependent on like, like, my resume and my background yeah and that's and that's kind of we ultimately went to, you know, interestingly enough, the first kind of product of software was for internal use only, because I was using it to open for different platforms. And I was like, there's no cost that is it associated with that. How do we control this? and and long story short the answer

21. Jeffrey Fidelman22:30

    was let's build our own CRM, let's build our operating system that our analysts will use And we said, you know, why don't you do it? Why don't the management service is kind of fun. list and just give you fundax, you're going to have to put an effort, you're going to have to do the work, but we'll get you set up on it. We'll have you do the same thing our analyst does that we know, but you do it. We already know. As long as you do what we tell you to do, you will get meetings with interested qualified investors. And that's, I mean, I can't tell you too much about that product because we probably have maybe and customers on there, my tech crunch disrupt. this week in San Francisco, kind of launching it. But so far, I mean, it seems to be working working really, really well and has decou, it relies on the experience of the firm and of the achievements of the firm,

22. Shane Mahi23:45

    but not at all to any one person. Wow. I want to back tuck that first deal at Fitlman & Company that this is a real business. Probably.

23. Jeffrey Fidelman24:10

    $400,000 by year two, $3,000 in the first year. And this is like, I literally started that business, this business. week after I got back from my honeymoon after day and night and my wife was like talking about bait and switch, you know! I would not recommend that to anyone. But I was convincing myself that there is a need, I need to tweak it a bit. And for the three years of the business, my joke was... If someone called, I would pick up the yes, yes? Yes? Yes I would. Anything that anybody wanted me to do operational consulting this dex financial models valuation like whatever it was, as long as I kind of knew how to do it, I would say yes, and then, and then proceed forward. And I think that, I think that the moment, the moment that we had kind of enough clients, we always did like an 80-20 review every year of where did the majority of our revenue come from? What are, what are we doing? Where do a majority of our headaches come from? And we realize that that seems to be low-headedness. Whether or not you raise capital is

24. Jeffrey Fidelman25:40

    really on you no one's gonna not fund you because a deck is good or bad like we're doing that obviously but yeah how do I get into the same low-head We do our best efforts, but at the end of the day, it's up to the client, to actually raise the capital. I think right around like really like you're four is when we realize that like hey we need to start saying no to anything outside of fundraising even if it's just back by you know when you find out that you're going to be selling one thing really well. We can be a little bit more in depth about it, but don't do anything. else. Don't be a jack of all trades. The moment that we said we were going to do that and then and then actually testing it for... months, well within that year, we said, like, this works, we got clients on, they're happy with our output, let's do this over and over and over again, and not even worry about everything else. And I think at that point, like, we started this in 2015, so call it 2019 going into COVID really, like, just into COVID and coming out of COVID, is when this business kind of I, I don't want to say pivoted, but when this business really really became like as opposed.

25. Shane Mahi27:05

    about this, because these are most of, these are things I haven't heard in any of the podcasts I've watched from you. But for me, I always had this number in my head. It was just, I want to own a hundred million dollar business. And I remember having this coach. I always from the, from the first coach I had was a life coach. It was. I was in a relationship. I was engaged to this woman and basically she said you're like you're so many of these and she said I want you to get counseling so I said okay cool I'll go get counseling the council told me get rid But there was a load of lessons around and it was basically if you don't if you like you feel guilty that you're stuck with this person you feel like gonna let her down but if you don't let go, you don't give her freedom in her own endeavours, same way you you don't find your wayay to get your freedom and then I went to some more life coaching, and I thought, I want to be a CEO. Let me take some coaching on how to, because I always been a manager. And I had to, and then I went through more kind of ambitions and the last like real pivotal moment, this coach Andy Shaw, and we did this session where we drew the big circle, we said 100 million, branch out what 100 million means. In revenue actually creates and how much stuff goes into and hiring a firing and compliance regulation and all this kind of stuff

26. Shane Mahi28:36

    And he goes shame. What on earth that you actually really want? And it came down to, I just want to have like 25, 30 grand a month. I want to drive a couple of nice cars, I want to be able to buy the things I want. That's pretty much what you want. You need a lifestyle business. You don't need this $100 million business. And then a load of things evolved from there. It was a massive goal, but I didn't need to keep it simple, be direct, solve a problem. And learned a lot about SAAD, it was a few. other coaches down my path and it helped me much for you though, You honorable fit that taught you the most about selling.

