Creating a Startup Engine w/ Stephen Alred Jr.

Stephen actually has a background in financial services and entrepreneurship. He shares how his previous experiences inspired him to build a Startup Engine (ecosystem development system).

Summary of topics covered:

• Drawing from previous career
• Accelerator
• Cold calling/emailing
• Venture capital
• Silicon Valley
• Road blocks
• City benefits of workforce development
• Minority founders
• Startup engine (ecosystem development system)
• Strengthening communities (Introduce 30,000- 50,000 jobs)
• Scaling 
• Diversity and Inclusion
• Qualities of Founders
• Founders Financial Foundation

Referenced Resources
https://www.knowcap.io
https://www.thefastlaneforum.com/community/
https://angel.co
https://twitter.com/salred3

Video Version
https://youtu.be/nICy4JoRMkw

Fee-Only Financial Planner
Music: 80s Motivational Chiptune by Shane Ivers - https://www.silvermansound.com

Transcript

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SPEAKER_02 0:00

I still want to take 50 50s to stay in our power players with power players. Because if we can work with every, if we can work with 10 cities around the country and if BCs stay in Silicon Valley, we have bigger reach and then they have to come to us to find startups because startups are no longer going to BCs and going to Silicon Valley and bagging on their hands and knees for money. They're content to hanging out with us. So VCs have to come to us instead. And startups founders obviously love that too because no one likes to get told no 300 times.

SPEAKER_00 0:36

This is Techy Personal Finance Bootcamp, where I help tech professionals in their 20s and 30s build a great life today without sacrificing their future possibilities. I'm your host, Lucas Cassard, certified financial planner and founder of Global Financial Planning, where I help educate, coach, and build strategies with tech clients to help them take their financial confidence to the next level. Hello, thank you for joining Techie Personal Finance Bootcamp. Today I'm excited. I have Steven Alred Jr. joining us. And Stephen is passionate about building businesses and serving people. His background is actually concentrated in the financial services industry. He's been an insurance, financial coaching, financial consultant, wealth management, wealth transfer, and even dabbled in taxes. His previous role as a director of advisory success at XY Planning Network, which is actually where I met him, along with Bill Carman from one employee to five, his team also helped over 250 financial service organizations launch from IDEA to sign in their first clients. And I also happen to be in there. So what Steven does now is he's currently uses his experience and expertise as the founder of a startup ecosystem development agency, helping cities support local entrepreneurs with business strategy, marketing branding, and operations. His bag or big carry audacious goal for NoCap I.O. is to create a streamlined process. He calls it the startup engine, where people with ideas can turn those ideas into fast growing company. Hey Steven, thanks for joining us.

SPEAKER_02 2:21

Hey, good to finally meet you face to face again. It's been a while, so thank you for inviting me on the podcast.

SPEAKER_00 2:28

Yeah, of course, yeah. I think the the last time was when I was launching, actually, I definitely had a bunch of other advisors.

SPEAKER_02 2:36

Yeah, those were good times. That was so much fun. And actually, even using that blueprint is how I came up with the idea for some of the stuff that I'm doing now. So it worked out pretty well.

SPEAKER_00 2:47

No, yeah, I've seen that in some of the content that you produce. And I know a lot of it's not even relevant to me sometimes if it's not financial advising uh phase and it's more with that tech startup world. But yeah, I can see like a lot of the way that you approach the financial advisor success model uh carrying over to these new startups that you're helping out. So I think that's a good starting point to jump in. Like, what made you make that shift? I know financial services was your kind of foundational background, but what was it that inspired you to be like, I I want to help people take their huge, crazy ideas and make them a reality? Great question.

SPEAKER_02 3:27

I have been studying startups since I was in my sophomore year of college. And I have a minor in entrepreneurship and marketing as well as a major in finance. And so I have experience in college launching companies and helping others launch companies. And a lot of people don't know this, but back in the day, I was trying to figure out how to launch a financial services company and ended up on, I believe they're still around, but the Fast Lane Forums. Uh, and what we did is I orchestrated about a dozen or so people to launch a global Skype community where we just helped each other develop our own business ideas. And that is actually kind of close to the start of me launching a company. So I've always had a background in a knowledge of entrepreneurship. And when I launched my financial services firm, it actually wasn't to serve clients, uh, to be perfectly honest. It was to build a company that could serve clients. So I didn't actually want to serve clients. I'm not the most customer service-centric person. So I felt that if I could build a company and just kind of support my my normal lifestyle, like a low income lifestyle, you know, ramen, they call it the ramen diet. Yeah, yeah. I could then hire people on to service the clients and then grow from there. So really what I wanted to do was just disrupt the the financial services um community. And in doing so, what ended up happening actually was I got recruited into XY because I started posting things that were a little bit more radical, like how I can uh how I could use MailChimp and Zapier to completely automate the onboarding process of a client. And I just got an email last week, actually, two weeks ago, and a LinkedIn connection from someone who read the article that I wrote like a year and a half, two years ago about Zapier and using financial services. And he was like, it's still the best one that I've ever seen. Um, so I was so ahead that people from the XY community started asking me to help them. And my wife, being the genius that she is, she's my secret weapon because she's basically a top-tier business consultant, but she works in nonprofits. So she helps me with all of my business consultants. And matter of fact, we actually have an operations session where she's gonna help me run operations and go through my systems this weekend. That's just gonna be amazing because she's top tier. And so she said, Oh, just charge them, just charge the money. So I started charging the money and then realized I had a lot of XY clients. You realize I also had a lot of XY clients. So I was an XY member and I was also consulting on this side. And in doing that, I really found that, oh, wait, I have a NAC for this. I think that I can do things that most people don't think of, which is reach outside of the financial services industry and pull best practices inside of the financial services industry. And so I was using Zapier when it first launched. Um I was using automations for MailChimp to in order to streamline the process so that through automated emails, I didn't have to do anything which allowed me to waive my onboarding fees or my initial planning fees that most people charge $3,000 for. I was able to do away with that because it didn't take me any time to really do that initial plan. And so by doing that, I realized wait, I would be much better at just managing and innovating on the model than I would be actually serving clients one-to-one. And so that was that was one of the main reasons why I launched a firm. It wasn't actually to serve clients myself.

