ASK ANDY： How to Pitch an Investor (And a Question About Supply and Demand)
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Summary
In this episode of The MFCEO Project, Vaughn and I answer a bunch of your questions and talk about the Lamborghini story and how the company came to be. We also talk about Lamborghinis and why they are a cool car.
Transcript
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What's up guys, this is Andy Fursella. You're listening to the MFCEO Project. Welcome to
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our Thursday Q&A. MF Q&A. Okay, MF Q&A. I stand corrected. Welcome to our Thursday motherfucking
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Q&A. How about that? That's perfect. Otherwise known as Ask Andy. Okay. Today, we're going
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to go through some questions. Vaughn's going to hit me up. Yeah. As always, I'm here with
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my co-host, Vaughn Kohler. Yes. What's up dude? It's good to be here. Can I do the stuff
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that you hate that I have to do, but I got to do it? Yeah. Okay. So, for those of you
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who like to get full extensive show notes and links and all good goodies such as that, the
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link, the specific custom link for this episode of the MFCEO Project is themfceo.com slash QA3,
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QA3, I believe. It might be four. It's either QA3 or QA4. You'll go there. Trial and error.
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Yeah. Trial and error. Anyway, you can go there and then, of course, our social media connections.
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You want to go through yours, Andrew? Yeah. At Andy Fursella on Instagram. At Andy Fursella
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on Periscope. If you want to see some behind the scenes shit, MFCEO-1 on Snapchat. Vaughn?
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Yeah. I'm just at V-A-U-G-H-N-K-O-H-L-E-R for everything. Periscope, Snapchat, and well,
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no, actually Snapchat. I'm V-K-O-M-F-CEO and then at Vaughn Kohler for Instagram. And I've
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been telling people, I am going to debut on Periscope and I think what we're going to do
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for me, I'm going to start the first couple ones I'm going to do are going to be MFCEO
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focus groups. So, I'm going to get some feedback from people.
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Dude, Periscope's badass, man. If you were not on Periscope,
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go on Periscope. It's like watching a live television broadcast, but you can ask questions
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live or comment live. And they can see it. It's really cool. If you haven't checked it
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out, download it. Follow me at Andy Fursella. You'll see what it's all about. It either is
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or isn't for you, but it's a good thing to check out.
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Yeah. So, the first Q&A or the first question is actually a pretty easy one. And that is that
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in a previous episode, you talked about your great love for Lamborghinis and actually talked
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not just about your love for the car, but for the company itself and the whole culture.
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Yeah. So, you mentioned reading a book that you thought was pretty helpful. And I mean,
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obviously, I think if people wanted information, they can look it up on Wikipedia. But you mentioned
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Yeah. I mean, you could either Google the company and read the history if that's all
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you're interested in. But there's a book out there called Lamborghini 40 Years by David
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So, that's the easiest thing to answer in this episode. So, now we go on to the next
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Okay. So, just as you know, normally I throw the questions out to Andy with no previous knowledge,
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but I'm going to tell you right now that I actually read him the entire email for this
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question. And there is some backstory, but I think in order to understand Andy's question
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or answer, you don't need to have the whole backstory. However, I will be throwing up the
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backstory on the show notes if you guys want to hear a little bit more about this particular
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person's question and their business background. But anyway, here's the question. All right.
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Dear MF CEO, as a new, less than one-year-old company, how do we grow our inventory? We are
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in the fortunate position to have more demand than supply. The unfortunate part is that we
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lose customers due to lack of inventory, which means that they have to go to our competitors
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instead. Banks won't lend to us because we are too new and investors don't find us appealing
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because we aren't a hot tech startup. In other words, how do we overcome a demand is greater than
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supply problem? Okay. First of all, there's plenty of investors out there that will invest in your
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company, either for an interest rate, a typical standard loan, or an equity position in your
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company. You don't have to be a hot tech startup. So, you think they just haven't beat the path?
