The Vouris Podcast

The Startup Growth Podcast E14:

Episode 14: How to prepare your business for an exit or a capital raise with Shawn Flynn
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The Startup Growth Podcast E14

Episode 14: How to prepare your business for an exit or a capital raise with Shawn Flynn

Kyle Vamvouris

Dan McDermott

Shawn Flynn

Podcast Transcript

In today’s episode, we’re joined by Shawn Flynn, host of the Silicon Valley Podcast and principal at Global Capital Markets.

He’s here to tell us about how to:

👉 Build relationships in the VC world

👉 Which business numbers you need to know to raise money (or exit)

👉 How to build a strong personal brand.


[00:00:00] Dan McDermott: Hey folks. So today we're joined by Sean Flynn of the Silicon valley podcast. And we're gonna be asking some questions about how sales and the VC world interact with each other. And I will throw it over to our CEO, Kyle, to introduce himself, 

[00:00:22] Kyle Vamvouris: hello 

[00:00:22] Kyle Vamvouris: everybody. My name is Kyle Vamvouris I'm the CEO of Vouris where we help organizations build a repeatable sales process.

[00:00:27] Kyle Vamvouris: I'm excited for our conversations today. Dan 

[00:00:29] Dan McDermott: I'm pumped. This is the first time we're doing it in a while. And the first time we have somebody live in about two months, I know, look at us. 

[00:00:34] Kyle Vamvouris: Sean, why don't you introduce yourself? 

[00:00:35] Shawn Flynn: Hi, my name is Sean Flynn. I'm a mid-market investment banker, focused on mergers, acquisition and growth capital.

[00:00:40] Shawn Flynn: Along with that, I have two other things that I focus my time on. And that's the Silicon valley podcast where I've interviewed people such as Jim McKelvey co-founder of square, Melanie Perkins, co-founder at Canva, Avram Miller co-founder of Intel capital, the list of VIPs go on and on. And when I'm not doing that, the third little thing, I'm current president of the second oldest angel group [00:01:00] in Silicon valley.

[00:01:00] Kyle Vamvouris: Thank you for joining us today. And what are we gonna be talking about? Mostly about raising money, selling your business. If that's the, a decision you're gonna make we're gonna talk a little bit about data. So I'm really excited for the conversation today. And Dan, I think we have a whole bunch of questions don't we?

[00:01:12] Dan McDermott: We do. 

[00:01:13] Dan McDermott: Should we kick it off? 

[00:01:14] Kyle Vamvouris: Yeah. Why don't you hit us with the first question? 

[00:01:15] Dan McDermott: Okay. In the current market that we're facing right now, how should you be organizing your business and your sales data specifically to get acquired? 

[00:01:23] Shawn Flynn: Great question. Really now shouldn't be any different than before.

[00:01:28] Shawn Flynn: And what I mean by that is you should always be thinking of your company as preparing it for, if tomorrow you're gonna sell it, it shouldn't be something that's suddenly gonna happen. It should always be in preparation. And that way you really look at everything day to day as the best processes, the best way of doing things that, they're step one, step two, step three, step four, that you can just hand off to someone else and they can continue the business.

[00:01:50] Shawn Flynn: So with that, getting that sales data, sales is a process. Am I right? Or am I 

[00:01:53] Kyle Vamvouris: yeah, a hundred percent. Yeah. A hundred percent. 

[00:01:55] Shawn Flynn: So how do you maximize that sales process? How do you get those numbers [00:02:00] better and better every day? How do you track the numbers from two years ago last year, this year?

[00:02:05] Shawn Flynn: How can you have that performa next year, two, three years, outwards getting better and better, and you can show data to someone to back it up and go, listen, this is where we are today. This is where we think we're gonna be. And that information tells this story. And that story is what you're selling to investors.

[00:02:22] Shawn Flynn: When they see that story, they go, oh, I believe the story or this story's total BS. 

[00:02:27] Shawn Flynn: And based on that, they're gonna say, Hey, I'm confident and invested in this company. Or, you know what, this just doesn't pass the smell test 

[00:02:36] Kyle Vamvouris: now to jump in a little bit deeper on that. I think part of what you touched on is the fact that the founders getting themselves out of those processes.

[00:02:44] Kyle Vamvouris: And I imagine that de-risks a lot for an investor when they look at an organization that's all tied on the founder, less excited about it than if they actually have systems in place that are shown to be working without them. Is that the case? That's something that you're looking 

[00:02:55] Kyle Vamvouris: at. 

[00:02:55] Shawn Flynn: That's absolutely correct.

[00:02:56] Shawn Flynn: Okay. And that's a, an interesting thing that happens in, in [00:03:00] Silicon valley and so many companies around the world where they have this open door policy where it's, Hey, just come to me with any questions. 

[00:03:05] Shawn Flynn: In reality, that's not the situation you want when you wanna sell a company you would rather have it as, Hey, all of us know what we're supposed to be doing.

[00:03:13] Shawn Flynn: We all know our KPIs. We all know our metrics that we're supposed to hit. And the CEO. Yeah. He gives us advice and guidance, but we know what we're doing day to day. And we're growing this company. We know we're supposed to hit these numbers every quarter. And we're doing that way. When the company is transitioned to another body, when another group comes in private equity group or someone else to acquire it, they're going okay.

[00:03:37] Shawn Flynn: The processes are done. People know their roles that transition's gonna be smooth. And these people here are not gonna be a bio neck. They're not gonna be. I want to, I don't, I guess the best word is we have confidence in this story that they portrayed with this growth really happening without these people who, once they get a check, are they really gonna be as committed as they were before?

[00:03:59] Shawn Flynn: When [00:04:00] they were growing, when they were the owners, are they really gonna like this new situation where they're probably not the boss anymore? There's so much risk in this. If you're dependent on these people. And when that happens, Valuations are lower multiples are lower when you can.

[00:04:15] Shawn Flynn: De-risk the situation. That's when you're able to get the most bang for your buck. That's when the valuations are that higher 

[00:04:21] Shawn Flynn: range 

[00:04:22] Kyle Vamvouris: right. So of course de-risk having strong numbers. And so showing you're growing a month over month, everything looks great. That helps de-risk. But what else outside of just having good numbers helps de-risk that opportunity for investment.

[00:04:34] Shawn Flynn: Think of it. What areas can you de-risk? The concentration of clients, right? If one customer makes up 20, 30% of your sales, right? Is that pretty risky? Yes. . All right. Now, if you had it down where maybe no one has more than 5% of your sales, now it's spread out. Now, if you lose one or two, not a big deal.

[00:04:52] Shawn Flynn: Okay. Maybe when you have those numbers that say, when we have this many sales calls, we have this many meetings [00:05:00] goes to this many closes and you have one year to show this versus the last month. You have that history that de-risk things , there's so many things that happen when you have these processes where you can show these past numbers to present day that give support for what those future numbers could be.

[00:05:15] Shawn Flynn: And it's so many from the number of people we have to interview to hire, right? From the number of, oh, these many impressions to get this many clicks to all that is just processes and stories. And when it's there in a book, think of it almost like you're not selling a company, you're selling a book of processes.

[00:05:34] Shawn Flynn: And that's where the value 

[00:05:36] Shawn Flynn: is.

[00:05:36] Kyle Vamvouris: I see. Yeah, that makes sense. Cause I actually never thought about how, what if we were to look at our, how many candidates we have to hire before we find a qualified candidate. That's an interesting metric that I'm not sure everybody tracks today, from what I'm hearing from you, it almost sounds like you want everything that could possibly be measured, and then shown there.

[00:05:55] Kyle Vamvouris: So that way the organization or the investor has confidence that they can invest in this [00:06:00] organization cuz they know all of their numbers, they know their processes and that's really what they're selling. It's an interesting perspective 

[00:06:05] Shawn Flynn: all with all that data comes, cuz during that process to sell the company, there's that due diligence where they're gonna look at everything.

[00:06:14] Shawn Flynn: They going back to the whole hiring process. They're gonna look to see was everyone onboarded correctly? Do you have that employees' guidebook was everyone let go correctly. And having all that data, all that information collected in one spot, that's gonna move that process along. Maybe it's just cuz I got that engineering background, but numbers, data, everything, and tracking it from day one.

[00:06:34] Shawn Flynn: To put this in perspective, there was a company we were working or actually, sorry, I shouldn't say an exact name of the company. Hypothetically. I heard of a company. 

[00:06:42] Kyle Vamvouris: Yeah. 

[00:06:43] Shawn Flynn: That their data room had the transcriptions to every podcast that CEO had ever been on. Okay. That's how detailed it was really everything was there.

[00:06:53] Shawn Flynn: You looked at it. You're like Jesus, yeah. It was insane. 

