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Authentic Deal-Making Authentic Negotiating Deal-Driven Growth Podcast Guest

Market Upheaval & Continued Growth

Steven Mail was the founder of the largest single manager global macro hedge fund in Europe. His investments center around companies that deliver insights to hidden areas of the enterprise. He is an ambassador for business to Scotland and an advisor to the Endeavor organization. Throughout his career, Steven has experienced market upheaval and panic. He says those things have shaped him for the better as both a businessman and investor.

Steven is also the founder and managing partner of Mail Venture Partners. He got his start as a bond trader and hedge fund manager in London. After “retirement” at age 39, he moved to Florida, where he has continued to engage in investment and giving back. You can listen to our interview HERE.

Getting His Start

Steven runs Florida’s largest youth soccer club, but growing up, he was an aspiring boxer. Both of his parents were involved in athletics, and he had an early passion for them as well. Now, he’s thankful that didn’t work out!

At age 12, he started playing poker (he was quickly playing with kids 5+ years older than him!). At age 15 he started his first job, and at age 17 he started his first business. By 21, he was involved in business. Coming of age in the UK during the “big bang” era had a strong influence on Steven’s career path, as many doors in financial industries were open and there was a strong recruitment drive.

Unfortunately, the week that he started his bond trader trainer also happened to be the 1987 “Black Monday” crash. It was an unusual, emotional experience that shaped Steven’s entire career. He finds that he has always been able to survive and even thrive during the most difficult times in the market, which he connects to the humility and detachment he was able to learn from the volatile markets he experienced early in his career.

Steven also notes that the ability to reverse his positions has been a clear strength. He’s never held too tightly to a stance, and has been able to pivot and change as needed on a moment-by-moment basis. (This makes total sense! Detachment is part of the negotiating framework I provide in my book, Authentic Negotiating.)

Regardless of the difficult market, he started trading in 1987 as a bond trader and market maker. He thought it was a bit like boxing; you put out an offer (throw a punch) and they throw one back and it goes on like that. He loved the years he spent in that arena, and eventually shifted into proprietary trading. This coincided with the launch of the Euro and it’s trade being shifted from headquartering out of Paris and into London. Steven was named head trader, and had a fantastic first year as such.

Growth Through Upheaval

At the end of his first year as head trader, France wanted the Euro trade headquarters to return to Paris. After negotiations ensued it became clear operations were going to be moving. Steven felt uncomfortable about the language change, and eventually it was agreed  that if he made the move, everyone would speak to him in English if he would be willing to come, which got him to agree. Ultimately, he was able to make many connections in Paris, and greatly enjoyed his time there. 

After some time in Paris, Steven returned to London and continued to grow his career. He worked through another crisis in which the market dried up, and things got hard. The markets literally closed, and there was general panic.

Shortly after, Steven became aware of a Japanese pension fund that was desperate to sell half a billion of bonds. Despite the market havoc, Steven decided that everything has a price, and that there was an opportunity there. After evaluating the market, he made an offer they accepted — an offer that covered the losses from all the rest of the positions he’d held during the market upheaval.

His ability to continue engaging in the market and think strategically has enabled him to continue to experience success, regardless of whether the markets are up or down.

Investing in Mentorship & Advising

Steven shares he’s never been in the game to make the most money. Instead, he’s always wanted to have an interesting experience. He enjoys meeting people, traveling, and enjoying new things. As a result, it’s no surprise that his career has changed over the years.

He found hedge fund management to be much slower than bond trading, and when he moved into private company investments he found it to be yet another slow down. Now, he does fewer trades, and they take longer.

Whether you find yourself in trading or investing, Steven notes self-confidence is key. If you don’t believe in yourself, who else will? Beyond that, he also looks for humility and character. In the same way you want your friend group to be made up of great people, the people you invest in ought to be the same.

His investor role often comes with a great deal more advising than his time in trading did. Steven leverages his network for connections, advice, and insight — he enjoys mutually beneficial relationships that highlight giving back and growing. Mentorship has also been something he engages with, from his formal role with Endeavor to his work with the youth soccer league in Florida.

Making Investment Decisions

Steven enjoys finding ways to help companies by opening doors and making connections. One way to do this is to help companies piggyback off of each other in order to scale their growth to the next level. 