27. Jeffrey Fidelman29:30

    That is a great question Hmm, I would I would have to I Okay, I Obviously met him a little bit. Well I got married and my wife very young Brella's at least speaking and and and I think that that I would have to say him. Yeah, my father and I he similar background I mean, he, so my parents immigrated, my wife's parents immigrated, I guess first generation or maybe, I don't know, it was my first generation or would he be first generation? I was born here, he was born there, right I've known him for so long now where it's funny because I've seen his phases as well over the past almost 20 years that I've, and it's It's like, to your point, you want to achieve this whole thing. And usually when people sit down and say, I want to be a hundred millionaire, I want to be a billionaire, achieve this this seems impossible and the one- as you're talking, the quote that t comes to my mind is something that he said to me which, which is why when you ask me who is that person I say it's him and it's like what he told me is still something that rings true today Which is when you have something that seems insurmountable and seems too big The question is, how do you eat an

28. Jeffrey Fidelman31:05

    elephant? Let's take Peter aside for a moment. This is just for the purposes. How do you eat an elephant? And the answer is, one bite at a time. Exactly. And I think that's the whole idea of it. And that's it.. If you and all of a sudden it's like you put all your eggs in one basket and it either hits or it doesn't and chances are statistically So yes, one bite at a time out of this massive goal, but reverse engineering that idea is that each bite is separate and each bite is cumulative in order to get you to your goal. So I would rather have a hundred clients each paying me a million dollars than paying me fifty million dollars each. So you're exactly right. And I think there's a lot of like risk, risk retention, risk control, risk, how you We think about risk in sales as well. which is like, what is the best that can happen and, and what's the worst that can happen? And you always have to think through those types of things. I think something also that I took from him and kind of just knowing him, then, and we have such a close relationship now is that it's in business,... It's always better to respond than it is to react. And it's something that, interestingly enough,

29. Jeffrey Fidelman32:40

    You have to be at a certain point in your life for that saying to actually like dig into your brain and make sense. I started this business in the mid-20s, and I definitely reacted more than I reaction, the amount of bridges that I bring, I was an island for a while, I would tell people to go and ask themselves, I'm like, yeah, I'm not a, and I don't know, it comes with experience, it comes with business for this amount of time, in, in almost every situation, it's better to respond than to react, like, if you are feeling like an emotional response to something or motion reaction to something, I will get up and like I'll go take a walk. or I'll wait or I mean, I think Jamie Dimon said something like this also a few years ago where he's like, if that happens, he has like a 24 hour rule or something where he's like, he'll leave it in an unopened mail mailbox and just respond to- for a day. Because you know, it's, it's, I think the, I think the number is three minutes. When you get angry, anger lasts exactly three minutes in, in your brain chemically speaking and if you I mean obviously not if you're in a fight. or actively fight, but if you get angry at something, give yourself at least three minutes for your chemical levels tos to kind of recalibrate inside. Inside of your body. And then you'll have a little bit more clarity of mind.

30. Jeffrey Fidelman34:12

    And that's three minutes. Now imagine you wait 12 hours to respond to something. Yeah, oftentimes, like even even I had a situation last Friday where something was driving me to a point of like I wanted to throw my phone against the wall. And I literally said to the person I was talking to like I feel like I want to throw my phone phone against the wall I'm not going to be responding for a couple hours I'll talk to you tomorrow talk to you later tonight I mean it didn't end well with that individual, but it's certainly on

31. Shane Mahi35:00

    where everything can be like copy pasted and posted online. So I find that very interesting. And I'm even still trying to digest it. And I remember one phrase I had, common sense ain't so common. Now, if you break that down though, that again, I know you went through a few examples, but to react and then to respond. tape, so I've had it plenty of times before. As soon as I get an email, let's just say I had a perfect example, I had this guy, we're welcome. on a deal, we worked on it for three months, he bought his finance person, he bought his operations guy, and then we talked commercial, and that month three at the decision stage he goes, I thought this was an equity deal, and I was going to get equity ante your company. Why are we talking about money? I was going to lose my ship. I did it, I messaged my coach, I'm like, I don't know what to do with this guy, I f***ing can't in your time, but... That the reaction is one thing, but then how do you kind of like just in Domify that cut those for those phrases like I do So reaction is when you, speak from the heart or response is when you speak from the brain and okay okay, like and it's not to say you should do one or the I think in