SPEAKER_04 7:02

That's crazy.

SPEAKER_00 7:04

And I'm on the opposite end. And so, like, that's that's hard for me to fathom. But I do know like a lot of those videos and some of the blog posts that you mentioned, like I've seen those. I was like, ah, this actually helps a lot for the things I don't want to necessarily do. Um but yeah, it's like sitting down with clients and talking to them and getting to know their thing, like that's that's the what breathes life into my aspects of it. So that's crazy that you came from it from a totally different perspective. And it still was a business model that stood up on its own right too. Um, but then you kind of got pulled to XY Planet Network. And then what from XY Planet Network to your launch in NoCap, like what what made you make that leap?

SPEAKER_02 7:47

So what I saw it was really interesting because we worked on the what's called the academy, the I I forget what it's called, but it's like an academy model, which we didn't call it that, but on hindsight, when I started to look at launching NoteCap, I thought, oh my gosh, we ran an accelerator, a six-week accelerator for financial services businesses. And we were able to scale it very, very quickly. And not only that, but we were able to offer it for free without taking any equity. So that meant that if I were to just take that model and then use it for startups, like I could run a no-fee, no equity accelerator model. And that is what really made me start thinking about okay, the ramifications of what we're doing at XY could actually be wider set. So once I left XY, there was a period of time where my wife and I, we were traveling overseas for a year. And so we were in, I believe, Bangkok, Thailand, and we had another trip to Chiang Mai and another trip to an island somewhere in Southeast Asia. And so I just formulated this plan of okay, I'm gonna take everything I took from XY and port it over and speak, see if there's a way that I can build a model out of thin air that works to help a lot of people because when I talk about, you know, most top accelerators, they only they only accept 10 at a time. Uh we have tech stars here in Atlanta, they just announced their their 10 their cohort of 10 companies. But at XY, we were launching 30 financial services companies at a time. So I went, okay, well, we tripled what tech starts can do. So what if we built out a model that could do 50 comp 50 startups? So it'd be five times bigger than a tech starts cohort. And that would allow us to kind of be a little bit more flexible. And then I knew that founders would really enjoy not having to give up equity and not having to pay a fee. So what we did there is we again took the took the XY model and then ported it over and went, okay, what if we after it it came out and after they graduated from our program, we actually put them on a two-year plan that's called a residency. Um and that would be for equity. So hopefully people would get so much value through the 10-week accelerator model that they would say, I want you all to be our first board of advisors. And as a as a board of advisors, we would just take equity in their company. So we wouldn't have to invest in them because we would have already invested 12, 10 to 12 weeks into their company to begin with. So where most accelerators they have to invest or they need to invest, you know, $50,000 to $150,000 per company. Uh, we decided, hey, if we just give it away for free, maybe they'll just love us so much that they'll just give us equity as long as we stay on board for the next two years. And so that was the initial plan, actually. That was looking at XY and my experience there and going, okay, I'm interested in startups. I have a year, uh, my wife and I determined that I could I could take a year off and just do whatever I wanted. And so that is kind of what forced that into uh into being. And what was funny is that it did not work out that way. Yeah, what's it what's it look like now? Um so so what I I started reaching out to people and I thought, oh my gosh, I can just reach out to the chief people officer at Lyft and the senior product manager at Amazon and the best people at a way. I was just I was cold emailing like crazy all these different top-tier startup people. I think I even cold emailed like the CEO of a now billion-dollar company, because it wasn't billion dollars back then, and just heard crickets. And I went, okay, I know that they're opening the emails. How can I figure out a way around this? So then I adjusted that and went, okay, I need to, I need to go to investors and figure out if I can establish kind of like a scout program. So at least the investors that partner with us could give us credibility for when I email all of these top-tier people at Gusto and things like that. Um that also didn't work out. All the investors said, I would rather you just send me the companies. I don't want to, I don't want to sign up for anything. I'd rather you just send me the companies. And I went, wait, I'm offering you deal flow, and you are telling me that you won't even tell me what you're looking for so that I can send you the companies. And they were like, Yeah, pretty much. We don't want to give you any information. And I went, that's crazy.

