The Biz Dojo

S2 E15 - The Next Steps w/Jacob Young

April 27, 2021 Jacob Young Season 2 Episode 15
The Biz Dojo
S2 E15 - The Next Steps w/Jacob Young
Show Notes Transcript

This week in The Biz Dojo, we're joined by Jacob Young - Associate at Osler, Hoskin & Harcourt LLP, specializing in Corporate Governance, Emerging and High-Growth Companies, and Mergers and Acquisitions. 

Jacob provides insight into the importance of proper business structure. As more and more entrepreneurs seek to establish their budding side-gigs into legitimate businesses, it's important to understand the right model and approach. We'll also dive into some of the dynamics of funding, and specifically get into an explanation of what a Series A funding model is, and where it might be handy for certain types of business. 

Then on the Podium - brought to you by Beyond a Beaten Path - Seth and JP share some of their experiences with new ventures and some their first exposures to entrepreneurship. There are a lot of laughs in this one - you do not want to miss it!
 
So whether you're looking to take your business to the next step, or are a leader who might find value in better understanding structure and funding models - this is another great episode to fire up a Dojo Dark, and grab your pen and paper.

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Seth Anderson:

Welcome to Episode 15. Season Two of The Biz Dojo was Seth and JP. Bit of a different episode this week JP,

JP Gaston:

yeah, 75% of the way there. We got a handful episodes left, but took a bit of a different approach on this one.

Seth Anderson:

Yeah, I think, you know, we've been trying to come up with different guests, keep things fresh, try some new things. And this week in the show, we've got Jacob young, and he is a corporate lawyer with oastler. And it was great to have him in the dojo just to get some perspectives, a subject matter expert, if you will, on starting a business and some of the things that are involved with that.

JP Gaston:

Yeah, I mean, we're going through the experience itself right now, right, like, we started this podcast as a fun little thing and thought 13 people will listen, that's kind of been our number from day 113 people listen. And it's blossomed into so much more than that, that now we're on the path to becoming a real, legitimate business. And so we're going through that experience ourselves. And we've heard from others that this is the sort of thing that they are challenged by, and want to get more information on as well. So

Seth Anderson:

yeah, I think, you know, for me on I think a lot of people that I've talked to you, you kind of get hung up on that first couple of steps. Do you incorporate the you go proprietorship? Do you know, there's a bunch of different things you could do? And, you know, we thought it was a interesting approach to get, you know, lawyers perspective on it. And, and, you know, I thought there was some really good stuff that he shared with us.

JP Gaston:

Well, so many people are starting businesses, right, thanks, COVID. For one thing, a lot of entrepreneurial spirit, making its way out into the world, and a lot of people who never intended to be in business getting in business and probably not thinking about it. And frankly, it's not their expertise, you know, you're making something out of your garage, or you're running a podcast out of your basement. But you're doing those things, because that's, that's your, that's your your skill. Learning to incorporate a business is not just not your skill, a lot of people look at that and think that seems boring and tedious. And I don't want to do it. But there are lots of legitimate reasons why you need to consider those things, especially as you start to grow,

Seth Anderson:

my head just got hung up on thing that podcasting with a skill of ours, I don't know, we have

JP Gaston:

two awards, we have won two podcasting awards,

Seth Anderson:

we've come a long way I just meant like in the beginning. I don't know,

JP Gaston:

I use the term loosely. It is become a skill, let's say it's become a skill,

Seth Anderson:

it's a it's a growing skill, the growth skill to quote the great Walter Walter vandervelde. At the end of the day, I don't know that we expected this was going to turn into a business. But we're definitely you know, approaching a crossroads where we have to make some decisions. And as much as this is for anyone that's, you know, maybe going through this type of decision making matrix or may come across it at some point, and you can draw back on this episode. Part of this was we're trying to figure some things out. And Jacob was a great guy to kind of bounce some things off of and I appreciate his insights, for sure. Well,

JP Gaston:

we definitely thought if we're going through this, and we're hearing from others that are going through this, like, why not broadcast the conversation instead of just trying to go it alone and hope those folks can, you know, go it alone as well. I think this really brings some perspective on to when and where, and I appreciate that Jacob didn't just say, hey, always go to a lawyer, every single time we actually gave some insight on to, you know, when and where that is a valuable thing. And when you might be able to just go out on your own and use those online services that exist and those sorts of things.

Seth Anderson:

I think we're kind of straddling a line right now. Like, I don't know, that all the things we're doing weren't necessarily starting a business. But I think it's like, looking ahead to the future and what this could be and where we want to take it and, you know, the lay the foundation right now and get the things in place. So that, you know, as things start to grow, you don't have to worry about kind of playing catch up. And I think that's kind of where we're at.

JP Gaston:

We don't want to think oh, man, two months ago, I sure wish I incorporated because I could use that right now.

Seth Anderson:

Well, I thought one of the interesting perspectives is I can't remember one of us asked a question or we were having a bit of a conversation around, you know, when things go bad and a partnership and you know, setting that up in advance and having a partnership agreement and all those kinds of things. But then he had the CounterPoint that it's actually when things go well, is where a lot of the challenges come in place. So something for us to navigate and work through, but it's not necessarily the thing you think of I think, you know, at least for me, I've always kind of thought well what about when things don't go well, and how does that kind of shake out but thinking of it from that lens. There's so much that can happen if things blow up and you're not expecting it to or it goes a certain directions

JP Gaston:

It's really key that a you're on the same page as much as you can be. And you know, you got something written down that you can go back on as a as a team later on. Yeah, I mean, looking at the podcast as a sort of nonprofit passion endeavor of ours is one thing. And I think we're both all in on that. And whatever happens happens when it hits that one to $3. million. And coffees. Very happy with it. Yes, yes, he would be. Well, we're pushing for it, Uncle Sam. But no, like, it's easy for us to have these conversations when it's just a small, you know, sort of passion project, but you hit that $1 million valuation mark, and then all of a sudden, there's some tension there. And I mean, I can say now, like, I feel like we wouldn't have any problems, but maybe we would, maybe we would, I guess we'll cross that bridge when we get to it. But in the meantime, maybe you'd want to do a million dollars and upgrades to the dojo. And I'd be like, No, I want to do some upgrades in my little version of the dojo here. Can