[00:06:56] Kyle Vamvouris: It shows you the culture of the organization. Wait, we're organized and we [00:07:00] track everything 

[00:07:00] Shawn Flynn: and there's no surprises. 

[00:07:01] Kyle Vamvouris: That's right. 

[00:07:02] Shawn Flynn: There's not that one person that, halfway through deal due diligence comes in is Hey, you know what?

[00:07:06] Shawn Flynn: I heard the company is being acquired. I was like go at a bar inappropriately and I want some compensation. 

[00:07:13] Kyle Vamvouris: I'm sure that happens 

[00:07:14] Kyle Vamvouris: all the time too. 

[00:07:15] Shawn Flynn: Or Hey, I actually was one of the co-founders even though no one knows 

[00:07:18] Shawn Flynn: who I am. 

[00:07:19] Kyle Vamvouris: yeah, that 

[00:07:20] Kyle Vamvouris: happened with Facebook. 

[00:07:21] Shawn Flynn: What we were having a conversation and, 

[00:07:23] Shawn Flynn: I gave some input.

[00:07:24] Kyle Vamvouris: I'm a co-founder yeah. , I've done nothing, but 

[00:07:27] Kyle Vamvouris: I'm a co-founder. Yeah.

[00:07:28] Dan McDermott: There's one part of this too, that I'm interested in. And specifically it's this idea of it's this idea of having a processes and SOPs and documents in place versus having documents in place that you're actually using.

[00:07:39] Dan McDermott: I feel like a lot of companies might have stuff and say, Hey, look, we've checked the boxes. We have these things in place, but are they actually being used? I think that, looking at how you can attach performance metrics maybe, or looking into how often you're, are you really using the best practices that you've put in place?

[00:07:55] Dan McDermott: I feel like a lot of startups got away from that. And I'm just curious, how would you see that? 

[00:07:59] Shawn Flynn: Great [00:08:00] question. And this goes back to some of the videos that I've seen on this channel, which are incredible. And I have to recommend them to everyone. Everything is a step by step process, right?

[00:08:10] Shawn Flynn: So when you see these step by step processes going further back, yeah. One, once you start tracking. Then, where you can change things, right? And that's huge. It's huge to say, Hey, a year ago, the lifetime value of a customer was this because of turn. And we've gotten that down the turn down and now the lifetime value so much up the cost of acquiring a customer before was this.

[00:08:30] Shawn Flynn: Now it's so much lower and it show in this progression. 

[00:08:33] Dan McDermott: That's a great point 

[00:08:34] Shawn Flynn: is absolutely incredible. And the only way you can really show that is if you've been tracking numbers. 

[00:08:39] Kyle Vamvouris: Totally. And it's nice too. Cause you're highlighting things that aren't just revenue. I think a lot of times the folks is how do we increase revenue and cost revenue?

[00:08:45] Kyle Vamvouris: I can tell you a real story. I worked in an organization where all we cared about was revenue. And what we did was we used a dialing tool. So we could make 300,000 dials every single month, which was our entire total addressable market. And then guess what happens? We get a [00:09:00] big investor. Cause our growth curve is crazy and we exhausted the entire total addressable market.

[00:09:04] Kyle Vamvouris: Cause we had called everybody one time a month for the past six months. So what are you gonna do? So all of a sudden, our conversion plummets, and then you need to focus on more sustainable actions that are going to lead to more sustainable pipeline generation. We were just going way too crazy. Cause all we were focused on was revenue and we didn't care about churn.

[00:09:21] Kyle Vamvouris: We didn't care about any of these other metrics and you learn the hard way sometimes. 

[00:09:24] Shawn Flynn: Oh 

[00:09:25] Shawn Flynn: yeah, no it's crazy because. . There's so many companies here in Silicon valley that we've seen that has that amazing growth, their seed route and a route. And then you're like, wait, why'd that kind of flat out?

[00:09:34] Shawn Flynn: What, what changed there? Uhhuh and, as those customers, as that, as you grow can get more and more expensive, right? 

[00:09:41] Kyle Vamvouris: They get way more expensive, especially with advertising. I think a lot of people don't realize how often you need to change creative on your ads in order to keep them producing at even a similar rate.

[00:09:52] Kyle Vamvouris: And one of the things that we often see is somebody has an ad campaign that's finally working and they don't make very many changes of it. And they watch their cost per [00:10:00] cost of acquisition go up and up and up. And then at a certain point, they're like, oh my gosh, we're paying triple what we were originally paying.

[00:10:07] Kyle Vamvouris: Cuz we haven't done anything with our advertising. If you're not watching those metrics regularly, that's gonna get away from you. 

[00:10:12] Shawn Flynn: Now, if you were an investor and you saw that company, what would you be thinking? 

[00:10:15] Kyle Vamvouris: I'd be very concerned. Exactly right. especially, I'd actually be more concerned that they didn't know what was happening than I would be if they did know it was happening and were more allocating their time and energy to fixing different parts of 

[00:10:27] Kyle Vamvouris: the business.

[00:10:27] Dan McDermott: One, one thing that I hear out of this, that I really a lot is this idea of both having a longitudinal look at performance at health rather than a snapshot. And I think that this day and age, you don't really have an excuse not to do that. , you can maybe 10 years ago, 20 years ago.

[00:10:41] Dan McDermott: Yeah. You could cheat and say Hey, look, here's a month of of data. Therefore here's our ARR suddenly of based on this one month and okay. Does it really qualify? Maybe not. But then the second part of that is how does the company react to certain things? . Can I show evidence of a healthy reaction when something changed in the numbers, in the data based on processes [00:11:00] and, watching the whole system work.

[00:11:01] Dan McDermott: And then what do we do when it's not necessarily working anymore? Not because of anything bad, but just cuz of changing conditions, changing circumstances, the market, the company, whatever. So like that this idea of the more closely attached you are to the numbers, the better story that you could tell at various points in all really whatever happens.

[00:11:18] Dan McDermott: As long as you have a handle over the numbers, you can always kind of frame things in a way that's prob probably pretty well received on the end of either a business buyer or or a VC. 

[00:11:27] Shawn Flynn:

[00:11:27] Shawn Flynn: love that, but I also wanna say there is the opposite of it, where there's some people that track too many numbers.

[00:11:33] Kyle Vamvouris: Okay. ,

[00:11:34] Shawn Flynn: that's too much data, too much information and it's distracting them from the company from their work. I see where, you what are those four or five key metrics that you should be really diving into every week review and. Every week folks and each company, each business is different. Yeah. How do you go about picking those ones that are, the key for either maybe it's, customer acquisition, maybe it's even internally at your company for the health, the [00:12:00] turnover of your employees.

[00:12:01] Shawn Flynn: Yeah. That's something right now in this current environment, that's a real big concern, over the last two years what's been, the turnover of your employees. How do we know they're gonna stick around after this money's been invested or right. The company's been acquired, what's our confidence.

[00:12:16] Shawn Flynn: So there's a lot there. Not only track everything, but also track the right things. 

[00:12:21] Kyle Vamvouris: Oh, okay, cool. Should we just end it there? That was pretty. That was pretty clear. I think , yeah, you don't wanna track too much. We actually had a client that you should track fricking everything. And it used to, it was really impressive for sure, because you're like my gosh, you look at every piece of data, but also there's this, like the classic is there's paralysis by analysis and you're looking at all of these numbers and they don't all really matter all that much.

[00:12:43] Kyle Vamvouris: Like people ask me like, oh, do you track this? For example I did a Mo I was doing a growth model with somebody last week and they're like, Are you taking into account the price we pay for benefits I'm like, no, and yeah, we could add that here and that's useful for sure. But like we're a little too granular here,[00:13:00] yeah. We're, that's not the spirit of this model is to start tracking benefit costs. Like we're doing high level analysis of the growth of your company. Not necessarily tracking every tiny, there's a lot of things I'm not tracking in the sheet by the way. Benefits is one of 'em 

[00:13:11] Shawn Flynn: Have you been tracking the the chips in the break room 

[00:13:14] Kyle Vamvouris: Yeah. yeah. How much are you exactly? How much you spend on 

[00:13:16] Kyle Vamvouris: snacks?

[00:13:16] Dan McDermott: Don't put any ideas into his head. I I don't wanna start doing that. But yeah, I think maybe the thing here is to have a certain set of numbers that you are looking at, and then knowing, depending on who you're in front of at the right time.

[00:13:26] Kyle Vamvouris: That's right. 

[00:13:26] Dan McDermott: How do you tell the story efficiently I think that's the key is that, yes, you definitely don't wanna get distracted also in your own time tracking too much, but if you're going up in front of an investor, versus maybe a buyer versus just somebody on your board, what are the numbers to, to put together.