SPEAKER_00 12:18

So um from there, I went Do you think oh sorry, so even like do you think they were just like worried that you're gonna like take their what they're looking for and then just kind of keep it for yourself or or give it to another company, or I honestly think because the investor community that I found it is so small, for someone to come out of thin air and just say, Hey, I want to help you, sounds probably weird to them.

SPEAKER_02 12:45

To me, it was normal, right? I've done it so far for a lot of different companies, and so I think that they probably associated me saying, I will give you deal flow, and not only deal flow, but deal flow that has gone through an accelerator, and then through a year of intensive work with our company, like that just sounded probably too good to be true. So they weren't even interested, uh, which is interesting now because and we have investors now reaching out to us to partner. So it's kind of funny how that how that flip flopped. Oh, oh, oh, oh my goodness, you have no idea. So we've we've been looking at our pricing in the future, and now I have a team of 18 and just telling them, okay, this is what you see now, but I've been working on this for a year before you guys started or came on board. This is what it'll look like in five years. So just hang in there with me. We will get there, and eventually we're gonna charge investors a lot of money for the things that we were begging them to get them. So yeah, it's gonna be fun in the next few years here.

SPEAKER_00 13:45

Yeah, that's cool. So it sounds like I don't even know what the business model is like. I know I I specialize in helping tech employees, but to be honest, like a lot of my employees are not they're not the ones doing the startup, they're they're the employees of the startups or or just even more established companies like HP, Intel, Broadcom, and things like that. So yeah, that's I I run into a lot of these people, these um seed people, uh, and and like talking about raising capital and all this, and it's just still an outside world. So the the model that you mentioned, is it still the the one that you're currently on, is it still no fee, no equity, or or that had to shift because of just uh the traction and who you were able to talk to?

SPEAKER_02 14:32

That's a that's a great question. So, what actually happened is I had to change everything. I knew that I I found out over time that it was very unlikely that anyone would help me in the way that I wanted to be helped. Um, I cold emailed a lot of investors and said, Okay, why don't you just invest in me and in my company and then by proxy you own a piece of all the companies that we work with. And all of them said, I don't work with accelerators. And I went, Okay, that makes sense because I cold emailed you six months ago and you said no. So what I ended up doing is uh kind of radical. So I studied VCs because I didn't understand it. So I studied VCs for about three months of those six month period of that year, and just kind of dug into the startup financing stack, so what it takes and what they go through to evaluate a startup, and also how how deals are run, you know, term sheets, things like that, what legal ramifications like registering with SEC and form D filings and all of this crazy stuff. Studied that for a while. Then I realized that there was a component that all VCs were missing, and and that was city development or community development. I noticed that all VC, 80% of VC funding, this actually came out last year, 80% of VC funding is in California, Massachusetts slash New York, and so that northeastern area, and Texas. Like they come from four states, 80% of VC funding. And I went, okay, so that makes sense. So I went around Atlanta and talked to a bunch of Georgia Tech grads and and asked them why are you leaving? And realized that they were leaving because they also found that they could not raise funding in Atlanta. And that's why most of my friends that have raised over a million dollars, if I if you were to ask them where'd you get your money from, almost zero come from Atlanta. So then I started studying about uh city level innovation entrepreneurship dynamics and realized that a lot of cities have nothing in terms of helping entrepreneurs that are local grow and get investment funding. Like absolutely zero. Yeah, even Atlanta has a team of 40 on a team called Invest Atlanta, who we have a partnership with. Um, and even they find it really hard. Last year, in quarter two of 2018, only two seed deals got done in Atlanta. A city of six million people and multiple Fortune 500 companies. Yeah. And so with that, it was like, okay, even a team of 40 can't really make a huge difference by building, by bringing investors into uh our community from Silicon Valley. So I went, okay, if Atlanta's having a problem, everyone's having a problem. So I did a little bit more research, uh, looking up some white papers, City Lab. I even reached out to about 15 or 16 cities and talked to their economic development directors and just tried to like figure out what was going on. And then I reached out to about a couple hundred entrepreneurs and asked them how they were finding their startup development cycle and started reading through all of the ways that venture capital is done. So most people don't know this, but only I think less than 1% of all businesses get venture capital funding. And on top of that, only about I think less than 10% of that VC of that 1% actually goes to women and underrepresented founders or minority founders.

SPEAKER_03 17:56

Yeah.