Seth Anderson:

both have nice dojos double dojo, double dojos? Well, I think, you know, we're still kind of figuring out our service offering and a lot of ways because, yeah, the podcast is the, you know, the core of what we do is providing a platform for, you know, amazing leaders, people in general to share their stories and inspire others. But, you know, that's, that's opening doors and all kinds of other spaces. I mean, I can't say that I thought six months ago, we'd be dabbling in the in the coffee game. And, you know, we've got other ambitions. So we'll, we'll see. But, you know,

JP Gaston:

we've said this a few times, and every regional we say it, it's changed a little, if you would have told me six months ago, that we would be running a podcast where we talk to, you know, pro athletes, and lawyers, and un Humanitarian Award recipients, and chefs, and all in the same span of a few weeks, and winning awards for it. I don't know that I would have agreed that that's big.

Seth Anderson:

I think what they call that is range, I think we've got range in this. This game. Now had a couple threes. Down the post.

JP Gaston:

I think it's not even just threes. Like we're down in the post. We're hitting threes. Sometimes we're landing in the end zone.

Seth Anderson:

And get back on D. It's really awesome.

JP Gaston:

I don't get back on it. That's why run all that way, just to run back again. Seems like a wasted effort.

Seth Anderson:

Yeah, therein lies the difference between you and I.

JP Gaston:

And, and that might be why we need some form of

Seth Anderson:

this is definitely a little bit of a different episode than we had in The Biz Dojo. Hopefully, for any of you entrepreneurs out there, it's helpful to maybe help you make a decision or consider where you move next and your entrepreneurial endeavor. If you're not starting a business, I think we touch on some interesting business lingo that you may not be familiar with,

JP Gaston:

hey, we talk about series A. and series A is a big thing in the new like, almost every day in the news. So if you've heard of series A and you're wondering, why do I care? We talked about that.

Seth Anderson:

Yeah, we break it down for you. So without further ado, let's get into it with Mr. Jacob young. All right,

JP Gaston:

well take it there with the steadies.

Voiceover:

Welcome to The Biz Dojo, your your hosts, Seth Anderson, and JP Gaston.

Seth Anderson:

Welcome to The Biz Dojo with Seth and JP. This week, we're joined by Jacob young associate at oastler. Law Firm. Jacob, welcome to the dojo. Thanks for having me. Great to be here. Having a quick look and your areas of expertise at oastler are in capital markets, corporate governance, emerging and high growth companies as well as mergers and acquisitions. Quite a quite a diverse spectrum of expertise to go out there.

Jacob Young:

Yeah, well, it's all sort of within the umbrella of corporate law generally. So oastler is a business law firm, meaning that we work with people who have businesses and corporations and are looking to do business in Canada. We work with companies that are basically from incorporation and early stage all the way through to you know, TSX listed blue chip companies. So within that And what I do is essentially the corporate perk of that, which is helping those companies, you know, get set up organized, deal with governance disputes and shareholder disputes before they become litigious, and and most importantly, are sort of the majority of it, which is helping them raise capital and structure their financings in a way that company friendly. And then of course, m&a is buying and selling companies. So it's all part of the corporate law umbrella. Very cool.

Seth Anderson:

What inspired you to get into law? Were you laying in bed at night as a kid dreaming of being a lawyer? Or how did that all come to be?

Unknown:

I don't recall exactly how I got into it. I have a philosophy background. So I think that it just sort of lends itself naturally, like many lawyers were liberal arts students who just need something to do after we're done our liberal arts degree and went to law school, ended up liking business law, and in particular, really liking the emerging companies and sort of capital markets and m&a stuff. So no grand dreams of being a lawyer, but it's been a very rewarding and fulfilling career.

Seth Anderson:

So far, that's awesome. Just kind of looking through you've, you've been a part of it looks like many of those mergers and acquisitions. Yeah, I

Unknown:

mean, you know, it's exciting stuff. And, and with the the bigger deals in particular, you know, you read about them in the newspaper. And that's all very confidential and top secret as it's going on. But it's fun to be part of a big team and, and working with lots of different lawyers doing different things, and working with the business teams with, you know, the client and the other side and coming together to do something that is, I suppose you could call it transformational. So it's, yeah, it's fun to do the big ones, I personally really enjoyed the small ones as well, when you're, you know, working on a couple million dollars or something like that with a small startup team, and you're really in the weeds with them in the trenches, and helping them figure out the structure of the deal in a way that I think some of the bigger transactions, you don't get as much of an opportunity to do so

JP Gaston:

did they have kind of similar frameworks to them, the big deals and the small deals, like at some point, I feel like, it's just a whole lot more money and some additional coordination, not that it's like, there's additional complexity, not that it's really all that different. They're just, there's more moving pieces.

Unknown:

I mean, fundamentally, the concepts are the same, right? It's usually there's two ways to buy a business, which is to buy all of its assets, or to buy all of it shares, you know, fundamentally, the, the risks and considerations can be fairly similar. And it's, it's more about, you know, managing scope, and with a really big deal, there's going to be all kinds of other areas of the law that get involved, which are, you know, competition and securities and regulatory approvals, like, you know, antitrust and things like that. And if there's cross border aspects to it, and there's, you know, an international investor into a Canadian company, for example, then you can have investment Canada act approval, and when you're dealing with a smaller deal, it's usually more driven by the immediate commercial concerns of the deal team. But yeah, I think I think the fundamentals are, are really the same. And sometimes the smaller deals can be almost more complicated, because people are trying to come up with creative ways to essentially, make sure that all the commercial terms are mad at everybody gets as much value out of the deal as possible.