[00:13:40] Dan McDermott: And then also, maybe what's the format of that. So I know, do you guys have any insight into 

[00:13:43] Dan McDermott: that? 

[00:13:43] Shawn Flynn: Actually I love that question because an investor, they're gonna look at the numbers that they're thinking. If I put $1 in, I'm gonna get $2 out. And I think that's actually similar to the clients, but there's different numbers.

[00:13:54] Shawn Flynn: They're gonna want to see, what's my ROI. If I invest in this software or this solution or product or [00:14:00] whatever it is. Yeah. So yeah, having those numbers, depending on who you're talking to, I think is very key to make whatever that transaction happen. 

[00:14:08] Kyle Vamvouris: Is there a number that you like that maybe isn't as obvious to every.

[00:14:12] Shawn Flynn: Every industry's different, right? 

[00:14:14] Kyle Vamvouris: Oh, that's fair. Yeah. 

[00:14:14] Shawn Flynn: So if you're at, SaaS company versus logistics company versus it's all different, a key to it and hack, I guess you could say is just go to investors in that feeling go, okay, your investment thesis, what numbers, what metrics do you track?

[00:14:28] Shawn Flynn: What has to be hit? Is it maybe for this one investor? The company needs to be around for two years and need to have ARR annual recurring revenue of 1 million. And they need to have that in the geographic area of Northern America or in north America. So the, you just talk to a couple of investors that are in your niche, and they're gonna tell you what they're looking for.

[00:14:50] Shawn Flynn: And to be odd or honest, what's odd is you're gonna see a lot of people play in the same space. Like these checks will play around this. These checks will play around this and [00:15:00] just keep track of that and then start thinking to yourself. Okay. how long until I get to those numbers.

[00:15:05] Shawn Flynn: Is it six months from now? Is it a year from now? Work backwards, do your little milestones, figure out what those valuation bumps would be along that trail. What needs to be hit to get those and just work towards that. And then, start the sales process where a few months in advance, you're talking to, 'em going, man, we're having this great growth where we're hitting these numbers that you're looking at.

[00:15:24] Shawn Flynn: We're almost there, let's start having a conversation now because next six to eight weeks where we're right there and we're talking to these other people, build that little tension there, comma but that's how you should go about it. And honestly, each industry has different metrics they track.

[00:15:36] Shawn Flynn: So find out what your industry is and then try to understand those and then work toward. 

[00:15:43] Kyle Vamvouris: I think this is a natural to go to communicating with 

[00:15:46] Kyle Vamvouris: VCs. 

[00:15:47] Dan McDermott: Yeah. Let me just actually jump into Sean's point there. This I one of my first jobs was in fundraising and I used to work as a grant writer.

[00:15:53] Dan McDermott: So one of the things that the hack that I learned in that field was exactly the same thing. Stop trying to reinvent the [00:16:00] wheel in this crazy long document and try to get everybody was so worried about the grammar and getting, no typos and that kind of stuff, which is yes, technically yes, you should be doing that.

[00:16:07] Dan McDermott: Of course. But that's the marginal gain. The big thing that you can do immediately is go make the relationship with the person who's gonna make the judgment that you're asking for. And ask them directly, what do you want? And the thing that I always used to do is I would ring up the department and I would find out eventually who was literally the editor uh, sorry the reader of of what I was submitting and then ask them, Hey, look, I wanna make this obviously the best possible scenario for me, but I also wanna make it, the easiest possible process for you, right?

[00:16:33] Dan McDermott: I don't wanna be giving you extra fluff and I don't wanna be missing things that you really want. What can I do to make this the perfect thing for you? And then doing that? It's a no brainer for the person say, okay, I'll tell you exactly what we look like, and if you match it, cool. It's a, win-win 

[00:16:46] Shawn Flynn: What I love, there's one saying, and I'm not sure if you guys have heard it before or not, you feed an army for a year to use them for a day.

[00:16:52] Shawn Flynn: So what that means for the investment world, you're going out to these investors for that whole year. You're building relationships, you're building rapport. You're finding out what they [00:17:00] want. You're updating 'em maybe on a quarterly newsletter. So that there's that one day. That you use em.

[00:17:05] Kyle Vamvouris: Yeah. 

[00:17:05] Shawn Flynn: And then write that check for you 

[00:17:07] Kyle Vamvouris: and it feels good. 

[00:17:07] Shawn Flynn: And you, so you 

[00:17:08] Shawn Flynn: gotta nurture it. 

[00:17:09] Kyle Vamvouris: Yeah, totally. So why don't we talk about that then for a minute is how do you build relationships? I have a cool story around this and I'll tell a little bit in, in a minute, but how do you go about.

[00:17:18] Kyle Vamvouris: Building relationships 

[00:17:19] Kyle Vamvouris: with VCs. 

[00:17:20] Shawn Flynn: Honestly, a lot of it is added value to a conversation. One there's networking events where you could go to and just have a conversation where it's not, Hey, invest in my company, but more, Hey, I'm working on something in this space. That's interesting. Can I tell you about it cuz there is that other saying now that we're, I guess we're all on saying, ask for advice, get money, ask for money, get advice.

[00:17:39] Kyle Vamvouris: Oh, interesting. 

[00:17:40] Shawn Flynn: Just ask them go, Hey, I have something to tell you, blah, blah. Maybe they'll write a check or the officer, Hey, I'm looking to invest and they'll go I'll tell you about this and that, that but more than anything. Sorry, just going back to the relationship warm intros are always the best.

[00:17:53] Kyle Vamvouris: Okay. 

[00:17:53] Shawn Flynn: From either past people they've invested in or their friends or LinkedIn's absolutely amazing. I don't see why people don't utilize it even [00:18:00] more, which is building that network there to get connections find out who the investors are before. So maybe it's this angel group that makes intros to these micro VCs, that make intros to these VCs, have that whole plan laid out in advance. And more than anything, if you're just in the ecosystem long enough, just the people you meet are gonna be in that space. 

[00:18:21] Kyle Vamvouris: Totally. 

[00:18:21] Shawn Flynn: That's the best way to go about doing it is just be that friendly guy.

[00:18:24] Shawn Flynn: That's there. Try to get on panels, try to get on podcast, right? Try to get your name out there. Try to sit down with people and maintain the relations, follow up, ask, to go out for coffee, ask to go rock climb, and ask to do, maybe non-typical things, but just casual conversations over and over again, over and over again.

[00:18:43] Shawn Flynn: And that's how you build any network, 

[00:18:45] Kyle Vamvouris: right? And, 

[00:18:45] Kyle Vamvouris: That's the power of being in the Silicon valley too. And this is what people talk about is how strong the investment culture is around here. It feels different and yeah, you can raise money everywhere. And there's a lot of other markets that do really well here, but or outside of the Silicon valley, I should say, but [00:19:00] there's something in the walls here that you can feel when you're in this area.

[00:19:03] Shawn Flynn:

[00:19:03] Shawn Flynn: think one of the things behind it, I've been having that conversation lately is Silicon valley. So many of the people here are transplant. Yeah. Different countries, other cities, they came here for college or they came here for work. And when you're new to this area, the first thing you want to do is build a network.

[00:19:20] Shawn Flynn: So you're asking everyone, Hey, you want to hang out? You wanna do this. And then after you here a couple years, you remember what it was like being the new person and how you're like, oh, I just wish people made an intro. So then you start doing it to everyone, and where other parts of the country in the world it's.

[00:19:34] Shawn Flynn: Hey, this is my shiny object. I'm not showing it to anyone. If start up like, Ooh, I'm interested. I'm not gonna tell anyone. Or, Hey I'm scared to introduce you to any of my buddies in case you might embarrass me. Whereas here it's oh, embarrass the heck out of me. I don't barely won't laugh about you 

[00:19:48] Shawn Flynn: behind your back.

[00:19:48] Kyle Vamvouris: Yeah. It's always 

[00:19:49] Kyle Vamvouris: good. 

[00:19:50] Shawn Flynn: So that's I think the beauty of Silicon valley is just how open people are for their networks. 

[00:19:54] Kyle Vamvouris: Sure. 

[00:19:54] Shawn Flynn: To give it available to people that they hardly 

[00:19:58] Shawn Flynn: know. 

[00:19:58] Kyle Vamvouris: Yeah. So it's interesting. It's just a different 

[00:19:59] Kyle Vamvouris: [00:20:00] culture. 

[00:20:00] Dan McDermott: So yeah, one thing that, again, that I think is really an important takeaway there for me is understanding how an ecosystem works, understanding how a culture works.