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No, I think that, yeah, I think it's an excuse. Okay. Okay. That's an excuse. I text people won't
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invest in us because we're not tech startups. I mean, there's come, there's a million kinds of
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businesses out there. All right. That's an excuse. You're not beating the, you're not beating down
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the path hard enough. And I'm going to be honest. I read the whole question. I understand what your
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business is. And if you don't go beat that path out and find somebody to invest, you're not going to
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make it in business because you're, you're going to be passed up by the industry. Okay. The
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technology industry, which you guys are a technology company. Um, what they do is certainly related to
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it. Yeah. They make cell phone repair parts, screens. They figure out, uh, all the little
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things that, that you can repair a cell phone with, um, or tablet or computer. All right. And
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they, they have those parts, but here's the reality. The technology is going to pass you guys up.
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If you don't get some funding to fund your inventory, that's the bottom line. There's certain
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situations where you have to have funding. Um, we, my business, we were one of these companies who
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constantly reinvested, which you're going to have to do too, but we didn't have to take money from
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somebody and we didn't have to get banks to support us because we just went without pay and
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reinvested all the money in it and grew it that way. We maintain all our equity. Um, we're in a good
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position now, but it also took 16 years. You don't have 16 years to wait in 16 years. The
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products that you're making aren't even going to be fucking made anymore. That'd be like saying,
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you know, you're going to be the, you're going to be the eight track in 16 years. Okay. You have
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to go out and find funding for your inventory. Um, you don't think we're going to have cell phones
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in 16 years? Not the, not the kind that they're making parts for. Oh, gotcha. Gotcha. And maybe
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not. It might be something totally different. Yeah. You know, who knows? Yeah. But the point
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is, I was just clarifying. Yeah. The point is, is you can't, when you're in a, in a, in a fast
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paced environment market segment, like these guys are, you are going to have to find funding. This
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is one of those cases where you have to find it. There's plenty of people out there that will invest
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in a company like yours. If it's showing the numbers. Now I agree. You have only been in business
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for a couple of years and banks are going to be hard to do. So you're going to have to find
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somebody who is, um, a person who invests their own money. And it's probably going to
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have to be an equity position in your company is what's going to happen. Um, but the, the
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alternative to that, which, you know, nobody likes that. Nobody likes giving up part of
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their company, but the alternative to that is this, you're out of business. Okay. So don't
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be too proud to go take those deals. They're out there. You just have to go look for them.
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So look, cause I, I listened to you, but let me, let me, there's more people out there
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looking to invest in deals right now than there ever has been before. Yeah. Ever, ever,
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ever, ever in the history of birth. So your answer was basically either reinvest what you're
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making back into inventory or find an investor at all costs. My answer was do both of those
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things. Do both of them. Okay. So my answer was they better do both. Okay. Because they're
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brand new. Okay. Yeah. You're not going to get paid for a few more years. Um, don't get paid.
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They said in the email that they're not getting paid. Okay. Invest everything you have, go find
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somebody and show them that you're investing everything you have. You know, there's nothing
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worse than somebody comes to somebody with a deal and they say, Oh, well we need money,
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but I'm paying myself X amount of dollars to live on blah, blah, blah. You know, it's,
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it doesn't look good. Right. You know, it doesn't look like you're all in, right. You know,
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go be all in, you'll find somebody you're going to have to beat down doors to make it happen.