JP Gaston:

For the smaller companies that you're dealing with, and predominantly the listeners, to our show. We have some some entrepreneur, we certainly have some CEOs and whatnot of some larger corporations. And we recently had Jeff Dyer on who pretty major merger there with a couple of nonprofits. So we've got some folks who, who are listening who have been on the show in those larger corporations, but predominantly, you know, the folks who are listening are in the smaller space. So I think the first question that will come to their mind is, you know, there's there's websites I can go to, to click a button that does all the things that I think I need to do for, for incorporating or becoming a proper business. Why Why would I want to get a lawyer involved? Like, what's the benefit of having a lawyer in team?

Unknown:

Sure, yeah, I think that the benefit is really about, you know, to you, as you say, you can pull what you can go to the registry tomorrow and pay whatever it is and up with a company in an hour or something, probably. But of course, there's no structure to that. You can also go to certain websites and pull probably a suite of documents that can sort of get you organized. And I think that those can work in a lot of circumstances. I think where you want to have a lawyer involved though, is that we can really tailor those documents like our version of those documents to your certain circumstances and help explain to you What the pitfalls are, where the risks are, what the intention of the provisions are, and help you craft them in a way that is really sort of tailored to what your business is looking to do. And that comes from, of course, just having experience those same agreements and documents and structural components, playing out hundreds of times and, and seeing how they really work in practice. Whereas just taking a set of sort of precedent documents and slapping your company's name on them might not get you there, if you you know, anybody can read a legal agreement, a contract and and understand it, but it's about understandings, really the the practical implications of, of how it unfolds. And I think that's where a law firm can really add some value. other instances where you'd, you'd say, probably not necessary to engage, like,

JP Gaston:

I know, there's a lot of folks, especially during the pandemic, who have started their own business, this podcast, kind of being one, you know, some of those are sole proprietorships. And some of those are a couple of guys who got together and decided to start a podcast, is there any instance where you'd say, you know, absolutely, you should engage versus instances where, you know, absolutely, the website, sort of version should be sufficient?

Unknown:

Sure, we kind of distinguish between, you know, businesses that are looking to raise a lot of capital and grow really quickly. And of course, the result of that is that you're going to have all kinds of other third parties involved in the structure of your business and, and how it grows over time. And then businesses where, you know, maybe it's you or you and one other person, and you're looking to basically produce a product or provide a service and not really have anybody else involved, like you aren't going to need a debt financing or any equity financing. And that's probably where it's a bit more reasonable to rely on the templates or kind of do it yourself. Obviously, I'm biased in the sense that I would always recommend going to a lawyer, but I think those that's kind of the key distinguishing factor is between, am I going to have a bunch of people involved in this business that I'm going to have need to make sure we have our obligations and our rights and our relationship to each other structured properly? Or is it really just me and maybe one other person I really trust? I think trust is kind of the the key driver of why you want to get lawyers involved is the more people you get involved, the

Seth Anderson:

harder it is to just implicitly trust that you're going to have a long term good faith distance relationship with them. And so you want to make sure that there's more of a structure there that can kind of provide some backstops if, if things don't turn out the way that you had hoped. In that vein, Jacob, there's a couple of people or a group of people that are looking to enter into some kind of a partnership is there, you know, a checklist of sorts that you would recommend that people kind of go through, I mean, obviously, engaging with a lawyer and getting stuff down on paper, but any tips or recommendations on that front? If someone's starting down that path? Well, I

Unknown:

think you you want to think about what's the business plan for this business? What am I looking to achieve? Where am I going to get revenue from? And who's going to be involved? And think about whether you engage with the lawyer or not, but even before you, like if you're planning to engage with the lawyers, some things to think about beforehand? Or who do I want to have control over the day to day decisions of the business? Who do I want to have have control over serve more the fundamental or extraordinary decisions that need to be made over time, and think about sort of that balance of, of those relationships and, and have, like an idea in your head of how that might work. And obviously, the other thing is, you know, understanding the economics of how people receive the distributions from the business, the value, the revenue, etc.

JP Gaston:

I think a lot of folks and I'll use us as an example, you know, they're, they're on the path to becoming more of a business than just sitting in their basement and, you know, making widgets or, or doing whatever for friends and family, they, you know, they they recognize that they have a broader business that they can bring out into the market, and they get hung up. And again, ourselves included when they look at what streams they have available between the sole proprietorship, a partnership, a limited partnership and incorporation. So I guess for folks who are working with others, how do you decide which sort of path is the right path to go down?

Unknown:

Sure, well, I think that the default is usually a corporation. And the reason for that is that what distinguishes a corporation from a partnership or a sole proprietorship is the the liability of the shareholders who are involved in the corporation. So for example, YouTube, if you were to incorporate would be the amount of money that you put into it. So Cuz it's like buying stocks on the public market, it's the the liability is really limited to what you put in. There's other liabilities associated with governments of the corporation. But, but the idea is if if something goes wrong, then essentially, that's the maximum that you would be personally liable for in most circumstances. And another sort of related point is that it allows you to control sort of the tax really drives everything. And so it allows you to sort of control the tax outcomes as much as possible. So usually, a corporate structure is the best way to start a partnership. So there's there's sort of two kinds of partnerships, broadly speaking, that are available to if you want it to open any kind of business tomorrow. And the first is just a general partnership, where essentially, it's not its own separate legal entity, and it gets treated as though you know, all the losses and all the profits flow through to you as individuals, and so does the liability. So it's really not meaningfully different in a lot of ways from just having no structure having a sole proprietorship, which obviously can only be one person, when there's a limited partnership, where you've got, you know, it's brings you back to that stage where each of the two limited partners is really only liable for what they put into the business. And so you essentially, you can lose whatever money you put in. But then you've got to have a general partner anyway, which is usually a corporate entity, which is, is fully liable for all everything that business does. So realistically, when you're going to set up a simple business, as a starting point, the limited partnership just adds another layer of structure isn't really necessary, because you've already got that corporate entity that has to serve as the general partner. So most of the small businesses, and the high growth businesses that we set up are just a simple operating Corporation. And then over time, they sort of expand and have subsidiaries and, you know, get into jayvees, and have all kinds of partnership structures, which are usually tax driven. But as a starting point, a simple corporate entity usually does the trick.