SPEAKER_02 17:57

And then so what people normally do is they use credit cards and they use HELOCs and credit cards. Right. I know, right? And they use um, you know, friends and family rounds. So I went through all these stats and went, okay, most people don't have access to friends and family, rich friends and family, especially minorities. Um, most people don't have HELOCs, again, especially minorities. They don't have enough equity in their homes to pull it out to start a business. Most people don't have 401ks, because especially if they work for a small business with less than five employees, which is most businesses. Uh, and most people don't have the credit card limit to be able to put $50,000 in charges on a credit card to support their startup. So then I thought, okay, there's got to be a way around this. And that's when I came up with what the current iteration of no cap is, which is most people find it so difficult to raise funding, and banks won't even touch them without at least two years. I mean, Silicon Valley Bank is built for it, but most banks won't even touch a startup unless they have two years with another two years or three years of pro forma forecasting for their accounting. And so most banks don't get touched, and then most people don't know rich people. And so I realized wait, what would happen if we just asked them what they would do with the money? And so 10 years ago, it was to buy servers, buy office space, you know, buy the pay for employees, obviously. So those are the top three, but it shifted because people work remotely, because there's co-working spaces and the technology sped up, and because of AWS and Azure from Microsoft and uh Google Cloud, like they don't need to buy service anymore. So now most people are using their dollars to hire people and pay for marketing and branding and those types of things. So I said, okay, what if I just provided you the people? You didn't have to spend six to nine months, which is the average time it takes to raise around. You didn't have to spend the six to nine months, and you could just work on your company. I give you the people and I just take equity in your company as if I invested in it myself. So instead of investing money, we invest talent and services. And a lot of entrepreneurs said, I would sign up. So built a wait list from that, and then I went out and found a team. So now we have a team of, like I said, 18, and we're still bringing on more. We have five full stack developers, uh product manager that used to manage a billion-dollar product, uh, a couple of marketing people, branding people. I mean, and they're impressive. You know, Capital One, Amazon, Uber, like I said, Microsoft, Coach, Victoria's Secret, I mean, you name it, they come from top level. And when I reached out to these people, I just sold them on a vision of I think that we can change how startups are developed. I think that we can upend VCs so that they aren't the power players, we're the power players. Because if we can work with every if we can work with 10 cities around the country and VCs stay in Silicon Valley, we have bigger reach, and then they have to come to us to find startups because startups are no longer going to VCs and going to Silicon Valley and begging on their hands and knees for money. They're they're content to hanging out with us. So VCs have to come to us instead. And startups founders obviously love that too because no one likes to get told no 300 times. It's ridiculous. Like begging for it's crazy. I mean, even I just read that two women that built a I think they have a $150 million revenue, not valuation, revenue business. And they were told no 300 times. And I went, that's stupid. That shouldn't, we're gonna change that. In our system, you should probably get told no maybe 10 times because we have an investor relations specialist on staff, and their only job is to help startups get ready for due diligence, help startups get ready for pitch decks, and then also make the introductions to investors so that we have proprietary deal flow that investors are going like, okay, we want into this. Why don't you introduce us to all of your startups that have a million dollars in revenue and five team members and XYZ? We can go to our ecosystem and then start plucking people out. So they're not getting told no 30 times 300. Times, they may only get told no 10 times. And that's because they didn't jive with the investor. It's not because they cold email an investor and the investor didn't really know them from Adam. So that's basically how it switched. So it switched from an accelerator model to a almost a startup studio accelerator model. So what I tell people is that or a startup engineer? Yeah. And that's that's why we call it a startup ecosystem development agency because there's no such thing as what we're doing in the country. There is a company outside of in the UK that I found about 10 months into this journey. I found them and went, holy crap, I can't believe I never saw them because they've basically done what we're trying to do, except they recruit the founders from college and we're recruiting founders from like Fortune 500 companies because we believe that people with domain expertise providing them with branding and marketing and engineering, we can help them speed up their ideas because they know what they're talking about. Um but this company in the UK, you know, they've been around for eight years and have, you know, what $1.2 billion portfolio value. And I went, okay, like if they can do it, I can figure out a way to do it here. And they've already announced that they're never coming that they don't plan on coming to the US. So I'm like, okay, well, that's free reign. And by doing that, I think that we can really kind of adjust how startups are built. So that's kind of the whole transition model.

SPEAKER_00 23:18

Yeah, that's cool. And so one of your what kind of probably another function or more specifically about your big hear your audacious goal, that bag, you put on it like helping 4,000 startups by 2029. Like that's 10 years away. How many are you kind of in the process of helping right now? And and like, is that what really excited that team of 18 to kind of come on board with you? Okay, yeah.