[00:20:08] Dan McDermott: Cause it's always, it is different everywhere. And if how different places like for example, I spent a lot of my life in the middle east and a lot of Jordan, or if you wanna look at a better investment center, like Dubai, a lot of the way that those places work is a lot different than, the culture of Silicon valley here, for example, and not really

[00:20:25] Dan McDermott: because of cultural differences between the US and over there, it's more that, how do people actually know each other? How far back do people go? I was in Vienna recently the same way. It's a high school sort of city where people still are base basing a lot of the relationships and maybe I'm making some generalizations here, but from my friends everybody went back all the way to high school.

[00:20:42] Dan McDermott: And there, there are, I think four ma in high schools out there and it all kinds of goes back to, oh, wait a minute. Are you Nikki's friend? Oh yeah. All right. Yeah, that, it all goes back to there. Whereas like you said, a transplant city, very different. So understanding how these things work a little bit and asking people also, Hey, how did you meet that person?

[00:20:57] Dan McDermott: How did you go about where does that go? How far back do you [00:21:00] guys go? Where did this happen? And the more that you're able to ask these questions directly, the more you can save yourself, a lot of hassle and just recreate the same effect for yourself. I. 

[00:21:08] Kyle Vamvouris: That's an 

[00:21:08] Kyle Vamvouris: interesting point.

[00:21:09] Kyle Vamvouris: Actually, the, almost the more rooted into the community, the a community is the less likely they are to refer outsiders. 

[00:21:16] Dan McDermott: Yep. 

[00:21:17] Kyle Vamvouris: And maybe that goes back to your point about a lot of people being transplants here. The reason why they're so open with their network is they barely know those people too.

[00:21:23] Kyle Vamvouris: I met 'em twice. 

[00:21:25] Shawn Flynn: We had coffee last week. Yeah. We were best friends. 

[00:21:27] Kyle Vamvouris: No, it's so true. Cuz there's some people I know that I would totally consider a friend. I go hang out with them whenever they wanted to, but I met them once or twice in person. 

[00:21:35] Shawn Flynn: Oh God. Through zoom. 

[00:21:36] Kyle Vamvouris: Oh, forget about, yeah.

[00:21:37] Shawn Flynn: I've just now me 

[00:21:38] Shawn Flynn: as some people I've known for two years for the first time and I'm like, You're six foot 

[00:21:42] Shawn Flynn: one. Oh, I know. 

[00:21:43] Kyle Vamvouris: Isn't that wild. Yeah, it is super funny. When you finally meet somebody off of zoom for the first time, there's something about zoom. So actually this is a funny story. This is a total tangent and no one's gonna listening.

[00:21:52] Kyle Vamvouris: This is why I'm tell it anyway, I was on a zoom call with a guy that I know very well. We do this group goal setting thing. It's [00:22:00] a couple other business owners. We do a goal setting thing every three months. And we're talk , we're talking on the zoom call and I notice one of his eyebrows getting a little weird.

[00:22:11] Kyle Vamvouris: I'm like what is going on? So I call it out, right? Cuz I'm very, I'm the person to do that. And I go, Hey, there's something weird going on with your eyebrows, you had an eyebrow filter on zoom. So eyebrows were really defined, but they were fake. And I can't even imagine meeting him in person. And he's just got these light eyebrows.

[00:22:35] Kyle Vamvouris: you're like, who is this guy? Anyway? But it was a mistake. He's a really good guy. He didn't intentionally put, I think his wife was messing around with him or something, but he was just so funny. Cause he had no idea he had this eyebrow filter on. I was just thinking how funny it is with all these filters.

[00:22:48] Kyle Vamvouris: There's gonna be situations where we had multiple zoom meetings with someone. You meet him in person. They're a totally different person. 

[00:22:53] Shawn Flynn: Oh dude. There's 

[00:22:53] Shawn Flynn: one call. I remember where no idea how tall the guy I was and he was like, hold on, let me go get something. [00:23:00] And then I see him walking. He ducks under his door frame.

[00:23:02] Kyle Vamvouris: Oh my gosh. 

[00:23:03] Shawn Flynn: And I come back, he comes back , are you like a little person's house? Like one he's. It's like I'm seven feet tall. Oh my I'm like why I played in the NBA for eight years. I was like, yes. Why didn't you start this? I've known you for a year now. That's how you start conversation one.

[00:23:18] Shawn Flynn: I used to play in the NBA and then I look up to you as you're this cool guy. Yeah. What is this? Just we talked about finance for a 

[00:23:23] Shawn Flynn: year. 

[00:23:24] Kyle Vamvouris: I thought you were a loser this whole time. it turns out you're dunking on me. that's awesome. I wanna go back real quick to communication. Cause we actually had to client do a really cool thing to raise money and I'd like to run it by you to see what your thoughts are on this.

[00:23:35] Kyle Vamvouris: Cause it was pretty clever. So what he did was he knew who was gonna need to raise money in nine months or something. And they were just starting to build a company. They had a really good product. They were getting some traction. He didn't know any of VCs he's he grew up in Chicago, came to San Francisco and doesn't really know anybody.

[00:23:51] Kyle Vamvouris: So he knew like maybe two that he had managed through networking. So what he did was he started every month sending those two people, an email that just says, here [00:24:00] are all the updates of your of my company. Yeah. You probably see this. And he did it every single month. That email list grew and grew just organically.

[00:24:07] Kyle Vamvouris: And finally, like they were getting so much traction that people were just reaching out to him. Hey, I wanna invest, Hey, is there a way that we could talk about, potentially investing and when it came time for him being ready to invest, took him a couple days. Have you seen that before? 

[00:24:20] Shawn Flynn: Oh, my I'm on probably I'd say 25 30 email list.

[00:24:25] Kyle Vamvouris: Oh, really? 

[00:24:25] Shawn Flynn: And that's probably one of the key advices I give to people of starting that newsletter, that email list early on and let people know what you're working on. And normally, my suggestion and there's probably others, but have the format of what we've accomplished so far. 

[00:24:41] Kyle Vamvouris: Okay.

[00:24:42] Shawn Flynn: The ask, we're looking for, intros to these employees or these investors or these partners. And then with that, what your next couple months will look like because of that. And then a thank you at the bottom for anyone that gave intros or that, or helped you from the last month. [00:25:00] And so people look at that, they go, oh, I know someone that fits this, oh, partnership with this company.

[00:25:05] Shawn Flynn: Oh, I, I know someone that works there or that's good. I can make an intro. And then at the very bottom it's. I wasn't, I haven't been thanked yet, man. I gotta make another intro or, Hey, I know that guy that's being thanked. 

[00:25:17] Kyle Vamvouris: Oh, interesting. 

[00:25:18] Shawn Flynn: You list it out and then maybe have that one family picture or something else, attached after a while.

[00:25:24] Shawn Flynn: So now you get that personal connection, like this guy who got kids. Oh man. There's Tammy's water skiing or he is using this oh cool guy or, oh, there's him with this babe, or something like that. Now it's, you're emotional. You see that visual. Yeah. You had that as that you can reach out to your network.

[00:25:37] Shawn Flynn: You had that, thank you. That you wanna be part of or you feel good. And you see these milestones being hit and that traction, and then going back to your point, once those milestones are hit, that fit your investment thesis, or it's getting in that direction. Now there's also, how many people are, is this newsletter going out to I gotta jump on this.

[00:25:55] Shawn Flynn: Okay. Like this is normally my limit, but because I see competition, [00:26:00] maybe I'm here, let's start having this conversation and I've seen that work so well for so many companies over years. 

[00:26:06] Kyle Vamvouris: Yeah, that's so cool. Wow. I'm glad that there, a lot of people are doing the first time he had started.

[00:26:10] Kyle Vamvouris: He'd done this. God, I've known him for a while now. So three years ago about, and I'd never heard of it before and now I've heard a little bit more. I put that in the same vein as building in public. There's a lot of these startups now that are trying to build in public and they're putting their monthly numbers, their revenue, their customer, their churn, everything publicly, which cool.

[00:26:26] Kyle Vamvouris: Very similar idea. I think there, but one of the things that actually Dan and I were talking about this offline is your failures are also on display too, right? If all of a sudden you have huge numbers dip, then you have to you're held accountable to that, but you would be if you had them on your board anyway, so actually I think is a net positive, but 

[00:26:43] Dan McDermott: yeah.

[00:26:43] Dan McDermott: As long as you own it, I think that's the, key's like going back to what I was saying earlier, the reactions to things happening, positive, negative, whatever, if you can react. Boom, good science. So yeah, I think a, that's a great way to, 

[00:26:54] Shawn Flynn: and people reading it, they cuz it's more human.

[00:26:56] Dan McDermott: Yeah. It's a real story 

[00:26:57] Shawn Flynn: thing fails. And then there's that uptick the [00:27:00] next month or that, or, if it fails and they go wait. I can come in and save this by an intro. 