He pictures investing as a pyramid, and finds early-stage companies to be the most fun to get involved with. He also notes it’s key to look at and choose individuals when investing in early-stage businesses. After all, the business itself is going to pivot as things progress. Rather than getting too attached to the hoped for final outcome, he finds it helpful to choose founders who have the traits needed to really push through the difficulties and change as needed. To that end, Steven looks for problem solvers who have resilience. Evolution, growth, change, and problems are all part of starting a business, and a founder who can’t endure them won’t be able to build a business that can last.

His Most Important Interview Question

Thinking back 30 years or so ago, Steven notes that the best interview question he ever asked applicants was:

What’s the worst thing that ever happened to you, and how did you handle it?

It may be a popular question now (or at least some form of it), but when he first started using it it was quite uncommon. He was specifically looking for people who had lost money and been able to make it back. Ultimately, he was hoping to find the quality of the “bounce back” in new applicants. No matter how good the markets looked at the time of the interview, Steven knew how quickly things could change. He wanted to hire candidates who would have resilience and grit when things got hard, because it was inevitable that they would.

For longevity and sustainability, you must be able to endure the hard periods and be willing to push through. I remembered a seminar I was at years ago when a speaker who had undergone a great financial failure was asked what his mistake had been. His answer? “I mistook a bull market for brilliance!”

Doing well when everything is going well isn’t that hard. Showing up, putting in the work, and refusing to quit when everything is falling apart – that’s what sets successful people apart again and again.

Growth Mindset

At the end of the day, embracing challenges, showing you can grow through hardship, and making smart decisions are key indicators that Steven looks for when he considers investing. He sums this all up as having a growth mindset, and thinks it is a powerful key to success.

To learn more about how he makes his investment decisions, what values have driven him, and how his journey has continued to unfold, listen in to the whole episode!

 

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Authentic Deal-Making Authentic Leadership Authentic Negotiating Deal-Driven Growth Podcast Guest

DealQuest BEST OF: Financing

This week’s guests feature some of DealQuest’s Best OF Financing experts! They share about everything from finding little known funding sources to minimizing taxes, gaining freedom, and funding your next start-up. Listen in here to get a sample from each of them. In addition, you. can click their name to listen to their full featured episode!

BEST OF Financing: [black background with yellow, orange, and green dollar signs scattered about and reflecting on black surface]

Finding Little Known Funding Sources with Kedma Ough

Kedma Ough of Target Funding is a “small business superhero,” who has worked with over ten thousand entrepreneurs and small business leaders in the last two decades, helping them to attain capital and resources to grow their businesses. Kedma is also the author of Target Funding: A Proven System to Get the Money and Resources You Need to Start or Grow Your Business. She is a fifth-generation entrepreneur and small business funding expert who believes in breaking down barriers and leveling the playing field for small businesses and fellow entrepreneurs.

If you bring to mind the image of a pizza, most people see a single funding source as being the whole pie. However, Kedma notes that you need to look at funding sources as being single pieces, all of which make up the whole thing. You can access so many sources, opportunities, avenues and approaches to filling out your “whole pie” — you don’t need to make one source your make or break solution. Many different funding sources create the foundation for successful funding. 

Kedma’s best advice: Target what funding you need, and use variables unique to yourself to make it happen.

LISTEN HERE for all her tips!

Raising Capital and Avoiding Taxes with Joel Block

A money business insider, Joel Block is a long-time venture capitalist and hedge fund manager (gobbledygook for professional investors) who lives in a Shark Tank world like on TV. Since selling his publishing company to a Fortune 500, Joel keynotes conferences worldwide, delivering business strategies and the inside track for money and success to business executives and their teams.

Now, Joel lives in the world of funding and money! He’s amazing at raising capital, and has great insight on how to make it happen. He advises business owners to consider looking for strategic money. Big companies are looking for alignment with startups and new businesses. Often, they are actively seeking innovation, they want access to fresh new ideas, and they’re often much easier to work with than VC firms. You may get better terms, amazing partnerships, and lifelong advantages if you develop these relationships throughout your business’ life.

Raising capital is an art form. It’s an evolving practice that you continually adapt, and you have to look at it that way. Striking a balance between being investor friendly and promoter friendly is a huge key. If terms are onerous to either side of the deal-making table, things aren’t going to work out well!

Joel’s best advice: Big companies operate, small companies innovate. That’s why partnerships between the two can be so powerful! 