JP Gaston:

Are there specific industries where that's more I'm thinking specifically like things like, as soon as I think liability, I think, I think a food, I think food of all all the time, right stuff. But are there specific industries where it's extra important to perhaps pursue the corporate route, like becoming a corporation, versus, you know, if you're a sole proprietor, and you know, selling sandwiches, you probably want to limit some of the liability that comes with that? And I'm sure there's more complexity than it then to it than that. But that's, that's kind of where my brain goes. Are there other industries that are more important to do that in?

Unknown:

I think it's mostly a scale thing. I actually couldn't tell you from based on knowledge, whether most restaurant owners are our sole proprietors, my guess would be no, I think most people set up a sort of corporate entity even because it's it's relatively cheap, you know, it's probably a couple 100 bucks to incorporate a couple 100 bucks a year to keep it maintained if you're not really doing anything. So the benefits are substantial compared to having a sole proprietorship, when you're talking about more complex structures, I think they are industry driven for sure. I mean, as you are likely aware, the oil and gas industry, for example, relies on a lot of joint ventures and partnerships, because of the nature of the business. It's such that you are basically doing a lot of capital outlays, and there's a lot of risk. And so most people don't go it alone, they have real people, companies don't go out alone, they have, you know, more than one big company that's going to be involved. And so the partnership structure is the best structure for that for each project. So in that sense, I think that kind of drives, drives the bus on on what structure you go with. But for the most part, I think across all industries, you've you probably want a corporate entity, once you're doing anything material that has a lot of potential for growth.

Seth Anderson:

So let's just say, you know, hypothetically, the couple people they got together, they've got their agreement in place they decided to incorporate they're not necessarily, you know, maybe thinking about long term growth, but at some point, let's just say that they're going to do some series a funding or financing or there's some things they can do early in the in the game when they start the company up some some good muscles to build or practices to get under their belt, so that they're prepared for that even if they don't necessarily aren't necessarily thinking about it when they start the company. Sure. I

Unknown:

mean, you know, when we would incorporate a company that's looking to do a series A or have any kind of funding really, you know, we put together structure around shareholders agreement and bylaws and, and things like that. And the shareholders agreement is really the key document that sort of ensures that the economic interests and the the levers to control the business are well understood and defined. The you know, each corporate entity is a is a creation, it's like it exists under a given statute, not to get too technical, but so in Alberta, that would be the Alberta business Corporations Act. And that's an act that basically sets out all kinds of things about how companies work, and you know, how to resolve disputes and how shares get issued and how directors are elected and how shareholder meetings need to run, but, and so so if you just incorporate a company, you know, you go to the registry and you pay your 100 bucks or whatever, then that's sort of the fallback. That's the default, it'll be governed by that act, and you have to do everything in accordance with that act. But that's not the act really doesn't help you, when you're getting into sort of more complex disputes, or having any kind of, you know, governance structure, it's really a bare bones sort of baseline of this is what every company has to do. For example, if you've got a company with two shareholders, and they each own 50%, under the Act, that doesn't really if you have a dispute or a deadlock, there's no mechanism under the Act to help you resolve that dispute. And so shareholders agreement, well, you know, set out exactly how that works. So maybe one common thing with smaller businesses is what's called a shotgun clause where essentially, I can say to you for in a business together, and we have a dispute, I want to buy you out at this price, and you can buy me out at the same price it through some mechanisms. So that kind of gives each person essentially a release valve to to find a way out of a dispute that doesn't just result in litigation, which is a long way of saying I think that's a really important part of of incorporation is to, to have that shareholders agreement and build it up so that when you bring in other third parties, you've already got a structure there that is workable, and then you can kind of build them into that, more generally, like, the muscles that you want to build are, a lot of people don't think conceptually about the fact that it, you know, corporate entities have shareholders, and then they have a board of directors and the Board of Directors is sort of the deciding they make a lot of decisions about how the company is run, and the shareholders kind of stay out of the day to day, and only have decision making authority with respect to bigger decisions. But of course, the shareholders like the board, and a lot of people, you know, if, again, to go back to the example of if it's just you and I, and we're each shareholders, and we're used to director, we don't think about the fact that those are really separate roles. And we have actually different interests. And directors have a statutorily imposed duty have to act in the best interests of the corporation, where the shareholders, of course, don't have that duty. And so a lot of early stage companies don't really think about things in that way they think about it like, it's my company, and I'll do what I want with it, which makes sense when it's just you, and maybe just me or the two of us. But once you get a third person in who's maybe put in a bunch of money, then you can't really think that way anymore. And it can be difficult for people to wear those two separate hats of, I'm an act, I'm doing this in my capacity as a director, I'm doing this in my capacity as a shareholder. And then usually, they're also an employee. And so they have a third hat on and they can have even more than that. So I think, you know, trying to think about the fact that those are really distinct and separate holes, sets you up for having good governance, I think that's one of the fundamental ways of thinking about it. And if you have good governance, then you have a better story to tell. And you will probably have an easier time raising capital and getting people in the door to be part of your business.

JP Gaston:

I'm sure there's a lot of corporations that form with a couple of folks who have been working together and they know each other and they're friends and they've started this business and they feel like they're on a good path. And so they don't need anything in place. Because they you were talking about trust earlier, they do just implicitly trust each other. But I'm sure you've also seen over time, some businesses that may be failed because the business gets in between those two, is that is that a really common theme and something that folks should really consider that even if you're in business with your best of friends. Maybe it's worth having in place just so you have some structure.

