What If It Did Work?
What If It Did Work?
From Baseball Dreams to Venture Capital: Chris Van Dusen's Journey of Resilience
The path from athlete to entrepreneur to investor is paved with hard-won wisdom that few possess. Chris Van Dusen, Senior Partner at Sully Coy Capital, embodies this journey—transforming a career-ending baseball injury into the foundation for entrepreneurial success and eventually becoming a sought-after venture capitalist specializing in sports technology.
What separates successful founders from the rest? According to Chris, it's not just about great ideas but resilience in the face of setbacks. Drawing parallels between athletic discipline and entrepreneurial grit, he shares candid insights about the romanticized versus realistic nature of building companies. "Everyone talks about exits, but nobody discusses the graveyard of failed ventures behind each success," Chris reveals, acknowledging his own eight failures behind three successful exits.
His investment philosophy focuses on companies with proven product-market fit ready for strategic growth capital. We dive deep into FluidLogic, a revolutionary hydration technology originally developed for motorsports that's now expanding into military and industrial applications. The company exemplifies what Chris looks for—innovative solutions to fundamental problems with applications across multiple verticals.
For founders seeking investment, Chris offers rare transparency about the venture process, explaining why cold pitches rarely succeed and how relationship networks drive the best deals. He emphasizes the critical difference between "just needing money" and finding strategic partners who bring industry expertise and connections that accelerate growth far beyond what capital alone provides.
Perhaps most valuable is his direct advice to aspiring entrepreneurs: "Just start." Understanding the difference between low-risk "two-way doors" where you can experiment versus high-commitment "one-way doors" like taking outside investment could save countless founders from premature failure. Focus on dominating one market before expanding, and recognize when your company needs visionary leadership versus operational management.
Ready to build something meaningful? Listen now to gain insights that might just transform your entrepreneurial journey.
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I never told no one that my whole life I've been holding back. Every time I load my gun up so I can shoot for the star, I hear a voice like who do you?
Speaker 2:think you are all right. Another day, another dollar. Another one of my favorite podcasts yes, I'm biased, it's my own podcast. What if it did work? Got with me this week. Chris Van Dusen, entrepreneur investor. He's a motivational speaker. He's so much more he's a leader in venture capital and private equity, with a strong focus on sports. We all love sports and emerging businesses. As senior partner at Soical Capital, he excels at identifying and investing in companies reshaping the sports industry. And investing in companies reshaping the sports industry, chris not only invests, but he also plays an active role in helping these businesses grow, making them a trusted expert in scaling sports ventures. Most recently, sully Coy led FluidLogic's $15 million Series A3 funding round. Sully Coy, I'm saying that right, correct?
Speaker 1:Okay, man good.
Speaker 2:Investment has since you see, we're real, I don't want to butcher your company has since boosted the company's valuation by 10x. Fluid Logic, founded in 2016, develops cutting-edge hydration technology for motorsports, military sectors and suing peak performances for users like NASCAR stars, jimmy Johnson, tyler Eddick and the US Air Force. Chris's diverse background includes co-founding a marketing agency, guiding Balance Health Botanicals to a successful exit and partnering in a liquor distillery acquisition. Beyond business, he serves on several non-profit boards. He's a national board member of ALDER, which fosters leadership in undeserved high school students. He's also an entrepreneur organization EO member, black belt in jujitsu from Venture Capital Sports Business. Chris brings a unique blend of expertise and passion, helping companies succeed in competitive industries. He likes romantic dinners and he also likes long walks on the beach. How's it going, chris?
Speaker 1:I'm great, what an intro.
Speaker 2:Dude man. I mean got to hand it to your PR people. Man, that's an intro man. More importantly, you told me before that you played sports man, you played baseball. You see, I always gravitate to that because I'm like Rudy Mine is going to Notre Dame. I went to LSU, but I'm only five foot eight and man, I wanted to play sports. So bad in high school and I went to. My high school was it was all white and Hispanic, so we were like horrible in every sport. It was all white and Hispanic, so we were like horrible in every sport. I mean not, not, not racial profiling, but I still got cut. So I did the next best thing. I became. I thought I was going to be the next Bob Costas sports journalist, but that never panned out. So so you made it to did. Did you make it all the way to the majors, or did a couple of them?
Speaker 1:So I made a geo Olympic team in in in connecticut. That's where I grew up, played baseball there, starting at 15 uh started earlier, obviously played baseball, so I played for them. I played at boarding school uh, I had a scholarship to play william and mary. I got some looks right during during high school. But throwing a bullpen my sophomore year in college you know we call it now the tommy john surgery but to a ligament and I went from a left-handed pitcher throwing a little bit of cheddar back in the day to a has been with some good stories. So just as quickly as you come in, you go out you know what man?
Speaker 2:everybody, dude, you, you still made it. It was my, like my. My daughter's played at the high level of travel soccer and she had a decision to make Do I play in small colleges in the middle of nowhere where nobody watches me, 1,000, 2,000, maybe students or go to LSU like her dad? So she made the right choice LSU More power to you, brother. You blew out, you blew out your elbow, but you know what? God had other plans for you if it was. Think about it, man. You, you wouldn't help others exit. You wouldn't help others by investing, and everything happens for a reason, even the sucky parts. Dude, I'm sure you were like you. You know you. You were sitting there reading the tommy john bio and being oh man, I hope I can be like a, a dodger and a yankee like him and have, like this, renaissance career after the surgery and whatnot just wasn't meant to be.