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Um, it's not going to be me just so we don't follow up the email and say, Hey, uh, but I'm
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telling you, there's people out there that do this. Right. You know, and you're going
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to have to go find somebody or you're going to be out of business. Right. So don't sit
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here and put the mental block up of we're not a sexy tech startup. You know what's sexy
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make a fucking money. And that's what investors care about. Right. So if you're making money,
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if you're making margin, if you have a legit business plan, there will be somebody out
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there that finds you quote unquote sexy. You just got to bang down the doors. You can't
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quit. Yeah. You know, the, the, the first, there's an excuse in there. We're not a sexy
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startup. I read that and cringed. Right. What do you mean? You think that's the only business
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that gets funding? If you have a viable business people, you'll find the money period. So a comment
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and then a followup question. The comment is that, you know, you were saying, Hey, don't,
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don't send up a followup email because I'm not investing. But the reality is, is that,
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uh, they shouldn't be super offended by that because you don't really, you're, you're
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extremely, extremely, you can't look at situation like that. Like it's offensive. Right. Well,
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no, what I'm saying about what, what you just said is I'm not going to invest, but you don't
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at this point, you are extremely, uh, focused, focused. And you're, you're just, you just haven't
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gotten into that yet in your life. Right. No, like you don't, you don't personally invest
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in any startups, right? Not in startups. No, no. Um, I will, I will invest in businesses
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that are established for an equity position that I bring a certain expertise to their
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company and I have done so. Um, but I'm not, I'm not a startup guy. I'm not, I'm just not
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that kind of guy. Um, and I'm very good at what I do and I like to invest in myself.
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That's my position, which was my point. You're, you're very, a lot of these guys, a lot of
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these guys who are investing, they invest because they sold their business and they're looking
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for new things. I'm not at that point in my life. Right. I have a lot to growth to do
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in my own and no offense. I trust myself better than anybody else outside with my money.
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Right. Right. At this point in my life. Makes sense. So that's what I'm saying. It's not
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me. It's, I'm not trying to be a dick and say you have a bad plan. Yeah. You know, that's
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just not what I'm doing right now. I think that's what you're trying to get me to say. Right.
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Because you don't want these guys to let you upset. No, no, no, no, no, no, no. I just
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wanted to point out because I think there are probably a lot of people who listen to us
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who have thought, and I know because I answer a lot of the, a lot of the emails. I know a
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lot of people that are doing that. And I, and I just, I'm using this as an opportunity to
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tell everybody, listen guys, it's not that Andy doesn't believe in your product or you're,
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or it's just that you are. That's not my business. That's not what you're doing. Right. You're
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not, you're not in that, in that area right now. You're very focused. Right. So my follow-up
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question, and you know, I've, I've said this for other questions and I'm going to say it
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for this one too. Don't be too thorough. I know that's your, I know that's your default
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is to be thorough, but give me the nuts and bolts answer to this follow-up question, which
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I would like to become an eventual full-length podcast. And that is in light of what you said
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about them not beating the pavement and, and working to find an investor. Why don't you
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give me the thumbnail strategery for how, what is the best way to pitch an investor?
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Okay. I'm going to tell you what to not do because I just dealt with this this morning.
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It's funny that you bring this question up. Learn the phrase, have your shit together. Okay.
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Know what you're going to do. Know what your end game is. Understand that a hundred percent,
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but be humble in your approach. Know the phrase. I don't know. I got this email from this guy this
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morning that just really honestly pissed me off. Okay. It's this guy. I'm not going to say what
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company he's with, but he's been trying to get our business and he keeps telling me how he's going
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to save money on producing our product. And I'm like, look, dude, we produce our own product.
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Our fucking Ross come in on fucking rails. You're, you're telling me that you, you're going to save
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us money by rails. I mean a train you're going to, we're vertically integrated. You're going to save
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us money on, on our production, you know, by us sending it out somewhere else. It doesn't make sense.
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don't go at somebody like you have the answers to everything because most people who are going to
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consider lending to you are going to test you to see what kind of person you are by the way that
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you react to certain things. And if you go in there trying to high energy, you know, overly sell them
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and act like you have all the answers and this and that, they're going to know you're not coachable
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and they're not going to give you any fucking money. Right. They're going to, you need to come in
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humbly and say, this is what we know. This is our numbers. This is what we know about our products.
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This is where we want to take it. And we're going to go here, here, and here. And then when you ask
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something that you don't know the answer to be like, Hey, look, I don't know the answer to that,
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but I'm going to find out. That's a great question. Don't act like you know everything.