LISTEN HERE for all his tips, including taking advantage of tax breaks!

Entrepreneurial Freedom and Community Building with Niles Heron

Niles Heron has been a part of a number of startups — a few exits, a few exciting failures — and has invested heavily in trying to make paths like the one he took more accessible to the under-represented spaces he came from. He also taught and mentored at incubators and accelerators (TechStars, Gener8tor, Detroit’s TechTown), spoken across the country at events about the value of entrepreneurship and startups to founders and the communities they live in, and is a respected voice in the Detroit Startup ecosystem. In addition, he was honored by Crain’s Detroit Business as a 20 in their 20s award winner in 2015.

Niles notes that helping people make their product actually work is essential. He’s found that entrepreneurs are often raising money to solve the wrong problems within their business. After all, it’s easier to say that marketing, organization, or something else is the problem. However, too often there is a reluctance to reexamine your product and the way it is tailored to your client or customer. He notes that even a Tom Ford suit will look bad if it’s not tailored to fit the wearer. Your product is no different.

You have to be able to get honest with yourself about exactly what it is you need. Capital can certainly help you grow your business, but only when it serves the actual needs within your business. Raising money for the sake of “having” it, or to solve any problem other than the real problem, are never going to lead to entrepreneurial freedom and ultimate success.

Some of Niles best advice: Money isn’t the total solution, and it’s not the only problem. It’s never “just” money.

LISTEN HERE for more of his advice!

Launching & Funding Start Ups with Peter Dolch

Peter Dolch is the President and Co-Founder of Thaumaturgix, Inc. (Tgix) which was twice ranked in the Inc. 500 Fastest Growing Private Companies list. Peter also acts as the Managing Partner at Tgix; the CTO of Biospectal SA (a Swiss-based MedTech Startup); the Managing Partner at AEON Foundry, a NYC-based fund investing in and mentoring early-stage startups; is on the Advisory Board of American Diamond Mint, a new way to buy, sell and trade diamond assets; and is a Science Advisory Board member of DietPower.

There is an advantage of being part of a bigger investor group. Larger groups have the ability to pull money and act as a deal lead, which is powerful. An individual or small fund often has to take whatever terms the lead investor negotiated, rather than set your own terms. However, being part of something larger allows you to be at the table, creating the most desirable possible terms. This lets you be part of even better deals!

Over the last 20 years, the industry has dramatically shifted, for both better and worse. Preferred equity, cap notes, and SAFE options are all options now, but they aren’t created equal. Peter counsels entrepreneurs that what investors tend to really want is preferred equity. If you can create that, you’re much more likely to bring in partners who are invested in your success in a deeper way.

Peter’s best advice: When it comes to bringing on investors and gaining funding, alignment is essential.

LISTEN HERE for more of his advice!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast..

If you want to find out how deal-ready you are, take the Deal-Ready Assessment today!

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Authentic Deal-Making Deal-Driven Growth

Seed Stage Venture Capital Funds

Today’s guest, Nick Adams, has a background in tech companies and deal-making. Now he’s a Managing Partner and co-founder at Differential Ventures, a seed stage venture capital fund. His group invests early in the process, which gives him a bird’s eye view of mistakes and innovations in the field. In addition, Nick’s been part of growth and deals connected to scaling from two million to ten, or ten million to twenty-five. He’s seen how deals and decision making can make or break a business.

Getting Into Venture Capital

Nick shares that, as a kid, he wanted to be a major league baseball shortstop. Although he did play ball throughout college, his career ended there. At age 22 he played his last official game, and moved on with his future.

One of Nick’s earliest memorable deals involved early software sales. He remembers closing the deal with the A&P supermarket chain and being elated. Now he’s in the venture capital field. His focus is in investing in companies in their earliest stages. This is usually a step beyond “idea stages”, but pre-revenue.

Often when companies raise money, early rounds include family and friends. This is also where angel investors might get involved. After this you’ll find seed stage investors, followed by series B, C, D and so on until fundraising is done or the company is placed on the market for public buy ins.

Differential Ventures often comes in with investments between $250,000 and 1.2 million as part of a seed room. In exchange they usually receive a board seat, and work with founders to build out the company. This involves everything from product development to finding those first few customers. Nick finds that each company’s needs vary greatly. Often, his team tends to pick up more technically based founders, so one thing they look for is whether there is going to be an ability for the founder or founding team to build a product all the way out to being saleable.