Speaker 1:You know you know I look at it and uh, I don't want to make it so flippant, but for me, you know I play baseball and to play competitively and you know, when you look at it, most people go on scholarship or get to the next level. There's a level of commitment, a level of, like, resilience and grit and just hard work that it takes to go, and so I take those valuable lessons forward and certainly try to instill them in my, you know, 10 year old daughter who's doing competitive dance and all these things. But when I look at it, it got me into a school I wanted to go to. So we look at it and when you talk about your daughter making this decision, you're trying to figure out, okay, what college works for me, whether or not you play sports or not. You're making this kind of decision matrix down to a great school that works perfectly for you and then you hope on the backside they're going to actually accept you Right, and so for me, I was able to leverage baseball into getting into, you know, william Mary in Virginia, which is an unbelievable academic institution, yeah, I'd say, and it was Division One baseball.
Speaker 1:You know to pitch against georgia and clemson and some of the big boys in baseball. Right, we're also talking about, uh, late 90s. So to date myself, right, may have been good by late 90s standards, but you look at these kids today throwing 96 and doing velo training and all this amazing work because we understand biomechanics so much better and the recovery process and how to really unlock talent.
Speaker 1:um, I, I would have been lucky to get a cup of coffee on a d3 team today, so you know everyone is at their their best and hopefully that matches what, uh what's happening in the world of sports around them at the time.
Speaker 2:Well, you use that to that competitiveness. It transferred over to the business world because when it comes to business, especially when it comes to acquisitions and when it comes to investing, there's no participation. You know, it's not like. It's not like how some people just say, hey, you get the kudos, you get the cyber hug, we get to hug it out.
Speaker 1:If you look at my career, which we certainly do not need to spend that much time in, there's just this. I'll call it sales. Post-college I was in finance. I had a degree in economics, used to have my Series 7 in 63. I was what we could. I had a degree in economics, used to have my series seven in 63. I was what we could call a wholesaler right. So I'm out in the world selling products down through the financial services channels. Came out to California company, came out for a BK about 75 days after I moved here. So, like I can show you in the career times, just like baseball ended like that, so did these other things.
Speaker 1:While you know we have a tendency to kind of curl up and say why me and may be the victim, there's this level of well, all right, what's next?
Speaker 1:Gotta move, gotta keep going. And if you think about it, whether or not you're in the world I am now with investing, or whether or not you're an entrepreneur, those lessons of resilience and grit and I'll call it hard work, determination, doing hard stuff, right Carries through right and the idea of getting up every day and I think it's an old Mike Tyson quote, so I don't want to take credit for it right and treating the thing you don't like like you love it. That's what makes champions right. So, like getting up and going, look, I've got this company to build. I don't care who thinks I'm crazy, I'm going to get up every day and I'm going to go execute. And you know I talk about it quite often Like we romanticize this idea of being an entrepreneur. And I was very fortunate and had three exits along the way here in my career one in 19 and two in 21. And it's everyone's like wow, that's amazing. Don't get me wrong. It was quite special to grow these companies, but it's hard as hell Cause you don't know, if someone ever wants to buy it, you don't know if there's an exit
Speaker 1:you're trying to build something that you believe in, and it is hard work, and if you haven't spent that time right Hitting plateausaus, going backwards, understanding how to persevere, understanding and move forward, which you get as a corollary, back to sports, um, I think it's just tougher, and so sports really for me, uh, was kind of this opening to what the rest of the world's actually going to be like when you get there, you understand teamwork, you understand leadership, you understand what it takes to do hard work. Uh, it's been a great core, like for the or I should say metaphor there for the rest of the life now, chris, I was an entrepreneur for 20 years and I exited without an exit strategy.
Speaker 2:I actually literally wrote about how important it's one in my second book. You being being an expert, it wouldn't you say that's probably the most important thing that an entrepreneur should have right off the bat is having an exit strategy.
Speaker 1:So I think there's great sayings. Like you know, build with the end in mind, right.
Speaker 2:There's many different flavors of companies.
Speaker 1:Right, we as investors look for companies that are trying to build something meaningful and I don't want to use the word disruptive, but like are trying to build something meaningful where we can grow total kind of enterprise value, where there's an exit and that exit could be a strategic, a recap from private equity, a sale or sorry a you know, going IPO, doing something like that from private equity, a sale, or sorry, going IPO doing something like that.
Speaker 1:And so if you're building a business that has great cash flow but there's no path to exit I like to call those lifestyle businesses that's not a bad thing, that's great. Love, cash flow, it's amazing. But as investors and the type of investments we do, we're looking for this multiple of invested capital. We need to get a return at some point for our investors because we're using their capital and our capital to make these investments. Therefore, it needs to come back at some point.
Speaker 1:And I think sometimes founders go I'm building this huge, once-in-a-generation business that I never want to sell and you're like well, that's fine and all, but that's going to be a very different discussion on who you have as investors. Or, on the flip side, you have people who go I want to build something, or I need capital to get the company to the next level and I never plan to sell it. And you're going OK, then again, how Go get a loan? Right, we're not going to do institutional venture investing at this point. But if you're looking and saying I want to build something, I believe there's this addressable market, I believe we can corner it and we can grow and this will be something that is meaningful to be bought, to go IPO, to do something. You're going to get a lot of people who are interested in following that dream, but you have to start there. More tactically, most people start realizing what it means to sell their company and say I'm ready to go.
Speaker 1:And you're like well, you're a year or 18 months before you're ever ready to actually sell your company.
Speaker 1:And that's the planning side of it that most people forget. Now, I'm not an investment banker, but the idea is. One mistake we made in the first company is we didn't build a data room from the beginning. Now some people and I'm not sure necessarily all your listeners have that this data room is everything from contracts to sales per SKU, depending on what you're selling and you're building this entire Bible, if you will, of your business.