Unknown:

Yeah. Well, the funny thing is, it's not the failures that are often the issue. It's the successes if if there's sort of mismatch between efforts between, you know, say two or three people. And, and making sure that, you know, people feel fairly compensated for the work that they've done. And so a lot of people think about the fact that, you know, all our friends, and we have trust, and everything's gonna go great. But then, as a business develops, something happens, and maybe one person isn't really pulling their weight, or, you know, just as a result of the natural growth of the business, some other people's roles become more important or, or, you know, more, typically, what happens is just that something in the process of starting a business is a high risk, endeavor often and, you know, you're often for going salary or salary at the market rate that you'd get if you were employed by, you know, a larger company. And so a lot of times, people just have to pack it up, because it's just not workable, for whatever reason, whether they have personal circumstances that cause them to not be able to do something anymore, or they need to make more money or whatever. So, you know, you start thinking, this is great. And then things happen, and people have to move on. And it makes it a lot easier to move on. If you when you were when everything was great, you agreed to things that kind of thought through some of the contingencies and thought through some of the not worst case scenarios, but the less than optimal scenarios that you don't think in your head are going to happen. So that's Unfortunately, the job of the corporate lawyer is to just preoccupy ourselves with all the terrible things that can happen to you. Obviously, entrepreneurs are naturally predisposed to not thinking that way, or else they wouldn't be taking on the risks that they do. And yeah, I think it's it's very important to think about it that way. Because it does make it a lot easier if you've got that those mechanisms and that structure to have a departure resolution that isn't mired in conflict,

Seth Anderson:

some sound advice, I'm curious, in the vein of what we're talking about, seems like there's more ways than ever for people to make money beyond corporate world or traditional jobs and, and the the rise in what I guess you would call side gigs, over the last number of years, what's what's your feeling on, you know, people who are maybe dabbling in the side gig space and sort of straddling that line of being a real business and not a real business? Like, I know, we kind of touched on it a little bit earlier, but you have any, like opinions or feelings on on the whole Rise of the sidekick,

Unknown:

I don't know that there's much to say about it from the perspective of a lawyer, other than I guess, make sure that you're being careful about being definitive on what you're doing as part of your day job and what you're doing on the side gig so that you don't have any conflict in the future over. If you're, if what you're doing is totally different than it's not really an issue. But if you're doing something that overlaps in any way, then you probably want to make sure you have a good understanding of what hat you're wearing, at what time

Seth Anderson:

simple, but, you know, it could be profound advice, you may not even realize that you're overlapping, because so many companies nowadays are in so many different spaces and diversifying and you may not think you're overlapping, but you actually might be. So I don't know might be food for thought there.

JP Gaston:

There's been a lot of discussion about series a funding in the news, it's become more and more thing, especially with Calgary is starting to diversify a little bit and really encourage those sort of tech startups. And we've got the film industry moving into Calgary more and more. So there's more and more talk of kind of those funding streams that exist. So maybe, maybe we'll back up just for a moment. And you know, what, what is series a funding? What does that actually mean, when people are hearing that in the news? Or when does someone actually pursue because I'm sure there's a lot of people who have started a business who could potentially pursue series a funding, but they don't actually know. Yes, for

Unknown:

sure. So I series a financing is a term that developed in Silicon Valley and I'm sure everybody that your listeners is familiar with the fact that you know, technology companies and startups are some of the biggest companies in the world now. And all of those big companies have done or did a series A at one point in their, in their lifecycle. And, and it's really just a venture capital term. And venture capital is a sort of subset of private equity, meaning that it's, you know, money flowing in from, you know, family offices and pension funds and all kinds of other places, and being invested in private businesses and and venture capital compared to private equity and work together. Private Equity tends to have a higher tolerance for risk and, and be willing to invest in high risk early stage ventures. So, the series A is really usually the first time that a company that is developing technology, it will get venture capital money. And what it specifically refers to is a type of shares. And it's it's preferred shares that are just named series A. and preferred shares are essentially a type of equity security that has they if they put their money in last, and they get their money out first, in the event of a dissolution or liquidation of the business, so I don't know that every business needs to do a series A, it's certainly a popular concept. And if you're building that type of business, that's, you know, meant to be high growth and developing, you know, software or some kind of other technology, then it's probably the easiest source of funding that you can find. But if you're, you know, for example, setting up a laundry mat or something, and you just want to have some locations of your laundry mat, and maybe you even want to grow it into a chain of laundry mats across western Canada, you're probably not going to pursue series a funding, you probably go for more conventional sources of funding like a, you know, a bank line of credit or something like that, because, of course, banks are more tip it's changing. But banks in historically are more comfortable financing a laundromat than an early stage technology company that is incredibly high risk and hard to sort of evaluate, and really has no assets in the event that something goes wrong other than the technology. So that's where the series is, that's interesting,

JP Gaston:

I never like I never thought of it from the perspective of the laundromat, which is actually an interesting perspective, because I'd never thought of it as the bank being more comfortable with a certain type of business forming, versus that sort of venture capital investment from people who are willing to take the risk that the bank likely is not without some form of really, really high interest rate or those sorts of things. So it's, it's interesting, for sure,

Unknown:

I mean, the bank can seize the laundry mat, right, if you don't make good on the long term. So whereas they can't really do anything with technology until it's more proven out and and as viable, so

JP Gaston:

teeny dry cleaning? Yeah, exactly.

Seth Anderson:

You mentioned Thursday, being a popular term in venture capital and Silicon Valley, and some of the things and this got me to thinking this is, you know, mergers and acquisitions is sort of a rapidly changing place, right? There's always big deals that are going down. How do you keep track of sort of what's happening in the industry? Or? And are there trends that you pay attention to you to kind of keep up with things? Or how do you do that for yourself? Well, I

Unknown:

think the easiest way to keep track is what kind of business comes in the door and what what you find yourself working on and you do see definite cycles, like a few years ago, when cryptocurrency and blockchain we're really blowing up, and a lot of businesses were working to incorporate that somehow into their strategy. And there were lots of, you know, crypto funds that were looking to do an initial coin offering. And then that went away, obviously, and now we're kind of back to maybe the second iteration of that same thing. Otherwise, you know, there's all kinds of newsletters and, and things you can subscribe for the Canadian venture capital Association as an example. P hub, things like that, that that were they'll they'll push out daily sort of information blasts, where you can see kind of what's going on. But other than that, a lot of it is just from doing the work and seeing when what the market is telling you.