[00:27:05] Kyle Vamvouris: Oh, interesting. 

[00:27:06] Shawn Flynn: So you get that. You're basically having a huge broad conversation with all these people with power or another.

[00:27:13] Shawn Flynn: Having that showing that's vulnerability yeah. Could end up being what, you takes your company the next level. 

[00:27:19] Kyle Vamvouris: Totally. 

[00:27:20] Kyle Vamvouris: Yeah. I think so. Cause like to your point, you're real. I feel and you can confirm if it's true or not. I would feel like if you're an investor, you get a lot of Polished versions of people.

[00:27:30] Dan McDermott: Perfect stories. 

[00:27:31] Kyle Vamvouris: yeah. Perfect stories. It was tough growing up. I was bullied a lot in high school. Like you just get such a polished version of a human, as opposed to Hey, can we just sit on the couch and talk shit a little bit? 

[00:27:39] Shawn Flynn: Yeah. Then I taught myself my ninth language. Get outta here. And that I mentioned, I was volunteering at this place while doing it and I 

[00:27:46] Shawn Flynn: just wanna give back. 

[00:27:47] Dan McDermott: So maybe one point around this too, is maybe connected to the idea of building in public and sharing your numbers and sharing the story of the company and yourself a little bit.

[00:27:53] Dan McDermott: How important is the idea of building a personal brand? 

[00:27:56] Shawn Flynn: It's huge. Companies that have a personal brand meets so much more [00:28:00] than companies that are just the name 

[00:28:01] Kyle Vamvouris: and how do 

[00:28:02] Kyle Vamvouris: they or do you have any experience around evaluating someone's personal brand is real do they think about that?

[00:28:07] Shawn Flynn: That's a good question. I've I've come across people that I've thought their personal brand was amazing. That you look online, total dress, nice pictures with the right people, everything. And then when you dive a little bit deeper in the company, you're like, it's a facade.

[00:28:20] Shawn Flynn: That's what due diligence is for right. Yeah. The person in the back room, crunching numbers at the computer and everything that's their role. So it's, but on the flip side, there's those great companies with that CEO that is the exact opposite.

[00:28:33] Shawn Flynn: It's hidden the shadows. No one knows about. Yeah. And you're like, ah, that's not a great match either, but I guess if you're gonna sell the company and that, it's easier to take that person out. But that company that has that brand, that CEO with the brand, the company with the brand they're growing in unison.

[00:28:48] Shawn Flynn: Yeah. Those are the ones that, when you think of the household names, everyone talks about. Those are the 

[00:28:53] Shawn Flynn: biggest ones. 

[00:28:54] Kyle Vamvouris: Totally. Absolutely. I think personal brand is really important. And I mean for employees too, but also for [00:29:00] founders and there are, I put founders sometimes in two categories, there's the, the more enthusiastic, the more, or maybe not enthusiastic, but the more charismatic leader, who's more out in the forefront.

[00:29:10] Kyle Vamvouris: And those are people who are very operational and they both have their pros and their cons. But I oftentimes, I find that people who are very operational and good drivers of certain business KPIs, if they often will tell me I, I need to figure out how to build a personal brand, but I don't know what to write on LinkedIn or whatever it is 

[00:29:26] Shawn Flynn: they need to get out there.

[00:29:27] Shawn Flynn: Cuz going back to. To your company here. That's CEO. What does that really stand for? They're supposed to be the best salesman 

[00:29:33] Shawn Flynn: in the room. 

[00:29:33] Kyle Vamvouris: That's true. Yeah. Yeah. And they often are. They often are like, when we work with earlier stage founders, their conversions are high. And I always tell 'em, we need to drop your conversion a little bit when we're modeling, because it's not gonna be you anymore.

[00:29:45] Kyle Vamvouris: And it's difficult, especially for a founder who'd been selling for the first two years of the organization has a lot of experience doing it. They might not be natural sales people, but they figured it out. They had to. They go and they look at their sales team and it's not converting at them.

[00:29:58] Kyle Vamvouris: And there's a little bit of [00:30:00] challenges around stepping away from selling because you're not getting as much efficiency as you would if you were to do it yourself, but you have to be 

[00:30:06] Kyle Vamvouris: okay with that. Yeah. 

[00:30:06] Shawn Flynn: That goes back to what we said earlier. Or another podcast panel that said is Uhhuh of that owner, that boss stepping out of the day to day processes.

[00:30:17] Shawn Flynn: You don't want his numbers mixed and you want that sales team number. When the there's that transition, you're able to track everything. You're able to see everything, you see all the steps. And you're like, okay, when this money goes in, this is what I should expect coming 

[00:30:27] Shawn Flynn: out.

[00:30:27] Dan McDermott: Yeah. It's all about, it's all about balance, right? I If you have a really powerful founder with a, a great personal brand, big audience, that's a good sign. That's a healthy sign. And then you can show that person has removed themselves from sales healthily, put in a sales team.

[00:30:40] Dan McDermott: That's performing healthily. Yep. That's a, one of the strongest stories that you could tell for early stage startups, I think. 

[00:30:46] Kyle Vamvouris: Yeah. Cause they've done something right. Exactly. Which is such an important piece of the equation is you have success, getting other people to do things that you used to do.

[00:30:56] Dan McDermott: They've navigated one of 

[00:30:57] Dan McDermott: the tricky parts of early 

[00:30:59] Kyle Vamvouris: it's so tricky development. [00:31:00] It's so tricky cuz at the end of the day, like there's always if you own a business, if you're a founder of a startup, whatever it might be, you're very good at doing these things. There's always this sense of, I could just do it.

[00:31:11] Kyle Vamvouris: Like, why am I relying on other people 

[00:31:13] Kyle Vamvouris: to do what I can 

[00:31:13] Dan McDermott: see that's the thing though, so that great performers are not necessarily great teachers. It's very true. And I think that you don't often know what are, what you're actually doing. Yeah. You overlook the little things that you're like to you is a little thing.

[00:31:24] Dan McDermott: It's a little detail, but then to somebody else, somebody like an SDR coming in and selling for the first time, it might be terrifying or there might be some sort of big Walker. So being able to systematize and then operationalize and and really put into effect properly is one of the nicest things to be able to show you've 

[00:31:39] Dan McDermott: done.

[00:31:40] Kyle Vamvouris: Absolutely. 

[00:31:40] Shawn Flynn: How many times have you've been in a situation where you're just like, okay, put in a flow chart. And the person's I can't, explain it or that flow. Yeah. But if there's that flow chart already there with this, then this and this. Yeah. And that you just hand to someone and they just take off right.

[00:31:55] Shawn Flynn: That's nice. That's super valuable. Totally. That's your that's intellectual property for the company. Yeah that's [00:32:00] huge. 

[00:32:00] Kyle Vamvouris: It's a lot of what we focus on here is how can we take things that are pretty comp complicated or people often do on the back of a napkin and actually put a lot of structure around it.

[00:32:11] Kyle Vamvouris: And it's a hard challenge sometimes because every organization is so different. And one of, one of the things that we run into often is it's really challenging to give general advice when there's no reason for two companies to take the same advice. , there's certain things like hire good people that are, yeah.

[00:32:26] Kyle Vamvouris: Everybody knows these things, but like a classic one is, do you hire an SDR or AE first? It depends. I need to know so much about how your organization runs today, what your visions are for the future. What are your growth plans? How are you currently selling? What market are you selling to? What does your time look like?

[00:32:40] Kyle Vamvouris: Can you allocate to actually selling or do you need somebody to come in and take that responsibility off your plate? Because all of these questions that are really important now you multiply that by infinite because every company's different and all have different questions becomes really challenging to start giving more advice that's 

[00:32:54] Kyle Vamvouris: general, 

[00:32:55] Shawn Flynn: but that's where there's that whole value of the company versus sure.

[00:32:58] Shawn Flynn: Their build verse [00:33:00] buy. And how many times have you talked to someone and they're scared to tell things because they're like if I tell these investors, they'll just build it themselves and copy it and you go no. Like you just can't copy everything. , you've built out this whole system.

[00:33:12] Shawn Flynn: You've built out this culture you've built out and they're gonna look at it and go it's 10 X, better for me to buy this than to build it on my own. And so everything you just said. That's where the value of that company is. And that's why there's so much, that's why they put such high multiples on these revenue, right?

[00:33:27] Shawn Flynn: Because they're thinking and going, this is built out. I don't even know how expensive it would be for me to try to copy this. Like I need to purchase this instead of doing it myself and 

[00:33:37] Kyle Vamvouris: it's hard to 

[00:33:37] Kyle Vamvouris: build stuff, but this 

[00:33:38] Kyle Vamvouris: is the reality. 