Speaker 1:Some people are like okay, I'm ready to sell. Great, do you have a data room? No, what's that? Out of room? No, what's that? Well, you know what? The last five years of your work you're going to consolidate into a nice big stack of folders that show what this business actually is other than what you're telling me it is, and that is a huge undertaking, while you're trying to find a sales contract from three years ago, right, with a coffee stain somewhere in a file, right, and that becomes a very tough thing. And so I don't think a lot of, unless you're building your company with the intent to sell, I don't think a lot of individuals understand what it truly means to have your business ready to be sold or, put a different way, ready to be acquired, and I think it's a big miss.
Speaker 2:Now, chris, a lot of entrepreneurs, a lot of especially founders. They treat their business like it's a living or like if it's their child.
Speaker 1:Oh yeah.
Speaker 2:And they. That's the worst thing to do is when you keep all those emotions in it. It's it's not your daughter, it's not your son, you know it's a. It's an LLC, it's an S Corp. Your son, it's an LLC, it's an S-corp. You can't also believe that you don't need an exit strategy because you're going to give it to your children One. It's like timeshare. You don't know whether your kids want that. The hell. Are you going to give it to them A lot of times? Oh, this is my legacy. Well, that's not what the kid wants. Then also, the next thing is they believe that they're going to live forever or that the company can't run without them, and it's like well shit, walt's been dead for like 60 years, it seems to be doing okay, steve Jobs.
Speaker 2:You know he's been dead for over 10. And you know Apple's been doing quite well without him. So I never understood that, because, speaking to a lot of entrepreneurs, they're like oh man, this, I'm unique, I bring something we can all be replaced, every single person with their, any organization you know can be, can be purchased, can be replicated.
Speaker 1:I couldn't agree more and I went through it myself. So one of the exits that I had we sold a company and it was the last one that I had. So now I have this time where and many might think this is great For me it was an identity crisis, same one I had post-baseball I I'm not playing baseball anymore Now. Who am I when I wasn't the chief revenue officer and partner in this company and it's gone, and you know, certainly hubris, but like I don't know they'd be able to do it without me. Well, the company was just fine without me, right.
Speaker 1:But that also goes to the second point where you know, again, you look at patterns there are amazing visionary leaders and there are managers, and they may both have the same title, right, and that title could be CEO, right. And so there are different waves within any company's growth cycle that require both. And so what was really interesting is, with one of the companies we built, it required this type of vision that our CEO had, right, my partner had, coupled with visionary leaders in their respective departments who are working fast, and I hate to use the quote, but working fast, breaking things, failing fast, doing all the things and really pushing and being scrappy. And then it gets to a point where we're not doing going from 7 million to 40 million to 60 million like this year over year kind of growth trajectory. We're now managing 10 to 15% growth in category kind of year over year.
Speaker 1:That's a very different job function from a leadership position in that department and we like to think they're the same but you can grow out of or into jobs, depending on where the life cycle of the company is, and I think a lot of people forget that. And so we were at a management stage, and I'm probably not a great management leader. I'm great at going early when I was operating and scaling hard and fast. Well, I can't go into a P&G and scale hard and fast. I can't go into certain like. That's just not me, and I think the inverse too. You get these great startups who hire amazing candidates. On paper, they have the commensurate knowledge, but they're not right for the timing of the company, and so I think there's definitely some issues there. As it pertains to the founders and their love and relationship with their company, we run into this all the time.
Speaker 1:You, as a founder, who have put your blood, sweat, tears, late nights, ulcers, alopecia you name it into your business.
Speaker 1:When it comes time to raise capital, there is absolutely traditionally a difference in what valuations come back at Same thing when you're ready to sell Because you believe, as the founder, your baby is going to Harvard, your baby is playing D1 sports and going to get drafted Right.
Speaker 1:That may not be the case, and that bias unfortunately carries over and becomes naturally this rub, because, let's say, bad example, but you're selling a private equity. Private equity traditionally wants to give you the lowest cost, lowest outlay of capital for your business, and you, as the founder, want to get the highest outlay of capital. And somewhere in between is the truth and that becomes part of the art and science of the negotiation of selling your business. But I've seen founders who go out, love their business, try to command this premium for what it means to them, not what it means to the market, and end up losing amazing deals, whether or not it is capital raising or a full sale, and then months later get retraded down below the initial offer, either by the same group or a different group, and end up worse because they let that emotion really carry them forward.
Speaker 1:As much as I say that there's also the other side of you've heard the Zuckerbergs of the world and others that were offered a billion dollars by Yahoo early on in the company and said I believe it's worth more and the vision. And now I think he was very much right to not take a billion dollars back in the time from Yahoo. Right, and so it really. It depends, but certainly in this business hogs can get slaughtered very, very quickly.
Speaker 2:Spoken like a man that once had a Series 7. Don't worry, I had a series seven in 63, so I did that for years before.
Speaker 1:That was my last foray before becoming an entrepreneur, so so I did completely same, because after the coming of bk I started my first company about four months later, let those licenses lapse and didn't turn oh, I know people always ask me, like you know I, I haven't done that in like over 20 years like well, why'd you do it?
Speaker 2:I'm like well, because I wasn't gonna put it like some shitty mlm, like prime america, and park my licenses and I knew I, you know, that's it I. You know it was a chapter of my life. It looks glamorous on TV and the movies but it's the furthest thing from it. It's basically 100% sales, correct?
Speaker 1:Now those licenses not the 63, that's Series 7. That thing was a little spicy.
Speaker 2:Oh man, that was like yeah, yeah, it's dude, that, that that's like longer than taking, like the sat and the act, I, I it's like a multiple hour, yeah yeah, I was I wouldn't want to set like if my life depended on it. And they're like, well, we, we need you to start working for morgan stanley. I'd be like, hey, man, I'm not, I'm not going through all that hassle you know I think I graduated in 03 from college.