32. Jeffrey Fidelman36:30

    should be a measured response. Again, pros and cons, plus the Delta as someone, how do you compare the two? And yelling at someone, look, I'm not saying never do it, for sure. Like yelling at somebody and putting the, the fear of God in them sometimes gets the result I want to get. But in today's day and age where everything is so virtual or everybody can hide behind a screen, you are the smaller person if you start reacting more often. like again another example you're playing checkers versus chess yeah you need to have a strategy you You need to talk with people in a certain intent. need to have if you want a certain outcome to be achieved then you know then try to achieve that outcome and so many people when they react they bite their nose to spite their face. They a reaction. This feels good. I feel good help you achieve your goals? No. It helps you achieve better about yourself for the moment. But in a way, you probably feel like s*** afterwards as you're thinking to yourself about where you've said that. So that's why I think about it that's that way. It's like, I'd rather bottle it up and then decide how you want to react around it. And if you still

33. Shane Mahi37:54

    make a lot of sense, make a lot of sense. So let's unpack the business because I think your business is very, very interesting. Walk me through the what happens when a founder signs with me through what happens when a founder signs with you day one to the day money But what does that actually mean? In any managed service, there's some sort of technology and then there's a human person running the technology on your behalf on Shane's. So Shane comes to us, Shane's company kind of engages and us to raise capital and what they're engaging us to do

34. Jeffrey Fidelman38:30

    is essentially renting our investment relations infrastructure on a month-to-month basis for Shane. So, we built a CRM, that's what we're talking about. before we have an analyst, Adam the analyst is now working for Shane's fund raise. Shane company gives me a few s s directly to raise your raise directly to raise your raise to raise your raise to raise your raise. Yeah, yeah, okay. And we're very high touch we I, I call myself yes, at relations, but I'd like to think about it more as like in source investment relations, so to speak. Mm hmm. Because we, we, we speak with our clients at minimum once a week on a recurring call ad hoc always available. all the data that comes off of the engagement, meaning the investor phone number, email, personalization that goes into it, all of that. that is our client's data and they retain forever. So we're kind of the footprint that's created from putting that infrastructure in always stays with the client even after our engagement. So we get our clients on the phone with investors that are both interested and qualified. We have these weekly debrief calls. We get an understanding of where they are with the process. And then really, from there, it's in recommendations that we do.

35. Jeffrey Fidelman40:00

    clients not always taking it off. Raising capital, you should be sending out a monthly newsletter. Every month and or start of the month as long as it this consistent, send out like an update. Here's where we're at, heret last month, what we're doing next month, here's our ask. Just to make sure you're relevant in the investor mind and you don't just disappear. By the way, 80% of our clients don't do that. I can't create the content for them. they have to make the money and I'll send it out. But they just don't do it, despite it being kind of a best practice. We do follow up with all those investors on our clients behalf. We try to get them second calls. We try to get them in front of them. But at the end of wa the day, it's our clients on the phone with the investors really on calls that we're not part of.ur most frankly, all of the time. So it's really in a this as possible in order to close the capital. We have both a retainer and a success fee in terms of our commercials. So we're incentivized by them actually closing on capital. But there's only so much we can do to actually force like, I can't force my client to write a newsletter and send it out. I can't force my client to sek a personalized follow up to each investor that theys speak with. And I know these things sound, sound like common sense and to your point, Shane, common sense isn't like we had clients before.

36. Jeffrey Fidelman41:30

    where you follow the last month's investors you spoke with, I don't know a dozen of them, no, no, I'll do it today. And then I see an email, what comes through is, hey, do you still want to invest in us? Copy, paste it to every single investor, just. Just that one sentence over and over again. I mean, you can get some of the responses they got back today. And it's not out of lack of our trying or trying to impress upon how important it is to personalize. It's, you know, our service. I'll put it this. fight. Our service is like hiring a trainer at a gym. That was one of my odd jobs back in the day too. I can make the workout plan. I can get the guy on the bench. I can put the dumbbells in his hands. I can tell him how to push, how high and how much. But he's got to actually press off the bench. You know what I mean? Yeah, exactly. Unless he or she does that, there's only so much I can do. And then don't come to me that you haven't lost weight, haven't built... muscle, having achieved your goals, because no matter what, and I know AI is doing wonderful things for many, many people, but the reality is that the best things in life, the things that are most worth it, often take effort, often take a lot of effort. And fundraising for a brand new business that you're the founder of, or a new fund that you're the GP of, it's going to be really, really hard. Yeah, really really hard part is