[00:33:39] Dan McDermott: This is one thing that I wanna loop back to. One thing we talked about how.

[00:33:43] Dan McDermott: You can watch if a team's actually using the processes that you've put in place. Sure. And the teams that, that I've seen personally buy into the idea of we need to be constantly improving our playbook, for example, we need to be constantly improving. What we have as our core brain documents internally, when you have a team that's invested in doing [00:34:00] that by themselves, show me a way to just, replace it a versus B, you can't do it.

[00:34:05] Dan McDermott: You have to develop that. And that's a special thing that, happens over time. Cultivating people nurturing the culture, and which is one of the, most amazing things to watch happen when it's happening in front of you. But it's also in almost impossible to just create out of thin air.

[00:34:17] Kyle Vamvouris: Totally. 

[00:34:18] Dan McDermott: I wanna talk a little bit about about formatting. Let's get really practical when you are gonna present things to, to VCs. Let's say before you go for a formal pitch, Should you be one paging things. Should you be summarizing your numbers in some sort of format?

[00:34:32] Dan McDermott: Would you do it like on a Google doc? Would you do it on a, what sort of tools, what sort of format, what sort of presentation would you give? 

[00:34:37] Shawn Flynn: It really depends on kinda the stage of your company, if this is very early and maybe your, just have an idea and you really don't have any numbers yet, or if it's more later on and you have that 1, 2, 3 years of financials, , so it's is very situational based of the stage of the company, but just that Excel, printout in most cases is good enough where you have the last couple years, and then [00:35:00] that next 1, 2, 3 years where it's an actual believable situation, these numbers and the stories where it's, Hey, we're gonna need to hire this many sales people and this many account executives to manage this much in sales.

[00:35:14] Shawn Flynn: And you look at it from the past years you go, okay. That makes sense that this. Sales unit gets added at this stage. And then that's, what's gonna of limit the number the revenue is how quickly we can onboard these and just have that story in, in front of you where they can look at it and go, does this, is this believable?

[00:35:31] Shawn Flynn: Does it make sense based on what they've done in the past and having those numbers in just a clear way where, an analyst can come in and change things around and play and it's dynamic. It's okay, if I move this here, what happens here? That's ideal situation. 

[00:35:44] Dan McDermott: Now, do you include future state as well?

[00:35:46] Dan McDermott: Do you include things like your sales targets when you're presenting numbers like 

[00:35:49] Dan McDermott: this? 

[00:35:50] Shawn Flynn: You have your performer, right? So you have your revenue, you have your sales at you're planning on on, get in the next quarter or month by month basis for maybe the next year, and then maybe [00:36:00] quarterly after that.

[00:36:00] Shawn Flynn: It really depends how granular you want to get, how granular they ask. But those sales numbers. that's the revenue, is it not? Yeah, . So when you're seeing that revenue six months from now, you have to have a believable story of working backwards of how you get there. Yeah. And as hard as this is, if you don't actually hit these numbers, save due diligence is 30, 60, 90 days, whatever it is, they're gonna be looking and seeing, okay, they predicted this.

[00:36:26] Shawn Flynn: Are they on track? Are they hitting it or not? Okay. If they're not, can I believe anything moving forward? Sure. Yeah. Or actually they're killing it this whole, everything else they've said they were being pretty conservative and you could come into that, popping the collar and be like, we're killing everything.

[00:36:43] Shawn Flynn: Yeah. And this is a great value for you right now, because at the growth rate we're going really, we should be over here where we're telling you we're here right now. , having those believable numbers and you have to have the story of how you get those and that's, your sales team, that's your, the cost of the goods you sell and that's [00:37:00] everything.

[00:37:00] Shawn Flynn: Yeah. I It's all packaged together on that thing in front of you that excels you here, whatever, and you're looking through it, the line items what's missing, wait we need people that are, service representatives now, or we need customer service. Oh I didn't think about, or we need, this management in position in, because now there's this many people.

[00:37:17] Shawn Flynn: Oh, I didn't think of, they're gonna, they're gonna point holes in this story and it should all 

[00:37:21] Shawn Flynn: be laid out. 

[00:37:22] Kyle Vamvouris: I imagine there are situations that come up where a person's oh, this is what my growth plan looks like. And they don't include increasing customer success at all. And it's Ugh, you have way more customers.

[00:37:35] Shawn Flynn: What's crazy is when you'll see some growth. And it's a million this month and then 5 million and you're like, wait, how did you go there? Oh, we'll just sell more. And you're like, wait, but you need sales people, you need account, you need all these people to manage it. And how long is the sales cycle?

[00:37:52] Shawn Flynn: Oh, six months. You're like, how did a six month sales cycle gets shorten into three months suddenly? And how did you get all this without having the [00:38:00] people there to make the call or the and then, you realize the persons just hasn't either thought it out or doesn't really understand the sales cycle or, we're, gotta prep in advance.

[00:38:12] Shawn Flynn: And normally when you have these questions with someone, they have these aha moments. And then they go, oh, that's why companies that's go, don't go from zero to a billion overnight. Yeah. There actually has to be these steps taken in between to be able to service this product, the solution that's going out there.

[00:38:28] Shawn Flynn: And you can only grow at this rate. Yeah. And that, it does get maybe less efficient or whatever along the path, but just having those conversations early on. And it's, one of the conversation I had not too long ago was just, how long does it take to onboard a salesperson? 

[00:38:44] Kyle Vamvouris: Yeah, that's a good question.

[00:38:46] Shawn Flynn: It wasn't in the, it wasn't in the Excel, apparently every, the first day of every quarter, 10 people are on board, it's okay, so how long does it take them to actually hit their, quota is the ramp from zero to a hundred percent or is [00:39:00] it oh, first ramp ramped up over three months?

[00:39:01] Kyle Vamvouris: Totally. Yeah.

[00:39:02] Shawn Flynn: The person that didn't have an answer is just, okay, this is what I have in the Excel to make it hit this revenue number, which, the investor wants to see. It's you gotta have that 

[00:39:09] Shawn Flynn: story to get to that number. 

[00:39:10] Kyle Vamvouris: Totally. And what's funny about ramp is it's almost always slower than they think it would be.

[00:39:15] Kyle Vamvouris: Unless they have a really mature sales organization. They have people whose responsibility is to help folks onboard. A lot of people think the shortcut is, oh, I'll just hire a salesperson with experience. it's okay, good luck. Because you bring that person over. Here's a great example where a startup will hire a sales person from Oracle.

[00:39:31] Kyle Vamvouris: And they're like, great. I got this salesperson. They're from Oracle. They're from Salesforce. This is gonna be great. They're gonna crush it. And they come and they do horrible. And here's the reality. Oracle Salesforce, all these really large organizations, they spend a ton of money on enablement. How could we help our reps actually hit their number?

[00:39:49] Kyle Vamvouris: How can we help? 'em be successful. They have all these materials. They have a ton of testimonials. Also, nobody got fired for implementing these solutions. So it makes it even more attractive. That is incredibly difficult [00:40:00] for a small startup company to provide. And you take somebody out of that environment.

[00:40:05] Kyle Vamvouris: You say all. Here you go, we're scrappy. They're gonna be like where's gong, and like stuff that they're used to that they're not able to have. Cause they're a small company. 

[00:40:13] Shawn Flynn: Wait, I have to book my 

[00:40:14] Shawn Flynn: own means 

[00:40:14] Shawn Flynn: on my calendar. 

[00:40:15] Kyle Vamvouris: Yeah. Yeah. Where's the in where's the event button in Salesforce.

[00:40:19] Kyle Vamvouris: Yeah. They have no idea. Like they're so used to things being really easy or a lot easier, I should say. It's never, always just easy. Cuz those organizations also push their employees to do really well, but they give them a lot of resources in order to do that. And I think that's something people need to consider and ramp is such a classic example of that.

[00:40:34] Shawn Flynn: Also, most of these companies, they don't have any onboarding. None. When was the last time you talked to a startup and they're like, yeah, this is our onboarding process for new sales reps. 

[00:40:43] Kyle Vamvouris: Yeah, none of 'em. None of 'em yeah, unless they've worked with us, they have a clear onboarding flood process, but they don't like, and to not include ramp, I'm actually shocked to hear that not include ramp in, in your model would be a huge mistake.

[00:40:56] Kyle Vamvouris: And especially if you sell to the mid-market or the enterprise, [00:41:00] you're looking at six months before somebody's productive. And if you are really tight and you have very organized system, you have the people to deliver training and that kind of thing, it could be three months and maybe their fourth month is gonna be on full productivity.