Speaker 1:I took my series 7 in 2006, maybe early 7. I'm trying to remember my timing. I know it was before the financial crisis so yeah for the record, I'm selling mes debt and growth and income funds with a real estate investment bank during 2007 to 2009. Oh, you're talking about cutting your teeth? That was fun.
Speaker 2:I was like right during the economic meltdown after 9-11. And you're there with a straight face and you're like, well, now's the time to buy. Yeah, everything's down like 30, 40%, and then you have to give them the cheesy Warren Buffett line. When people are fearful, that's when you run in, that's when you invest. And when everybody's greedy, that's when you sell and you see nobody wants to buy. This is it. This is your opportunity. And if it goes down even more, you know what. That's the time to buy. That's when you dollar cost average and, believe it or not, 10, 20 years from now, you're going to be thanking me and your family's going to be thanking me for this amazing position in Exxon stock.
Speaker 1:Exactly Well for this amazing position in Exxon stock. Exactly Well, it's so funny. Exactly Right. Well, it's funny too, and hopefully none of your listeners are a real estate agents and you're going to get hate mail or probably, more directly, I'm going to get some nasty games. But there was an old, I'd call it joke in the real estate world Right, individual finishes selling a home, discussing how it's an absolute buyer's market for this new homeowner, and the next day the owners would like to sell and they go. Yeah, it's exactly right. Best time to sell it's a seller's market right now.
Speaker 2:The idea is it's whatever market you're in is the best, of course, of course, of course. And it's funny because I, I, it's, yes, I hope you're well, fuck it, I could care less man, that. That, that my my show. But, yeah, dude, when it, when it comes to real estate agents, it's usually the woman's successful, usually because she's hot or you know you, you, it's, it's who you know it's. You know, if my network I know plenty of people with you know multi-million dollar homes, I'm going to be successful. If I'm like some idiot that goes to Gold Coast or whatever, thinking you know, I have no contacts. But, man, I read and I hear all the time that you know if these real estate agents are making hundreds of thousands of dollars easily, you know they're the ones that you know more. If these real estate agents are making hundreds of thousands of dollars easily, you know they're the ones that you know come home crying after like two, three months of like $0 in her bank account.
Speaker 1:You know, and it's funny you mentioned it, because I think this idea of network, this idea of your own community, your own, well, again back to network, that you have is important in so many roles. So, yes, for the real estate agent, super important. Same in venture, right, and I think that there's this misnomer because there's kind of these a couple paths you can go to work in venture. And one is you know, standard business school straight, you know, into analysts, work your way up, right, understand the business. And the other side is to be in the trenches building, operating, understanding, selling. I obviously was the latter, not the former.
Speaker 1:But when it comes down to it and I talk to my team, my internal team, as well as people I do work with, to be a good venture partner, be a good private equity partner, to be a good venture partner, to be a good private equity partner, to be a good insert here, even M&A, to be anything that is within the service, it really is your network. And there is an old saying, right, your network is your net worth. And so, at the end of the day, to be a good venture partner, you have to understand the kind of supply chain of company and who are the players? What are the investment banks? Right? Who are the M&A attorneys? Who else is doing things?
Speaker 1:Where do I get capital? Where am I sourcing deals? And all of that is network effects. You can't do it sitting in an office by yourself looking at a computer, and that in and of itself means you're out being observant, meeting with people and building and continuing to work that network, and that's really what ends up, I believe, separating uh the good from the great when it comes to, uh, to a lot of these type of businesses, whether or not it's real estate or venture or something in between now, chris, we've now do you do primarily?
Speaker 2:is this your specialty, like investing in companies that are in the sports industry aspect, or that's just your bread and butter, or that's one of many aspects?
Speaker 1:Yeah. So as a firm we're industry agnostic. You know we kind of break the rules of venture. The traditional venture and I'm not dogging on it, just stating facts are traditionally run on what we call the 2 in 20. You go raise a big fund and it's usually against a thesis or a mandate that could be AI, that could be industrial manufacturing, ESG, whatever it is and you go raise capital and then, in flight, you are identifying assets to invest in. You're identifying new companies to deploy that capital in. We look at it and we identify great assets, great companies that we can participate in and we know we can drive value. And then we go match that with investors that we have in our ecosystem and we did a really good job building an amazing group of LPs that like participating in our deals, so that inverse effect leads to discovery of great companies as we find them.
Speaker 1:What ends up happening for me is because of being a past athlete, I meet a lot of people in the sports world. I have quite a few LPs that are athletes, team owners, the like, and I end up finding more deals that are in that world. Fluid Logic was part of our portfolio before I joined the firm at the beginning of 22. But since then I brought a few deals in, like Don't Quit, which is a, you know, ready to drink protein and energy adult nutrition company unbelievable company uh. Aiio, which is um ai for player development, and scouting unbelievable company, uh.
Speaker 1:And you start looking and I just kind of found my way more into the sports world and the opportunities that came my way. But it wasn't like I woke up and said I'm going to build a book of portfolio of companies in our portfolio around sports, Because I also originated another AI company that we're taking a really hard look at, along with a property tech company that is unbelievably scaling right now. And so you look at it and, kind of, we are able to sit and identify great opportunities and then bring those in. It just happened to be sports, as I you know I spend time with a lot of people. What's your passion?
Speaker 2:Yeah, yeah, yeah, you're an athlete Former baseball player Of course.
Speaker 1:Still train Brazilian jiu-jitsu as many days a week as I can when I'm in town.
Speaker 2:So you show no mercy.