JP Gaston:

How far ahead does the does this fortune teller give you? Like when you're working on cryptocurrency? Do you see that cryptocurrency come up like a few months later? Or is it really a thing that they're quite far ahead of the game? And it's like a year or two years later, before you see it really starting to pick up in the newspapers and did with the general public? Well,

Unknown:

I think it depends. I mean, you know, like, a similar example would be when prior to the legalization of marijuana when all kinds of businesses were trying to find their way to get into that sort of gold rush. There's lots of businesses that are looking to capitalize on whatever that latest sort of thing happening is but then there's also going to be some that are going to predict trends years in advance and it's, you know, as a lawyer, you certainly have no idea what the which ones are going to be successful. which ones aren't? It's? And I'm sure most many business people also are not sure. But it's hard to tell who the WHO THE trendsetters will be when when they come in the door, and you're just incorporating them. And they could turn out to be the next unicorn. You don't know.

JP Gaston:

Yeah, I'm sure some of them you just think, man, that's crazy. I'll help you. I'll do what I can to help you. But that's a crazy thought. And then a few months later, you go, Wow, that really took off. Yeah, yeah,

Seth Anderson:

it's one of those industries, ag tech right now. And notice, that's one of the spaces you plan in terms of being a popular industry and lots going on there. I

Unknown:

think it's an industry where there is a lot of potential for for, you know, technology to, to come into the industry and, and really change it. Farming is obviously one of the oldest industries that people have undertaken. And it's also one of the least infiltrated by technology. And obviously, there's lots of potential for efficiencies, the air and basically being more precise about farming. And obviously, with all of the broader conversations about emissions, and, you know, things that are happening with the world overall, and looking for food security and sustainability, that's where technology can obviously play a huge role in the sense of helping to increase yields, and be more efficient with our land use and do other things like indoor farming and lab grown meats and all kinds of crazy ideas that have had a lot of legs and who will, I think be commercialized over time.

JP Gaston:

But it's certainly a very, it's a it's an industry that a lot of people are paying attention to at the moment, being a lawyer, I think, you know, a lot of people think you go to school, you read some books, then you're a lawyer, and that's permanent. But I'm sure there's there's especially in in the space that you work at, I'm sure there's a lot of constant sort of upgrading and building up on your skill set. So what are the sorts of things that that you're working on for your, for yourself? And for oastler?

Unknown:

Yeah, I mean, well, we're, I think we're all very eager to help Alberta do what we can to diversify the economy and to, to expand into new and exciting areas of business. And, and so just, you know, I think we all miss the ability to go socialize and meet new people. But that's sort of the one of the number one goals is to get to know the new entrepreneurs and the people who are are helping to build that that new economy,

JP Gaston:

is there anything that you're kind of working on for yourself any, you know, podcasts you're listening to? or, or, or books you're eating or anything to? Yeah, those sorts of things.

Unknown:

I've been listening to a lot of blood loss. I don't know if you guys are familiar with that. One. It's a Bloomberg markets podcast that helps to make sense of all of the crazy broader sort of macro things going on that we all see in the news. And I think that that obviously just helps you contextualize the things that you see come across your desk and lawyer and, and put things in perspective. So that's, that's my recommendation.

JP Gaston:

I suspect that sometimes you can get caught up in the weeds of the deep dark hole that you get into sometimes on putting together business plans for individual businesses. So that macro level might be a little bit more difficult to see as you're constantly working on those those minor details. For sure.

Seth Anderson:

It's been a pleasure having you in the dojo today, Jacob, where can people find out more about what do you guys offer and get in touch?

Unknown:

Sure, well, you know, my profiles on the proposal or comms the law firm website, and I'm on there. So you can also reach out to me on LinkedIn, if you're interested in starting a business and and looking for some legal advice. How can you connect?

Seth Anderson:

Perfect, thanks for coming by today. Really appreciate it. some amazing advice and really enjoyed having you have any job play. Thanks for having me, guys.

Voiceover:

Thanks to Jacob, for joining us today. Now, stay tuned for the podium. Brought to you by beyond the beaten path visit beyond the beaten path.ca.

Seth Anderson:

All right, well, I hope folks had their pens ready and got all their notes down and are inspired to go start a business now.

JP Gaston:

Or inspired to take their business to the next step.

Seth Anderson:

Either or we we just aim to inspire we don't care what you do with it. Well, well, we can't care what you do with it, good things, just good things, all positive positive vibes, good things into the universe. And you'll get it back I promise. takes us to this week's beyond the beaten path podium, where we're going to talk about our top three entrepreneurial endeavors experiences.

JP Gaston:

variances. Yeah, my guess experience, they might not have fully made the endeavour category?

Seth Anderson:

Well, we start with Kind of, yeah, I think in each of these cases, we did something up that we woke up, got out of bed,

JP Gaston:

right slowly and left foot in belt on.

Seth Anderson:

JP, we were chatting before this, and I was I was quite enjoying your entrepreneurial journey. And I really believe it's at home.

JP Gaston:

It's a varied one, the,

Seth Anderson:

you know, the ambition.

JP Gaston:

All right, well, I guess I'll get into it. I'll go. My 321 is gonna be in chronological order. This time, cuz I thought

Seth Anderson:

I was gonna say it's all in like a two week span? No, I

JP Gaston:

just have. No, it was not. I have no idea how to rank these as a, you know, true gold silver bronze type approach. So I'm just going to, chronologically This is how they occurred. So the first one would be when I was a little bit younger, but half my age. That was a while ago, I decided as I was working security, that I was going to start my own security business, and even went so far as to actually register my business with a proper name. I was getting close. My parents were

Seth Anderson:

a business called,

JP Gaston:

well, I'm getting there.

Seth Anderson:

Or have the journey. Okay,

JP Gaston:

we are on a journey. My my parents didn't know that I had started a business while I was living at their house. So they were wondering why they were getting mail in their mailbox for anti sec. Which was an anti security company.

Seth Anderson:

Thought you were like a hacker.