To learn which is more essential: team, technology, or market, listen to the full episode!

Do Venture Capitalists Eliminate Founders?

Nick notes that his sort of venture capital work isn’t for everyone. First and foremost, founders need to have an awareness of whether their company warrants outside investment at a higher level, as well as what that sort of increase in funds will mean for their organizations. Out of curiosity, I asked him to share more about what happens when VC money comes in, and founders get pushed out.

In my experience, founders and CEOs who leave their companies after investments are granted are usually looked on favorably. The public seems ready to take their side, and venture capitalists can end up looking like the “bad guys”. Although Nick acknowledges that things do go wildly sideways sometimes, that tends to be the exception, not the rule.

He does share that sometimes founders get pushed out, but this can happen for a variety of reasons. Timing, personality, growth needs, or even a founder no longer wanting to be part of the deal. Sometimes technical founders loved creating and building, but have little desire to take on a CEO role. In that case, they may initiate their own transition. However, it’s rare for a VC to come into a business and actually force a founder or CEO out of their role.

In his opinion, Nick finds that most VC’s are pretty good actors. Their funding and outcomes are very much attached to a start-ups success and needs. There are long holding periods, things move slow, and there is a strenuous process involved in really making a profit. In fact, he finds that angel investors can sometimes put more pressure on a young business simply because they don’t understand the nature of the slow game that investing can be.

Is Venture Capital Funding For You?

The percentage of companies that are really right for VC funding is small. For one thing, they need to be ready for massive growth, and to take the market by storm. For another, they should actually need the money as an avenue for growth.

Nick shares that he recently had a potential client who shared that he wouldn’t be bothered with an early exit from the fund if taken on. The rejoinder: Nick knew immediately his company wasn’t interested. In order for VC funding to make sense, there needs to be a large return that can pay off investors and create profit. Although the potential client was shocked to be turned down so quickly, Nicks’ been in VC funding long enough to know that short term thinking doesn’t work well.

He also knows that this kind of long term, high dollar deal isn’t for everybody. Neither is venture capital funding! Unlike angel investors (who are using their own money), a fund mathematically requires a high return to pay back each party involved.

The Ideal Founder

If you’re considering approaching a venture capital fund, Nick suggests that the best founding teams combine leaders who have:

+ Strong technical differential and skills (academic background, work history, etc)
+ Entrepreneurial by nature
+ Experience working with both engineers/creators and customers
+ Product management ability

In addition, Nick shares that their best founders who seem to be most successful are usually in it for some reason larger than just “being” a founder. They often have some deep sense of obligation to a family member, friend, community, or other group that they want to prove themselves to. When someone has believed in you and invested in you, you’re highly motivated to make good in their name.

Having a deeper drive and purpose is a key part of pushing through hardship and delivering the best possible outcome. This is true for any entrepreneurial group, but especially so for founders who want to bring on venture capital funds!

There is a risk calculation here: how far are you willing to go to bring your idea to life? Depending on your savings, your family’s needs, and your ability to handle risk, your answer might be quite different from someone else’s. There are no wrong answers, but it’s vital that you’re honest with yourself about what those answers are for you.

Nick encourages founders to establish the amount of risk they’re willing and able to take on for themselves prior to seeking funding.

Venture Capital Funding and Covid-19

Nick shares that he believes there has been too much capital in too many startups across the market. Leading up to February, the market was fairly overheated, and it contained a number of startups and investors who probably didn’t belong in the market for the long haul.

When Covid-19 broke out and businesses started to close, a great deal of capital either froze or dried up. After a slow March and April and a brutal adjustment period, Nick has seen changes taking place. They completed their first completely remote deal in which they hadn’t known the founder in any capacity beforehand at the end of June.

They negotiated the terms sheet at 6pm, and the founder’s 6-year old was present for the end of the call, staring into the Zoom screen and watching the proceedings. The market is still moving along, and Nick is optimistic about the direction it’s taking.

You can connect with Nick by emailing him at [email protected]. He encourages you to be able to succinctly communicate:

What are you doing?
Why is it important?
Why are you uniquely qualified?
What proof points do you have?

Listen to the full episode here!

Corey Kupfer is an expert strategist, negotiator and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author and professional speaker who is passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.

If you want to find out how deal-ready you are, take the Deal- Ready Assessment today!