SPEAKER_02 23:43

So the B HAG is something that I actually use, I extrapolated data from what we did with XY and kind of moved it into the model. So I have a pretty extensive spreadsheet that I worked on over the course of a few months that kind of creates almost like not an algorithm because I'm not that smart, but a logarithm. So everything is tied back to the first sheet. So if we do things in Atlanta well, then we can start expanding out. And so what I found is that five million dollars either from investors, either from talent uh investing their services into us, either from uh people partnering with us, five million dollars in each city can probably help sustain this model. Um less because we're paying for like office space and more because we just need to sustain it because the average time from starting a business to an exit, if they're going to exit, is six six years for uh mergers and acquisitions, so to get bought by another company, and about it's becoming nine to ten years, but it's getting longer now that people are raising billion dollar rounds. But it was nine to ten years to go IPO, and so we created the money ball concept of startups. So most VCs are trying to swing for the fences, that's why they have a 90% miss rate. Um, they like the best VCs are only right 10% of the time. Um and most VCs actually lose money in their second and third rounds. So after the first round, they make a hit, they go and raise more money, they usually lose it. And so what we decided was we need the money ball concept. How can we implement that in our business model? And so what we determined is that by just getting our startups bought at about $10 million, that's a valuation that we need them to get bought at. If we can have a if we can have six percent of the 4,000 startups over the next 10 years get bought for $10 million or more, uh, we can sustain this model and keep growing. And so that's one thing that that we like that that powers the engine. That's how we sustain it. And how I got these 18 people on the team is I gave up equity. Um, sometimes when you when you aren't able to raise funding, you have to figure out another creative way to do it. And so we were in talks with a couple of companies. Uh, we actually are talking with real estate investors to launch an innovation center because we, like I said, we got approved for a partnership with with the city of Atlanta. So we are in an opportunity zone in in downtown Atlanta. So we're talking with investors to do that, but on top of that, I had to figure out a way, okay, if no one's gonna help me, if no VC is gonna touch me, how can I at least get this idea off the ground and launch our own MVP so that we can raise funding later? And so what we did is we structured no cap as if we were a VC firm. By doing that, we were able to offer people equity as if they were our limited partners. So in a typical VC model, it's a VC, it's a VC firm which creates VC funds, which then has LPs invest in those funds. Um, but the the the VC, like the general partners own the earn the own the firm. And so what we did is we did that same model and and we invited people in and said, hey, you get equity in our company, which by proxy means you get equity in all the companies that we work with because we work off an off of an equity model. We don't like people don't pay us, you know, $10,000 for a logo, they pay us an equity for all the work that we do. And so by doing that, we got a lot of interest and we whittled down the candidates. I did a bunch of interviews, probably like 75 or so. Whittle down the can't candidates and found out like they're really interested in this in this idea. But not only that, we were able to cap them so that they didn't feel like they couldn't have an outside job. So that was also very valuable. So showed them that we showed them the huge vision and said, okay, if you work with us, like you probably will make zero dollars. Statistics show. But you could also make three million dollars. And on top of that, you don't have to work for us full-time, you can also have a job outside of outside of us. And so they thought that that was really interesting, and that's how we recruited the people on board. And I just did the paper math the other day uh using their market rate and was like, okay, having them on board was the equivalent of raising $350,000 from a VC. And I would have done the exact same thing that I did, except I would have hired full-time employees and hired less employees. So effectively, what I went out and did is said, okay, if VCs aren't gonna help me, I'm gonna figure out a way to help myself. And if if I'm gonna do the same thing with VC dollars that my companies and I'm gonna help them do, like why wouldn't I just eat my own cooking? Which is exactly what we did. So if they're gonna give up company to work with, if they're gonna give up equity to work with us, I should give up equity to work with the other people that we hired. So that's how it worked out.

SPEAKER_00 28:28

That's sweet, man. That's that's exciting. Again, this like isn't my world, but it sounds like ran into a roadblock. Let's figure it out. There's always ways to to reach your goals and make stuff happen. And so that's what you kept doing. And I think it inspired these people too. Like, I'm sure, I'm sure a small portion of them was looking at that potential maximum upside, but earning zero dollars and still wanting to do something, that's and again you said that's probably the most probable going into it, like especially at the stages that they started helping out with you. But now, as new people are coming on, that that chance is going up a little bit higher. But they had to believe in you, they had to believe in this kind of vision. So, yeah, it's definitely impressive. Just from a quick overview, because there's a few more things I want to hit on, but from an overview, what does your ecosystem look like? Like what are those silos or or what are those kind of pieces of the big ecosystem puzzle?

SPEAKER_02 29:22

Right. Okay, so we we have about seven to eight programs, not all of them are launched yet, yeah. But the one what we're trying to piecemeal it and figure out what's the most pressent uh for what we're trying to accomplish. And so we believe that if we're able to launch this NDP and work with startups ahead of time, eventually, once we see, once we see that there's proof in the pudding, we'll then have our investor relations specialist on our team go out and start pitching our model to other VCs. So we're actually trying to get traction on our own model, improve product market fit the same way that we would tell any start to do. And then we're gonna go out and and do work with VCs. And once we get the investors to come in, then we'll start expanding into the other programs. But uh what's slated is the exchange and talent model, which are basically equity-based services and talent-based services. That's kind of our flagship thing that not many people are doing. And when I say not many, I mean basically zero. So that's something that's happening. And then uh we also have a typical agency model. So if someone sees the work that we do and go, I don't want to give up equity, I don't want to give up revenue share because that comes with a premium, obviously, because there's a risk premium. I just want to pay you to just do my logo. Like if the NBA or Chick-fil-A or Coke said, I just want you to help me with branding. We also have just a regular straightforward service where they see our work or our portfolio and they go, I want that for us, but I don't want to give you equity. Um, so we have that, those are like our top three flagship programs. Underneath that, we also still have the X program, which is that accelerated program that I mentioned that actually kicked off this whole idea. Um, and then we have an educational program, which is also a workforce development program. So our goal is to not just make a lot of money, we want to help people first. That's kind of like we believe that if we help enough people, we'll make money just because we provide value to the world and to the communities that we operate in. And so we have a workforce development program that we're that we're currently building and an educational program for founders. So we operate, I think the only recurring founder, like focus, so mostly only founders, free event in Atlanta. So what we do is we find founders uh who have raised money or who are experts or who have shown success in their field and bring them in. And we did a partnership with General Assembly. So we have so we take some of their space and we basically invite for free entrepreneurs around the city to come in and listen to these founders explain how they're doing. So one founder raised a million dollars and he said how he leveraged accelerators to get banking connections. So that was for FinTech. Another founder is in storage management and they raised $16 million recently this year, and he talked about how they sold Fortune 500 companies because they have AT ⁇ T, Dunkin' Donuts, like they have a bunch of Fortune 500 companies, but they did that before they had any team members. So they kind of pre-sold Fortune 500 companies, which is extremely hard to do. So he kind of gave everyone the blueprint. So that's how we're currently building out that program and then the workforce development. We believe at a core level that if we can create a place where people who are underemployed or unemployed to get gainful employment, we can actually build a circular uh economy, not in the way that people think with sustainability, but in the fact that if we can get them into our startup ecosystem, so the startups can hire them. Uh, so they'll hire them at a discount, obviously, because those people, those people, if they're working at Goodwill or Chick-fil-A or if they're driving Uber, these people will get a better paying job and they'll get equity in these companies as well that are in our startup ecosystem. What we hope is that once they've worked with this company for three to five years, they'll come up with their own ideas and then they'll flip into a founder and then they'll start hiring the people in the communities that are underemployed and unemployed. So it becomes like this circular model of innovation entrepreneurship that starts at the community level. So that's kind of like one of the biggest things that we want to do because we estimate that we can probably over the next 10 years either create or introduce to about 30 to 50,000 jobs. Um, that's our goal. So we think that by doing this, yeah, I know. And and I think that there's some semblance of it. There are a lot of cities that are interested. We have them reaching out to us now saying, hey, like when you're ready, come to us first. Um so that's really cool. So that's kind of the overview of all the programs that that we have going on that we're constantly working on. And so that's the benefit of working with these 18 people because they work with the startups. I'm more concerned with building out the extra piece. So talking to city governments, um, talking to partnerships. So we just did a partnership with Stripe and HubSpot and Google and the city of Atlanta. And so trying to build out the partnerships so that this can scale very well and very intelligently, uh, so that we're not just trapped in one segment of the country. We can actually start expanding in a very organic fashion.