[00:41:12] Kyle Vamvouris: But if you're selling those upper bigger, larger deals, it usually takes a lot longer. 

[00:41:15] Shawn Flynn: It's crazy is talking to companies and this is going back to raising capital and they'll say, Hey, I'm raising this much money for, 12 months, 18 months runway, whatever it is. Yeah. And then you find out the.

[00:41:28] Shawn Flynn: their sales pipeline. They're like, yeah, we're selling to, for example, schools or hotels. And you're like whoa. There. Or I had one sports teams and you're stadiums. Oh really? And it was wait, when do they make their decisions? And it was like a two month window every year. Yep. And it had just passed and I was like, so wait, really, you have to wait till next year.

[00:41:47] Shawn Flynn: So how is this 12 months gonna make that? And then you'd have to, and the person's just draw dropped was like, wait maybe this is gonna work out. 

[00:41:56] Kyle Vamvouris: Oh my gosh. 

[00:41:56] Kyle Vamvouris: You're like, oh man, no, I love Disney. Like, 

[00:41:59] Shawn Flynn: why don't you [00:42:00] just, close the doors for a couple months or whatever. Cause very early idea just, reopen in another company or something like, how can you survive until that next?

[00:42:08] Kyle Vamvouris: Gosh, that's crazy. Yeah. And even like companies that sell to schools, sometimes it blows my mind because we worked with an organization a long time ago that they sold to schools and their average deal size was like 1200 bucks and their sales cycle. Yeah. I know they per school, they was elementary school, middle school.

[00:42:26] Kyle Vamvouris: And their average deal size was around 1200 bucks, maybe 2000 a year, by the way, what were they selling? Like cramps would be more, I know it was a software for like teachers and students and parents, all to communicate to each other, blew my mind. It was like five bucks per student per year. They have these really low deal sizes and their sales cycle was like eight months.

[00:42:47] Kyle Vamvouris: And it blew my mind because you're gonna work. That's an enterprise deal. Like you're gonna work an enterprise deal for eight months. In the weeds meeting with other decision makers, work in the network in the organization. [00:43:00] And the payoff is $1,200. Oh my goodness. I'd rather drive Uber, but it is their it's their business, and they're from overseas, they'd done really well in a different market. So they were like willing to do that investment, and it's a very sticky solution, but it still blew my mind. Oh, 

[00:43:17] Shawn Flynn: that's another thing that makes hilarious. I had one conversation not too long ago and I thought they were in US dollars the entire time.

[00:43:24] Shawn Flynn: Oh It was in Turkish. 

[00:43:26] Kyle Vamvouris: Oh no. 

[00:43:28] Shawn Flynn: 15 to one conversion. 

[00:43:30] Kyle Vamvouris: I didn't realize it was out like different 

[00:43:32] Shawn Flynn: or maybe is it 15 or seven? I don't know. It's it was something where as soon as he said, I was like, 

[00:43:38] Kyle Vamvouris: Divide bodies. 

[00:43:39] Shawn Flynn: I was like, wow. 

[00:43:41] Kyle Vamvouris: Oh my goodness. 

[00:43:42] Shawn Flynn: A couple years ago before the, the changed economy, you guys would've been good.

[00:43:45] Shawn Flynn: Yeah. Currently I want to give you a hug, buddy. Yeah. 

[00:43:48] Kyle Vamvouris: Yeah. It's tough. One of the things too, that I think is interesting and worth talking about is churn numbers at the early stage. It's so interesting to me when people are really confident about [00:44:00] the stickiness of their solution, when they've been around for one year, it's like they have no idea what the true stickiness of their solution is.

[00:44:06] Kyle Vamvouris: And you have to be careful with that if they're doing any kind of churn modeling that's so at least what I tell people is also, if you're not doing annual contracts, oftentimes you'll have churn, but within the first year, and like really your average the average amount of time someone's using your solution is eight months.

[00:44:20] Kyle Vamvouris: And it radically changes your numbers depending on the cost. Yeah. 

[00:44:24] Shawn Flynn: Not only that, the employees, how quickly those churn. Yeah. Yeah. Is that something you guys depend a lot the early days? We'll ask, like how long is these, especially now? Cuz. Yeah, that's a great point. Resignation is coming up in every conversation.

[00:44:38] Kyle Vamvouris: Really?

[00:44:38] Shawn Flynn: How long has these employees been there? How long? A year, two years, three years from before the pandemic or the pandemic hires, they're coming up because once again, going back, you want that confidence that whatever you're, buying's gonna be their post transaction or whatever you invest in is gonna grow.

[00:44:54] Shawn Flynn: There's so much demand for engineers, for sales free for all these people. It's okay, how long have they been there? Six months. [00:45:00] Ooh. I'm not as confident as if I heard, Hey, they've been there four years. Yeah. 

[00:45:04] Kyle Vamvouris: Yeah. And the truth is I was just talking to someone about this. Recently, most people aren't staying at companies for four years anymore, and someone was asking me why, like, why I think sales people specifically, I don't know about other parts of the organization.

[00:45:17] Kyle Vamvouris: Maybe you can add color there, but for salespeople specifically, I think there was a lot of factors involved in why there was so much job hopping. One salary skyrocketed over the pandemic. It was really competitive to hire the right people. Salaries were going up and salespeople were jumping for better salaries.

[00:45:32] Kyle Vamvouris: And they were also going into industries that they didn't have any experience in. They might have had a couple years of sales experience or cause they're not staying at places that long. And they really had no business being in that role and making what they made. Like they're not valued at what they got paid to, to be valued at.

[00:45:46] Kyle Vamvouris: And then what happens is they underperform, then they lose their job, which is not a good, not a good look. So you have this salary skyrocketing, there's also this level of, Hey can I just get a better situation somewhere else? So maybe you are in a [00:46:00] hybrid environment before, and you'd rather be in fully remote environment or whatever it might be.

[00:46:04] Kyle Vamvouris: But I always tell folks early in their careers that they should go to a company. And maybe we can talk a little bit about remote versus in, on site. But I tell people who are early in their careers, they should go to a company where there's, it's in person, where they get to interact with other people actually build their network.

[00:46:19] Kyle Vamvouris: It's hard to build a strong network over zoom, especially if you are inexperienced, you don't know people 

[00:46:25] Shawn Flynn: well now. 

[00:46:25] Shawn Flynn: Who's your mentor on zoom, 

[00:46:27] Kyle Vamvouris: right? Yeah. It's true. 

[00:46:28] Shawn Flynn: When you're in the office, you're bugging that one guy down 

[00:46:31] Kyle Vamvouris: Yeah. All the time. All the time, because it's so easy. You catch 'em in, when you're walking the hallway, if you're in the kitchen together, if so many times to interact, you don't get that over zoom, which is a big problem.

[00:46:40] Kyle Vamvouris: And people live a little bit more in isolation. If you're early in your career, that could be the death of your career from the get go. 

[00:46:46] Shawn Flynn: I really think we're gonna have in the next five, 10 years, a lot of repercussions on so many levels. Yeah. From school, early children, that development.

[00:46:54] Shawn Flynn: Yeah. Interaction, high school things missing your work. Those first there's gonna be [00:47:00] so much repercussion that we have no idea about. Yeah. And yeah, who's your mentor? Who's that champion up the ladder. Yeah. At the company. Yeah. That's gonna get you 

[00:47:08] Shawn Flynn: promoted. 

[00:47:09] Kyle Vamvouris: Who sees you every day? Knows that you work really hard.

[00:47:12] Kyle Vamvouris: The optics are so important and people always talk negatively about optics. Like it shouldn't be part of an organization. Like it should be on merit and Everybody's trying to do a good job. Who is in proximity. Proximity is power. And if I'm in the office with somebody and they're seeing me work and I get to joke around with them, we have a good working relationship.

[00:47:28] Kyle Vamvouris: How is it possible? The remote person's getting promoted over me, unless it's radically different our performances. There's no way they're going to promote the person that works with them, that they have a better relationship with. And you'd be so silly to not believe that's the case. 

[00:47:42] Dan McDermott: Yeah, I 

[00:47:42] Dan McDermott: think there's definitely something to be said for large organizations.

[00:47:46] Dan McDermott: Being able to operate almost siloed, independent arms. And being able, like if I worked as a I don't know, as a copywriter for some big agency somewhere. Yeah. I could see a perfectly good reason to, to argue that I should have a remote experience and I wanna be away [00:48:00] from everybody.

[00:48:00] Dan McDermott: And I just of want to, tipity tap it on my own fine. But it is so different with true startups. And when you're the first couple people on your team as a company it is, it's a completely different environment. That's actually one of the reasons I moved out here, actually, I was in Colorado before, before coming here.