37. Jeffrey Fidelman43:00

    You can't just outsource like fundraising to someone set it and forget it. It's just, again, you're making $50 or $100 million in EBITDA. You go to Morgan Stanley and that's simpler and it's more straightforward. The earlier stage you are, the more you have to prove and yeah, it's going to be hard. So anyone thinking like even for us and I'm full disclosure, like we make it easier because we'll do everything to get you in front of the investor, but then you still have to put in the work. Like the people who don't putting the work instead of doing a raise gap.

38. Shane Mahi43:32

    So, that makes a lot of sense. So is there, there's one piece about this that I find quite You have a reputation, and that you have your brand name and I'm sure investors do know Jeffrey Fidelman and they know what you do and then you have thousands if thousands of companies like myself trying to raise I find it very I have a coach that helps me like the selling to a customer versus selling to an investor. or pitch a night and day, completely different. My story had to change drastically. But I was thinking, as you were saying it, why is it better that it comes from the company itself- under let's, say, for example, argument sake, Shane.co versus you as the reputable known broker? Like, it's better to come from one side than the next.

39. Jeffrey Fidelman44:25

    So really two main reasons. Investors and early-stage companies want the company to put- into it. They do not see them hiring a broker or banker. Like when I was a VC and a broker called me, first and last time, I saw the deal, right? Like, you don't want that. You want the founder. You want the company calling you ,'s directly. And the second piece of it is, is that I actually proactively, This is, this is not something that like I'm telling you on a podcast that I don't know anywhere, right? Like, listen to this. Like, time, we, you know, they're not like OFAC, red flags. I'm sort of like terrorist organization or money laundering or whatever like we have a broker dealer that checks those things But above and beyond that. I don't want to stake my reputation on dozens of early-stage companies that we end up representing every year and having done diligence on them because as many context as I can be. and do have in the industry, speaking the earlier stage a company is, the more likely it is going to fail before it gets to the next stage or the further stage beyond that. If I keep calling series A, C, pre-seed the investors, they will pick up my call, but they will expect me to have done diligence and underwriting and don't call them on every single deal.

40. Jeffrey Fidelman45:56

    And I don't want to put myself, my firm, my analysts into that position.

41. Shane Mahi46:00

    the, wow that's very important the main the main reasons there and something you said that I do want to touch on I know I know we're kind of close to

42. Jeffrey Fidelman46:30

    by the way. So we sat down and I started thinking, well, forget about the banking piece. Forget about, let's just what are we actually doing? And I'm sure you, most people listening to this podcast are thinking to themselves like, they've gotten a LinkedIn message or a cold call. Selling some sort of software they don't need a refinance on their mortgage. I mean I got a call yesterday a day to replace my hip like I don't know where these calls are coming from are coming from I'm not for full disclosure but like just getting calls being sold stuff we don't need yet yeah think about it like and this is personalizing the outreach, they should be through to be getting your call. So we started hiring former BDRs, former SDRs, guys and girls who were on the phone selling stuff to people who don't need the stuff that they're selling. And now all of a sudden turning it around and saying, look, I'll use Adam as the example who's actually an analyst with us us. I'm like, Adam, we have a client. It's a FinTech company raising $5 million series. Before you reach out to anybody, are you ready to go

43. Jeffrey Fidelman48:00

    Investors, do they have enough capital to invest? What's their average check size? Take a look at their LinkedIn, take a look at their website, their portfolio. Is it a good fit? You're repending to this and John Smith, the investor. Yes. Great. Now, personalize the outreach-outreach to them. And the personalization is, hi, John Smith, you are an investor in- as a job, their job is to deploy capital. Right, they get paid, forget management fee, that keeps the lights on, nobody's happy with that. The only way that John Smith the investor is getting paid is by investing money in a good company and then that company growing and selling and then then the carried interest comes back to John Smith the investor. So John Smith is in the position of constant origination of businesses. So if we can personalize and qualify prior to reaching out to John Smith, and then literally put on his lap this opportunity that fits exactly their mandate, he is going to be thrilled that Adam's Adam the Analyst just called him from So that's kind of the idea that we have that it's it is very similar to sales you're not throwing spaghetti at the wall to see what sticks and frankly that's what AI platforms are doing but if you can be as

44. Jeffrey Fidelman49:30

    for clients raising capital, or your outcomes if you're doing this on your own and raising capital, skyrocket. Because you're having more ad bats. you're having more opportunities to actually hit the ball that's coming at you.