JP Gaston:

Yeah, I was a, I was the physical being of a hacker, like I would basically go to businesses, and I would find their security flaws, their physical security flaws. By breaking into the business or, you know, even just walking around the site and, and showing them now, I was very successful. I had one client. Hey, and it was, and it was a client for the security company that I was actually working for. I was doing security for him on their behalf. And I told him about this endeavor,

Seth Anderson:

inside scoop in a little bit of what I could tell

JP Gaston:

him why his security sucks because his security was me. here's, here's the pro tip, hire someone.

Seth Anderson:

You got paid $200 for that advice?

JP Gaston:

Yeah, he, we had a long conversation about whether or not it was right for me to provide this information for him. But he wanted to help me start off my business. So he gave me 200 bucks to show him where all the small ones were. And he, he appreciated it. He actually fixed up most of them. There were a couple that he didn't. But it was interesting for me, it was my It was kind of my first dip into. I mean, you deliver newspapers and stuff as a kid, it's kind of being an entrepreneur. But this was me actually starting a business. I went to the registry and registered my business like I I took all the steps. And then I started to make

Seth Anderson:

t shirts. Was that a thing?

JP Gaston:

I did that I didn't sell coffee either. There is no deseq medium roast.

Seth Anderson:

I feel like we should get some anti sex shirts. That would be

JP Gaston:

where we should just get business shirts to say anti security on the back like a security shirt would for a concert. Oh,

Seth Anderson:

I love this story. This might be one of my favorite stories that you've told.

JP Gaston:

It was fun. I look back on it fondly. Like even though it didn't go anywhere. I still to this day think it's a good concept.

Seth Anderson:

That's awesome. I love it. I love it. I love the spirit of it. All right. Now how did you top that one?

JP Gaston:

Well, well, let me tell you I'm actually I told you these in a different order. I'm going to go with the last one I told you first and then I'm going to save my other one for last because I think it's my favorite. So buddy and I we were in two different bands, but those bands always played together. And we were at a show I believe we were in canmore and we had played a show. No we were in Banff. Sorry. We were in Banff and we had played a show and we were in the in the hotel in the middle of the day as A band that you got nothing to do in the middle of the day. So we were sitting on the balcony. And we were just, he was playing guitar. I was playing guitar and I just started singing random stuff about the people who showed up in the parking lot. And we were just having a grand time laughing at these stories. Yep. And then all sudden, there's this knock on the door. There's this guy who said, Hey, we can hear you three floors to how can you sound great, you guys, you guys are banned tonight? Or what's going on? And we said, No, we're, you know, parts of two different bands. And he said that we should start a band. And so we did. Right there. And yeah, we decided that we were, we were getting enough we'd start a band never played it never played a show made five grand.

Seth Anderson:

So sorry, how did you make the five grand

JP Gaston:

we actually sold on line. We sold them mp3. And we also had submitted a song to this, like compilation CD thing. And so we we got a portion of the proceeds for that. And then we also had a song that was featured in this like, festival thing, so

Seth Anderson:

And what was the band called?

JP Gaston:

I actually can't remember right now. Oh, no t shirts house. That's how fleeting It was. It was anti sec, the band

Seth Anderson:

was a fleet back where Fleetwood Mac bleeding

JP Gaston:

backwards. We didn't want to get sued. So we went with fleet Mac would

Seth Anderson:

know t shirts of this endeavor either.

JP Gaston:

No, no, we just had shorts printed. We did everything backwards.

Seth Anderson:

All right. That's fun. I like that.

JP Gaston:

And number one, number one on my list. Number one, my maybe my favorite one. I think aunties that was my most nostalgic one. The balcony was kind of a fun one. But my probably my favorite one, much shorter story. In music, it's really hard to get well paying gigs, especially in Ontario, where I was. So something I did there that I actually brought out west as well and was doing out here. When I whenever I book shows, or played around whatever, I created a fake persona with a fake email address. And that fake persona was my manager so that he could deal with all the crap that had to be dealt with for booking the gig, negotiating the price, all of those things, and I could just show up and play and get paid. You're like a member of D 12. With your alter ego. Yeah, he was my he was my front man. He just made sure everything's kind of taken care of for me. And then I would show his name was Darren.

Seth Anderson:

I think I've only been speaking with Karen or JP go for?

JP Gaston:

Yeah, I had I had a fake email.

Seth Anderson:

It gets better. Okay, go ahead, Dan.

JP Gaston:

Because I was also the webmaster. Like, gotta get through this. Alright, so cuz I was also the webmaster. I had like

Seth Anderson:

this to clarify the webmaster for your

JP Gaston:

well, so kind of, so I had tiny bands that I was either in or working with. And because I was doing their websites, Darren had an email address those websites that he could use to book. So I was able to make this persona work for everybody. So there were multiple shows that I had booked, where I actually booked all three bands together, and then we'd show up, and there's four of us. And they're like, Where are the other bands, we're like, we're all three bands. And it was different iterations of the four of us. So there was one band that had three of us. There was a band that had two of the guys, not myself, or the other guy, and then there was a man with all four of us. And we would each, we would each play a set and we would each get paid separately.

Seth Anderson:

I was gonna say was there a flaw in the Dan business model or was actually genius, because you all got

JP Gaston:

paid. Oh, we all got paid. We all got famous for three vans for the four guys who've made three baths.

Seth Anderson:

And then Darren They're in debt calm.

JP Gaston:

Derek got 10% so I got it.

Seth Anderson:

I like the business model. There. It's a hustler,

JP Gaston:

cuz the problem is if they ever made a checkout to dare, couldn't cash.

Seth Anderson:

So just lost money. It's worth it. You should have a catalog.

JP Gaston:

I've got I've got a stack of checks for Daron McGuinty here, if anyone's name Darren McGinty, it needs coin.

Seth Anderson:

That was the right turn I was not expecting.

JP Gaston:

Alright, well, those are my top three. How about yours?

Seth Anderson:

I think we should just end it. I got a lot to process, right.

JP Gaston:

This is the first time I've been in business with a real person.

Seth Anderson:

Fortunately, none of mine involve alter egos, or swindling my boss at 200 bucks.

JP Gaston:

I told him I would just tell him and he was very insistent that he wanted to pay me for it.