Speaker 1:I show a lot of mercy. That's actually the whole point of jiu-jitsu, right, it's doing not punching and kicking, and using technique versus escalation. But yeah, I received my black belt last year. It'll be something I do the rest of my life. It's unbelievable.
Speaker 2:Congratulations, man, on on doing that. You know, either you're, we're, we're always evolving, we're always growing man, and that's that. That's cool. Uh, I always, always loved um the martial arts, but I I think it was I'm a little older than you, so I always you know the cobra, kai and the Daniel LaRusso and Johnny Lawrence, so that's probably being an only child watching Bruce Lee movies and Chuck Norris. I got to ask you, though, when it comes to when you're doing rounds, looking, do you have your own investors or do you like, try to find, like accredited investors? You open up, like crowdsourcing, or looking for accredited investors to go in on this, or how do you do that?
Speaker 1:Yeah, I was going to say yes and, but I want to be careful because I certainly don't do general solicitation. It is accredited investors only, but we are invitation only and so that's not meant to be right, Like we don't want to talk to people.
Speaker 1:But really what it comes down to is we've built this amazing group of investors now that we're servicing deals to, and the best, nicest, kindest, most amazing thing is they will also introduce us to more individuals who like the ilk of our deals or want to participate. That's traditionally how it's grown. Now for me, I spent a lot of time on the road. I'm fortunate to be a guest on podcasts like this do keynotes across the country, and so for me, you know, over time I continue to meet more people who make me more opportunities and introduce me to more and more people. And that's really where, when we bring in a new deal, bring in a new portfolio company, we'll put together a deal or add it to one of our existing larger deals and then it's kind of resurfacing that back to our LP base, having calls meeting with new individuals. But yeah, from a crowdsource perspective, we're not going to do anything like that. Traditionally, our investors are high net worth, ultra high net worth and family office that are coming in.
Speaker 2:So they're beyond like accredited investors. They're not like the guys that, woohoo, I got my accreditation, I've got $1 million my net worth. I know it's that. That's the one that I've always longed to.
Speaker 1:There's qualified above, which is like two and a half, and then, the level of sophistication higher.
Speaker 1:But again, I'm not a financial planner so I want to be very careful. Not financial advice, all the disclaimers here. But if you were to look at a standard weighted portfolio, you've got equities, you've got fixed income, you have sitting in cash, maybe you're in real estate, you just here's your bucket of your dollars and every year you have a certain amount to invest and you want to weight that whatever your financial planner wants to do. But traditionally alternatives end up being about 20% and then illiquid alternatives are typically 20% of that right.
Speaker 1:And so that's about 5% of your overall investable dollars are in deals like ours. So if we were to run that slice down from, I just hit my accreditation and you might have 25,000 to invest right and that would be more prudent compared to that million I could and again, not financial advice. But as you move up, those dollars certainly scale as your net worth scales and you can start taking these opportunities to put things in your portfolio that have the opportunity to return what we call this multiple invested capital, that kind of 8, 10x that we shoot for in venture as a return for our investors.
Speaker 1:But again, that naturally, as we start talking about those numbers, is on a different risk continuum or a different place on the risk continuum than putting in an ETF or putting it into a mutual fund or putting into something that's capital markets correlated, and that's why those opportunities traditionally aren't. You don't need an accredited to be accredited investor to do right, because they're not going to give you 10x on your money but they're certainly going to be much further on that risk reward side.
Speaker 2:Oh, for sure. And looking at it this way, you get your accreditation because you hit the 1 million. What's on financial planner or anybody be like yeah, well, let 100,000, 200,000. And yeah, by by all means, let's, let's throw that into a startup, let's do it. Yeah, you know, let's. Let's put 20, 25 percent of your overall net worth.
Speaker 1:Let let let's do a friends and family with a deck and no actual product, it'll be perfect what's what's crazy is is people don't understand that because they always see the Ubers but they don't.
Speaker 2:We can pick and choose, man, but there's a graveyard and everybody's like, oh, I wish I could have gotten into it with what? Okay, even let's say you were open, you're $10, know you, you're ten thousand dollars because your net worth's a hundred a hundred k. That's still friggin. You know ten percent and it's gonna go by the way side because you know the this new opportunity. That that's what I love about. Like when they opened up crowdsourcing, for what was it? A few, like 10 years ago for all these companies and all of them went to shit, but they everybody got like a free drone if you invest in 5k or whatever it's like there.
Speaker 1:You wanted some startups now I have some friends and this was years ago so I want to be careful here not to mislead but but would work on places like AngelList and they had a small pocket of money and they would be part of the syndicates and they could follow syndicates. So you could still participate, but at a much lower level. That feels more prudent. If you really want to, oh yeah, for sure, right, because you're putting 1,000, 2,500 bucks into something right as part of a larger syndicate.
Speaker 1:But yeah, I mean, look for us we're traditionally in the seed through B range when we like to invest, right, for those that may not understand the full alphabet soup, you kind of have like friends and family, which is that angel round, and then you have pre-seed, traditionally seed A, b, c and you know things like I think Instacart had a J and a K round, which is like fidelity getting in right. So there's this level of like they all have these different round nomenclature. But when you're before seed, traditionally you may not, they may not have a product to market, they may be doing R&D, they may not still have product market fit, and so that is a much more speculative than when you're getting in and providing growth capital to a company who already has found product market fit. They need to scale operations, scale a team. They need opco capital to keep growing right, that's where we want to play traditionally well, that's where you play and you've been.
Speaker 2:You've proven results. That's why you have people. You have your investors that are coming back because they know the risk. But you've been given the rewards. You've been like you know, you've been very bonds and you've been hitting some homers there.
Speaker 1:Absolutely yeah.
