It was exactly one week ago that I went live. The first week was a bit of a dip of the toes in the water to see how warm these waters actually were. I had contacted 20 of my closest contacts that could give me a transparent view of my pitch deck and private placement memo and give me feedback. I had also asked if they, or anyone they knew, might be interested in investing. I then reached out to a select few in my professional network. I emailed, called, and spoke to 10 people. This was the proactive approach. However, when I updated my LinkedIn profile with the launch of Kay Capital… Wow! I had texts, calls, and emails from my old colleagues, business service partners, and even a few old bosses. I then went on SearchFunder.com and joined. Another mind blowing experience. The SF world is something that I had never known existed, but is deep and extensive. After a ton of phone calls, invites to private equity conferences (zoom and a new platform, "Hopin", which I highly recommend), I have taken the past day (Saturday) to reflect on the contacts. I am now wondering, is this traction real?
I'm writing this as a bit of a, "how to", but also for my own documentation purposes. I'm hoping that anyone reading this can use it as a guide. But, I also want to express the various emotional states of mind that come with starting a search fund. It is similar to starting a business, as you have no idea what will happen. All you can do is prepare and continue on the journey, regardless of the emotional state. You'll have bad days and you'll have good days. Some days, you'll be a deer in the headlights. Other days, you will have laser like focus. Regardless, you must make steps forward. I use mountain analogies a lot because, well... I'm a mountain climber.
There are often times where climbing the mountain is excruciatingly difficult. However, you must continue. Every step, regardless of how hard or easy, must be moving in the right direction. The question that is sometimes a bit difficult, "How do you know the step is in the right direction"? That is where your planning comes into play. A misconception is that a mountain climber just climbs a mountain. No, the reality is that a climber has a very detailed plan. Sometimes they deviate from the plan, but that is only possible by knowing the terrain, the weather, and all of the external factors that might pose a risk to that plan. A business venture is no different. Especially in these uncertain times.
The traction may or may not be real. At this point, it makes no difference. I am simply sitting at my dining room table and reading over the topography, charting the weather, and ensuring I have the proper gear for the mountain. I've only begun talking to those that have climbed this mountain before. To those that are willing to finance the endeavor or to those that I am trusting with my plan, it could all be for naught as other factors, like the weather or the terrain, may call for something different. What is real is the excitement with everyone I talk to. Of course, I'm setting out to, "climb a mountain". Who isn't excited about it? But, there are always people that'll be jealous, people that'll try and bring you down, some who will say you aren't worth it or experienced enough, and even some that'll sabotage you. However, those that are genuinely excited will help you plan and maybe even want to join you on your adventure. This search fund adventure is no different.
My discussions this week ranged identical to what I had just described. I had a previous colleague tell me that I wasn't experienced enough to run a company and that I don't even know how to, "kiss managements ass, so how can you kiss investors asses"? On the flip side, I had a previous manager of mine say, "This is you. I've always seen your abilities and they've far surpassed your peers. However, it isn't the right set of tools for an employee. I always needed you to be the piston that drove the engine. But, you were the fuel that drove everything. Your energy was too great for a simple employee job". Overall, the feedback was very positive. But, it was the challenging questions that made me better.
"Why would anyone bet on you? You haven't run a company before, you don't have any executive experience. You should start out with a $500,000 company and grow it to $5mm. Then, you can go to investors with proof that you know what it takes". This was, perhaps, my best advice. I couldn't fight with him on the fact I don't have the executive experience nor have I run a company 100%. However, to take a small company of $500m and grow it 10x, as I described, is much more difficult than taking a $20mm company and growing it to $200mm. It is merely based on economies of scale and cash flow. In a $500m company, I explained, every decision could potentially bankrupt the company. You would have to take a detailed look at each decision and essentially gamble. However, with the $20mm company, it is possible to make a few mistakes and absorb them with cash flow. Moreover, the $20mm company will have an advantage at the negotiation table with vendors over a $500m company. One is a price taker, one is a price maker. Though both are equally difficult in their own right, one has less consequences of the risks involved.
There were many tough questions, but the opportunities far outweighed them. These opportunities had a range of small to large successes. Some of which, I won't disclose at this time. However, I will mention this: When you put yourself out there for all to see, you will get what you are looking for. It is a bit of the, "Law of Attraction". As much as these types of theories exist, I truly believe that this is a very real phenomena. If you are new to it, essentially you put out a specific thought and intention into, "The Universe", and you will receive exactly what you want. To be clear, this is very dangerous. Most people focus on the negative - Via media, pessimistic views, or whatever else you might have. Unfortunately, this is exactly what is brought upon them. I could talk for ages about this, "Law", but the reality is this: If you take the time to focus your intention on EXACTLY what you want, it will come. And that is what has happened this previous week. However, it isn't by some divine gift. It is merely letting your network know what you are doing (and, I've only dipped my toes in the water this week). Someone knows someone who knows that person who is looking to sell, invest, or even mentor. People, by nature, are altruistic and want to help. It gives them a sense of self when they help you. The experiences of this past week truly prove this fact. Again, I'm not getting into too much detail in this realm, but it has been highly encouraging to have the discussions, introductions, and interactions of everyone - Even the negative.
As I said above, I don't know if this traction is real, nor do I care. Even a car that has the best of traction while rounding a corner could lose it all simply by releasing the accelerator. There must be energy and intention put into everything you do. This is no different. However, like a snowball, it is potential energy when brought up a large hill. If it is big enough and pushed with the right intention, not only can it get bigger - It can cause an avalanche of greatness if the snowball is rolled with good intentions.
However, a snowball can be like bosses AND investors. If you try and roll your snowball full of shit - it will be clear as day that your white snowball is covered in shit. You need to have honesty, integrity, and transparency as clear as those snow crystals that form the white snowball. Any kind of ass kissing will be spotted and will immediately tarnish your snowball that you're trying to make.
This next week is very exciting. I have multiple calls set up from the initial outreach. I still have approximately 180 people to reach out to in my network for initial fundraising. I have an investor call this week that could change my entire focus, but is something that would be much larger than my original intention. Regardless, I’m up for these challenges and excitement. I was reading on SearchFunder.com that this road is not an easy one and is filled with humility and difficulty. It has only been one week, and I will agree. However, it is this difficulty that is the fun part. It is how you view your world. I don’t want to make it sound as if they are wrong or not viewing it correctly, I don’t mean any disrespect. But, as you climb up a mountain, there is nothing easy about it. Even when you reach the summit, the hardest part comes – Going down! You are only half way once you reach the summit. In my example, it would be acquiring a company. But, like mountain climbing, the majority of failures happen on the descent, not the ascent. So, the difficulty, I am embracing as I take one foot in front of the other. Each step is a success. As you climb higher, the oxygen gets less and each step might take a few seconds to rest and continue. That is okay. It is the forward movement that keeps the momentum going. That is why it is better to be fuel than a piston. A piston can stop and simply be there, but fuel can be used in various applications and still create energy. Be that fuel – Be that transparent snow crystal that can create an avalanche of greatness – Constantly create. For, it is that creation that allows you to live your dreams.
Please, "like", and join our list by becoming a MeetKay member. Simply click on, "Sign in", at the top bar of the website and turn on notifications for the blog. I'll also be posting in SearchFunder.com and LinkedIn.com - I am also thinking of doing a podcast on this adventure. I want to help - So, feel free to reach out to me directly! I am happy to jump on the phone any time.