We Raised $100M - Venture Capital EXPLAINED

Want to know what it's like to raise over $100 Million in Venture Capital? See how board meetings work, what value investors truly bring to the company, and how we manage that cash inside of this episode of 5 Minute Marketing.

Follow along as I build my company to a $1 Billion valuation: https://www.brianmoran.com/

I’m Brian. Here’s my story…

• Sold my first digital product in 2009, fell in love with digital marketing.
• Launched a software company (@SamCartApp) in 2015. 
• Raised $100 Million in venture capital. 
• Powered more than $6 Billion in sales for our users.
• Grown SamCart to a +$300 Million valuation. 
• Run a team with 75 employees. 
• Acquired an AI Design software for $7 mil (@typeset) 
• Working our way to a $1 Billion valuation for ourselves. 

Every week, I share what I’m doing, studying, and thinking about. Join my newsletter and get my thoughts:  https://www.brianmoran.com/.

Comes see what my companies are up to…
Ecommerce for Digital Entrepreneurs: https://www.samcart.com/
AI Design in seconds: https://typeset.com/

Follow me around the web.
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LinkedIn:   / realbrianmoran  

Transcript

I'm not gonna call these guys and ask 'em how my copy on my Facebook ads are. They provided things that are  a hell of a lot more valuable than those things would've been. 

So what's it like to have a board and investors and all the things we now have? Um, a lot of people don't know what that stuff is like. That's what I wanna share with you today. I've gotten a bunch of questions, especially after the newsletter edition we sent out, Monday.

If you're watching this on YouTube, even if you're listening, you can probably tell bringing back, one of the car episodes today. If any of you have listened to the. Podcast since way, way back, I used to film them in my old Jeep. Today I'm on a highway driving out into the mountains to the lake house, so hopefully it's, not too noisy for you guys. 

Jeeps are already loud, let alone driving out on a highway with like, I don't know what the winds are today. It's like 40, 50 mile an hour winds about to blow my ass off the road. Here's a little kind of gear tip for you guys. We'll see this mic is actually as good as it says.

There's, a brand, this little kind of mini mic that I got called, holly Land, little clip right up here on my hat that has noise canceling. So we'll see how this turns out. Maybe I'll chuck this in the trash and have to rerecord this whole thing. But anyway, I've been talking in the newsletter last two editions.

I think, um, kind of chiming in on what it's like to have a board now. Uh, ever since we raised money, I. Uh, we've had these quarterly board meetings when you go to, in invest money, at least kind of the traditional route. There's other ways to avoid this with like angel investors and stuff, but we brought on some pretty big kind of institutional investors and typically when someone throws money at your company, they want.

A little bit of control along with that. And the typical way is that they ask for a board seat. So you incorporate, uh, usually turn into a C corp. At that point you have a board. Before we raise money, I guess hypothetically, the board was just me and Scott. We did not have board meetings, like, you know, we didn't do any of that stuff, but we brought on our first investor, so they got a board seat.

So it's me, Scott, and the new investor, three total board votes. Um, you know, we control two of them and as we raise more money each time, we did another round and we've done three. So far, each one we've added a board seat. We've actually added two. The investors got one, and then we added a second one.

And usually that's pretty typical. So it kind of leaves you with control of the board. And I've had a bunch of friends over the years ask, like, you. Have you lost control of your business? And you gotta make sure you have 51%. And while that in some cases is important, the one thing for a lot of you entrepreneurs to remember out there, you can own less than 51% of your company and still control it.

Like the board votes on all the major things. Raising more money, buying businesses, selling your business, making big hires. Like those things get voted on at the board level. And that's where you have control. A lot of times it doesn't matter, what percentage of the company that you still own.

So just a quick tidbit for any of you that, down the line or think about raising money or joining up with somebody else who has a board. These are all, things you gotta take into account, but, what are our board meetings like? They've really been kind of the same, ever since, the early days back in 2019 when we raised our first round and started having quarterly board meetings.

It's really just a check-in on the business, like us as the business operators, like the folks that work in the business. 'cause the investors don't, they're just there to provide advice and help and strategy and guidance. Um, we just put together a presentation that's. How you would, you know, do kind of a company all hands meeting, what's working well, what's not, any key updates that they need to know about.

And then, you know, there's usually a section where, you know, we need their advice on something. And, you know, that's pretty much it. Like they're, I don't know, 15, 20, maybe 30 slides total. And they used to be a lot shorter. They're just, they're longer today 'cause we have. Three companies inside of one, really, SamCart, typeset and creator U.

Um, so you have financials in there, p and l balance sheet projections for the next quarter. Um, some highlights on marketing, highlights on sales, highlights on product and engineering. Highlights on customer support. Really what's working well and what's not. And really it's our chance to tell the board kind of how we're feeling about the business, things that we're doing to, you know, get ready to have a good year.

Um, what's been really interesting for me, like I. When I'm, you know, talking to buddies that are thinking about going down this route is they, a lot of people make this mistake, and I made the same mistake that it, if you're thinking about raising money, one, you can hear a lot of horror stories.