Speaker 1:I mean it's a venture Venture as an industry is tough, I think you know it gets bad name a lot, lot, and rightfully so in a lot of cases.
Speaker 1:But it's also helping these companies grow meaningfully and what it's asking them for and I do talk about this is to grow up along the way, because the minute you take other people's money OPM as we call it the minute you receive OPM, you are now beholden and have a responsibility to grow this company prudently, in the way it needs to be done, right and, as a founder, right.
Speaker 1:The minute you say I want to bring in money, I want to bring in partners, you should make sure you're bringing in partners who are mission aligned, understand what you're trying to achieve it as a partner, are going to support you are going to tell you the hard truths when they come up and are going to be there to help unlock value, because money is not created equal and I think that's lost many, many times. Let's say, I have this massive consumer packaged goods, experience and network and can walk you into every distributor in the country and help you get on every shelf at every major retailer and I want to give you a million dollars. And then there's a guy who's your buddy's buddy, who knows nobody, who also wants to give you a million dollars. I realize that was very far on each end of the spectrum, but you've got to make a decision like which is going to help me get my company to the next level.
Speaker 1:And I think too many times also, founders are just saying I need to fill a round and I'm going to hit everybody I possibly can, and what most people don't understand is we are an anomaly in that we're industry agnostic, but many firms have a core focus. There's some great groups in LA that I do work with who are focused on healthcare. If you pitch them a sports AI company, they're going to go why did you just waste an hour of my time? And so it's really understanding who's that? The investors in the space that are truly going to unlock value for you, and I think it's missed a lot when individuals are raising. That's why I have a bias towards founders who are in their second or third acts. Right, because they know what it means to grow a company. They also know what it means to suffer through the entrepreneurial journey.
Speaker 2:Well, not only suffer, but with those additional rounds, it shows that they've had longevity, they've had skin in the game. They, they, know what they're doing. It's, it's way different than you know. Everybody believes that they have this great idea, this great concept shark tank. Watching cnbc, you know watching watching instagram and social media, where you know, three months ago, you know I'm doing a real. Three months ago I was cleaning pools in la jolla and look at me, now I have a mansion in La Jolla. It's like whatever, but yeah, it's, I get where you want, at least something proven. It lowers the risk to the grand common sense.
Speaker 1:Yeah, I mean, and again, I, I can't said suffer through it. Maybe that's heavy-handed, maybe it's just me who suffered through it, trying to do three right, um, and why I say that is. And you hear all these stories right, one day you're on the top of the world and you're setting it on fire the next day. You believe you're going out of business the next like that day and that it will destroy the story Correct.
Speaker 1:It'll destroy you if you're not careful, right, and everything that can go wrong will go wrong and you just have to be able to keep moving through it. And that becomes this, this weird thing and I am going to call out a buddy, paul, who I had this conversation with and I don't know if you ever heard the difference between the cow and a buffalo lives in montana, so he's, you know, uh, this cowboy. Now he tells me this story about this the bison or the buffalo versus the the cow. Um, when a storm is coming in, a bison turns and walks towards it and a cow will either lay down or walk away from it. The bison does it because it makes it through the storm faster. The cow does not.
Speaker 1:And I would ask you, there, from the same branch on a tree, one is the most hardier, battle-worn, sturdy and menacing creature and the other is a cow, right? And so there's this idea of running away versus turning head on and attacking problems, which is such a great story. So, if I know, I am going to make a bet with other people's money, with our money. I want someone who's going to turn into that storm, or has turned into the storm many times before, and understand what it means to look that storm in the face, not run from it when things get hard.
Speaker 1:And again, just seeing that founder who's done it before it doesn't mean we don't invest in first-time founders, but part of our diligence is really understanding and evaluating the team, the founders, as much as we are evaluating the true opportunity, because founders, especially co-founders, can be a huge reason why companies don't work while their idea was amazing. And so I want those individuals, I want to know they're mission aligned, I want to know they work together well and I want to know that they've done it. They know what this means, they know the task ahead.
Speaker 2:So there's a lot of due diligence. I mean you, you, you know the founder bio rhythms, you know their horoscope, they know the the ins and outs, everything if, if it's co-founders, they both have to be completely aligned. They both have to eat, dream, sleep, the mission statement.
Speaker 1:Yeah, and the type of deals that I look for, and I'd say the firm looks for as well, are ones that aren't necessarily in round yet, and it allows me the opportunity to what I say. Incubate them is to get to know them, get to know how they're doing. Maybe they just closed their seed round and they're going to gear up in 18 months for an A. Well, I now have 18 months or 12 months, let's say to watch, to get to know them, to see how they work together, to see how they're getting their KPIs, and then we'll start discussing on whether or not you know we're interested in participating or leading or doing something. And it allows me to you know as simple as take a founder out for lunch. I get them out of their office, understand them as humans, see how they are when you ask them uncomfortable questions. And take their co-founder out and see if someone starts talking a little smack about the other. You know, if they have a cocktail, give them a cocktail, like, just loosen them up.
Speaker 1:I want to understand them because this is now a relationship between these two companies right, ours where we provide a capital and you who needs to go out and execute the vision. And so you know, from the person side there's a lot of diligence, or personnel side. I should say From the person side there's a lot of diligence, or personnel side. I should say From the actual platform, there's a ton of diligence. Right, we are slow in diligence and our process because we really want to make sure this is something that A we can add massive value to and, b we believe they have the capacity to get it through have the capacity to get it through now, chris.
Speaker 2:Your neighbors, your friends, your kids, parents and all they know what you do. Many of them think, chris, I've got this great idea, all I need to do. People pitch you left and right yeah, you know, I.