45. Shane Mahi49:45

    So I find it interesting that so you've got your expertise. You've been doing this for years. obviously, nobody can, they cannot kind of compete with the expertise, the experience you have. You have these companies like Clay now, like BitScale that can personalize and you can gather signals and you can find out everything beyond what college they went to to a T. So how are you guys cutting through that noise where let's say a brain box, a GTM engineer at a founding company, they're very early stage, they're very clued up on how do you Smartlead and how to use all these systems and kind of really, really personalize to a T what those investors want, what really makes the difference then between those people and Fidelman & Co doing it, you guys, yourselves, with your expertise.

46. Jeffrey Fidelman50:33

    First of all, what you just described is few and far in between. Yeah, right. I think there's not enough bandwidth or personnel or knowledge to do that. But let's assume, fast forward, most of the companies have that. It does come down. to value and bandwidth, right? Like value is you're a founder, you are either doing this yourself, meaning you're not being qualifying or you're hiring an animal. who's spending most of his or her day doing this. And then on top of that, you're paying for all the software platforms, paying for Clay, for Apollo, for ZoomInfo, for the investor databases. for your AI, API and the tokens that you're spending and all of that. Essentially, we've packaged all of that together and we buy it to our clients on a month-to-month basis. So it's when it comes down to hey we can just do what you're doing yeah I mean nothing we do today is proprietary. I'm happy to admit that maybe our investor database at this point is proprietary because of 10 years worth of like notes and information that we've accumulated, but the actual process like go GPT or Google or Claude or whatever like what are best practices around raising capital that is exactly what we do that's what you know starting off the podcast was kind of there's no secret sauce there's no silver bullet there really isn't. It's around consistent structured outreach and approach and we've create a package, essentially a managed service around doing just that for those people.

47. Shane Mahi52:05

    Yeah, and I think it does come down to bandwidth because even right now I'm doing my second business. It's my so my first business was an agency tried to sell it. It was a garbage But it was a garbage multiple because your services went to software. I had a good payout from software at 2.5% equity stake in that company. That was a great payout. And I said, I want the whole bag. Now I want the whole bag. And in this occasion, I am really, really really, really running myself then with building pipeline, then I've hired somebody to build pipeline, now delivering all these contracts and scaling that out, I simply am running out of time. time. So I completely get it. Now, heading out to the last little bits of the podcast, I run outbound for a living. So I do this every day. I don't do it to investment degree that you do it, but I want to talk about raising money like we did about sales pipeline. So for a seed round, you may not be able to give exact specifics, but how many investors? that does a founder need to beat. How many investors does a founder need at the top to close the round?

48. Jeffrey Fidelman53:12

    For safe numbers, let's call it 50 to 100, interested, qualified investors that they speak with, you know, I'd say also to that end, Shane, for the people who are raising capital, like, ask a question. This is not a, it is a conversation. raising capital. So, when you talk to an investor, you've done done your qualification personalization, you should still ask like, tell me a bit about yourself and your criteria. Listen to what they're saying. Do your pitch. At the end of the pitch, ask for money. I know that common sense isn't type of thing again, but like you'd be surprised at how many times I have to remind our clients to ask for money at the end of their pitch calls. And oftentimes investors would be very straight, straight you like we need to see x in the revenue we need We need to see why and user activity and engagement or whatever, but again, to my point earlier, investors are incentivized to invest. So you just have to understand what is their ideal strike zone, and then to the best of your ability, try to hit that and then contact them. So 80 to 100, let's call it top of funnel, you keep them on a drip campaign, I could that number, you could find one investor that leads you around and the rest will follow. But you know, call it 80 to 100 calls that gets you to about 2030 highly qualified interested. Yes. I want to move forward pending XYZ. And then as long as you hit those hurdles you bring