SPEAKER_00 34:21

Yeah, and I think a lot of this, like you said, that kind of circular feeding into itself, that like that, what that does is that strengthen communities and that we're not talking about Silicon Valley at this point. We're not talking about people having to uproot their their lives, their families, what their potential future could have looked like if they would have stayed and still had access to those types of resources and go into Silicon Valley and stuff like that, and then just even talking about like minorities. I'm um half Mexican, so I'm very aware like there wasn't a lot of people for me when I was like I I have maybe one person I know that would have been like an engineer when I was a child growing up. Right, yeah, no financial planners that I was aware of. And so when we get into the industry, one of the big issues with diversity and inclusion is you don't see people that look like yourself, you don't see success stories that would model what your like story would look like. One that's how those things are gonna be circular, is because you're gonna start showing people like you can do this, like you don't have to move, you can have your cake and eat it too, and and just kind of not feel like you have to play like a certain type of game or a certain way in order to get above, like you can actually do things the right way, you can have the life that you want to live and be able to stay here. And yeah, that's gonna motivate the people kind of coming up through the ranks too. Like, oh, that is possible. And like, why why can't I do it then? Like, if they can do it, like I don't see why my situation's all that much different. Like, they're they're from Atlanta, I'm from Atlanta, like they went to this high school, I went to this high school. Like, so that's that's kind of the beauty of what you're talking about, is that you really want to inspire people and and make it more of a shared equity too. Like, as far as the US can all grow from this, it doesn't have to be all focused. And I think it's the perfect time, and I think a lot of people are looking for this or excited about not having to go there. A lot of people, like when they think about Silicon Valley, like, heck no, like that that sounds horrible. Like, I'd have to live in bunk beds basically, even though I'm making three thousand dollars. Like, that why why would I do that? I'm I'm 25, I'm 30, I'm whatever age. Like, I don't want to sleep in a bunk bed like I did when I was a kid or in college or whatever. So I I think it's awesome what you're working on. This is kind of like a hybrid show where we talk about personal finance, financial planning. With your background being a financial planner, like what nuggets of information do you think? I and I know it's probably hard to to circulate through all of the stuff that you have in your head, but from a personal finance standpoint, what do you think would like be the one biggest one or two tips or the the biggest financial lessons that you've learned on your your path?

SPEAKER_02 37:09

So that's actually going to be a difficult question to answer because well it it actually ties back into what you were saying about representation. I remember when I grew up, there was uh, you know, I went to private school where my mom worked two to three jobs to put me through it. And so I got exposed to things that people in my neighborhood, single parent home, very, very low income, probably at the poverty level or close to it. I got exposed to a lot of things like kids with you know elevators in their houses and stuff like that. And I would always, when we would play, I would come in and talk to the parents and be like, hey, what do you guys do? And more often than not, it was entrepreneurship or they're a founder of a company or something. And so I kind of held on to that really close. Yeah. And so with how startups are really unique, and you'll know this from being a financial planner. But what's really funny is that in the financial services industry, most financial services professionals that launch companies actually make dumb financial decisions. And so, because you know, it takes money to launch a company, and you're usually not making any money. And so, we what my wife and I had to do is we had to come to terms with one, who I am as a person, as an employee. I'm a terrible employee, terrible, terrible employee.

SPEAKER_00 38:25

Um because of your ideas, you're like the ideas just pop out of you.