Seth Anderson:

How much did the company cost the start? versus the one time on the one customer? Did you break even breakeven?

JP Gaston:

No, I think well, because I only had to register. Like I didn't have to incorporate or anything. I mean, I probably should have after listening to this, I'm probably protecting myself from a few things. But I just registered as a business. So it's like 80 bucks or something at the time seven, I think was 75 bucks.

Seth Anderson:

You doubled your money even more than the money, you tripled your money,

JP Gaston:

my experiences have all been very positive. So starting a business.

Seth Anderson:

So I kind of boiled mine down to three moments, if you will, in the entrepreneurial game. I've said more things than I thought I did. But one of them was in a corporate setting. My first director role where I want to use the term startup because in a lot of ways it was it was basically a newly formed organization. The only thing that it wasn't a startup was because it was bringing together teams that already existed. So it was taking seven independent franchises we'll call them and centralizing them under one team. And, you know, in early days, we had to establish processes, get data and information that basically it had no support in that that was new, it was

JP Gaston:

brand new endeavor.

Seth Anderson:

Yeah, so I you know, went from being a manager on a team where all this data and information is sort of supplied to you. So you can make decisions real time and, and you have more information than you knew what to do with to having like no information. So that was a very big learning early on is how important information is but like the right information. So it's one thing to have a lot, but then to get the right information so that I remember that being a particular challenge. And then the other, you know, thing that we did really early on was shift from more or less a paper dispatching model into a system baseline. So there was a lot of change management involved with that. So that was a pretty exciting time. I remember a lot of things but actually the the moment that I remember the most is the first day me and the seven or eight managers drove to Drumheller and it's central because it was an Alberta based team. And

JP Gaston:

it's not central in Alberta.

Seth Anderson:

Sure it is central ish. Why me? ish. Anyway, that's where we went. And we sat in this dingy little room and there you know, like those the old like flip charts with the paper, but it was like really old so the paper was like brown. Like it wasn't even like white like it hadn't been censored in

JP Gaston:

like abandoned school,

Seth Anderson:

or an abandoned school house. We spend by all day just like writing out all the things we wanted to do and then like I bundled up that piece of paper and I don't think I ever looked at it again. But you know, there's you bundled it up or it disintegrates.

JP Gaston:

Just imagine you folding this thing and just keeps snapping every day. You're like, Yeah,

Seth Anderson:

but there is moments in like a startup or restart or whatever that was. I don't know that you just remember and that was one of them was that stupid old piece of paper and spending the day in Drumheller. So that's my first one. That is I wish there was an alter ego That story, but more

JP Gaston:

like a ghost in the abandoned school, held your meeting even

Seth Anderson:

even a goat would have done but it was just mostly business. Dare they go? Number two I'm gonna go with was I helped a friend of mine with a startup couple of years ago. And I can't really talk much about what it was I can say that it was successful in that it ended up being a multi million dollar revenue generating business in Canada, which is amazing. But the coolest part was, we created this video. like one of those scribbly drawing videos, and it got noticed on LinkedIn and Anyway, it was a bit of a whirlwind. And I had always wanted to go on a business trip somewhere cool. That was like on my bucket list. So

JP Gaston:

not Drumheller?

Seth Anderson:

Yeah, I was I was aiming higher than Drumheller and Kryon. cashier like,

JP Gaston:

all right, I've been to where

Seth Anderson:

I've been to Vancouver I've been to that's at the time, at the time. That was basically Edmonton, Calgary, Vancouver. So excited. We build this little thing gets noticed are talking to this company. They're like, yeah, we'd love to have you come down and see us and I'm like, Oh, that's awesome. Go to the states for going on this business trip. They will fly business class who knows like the world's our oyster, wherever we go in Detroit, Michigan. In the middle of winter, no less. I'll find right. Detroit in early February. And it was cool. It was cool. It was cold. It was not. It was cold. It was cold. There was a lot of brick buildings. Somewhere on fire falling down.

JP Gaston:

Yeah, I've got stories growing up in Ontario. I've got stories about Detroit. I went there more than once.

Seth Anderson:

Yeah, yeah, I thought it was a good sign. Because on the way to the airport, it's like five o'clock in the morning. And we're on the way to the airport. And you know what song is on in the cab when we get in Detroit Rock City. Lose yourself by having some like, it's a sign this is this is gonna this is meant to be science from the universe as you go.

JP Gaston:

m&m is my sound familiar? It's

Seth Anderson:

sorry, I just thought of Darren. And I kind of lost that.

JP Gaston:

He also represented me now. I've looked at many issue.

Seth Anderson:

Am I number one? It's tough because I got a few on here. But I'm gonna go with last summer driving to a diner to have breakfast with a loose leaf piece of paper that said, Why do I see busy ninjas on it? And I seem to recall this. Yeah. And it was a sunny day, I'll never forget, it was like really sunny. And I even took a picture of the looseleaf piece of paper, and the like the dash in my car. So it had like the date and time because I was like, this is the thing. This is the thing thing. This is the moment and when we write our book that'll be like, in there somewhere is like the work will be on the cover here. Maybe that's the cover

JP Gaston:

cover I've done completed foreword, written by Darren McGinty.

Seth Anderson:

So I had like this whole idea of you know of like these powerful moments in the in the in the journey. And Darrin has just I don't have it in me. I'm gonna leave it there. Those are my moments. Drumheller, Detroit and the diner. Hey, those three B's

JP Gaston:

a diner. I remember that diner being very shiny.

Seth Anderson:

It was shiny. It's like it was like a spaceship. Yeah, I think I had I might have had like an Egg Benedict or a skillet or something was

JP Gaston:

delicious. I recalled. Breakfast being delightful.

Seth Anderson:

Yeah, perhaps one day we will go for breakfast again. Maybe trade or maybe Drumheller?

JP Gaston:

Let's make m&ms with air and breakfast for three please. I'll get him to book and still make the reservation. If you feel need to book us for anything, reach out to Darren at The Biz Dojo.

Seth Anderson:

Thanks for thanks for hopping in the dojo this week. And we'll see you next month. Thanks, everyone.