49. Jeffrey Fidelman54:50

    or two on and the rest fall like dominoes. Beautiful. Last question, when not to raise, so who do you turn away? So, there's really two types of people in general, I turn away. At the end of the day, I'm the last person to say, you know, don't take money from everyone. At the end of the day, like money is money Who want to tire kickers tire kickers or a few times already we're like They'll want to drag it out, they'll want to meet, they'll talk about all of the famous people that they know or investors and what projects they were involved in and nobody By the way, this isn't my money I'm putting together in SPV and you have to go to only my attorney to do the paperwork. That is too different. investors, we've heard with our clients say that both ended up to be, I mean, I don't want to call them fraudsters unnecessarily. Yeah, it was it was it was scammy. So I'd say that is number one, don't accept money from those people or even don't even continue the conversation. And they work on desperation, right? Like you're desperate for money. Don't, don't be dumb. That's not true. Number two or investor.

50. Jeffrey Fidelman56:20

    that maybe want too much control or put too many stipulations onto the terms of the deal. And what I mean by that is someone once told me, my father-in-law actually, But also, coming back to the moment you decide on a valuation or the moment you decide on a price is when the real negotiation starts. Because you'll get a term sheet and in the term sheet will come to evaluation in terms and all this stuff and then financial controls financial reporting. These are my veto rights. to control the board. Like, yes, you get the number you want at the valuation you want, but the next seven items basically turn you from a founder, see of the company into just an employee of this investor is coming in for, for 10-20% of the business. So with that one, you do have to like take it down the line a little bit to the term sheet, but make sure you understand all of the terms and conditions that come along with that capital

51. Shane Mahi57:16

    and you should be comfortable with those. All right, rapid fire and then we're closing it up. So you've got 20 seconds to answer every one of these questions. There's five questions coming up. What's the biggest myth about raising money?

52. Jeffrey Fidelman57:30

    You can automate it. There's no automation of raising capital. There's no AI back all the time like hey Jeff this didn't work you got your meetings you

53. Shane Mahi57:41

    yourself best question and investor is ever asked you

54. Jeffrey Fidelman57:47

    , on the phone meaning to me the founder why are you the best person to do remember an investor in an early-stage company is investing as much if not more than here she is in the business I'm giving you money. Tell me why you tell me why you're going to execute on this business plan and oh by the way When things don't go to plan because they rarely do why are you going to be the person who's gonna be the best kind of Steward of my investment of

55. Shane Mahi58:14

    Beautiful worst advice found is get about fundraising if your product you look at, first.

56. Jeffrey Fidelman58:33

    Growth--for sure growth. The fact that, yes, you're raising capital, but did you stop everything just to raise capital? Or are you raising capital and you're continuing to grow the business? Because the latter is where most investors will want to allocate their capital to.

57. Shane Mahi58:48

    I deal you past on and regret.

58. Jeffrey Fidelman58:53

    This wasn't my own, but I just heard a story. There's a, I don't know if you're from, you know, the zero. company yep yep yep so one of my close friends actually sat on the trading decks next to the guy that started the business, and he told him to his face that that is a, that is the worst business you'll never, it . It's not a good company. It's not great. I think they just crossed a billion dollar valuation relatively recently, but I pity my

59. Shane Mahi59:23

    friend a little. I still give him and last month and then that's a wrap. One book every founder should

60. Jeffrey Fidelman59:30

    So I'll go back to it, besides productize, I think tipping point was a really, really, and really good book. I'm pretty sure it was Gladwell, but don't quote me on the author. But tipping point was an amazing book, and it's what we spoke about. It's kind of like, you have this idea, you have this mentality, or there's a new innovation or there's a new widget or product or service that you've created. Everything that has created like that, hits a point, after which it is like a We're going to have to recognize that tipping point and

61. Shane Mahi60:08

    I think that's a wrap. Is there any lost, in words, where can people find you, if they want to use your service, where do they find out, and then more about you and contact you?

62. Jeffrey Fidelman60:19

    Yeah, so website is fidelmanco.com. It's my last name, C. C. And, you know, I use my email address. It's Jeffrey, Jeffrey at, fidelmanco.com. about what we do at the investment bank, Fundex, useFundex.com is the software that we're launching. And keep an eye out, there's a lot more to come over the next couple of months.

63. Shane Mahi60:40

    That was really exciting dude. That's a wrap anything else. No, all right that all right cool