[00:48:15] Dan McDermott: And I think that being in not just with Kyle and Leo and in the office here, but also when we have a couple SDRs now and just having. People that are gonna be with us and interacting and it's like you said, Kyle, like the little off work times, like seeing the work actually having SDR, listen to Kyle sell, for example that's a big value point, but then also just even the dumb stuff the little, the jokey stuff.

[00:48:35] Dan McDermott: Yeah. The little, I found a little gift that I'm, that I sent him, little stupid things like that to build the relationships, to build the buyin, to build the commitment, to build the making it fun, to come to work even. 

[00:48:43] Kyle Vamvouris: Yeah. And they'll 

[00:48:44] Kyle Vamvouris: stay longer. Exactly. They have more commitment to the people that they're working with.

[00:48:47] Dan McDermott: Exactly. 

[00:48:47] Kyle Vamvouris: It's easy. If you never really met somebody in person, I've never left a zoom meeting going, wow. Magic just happened. But I've had in person experiences where I'm like, oh my gosh, that was so creative and fluid and exciting. Never has happened [00:49:00] on zoom. Yeah. I would argue ever.

[00:49:01] Kyle Vamvouris: Yeah, but definitely in my experience, but I can tell you when we bring the whole team out here, we have so much fun. We get to laugh together. We hang out, we do stupid stuff. Like it's just so much more exciting and just, it's a different, 

[00:49:13] Dan McDermott: it goes back to the culture building we were talking about. It's also like the little things that, you know, so yes, there's the fun stuff, but then also, I think we're a little bit goofy on certain elements of being really hardcore about, for example, following through with with your data.

[00:49:24] Dan McDermott: Yeah. Are you gonna be numbers oriented? Yes or no. Are you gonna do this kind of work? Yes or no. And showing it in, in, in proof, in front of you, it's hard to not, then I dunno if you played sports at all, like growing up, but for me I was a team sports guy and it's very difficult to be the outlier when everybody else is working hard.

[00:49:39] Dan McDermott: It's very hard for you to just be like so true. Yeah. I'm not gonna do anything today, so true. Oh 

[00:49:42] Shawn Flynn: yeah. But when you're at home on zoom, you're thinking like I'm working hard than 

[00:49:45] Shawn Flynn: everyone else. 

[00:49:46] Kyle Vamvouris: Yeah. Yeah. That's very hard. 

[00:49:47] Dan McDermott: You don't have reference points. 

[00:49:48] Kyle Vamvouris: Very good point. Yeah. You're not seeing the person who comes in the office before everybody or leaving after everybody.

[00:49:54] Kyle Vamvouris: And you could argue whether that's a good or a bad thing to do whatever, but at the end of the day, I think [00:50:00] having visibility into the efforts that you're putting in beyond the outcomes that you've achieved is really important and is missed when you go remote. And one of our clients they're fully remote.

[00:50:10] Kyle Vamvouris: They've been remote since before the pandemic. And he was telling me recently, he went on this big tour, around the us to go meet up with all of the different employees and stuff. And he came back and him and I were having dinner and he says, we've always been a remote first company, but we're not a remote only company.

[00:50:25] Kyle Vamvouris: And he does a, he spends a lot more time getting people together in little groups, different departments together to make sure they have that in person collaboration. Cause it has a really big impact. 

[00:50:34] Kyle Vamvouris: It goes 

[00:50:35] Dan McDermott: back to the idea of balance. Yeah. I really think that's the case. Like you've gotta have balance in your, the actual operations of the company and whatnot, but also in, in the relationship.

[00:50:42] Dan McDermott: So yes, if somebody needs freedom, for sure, to do your thing, but then, you need to be able to give them that's true support in my mind. That's true. Freedom and also the feedback that people need to truly develop. 

[00:50:52] Shawn Flynn: I think 

[00:50:52] Shawn Flynn: there's also some of the components of the business that are more able to be outsourced or yes, or [00:51:00] need to be in that team environment.

[00:51:02] Kyle Vamvouris: That's good point. 

[00:51:02] Shawn Flynn: Like sales guys. More than me, but they're pretty competitive by nature. Yeah. Yeah. Like they need to see someone else a little bit ahead of them. Yep. To then push themselves further versus that, possible accountant. That's guys, 

[00:51:13] Shawn Flynn: just let me do my number. Yeah.

[00:51:14] Kyle Vamvouris: No. So true. Yeah. There's certain roles that are better oriented for remote work. That's absolutely true. I can tell you sales people, I wanna hire out of this office. And that's where we are for anybody who doesn't know. I wanna hire the sales people here so our SCR comes in twice a week, which I'm totally fine with.

[00:51:30] Kyle Vamvouris: I maybe I'd prefer three times a week, but I love having them here. Next SDR we hire, we're hoping that they're gonna be able to work out of this office too. There's something special about having people in the office. That dynamic is super fun. And Dan being here is fun. We have Leo too. There's just a fun environment you miss out on that.

[00:51:45] Kyle Vamvouris: If you're not here, which is sad makes 

[00:51:48] Kyle Vamvouris: me cry. 

[00:51:48] Dan McDermott: Sean how does sales relate to valuation inflection points in a company? 

[00:51:51] Shawn Flynn: Good 

[00:51:52] Shawn Flynn: question. That's actually a really great question. So when you're looking at the valuation of companies, whether you're raising money or that. So say you're looking to [00:52:00] raise money for the next 12 months.

[00:52:01] Shawn Flynn: They're gonna want to, know what that money's gonna go towards. Is it gonna go towards ping pong table, some beanbag chair? Sure. or is it gonna go to grow in the company? Yeah. And that grow in the company. Is it, is it to get new patents, new IP? Is it to do new partnerships? Is it to get a sales team or increase the sales team?

[00:52:18] Shawn Flynn: Get, some those revenue numbers, like what is it going towards so when you're raising that money, when you're creating that pro performer for the next year, when you're planning things out, whatever it is, it's okay. If I get this many more sales people, I get this much more sales.

[00:52:32] Shawn Flynn: If I get, if we develop this product now I have this new product to go out to market to, Hey, if I get this new partnership, what is that new partner? Allow the company to do or increase the company somehow or whatever it is. So it's putting those in that timeline of, okay, to get this, we'll take this much time to get this.

[00:52:49] Shawn Flynn: We'll take this much time and this many man hours or whatever it is, and penciling it all out and having those key things in there as key inflection points for that value, cuz you need [00:53:00] to increase it from today's valuation to tomorrow's valuation to make sure that companies grow and make sure investors are happy, get that return that they want, make sure that it's gone up enough.

[00:53:09] Shawn Flynn: So that future investors are really happy and they can see the growth going forward and all that. So really penciling it out, going okay, back to the processes, we run this process, we should increase it by this much. And then we should run it again, increase it by this much and just seeing it.

[00:53:24] Shawn Flynn: So you know how I'm doing kind of that yeah. With the hands there, cause that's really more or less how it looks and just having that down on paper and having conversations of. is this right? What we're going towards, or am I completely off track? And we really focus in on the wrong metrics, the wrong things.

[00:53:40] Shawn Flynn: And if those investors, those people down the line say no, this is what we wanna see. This is what we, you want to focus on. And you're working backwards and now it's on paper and you see how to get there and small enough steps that, you can get it. Yeah. Now your goal. 

[00:53:52] Kyle Vamvouris: Oh yeah, totally. Cause it gives you so much clarity.

[00:53:54] Kyle Vamvouris: And I think that's a really good spot for us to end here at the end of the day. Like the data's super important, making sure you know what your [00:54:00] numbers are, but you also, you're telling that story to the investors. If, whether you're trying to sell your company, whether you're trying to raise more capital, all those things are necessary in order to achieve your ultimate goal, which is to raise more money so you can grow your company quicker.

[00:54:11] Kyle Vamvouris: So thanks for joining us. This was a lot of fun and maybe shout out where people can find you. They should know the podcast, but why don't you give 'em the 

[00:54:17] Kyle Vamvouris: rundown. 

[00:54:18] Shawn Flynn: Fantastic. Kyle, thank you again for allowing me on your podcast. Dan, this has been a great, I've really enjoyed it and please invite me back in the future if possible.

[00:54:25] Shawn Flynn: But if anyone wants to contact me the podcast that I host is called the Silicon valley podcast. So just go to the Silicon valley or connect with me on LinkedIn, Sean Flynn, S E E AN F L Y N N. So Sean Flynn investment banker. And if you have any questions about mergers acquisitions, growth capital, please contact me.

[00:54:45] Shawn Flynn: That's what I do all day. So if you're a company that's looking do that transaction between 10 and 300 million. That's our sweet spot. So come in, contact me. 

[00:54:54] Kyle Vamvouris: Awesome. Thanks.[00:55:00] 

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