SPEAKER_02 38:30

Yeah, and well, you know, like hey, know your place. And so I've been told, like, hey, we can't have two founders at the company, like you cannot be a founder. Uh, and I'm like, but my ideas are good, and it turns out that company is still using my ideas. Um, so like like years later. So I think that's kind of ironic. Um, but so what we had to come to the conclusion of is okay, this may not be the most financially prudent decision, but we have to think long term. And when you're starting a startup like a no cap or if you're starting a service-based business, sometimes at the very beginning, you have to kind of you have to kind of look at what they call opportunity costs. You have to figure out, okay, I could sit in a nine to five job, earn no equity, earn a six-figure salary, possibly get fired in the next five to six months because I'm gonna push my ideas forward uh with their permission or without. I so they have so much control over my livelihood, or I could take three years, eat crow, as people say, and maybe even seven years, and potentially make a bigger outcome for our entire family. So when I pitched my wife, Erin on the idea, she said, okay, I want you to come back to me like I'm an investor because I am an investor. I'm investing my time, I'm investing our emotions, I'm investing, you know, not being able to buy clothes. I'm investing so much into this. So I want you to pitch me as if I'm investing in you. And that's what I did. I like created pitch deck and narrated format and kind of explained to her and showed her the models and everything. Um, so I think that it has to be that intentional when you're talking about finances and starting a company. It can't be, I'm gonna quit my job and launch a company. Some people do that with no parachute. I did it that way because we just have a lot of money saved. Um, but I would never encourage, and when I hear someone say, 'I'm gonna quit my job and I have no safety net and I'm just gonna launch a company,' I'm like, you should not do that. And matter of fact, I was I hate when people say they were reading an audio book. Uh, I was listening to an audio book even two days ago uh about uh the Adam Grant book. I can't bel I can't remember the name of it, but he said that matter of fact, if you launch a company when you have a job, so you moonlight a little bit, you have something like a 37% higher success rate than people who leave their jobs and launch companies. And not only that, but they are more risk takers. You would think that people who aren't, and actually VCs wrongly assume, if you're if you don't commit 100% to this company, you're not risky enough. And in actuality, people who have a safety net make more risky decisions, which end up benefiting them greater, like they take more long-term approaches and take riskier decisions in the short term because they have a safety net financially and they feel free to do so. And so when I meet someone who approaches uh their financial situation kind of haphazardly when they're trying to launch a company, I'm like, hey, you might not be a good founder for our situation.

SPEAKER_00 41:24

Yeah. Do do you do that deep of a dive into like their personal finances? I I know that's a huge stress point for if you are not managing your finances and you're thinking about starting a business, it's more likely, and this is something that you went through, and then obviously I went through when I launched my businesses like the only reason why my company could fail is if we don't check our finances when we make this huge leap of faith. And so, like, especially from the service base, it's not an idea. Like, it's there's a lot of reason to support that a financial planning service industry will or plant financial planning service company will be profitable, but it will be like a three to four, five, six, however long it ends up taking, but eventually it's gonna be able to provide the same type of income that I walked away from. And I didn't get as sophisticated as you with the slide deck and have to pitch my wife, but I did have to sell her over probably like uh a year and a half, two years as this was kind of uh percolating. But yeah, what we were doing in the background is we're saving buttloads of money. Like we we wouldn't have had the confidence, and in my business honestly, it wouldn't have lasted. Like we've been kind of working through the savings account that we saved up for this particular event. If we didn't do that, I would have been doing a lot of weird things trying to make stuff happen and trying to force stuff that that doesn't exist. But instead, I've been able to focus on providing value for my clients, and and that's been circulating back into my business. And it is definitely a process, but yeah, having that core financial background before starting my business, like I couldn't imagine not having that because I would have failed in six months if I didn't kind of think ahead and kind of have that planned out.

SPEAKER_02 43:06

Exactly. And and that's one thing that I encourage startups to or founders to do is to really examine because when you're constrained financially, you start making really stupid strategic decisions. You start taking on clients you shouldn't take on, you start uh making operational decisions that you shouldn't take on. You know, there are just a lot of things that actually end up with you could be getting sued because you're taking shortcuts because you don't have the money. So you're like letting people in that you shouldn't let in. I mean, there's just so many things like uh, and that's why if someone's gonna come on board, like you need to usually do background checks for employees. But if you're financially constrained, you can't afford a black background check, you could get screwed further down the line and you will never know it all because you just have the money, you know, fifty hundred dollars to do a background check. But yeah, so so when you ask the question of how deep do we go, actually, our evaluation process is pretty simple. I am a questioner by nature, I will say. I can talk to anyone, but I'm a questioner by nature. And so we, when we evaluate a founder, just the questions that we ask will let you know a lot of things about a person. And so even before we go and get their idea, I have a 20-minute conversation with everyone who comes through. And I just kind of just ask them questions background, what you're doing right now, how'd you come up with the idea, how long you've been working on it, things like that. And usually it comes out just through that comp that 20-minute conversation. Maybe not the actual details of their financial picture, but how they think about finances. Because we're betting, if we're going to put $100,000 worth of services in you, we have to make sure that you can actually one be an investable founder because very few founders are going to take it quickly, as quickly as we need it to be, are going to take it from idea to either investment funding or MA transaction, like in the in six years. Very few. And so we have to make sure that if we put you in front of an investor to help you further your your mission, we have to we have to believe that. We have to believe that you will be okay. And so a lot of times we think we try to ascertain like the learning curve that they'll need to that they'll need to do and then their aptitude for learning. And so that's a big thing in startups is how fast and how consistently can you re-engage and reinvent yourself at the leadership level? Because a company at one employee is different than 30, which is different than 300, which is different than 3,000. And you need to be a new kind of founder at every single point. And so by just talking to them about you know what they're doing now, I can figure out their finances because you know it's like, okay, if I were to give you a million dollars, would I trust you with a million dollars to not go and buy a Ferrari and buy a house and then take $300,000 and then hire employees? Like I can I can kind of hear that through how people talk about their business and what they think about for their own financial success.