Like, I have buddies that went down this route and they kind of lost control of their business and then ended up selling for parts down the road and, you know, it didn't really work out in their favor at all. Um, and you know, they'll blame the investors and, you know, a lot of folks, you know, investors can get a bad rap for just being like empty suits or, you know, they're nothing but a check.

And all they provide, the only value they provide is money. That has not been my experience at all, but for reasons that I did not expect. Yeah. In my experience and I have a dozen buddies that have boards and have raised money. The value that you get from going and raising money and having a board of.

Investors or really, really wealthy business people and successful business people is not that they're gonna be able to sit around your board table or pick up the phone when you call and give you really nitty gritty in the weeds advice on your business. You know, like, I'm not gonna call these guys and ask 'em how my copy on my Facebook ads are.

 Or even like, what product we should sell next or create next for SamCart customers because they don't know, like, they're not online entrepreneurs. They don't know our market the way we know it. That's our job. Their job has been very different. We, if you think, at least in our case, and I think it's probably the case for most, uh, institutional investors, these are very well connected people, very wealthy people.

And look, you don't get very wealthy and very connected by being a dummy like you. That just doesn't happen. Uh, a lot of people like to talk shit about. Billionaires, but when you really look at it, like 99% of them are self-made. Very few of them were just handed money from their parents or grandparents and are just morons.

Like, that doesn't happen. And even those people are probably smarter than, you know, me and you because they hang out with really smart people. Like when you're that wealthy, you are in, you know, clubs that none of us are in, and you're surrounded by very intelligent people and 99% of them are self-made.

And even if they made their money in oil and gas, which has nothing to do with online marketing and tech and SaaS. Those people are still freaking smart. Like those folks all day every day. You know what they do? They study how the global market is moving. They study what's happening to interest rates in the stock market, and you know.

The bond market and how money is flowing in the economy. And you might not think that's important to you, but as you grow it becomes extremely important. Like these are macro, high level, 30,000 foot view things that they will impact you and they do impact you even if you don't realize it. And so that's been for us, extremely valuable on top of the fact that.

These are the folks that are gonna know who we are gonna sell this business to, or how we're gonna IPO someday, and they're gonna be the ones that help us make it happen. Because I don't know those people. I don't have connections at Shopify, Amazon, you know, Stripe back in the day. Companies that might come and buy us or wanna partner with us, um, or help us IPO or companies that we might wanna acquire.

I didn't know these people. Before we started raising money and now rub shoulders with folks that are in those clubs, that's the value that these guys bring. Like they've made a handful of intros over the last three or four years that I can promise you

  we will be worth nine figures plus to me and our team over the next, you know, five, 10 years guaranteed. And I wouldn't have had those connections or that knowledge without these folks around the table. So did, did our board come in and all of a sudden like, help us make SamCart better . Or give us better marketing advice, um, or help us fix our ads. No, they didn't. But you know, they provided things that are actually a hell of a lot more valuable than those things would've been.  

 So in the end, I'm actually glad the investors aren't what I hope they would be, which is someone who could give me every answer I needed in the weeds of my business.

Like, that's just not what they were. Um, and, and I'm glad because we, the things that they provide, you know, the fact that they saw the rough economy coming before I even was paying attention to it, and they knew that for us the impact of that was gonna be. Look in that environment that happened in 20 22, 23, and it's still there today where interest rates are high and so money is not free anymore, that impacts people like us because it's now more difficult to go raise more money.

So what does that mean for a company like us that had raised a lot? That means you better get really damn efficient and you need to stop burning money and slim down and make your marketing campaigns more effective and become extremely profitable so that you can control your own destiny. And you don't have to raise more money without that knowledge, like that's how you run the business right off a cliff.

You think, oh, you know, it doesn't matter if we're burning a lot of money or we're not profitable yet. We can just go raise, more, and then you find out when it's too late that that's not the case. That's the kind of strategic, high level macroeconomic value that these guys have brought that I wouldn't want to know, where we'd be without that, without the connections that we now have that I think are probably gonna lead to.

You know, the end result that everybody wants for SamCart, at least for us. Um, so yeah, that's a little bit of taste of how board meetings are and at least how valuable they've been for me. And it's just been a great check-in. Like if you think about almost any aspect of life, you know, especially, you know, something like fitness, you're trying to like really get in shape.

What's the best way to do it? You hire a personal trainer. Why? Because one, they can kind of shortcut the learning curve and see things that you can't see, um, help you make tweaks that you can't, you know, you're not gonna think to make. But the biggest thing is also accountability. And that's the best thing I think for me, is knowing every quarter, like, we gotta write up a report of the business and we gotta go report to these guys.

Not effectively report to them, but you know what, like they're partners in the business. They want to know how the business is going. They don't work inside the building every day. And it's a great kind of accountability exercise for us to, one, make sure you have a good quarter, um, you know, every three months to make sure you know, you, you're showing really good progress.

And two, to document it. And, uh, you know, create that slide deck of 15 to 30 slides and do a good check in on the business. Um, it's been extremely valuable for us. Uh, I'm, I'm very glad that we did it. So, sorry, I don't have a horror story for you. Um, but, you know, I, I don't think the positive side of raising money, bringing on investors, having a board gets talked about that enough.

Everybody loves to talk about, you know. The horror stories and how in times where shit went wrong, and uh, that just hasn't been our experience.