Speaker 1:I think what's what's great is, uh, I don't get pitched from those individuals as much. It happens from time to time friends more will have something come across their desk and they'll send it over as going hey, can you take a look at this right? Sure, it is more. I get a lot of inbound. I love the ingenuity of many people. I do live out loud like you can track down my email, no problem, it's not hidden anywhere, right, phone number two. But I will get a lot of inbound people asking me to take a look at their deal and I'm happy to. Uh, but if you just think about the quant, like the amount, of course then it becomes.
Speaker 1:I'd be doing nothing but diligence all day. But traditionally the best deals that I believe you know that come in are coming in through a degree of separation, through a call it a you know a center of influence or a strategic partner or someone who's going hey, there's something here, you need to take a look at it. Right, it's usually not cold pitches and I can look at if I were to track back the origination through. You know the five or six deals I brought into the firm over the last three years. They've all come through some trusted relationship. Who said hey, there's something here you need to take a look at. And the majority of the time, if not every time, they have nothing to gain. They're doing it as a favor or as a, you know, as something for another individual as well. But they know this is something that I might be interested in taking a look at and those I'll give a much harder look to. This is something that I might be interested in taking a look at and those I'll give a much harder look to than I will. Just a cold pitch and so I go back to like I live very much out loud. You can see me on LinkedIn. You can see me on Instagram. You know all the social things. It's not hard to find a degree to a separation from me, and if you really want to get me to look at something, figure out how to get it through that channel Little cheat sheet here to get me to look at something, but traditionally a cold pitch, like with everything else going on and the responsibilities of being a venture partner. And I think I was on the road 165 nights last year, right, I'm not building a folder of companies that I need to go audit when I get back home from being on the road, right? So it really has to come through some way, or it's something that I'm interested in, that I've come across that I'm trying to track down that you are in space.
Speaker 2:What Chris is trying to tell you is if it's sports related, it's profitable. You should be able to find me and I'll pay attention to it if, if it's a, it's an energy drink or if it's something I can prolong endurance, definitely that's awesome, oh for sure. So what is this hydration technology? Man, man, fluid Logic.
Speaker 1:Yeah, so it's an amazing company, and Sarah Blackmore, one of my partners at Slyco, is the interim CEO. It's been in our portfolio here for a few years.
Speaker 1:It is an unbelievable company it was born out of motorsports, and so the simple question I like to ask is if you're driving 200 miles around a track, how are you staying hydrated? Usually it's at a pit stop. Someone's squirting something in your mouth, right. Or you have this old school igloo cooler with a tube that's kind of jammed into your helmet if you're in the amateur circuit, right. The original founders came up with this system. Where you have this water reservoir. It goes into a pump motor and board connects to the steering wheel with a Bluetooth button and then the actual tube comes over into the helmet and over your comms mic. So you're driving, a little red button comes up and it's tied into your biometrics. You press the button and it squirts water in your mouth and it can do it from a rate to keep you hydrated. Now you might say well, racing cars like why do I need to be hydrated? Uh, you can lose. I believe the last time was about eight pounds during a race oh, oh yeah.
Speaker 2:Unbelievable, of course, I can only imagine, but also mental acuity goes down.
Speaker 1:So we did this study. I believe it was Michigan State. There's an amazing PhD who went through and looked and said let's do a test on a simulator where there is no car issue, meaning like it's a controlled situation, the car's not going to break down, the brakes aren't going to go out, spension's like we're not going to lose a tire right. And let's look at lap times on a full session and at the time I had I think it was a two, three hour session, right, like they're in a race. Then they did it where they used the fluid logic system for that same race right the next day and what they found was the first two thirds of the race thereabouts were about the same, but the last third even though there is no brake issues.
Speaker 1:No, nothing right About a second lap time faster using the system. And why can that be right? If you ever listened to drivers on, if you watch racing at all, they start complaining about all these things the car is not doing. But you can look at the braking histograms which, if you know racing, you slam on the brakes. It's this big spike and then it kind of falls off Right and it needs to fall off fast. But over time that degrades because your response time is less and as you get more dehydrated it gets less and less, less. That mental acuity and performance goes down.
Speaker 1:But if you stay hydrated you actually the histograms look more similar to they did at the beginning of the race, which means your mental acuity has higher and your performance is higher and better, which allows them to quote unquote pick up time. That's meaningful and racing Well. What does it do in industrial, where you have to make decisions? Or what if you're a first responder? What if you're a motorcycle officer, right, and you're having to make life or death decisions being a police?
Speaker 1:officer on a motorcycle right, when are they drinking, as they're kind of riding the roads, right, they have to pull over. So there's all these applications, as we can go into industrial, we can go to firefighting, but we can also go on the rec channel, and then what I mean by that is mountain biking, cycling, right, motocross, things like this, jogging, where you can, instead of having it mounted in a car, it can be mounted into a wearable. Right, you can look at performance packs, things for sports, right, there's all these amazing applique. But what ends up being is this idea of we as humans, and it's the weirdest thing to think oh, don't drink properly, I don't mind, you're gonna be like, I drink, I've been alive. For how many years I've been alive? I drink properly, I drink. I don't know how to put water in my mouth, right, right. But what ends up happening is we drink when we're thirsty, which is the first steps of being dehydrated man.
Speaker 1:So the real way proven to drink is small micro doses at fixed intervals during the day. Now we can say who has time to be taking 30 milliliters of water every X amount of minutes, but that would be the most optimal way to stay hydrated. What's funny is you end up consuming less overall water during the day than you do slamming back a 12-ounce, 16-ounce bottle or a big cup from your kitchen or office right.
Speaker 2:So then you go okay. Well, what does that look like for military?