SPEAKER_00 46:07

That's very interesting. And yeah, I'm sure it's helpful for anyone listening to this, like to get their priorities straight before they come and talk to you. So with I definitely want to uh thank you for being on the show. But before we jump off, how if people want to get involved either with your company or or want to leverage your resources that you have at NoCap, how's the best way for them to get a hold of you?

SPEAKER_02 46:30

Uh the best way to get a hold of me is actually to go to our website. So it's nocap.io. And that is a a triple entendre, but I can't remember the third one. But so what no cap stands for is knowledge capital. I believe that knowledge is is more valuable than monetary capital. So all the cool people that have like, you know, uh, you know, awesome names. I I just came up with, hey, I've always believed in my mind more than anything. I think that you know that should be true for every founder. And so that is one way that we look at things. So when you come to nocap.io, you look at everything that we have going for us, and then you look at our programs and decide which one you want to be involved with, and then you just submit your email, tell us how we can help you, and then we'll reach out. That's honestly the best way. Uh, if you're not ready to do that yet, if you're not ready to start a company, just feel free to follow me on Twitter. I tweet a lot, I tweet a lot about a lot of things. Um but the best, the best relationships that I have I created on Twitter, except for my wife. Um and so on Twitter, I'm uh at sign sallred three. So S-A-L-R-E-D three, the let the the number three, not the word three. And yeah, just follow me and stay engaged because we'll be doing a lot of cool stuff. And we already have a wait list for startups. So we, you know, there's capacity that we have to, you know, we have five full stack developers, but you know, if someone were to work with us, we have to go one startup at a time. And so if you're thinking about, hey, let me just go ahead and get on their wait list, like that's actually probably a good idea to get on our wait list early rather than wait until you're ready to get on our wait list because we're gonna be going through ideas pretty quickly or as quickly as we can. And what we're finding is that it's a lot easier to sell this than I thought it was gonna be. Like we have a startup scout on the team. All she does is go out and find startups. And I sent five cold emails to interesting ideas on Angel lists and got five responses that they're interested in. So I was like, okay, wait, like we can't just have 500 people on our wait list. So I would follow me on Twitter first, and then as you get to know who I am, as we engage a little bit, then see if if it would make sense for you to apply to one of our programs.

SPEAKER_00 48:50

Yeah, and I encourage everyone, even if this is just interesting to you, definitely um follow him on Twitter. Uh, I'm connected with him on LinkedIn. He always puts out good stuff there, but it sounds like he's a little bit more active on Twitter, so I'll have to add him. Perfect. Thanks for joining, Stephen. Uh, it was a really great show, and yeah, super informative for me. And and I imagine it has to be really informative for my listeners as well.

SPEAKER_02 49:10

Thank you. Thank you for the invitation. I really appreciate it. And keep up the good work. I've loved everything that you've done from a branding perspective. I think you know that. On Twitter, everything you push out, I'm like, that's a great idea, Lucas. Like, that's what I've been telling everyone that I work with. Like, you should definitely follow Lucas and keep in touch with him because I think that he has a firm grasp on not only the financial planning industry, but also the tech industry. And that is something that that's rare. When I started my firm, I I wanted to go to help startup founders. And so I'm always cognizant of who I would refer people to because obviously we're gonna work with 4,000 startup founders and we need someone to refer them to. And I trust you. So, yeah, if you all are listening, you need to become a client of level up. Let's be honest. So, thank you so much for your time.

SPEAKER_00 50:00

Yeah, I appreciate that. Um, definitely means a lot coming from you, especially being the head of uh advisor success over at XY Planning Network. But yeah, it's been a lot of fun uh connecting with you, and I imagine you're gonna be back on the show again in the future. So, yeah, I look forward to seeing kind of the developments that occur between now and then and just all the ridiculous growth, all the different companies that you've helped. And and obviously, like you said, that kind of spurs not just helping the companies, you're helping growth in the city, you're helping uh younger entrepreneurs kind of get an idea, get that foundation. You have the that free resource of that education program. So lots of cool things. You're making a huge impact, and I'm excited to see where this goes for you. Thank you for listening to Techie Personal Finance Bootcamp. Remember, if you like what you've been hearing, to subscribe, review, and share with your friends and colleagues. I'm also still taking suggestions for future episode topics and guests. If you want to take your connections to the show to the next level, you can find me on LinkedIn or on Facebook. Techie next time at TechiePersonal Finance Bootcamp.