Speaker 1:applications Forward. Deployed individuals on mission, typically depending on how long it is and I did not serve, so I want to make sure I don't butcher this will be sent out and also be sent out with what they need for anticipated water supply that has weight. Well, if I can bring less weight to the same mission, I can be more efficient, which means I now have the same helmet I'd wear when I'm deployed, with an ability to drink and a pack. And so you start looking at all these applications going. What started in motorsports really has this crossover into the armed services, into industrial and certainly into kind of consumer recreation and then team sports, when you think about practicing and being out of the field for long durations, always having the ability to have water, kind of at what you need from a performance perspective. So unbelievable, unbelievable company, again born and bred in motorsports and now moving into all these amazing other industries.
Speaker 2:And it's part of your portfolio.
Speaker 1:It's part of the portfolio.
Speaker 2:Yeah, Now everybody go to solicocapitalcom. Dude, it's very interesting, I love. I mean, it's got everything from taxes, it's got the portfolio. It's very informative, Not just. I think even in layman's your middle-class person can learn a lot from your website, man it's. You know, I would prefer to read some of that and grow than you know I I would. I would prefer to read some of that and grow than you know. Scroll through tiktok and watch a 40 something year old woman dancing. But hey, you know that that's just me. Maybe you know understood?
Speaker 1:no, uh, so I do like tiktok. What I do love and I this isn't now a a discussion about tiktok, but micro learning was the big thing that people started saying it's not doom scrolling, it's micro learning micro learning I will have to tip my hat and say if you can get the algorithm to work right for you around the things you're truly interested in uh, around business. You know, if I go on there I am flooded with meaningful things there I'm not taking away from our website, right?
Speaker 1:Maybe I should just turn the website into a whole bunch of TikTok, you know.
Speaker 2:Paul, if you did it like that, you'd probably crack the server man.
Speaker 1:But no, but you know it does a good job, more so than a lot of the other networks. But I think that algorithm is exactly why we had a potential ban there for a moment, because it can also be manipulated to push things that oh hey, welcome to social media, or manipulation, has been with us since the caveman.
Speaker 2:You know we're easily swayed, easily manipulated. Compliments of Uncle, uncle Sam, compliments of every government out there. What about every Zach man? Like I said, I loved our conversation. I can talk to you on and on about everything from sports, from venture capitaling, everything from jujitsu, from being an entrepreneur, from having the Series 7. So what advice would you give to just an entrepreneur that has the dream, because every company, every publicly traded corporation, once was a small business? What words of advice would you have to tell any entrepreneur when all they want to do is grow?
Speaker 2:into the journey.
Speaker 1:So I would say, let's start with one that hasn't done it yet right. Start, Just fucking start, just do it Now. I was having this great conversation with this guy, brad, a couple of weeks ago, and we were talking about this idea of one-way and two-way doors. Amazon works a lot in this idea. Go fast, go hard. If it's a two-way door, meaning you can step into it, fail, step back out of it. But go very slow.
Speaker 1:If it's a one-way door, step back out of it, but go very slow if it's a one-way door. And so, to bring that back to what you asked, most entrepreneurs that I've met just started. I'll tell you we talked about earlier on the podcast. I had three exits. Use the word gravestone, it's a great one. I've got eight behind them. That did not work. But I started. I failed. I used my money, time, resources, energy, opportunity cost and when that started to fail, I walked right back through the door the other way. The minute you take other people's money, that becomes a one-way door. So go hard, go fast. Fail, go hard, go fast. Start getting traction Now, make it a one-way door and start growing. That's my first bit.
Speaker 1:Number two truly understand the market that you are selling in and don't and the third piece is and don't try and boil the ocean. So what do I mean by both of those One? The first part is we look at solving problems, and some of the greatest ideas have come from solving a problem that you uniquely have, that you've realized many other people have. But make sure you do enough market research to realize and understand if other people actually have that problem, because if you're building something to solve a niche problem for you. It might be a niche problem for a niche amount of people and therefore your total market can never be more than a small lifestyle business. So first, understand that. Still want to build it, go forth. Right, that's on you, but I think your ability to raise capital to truly make it scale is going to be your problem. And then three and this is one that even established entrepreneurs and founders who have companies do incorrectly is they try to do too many things too quickly. Right, our product, our service, our, you name it can be used in all of these different areas. So as we launch, we're going to build teams to service all these different areas, and so you end up going a mile wide, an inch deep in everything you do and you never can really get meaningful market traction.
Speaker 1:Or, said another way, you understand this one vertical really well, so you assume it would be easy to scale in another. But you haven't understood enough about that new vertical to understand contract times. Who are the incumbents? How long is it going to take to make a sale work? When are we going to build revenue off it? You just assume the same. From the first industry vertical you went out that you're selling your product in. So it's really truly understanding what you're selling, how to sell it, because if you can dominate one market, you can quickly and easily, in my opinion, raise capital to go attack another, because you now have proven that you can do it there. But when you try and tackle four at the same time and need to raise capital, there's no market signaling that you're dominating any of them and it becomes much harder.
Speaker 2:Amazing, thank you you. Thank you for the opportunity, thank you for the hour, man, thank you. I'm selfish, yeah, you might other my guests, my all my listeners might have learned something, but you know what? I've learned? A lot, and that's what counts, and you know if I'm doing it. I know other people want to hear. So, chris, how do they find you?
Speaker 1:So you said it's great. Selecocapitalcom is a great place. Linkedin is my name, so Chris M, as in Michael Van Dusen. It's the exact same on Instagram. That's probably the best three Email. I told you I'd give it out. It's C as in Chris Van Dusen at SalaicoCapitalcom Easy peasy.
Speaker 2:Thank you, brother, thank you for the hour. Man, what if?
Speaker 1:it did work.