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Don't act like you know more than the person about your business because very well, they may know a lot
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of shit that you don't know that you, that you can learn from and improve. And that person,
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personally, I'm never, ever going to invest in somebody that has that, that mentality because
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it makes me think they're uncoachable. All right. So be humble, you know, be confident,
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have your shit together, have a plan, but be humble about taking feedback. And that's the
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biggest thing I see about people pitching ideas. They think they have this awesome idea and there's
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no holes in it. Be welcome to people poking holes in your idea because if people could poke holes in
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your idea, that's an opportunity for you to improve. And if, and if, if I poke holes in your idea or
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somebody that has the ability to invest in your product service or business can poke holes in
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your idea and you're not willing to hear it, there's no way you're going to get the money
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because they know that you're too, you're not, you've lost the ability to learn. Okay. Yeah. So,
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you know, I've been around you for a long time or well, at least it feels that way. And, uh,
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that guy must've really gotten under your skin. Cause you were talking about that earlier today,
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but you know, I have to say in fairness to you, I mean, you, you, you know, you listen to you on
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the podcast and you're this intense, you know, swearing guy, but the reality is that you're
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actually a pretty nice guy. So for him to get under your skin like that, just don't come at
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somebody. Tyler's laughing. Do you not think Andy's a nice guy? He has his moments. Okay. My point is
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this. Don't go at somebody like, you know, everything, you know what I mean? Yeah. That's,
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that's the biggest thing that you make a mistake on. You know, you don't know everything. I don't
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know everything. There's a lot of shit that I don't know. Right. But what I do know, I fucking
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know really well. Right. Okay. And that's the attitude you have to have. Do you think the idea
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is when people are pitching investors, they're thinking if I don't have every single detail
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ironed out, then I'm not going to get this guy's money. Yes. But what they also couple
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that, that, that idea with is that they're going to somehow bullshit this person into
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fucking investing. And that's what I'm talking about. Don't bullshit people. Don't lie to
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people. If you don't really fucking know, don't say you don't know. Right. You know what
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I mean? Right. Don't go in somewhere. I mean, okay. You've got a guy sitting across the
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table from you that's, let's say he's worth a hundred million dollars. You're trying to get
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two million bucks for him to start your business. This guy didn't get a hundred million dollars
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by fucking accident, most likely. And even if he did inherit it, let's say he's family
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money, this and that he's probably been around business his whole entire life. Right. Okay.
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He's not stupid. So don't think that you're going to come in there and somehow enthusiastically
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bullshit somebody into giving you money. Your job is to take their money, go out and grow
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a business and give them a return. It's a business arrangement. They don't care about
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you. They care about getting their return. How are you going to get that person their
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return? It goes back to my talk on sales. It's not selling. It's helping. How am I going
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to help this investor get their money back? That's what you need to answer. And that's how
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you need to think. You don't need to think like, Hey, I'm going to get my 2 million bucks
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and run off and I'm going to, you know, do my thing. They want to hear how you're going
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to get their money back. Focus on that. You see what I mean?
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Yeah. Makes total sense. Makes total sense. So if I would offer my pithy summary of what
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you just said over the last 15 minutes, it would be if you have a greater demand than
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you have inventory, there's no question you find an investor, you reinvest your revenues.
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Before you get into this, Vaughn, there is an exception to this. Okay. Let's say you're
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a different guy's kind of business. If you're not a tech company or you're not in an industry
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where it's going to pass you by, you know, you can choose, like, let's say you're selling
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lumber. All right. And in your certain area, you know, you're selling more two by fours
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than you could keep in stock. You can choose to not take somebody's money if you're in that
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industry because in 10 years, we're still going to be using two by fours. You know what
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I mean? And you can grow your company slowly. Are you going to lose opportunity? Yes. Are
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you going to lose customers? Yes. Are you still going to grow? Absolutely. And it will take
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time. So if you're in a business that the industry is not going to pass you by and you
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choose to do it the slow way, good for you. It takes discipline. It takes heart. It takes
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grit. I respect that. That's how we did it. That's a good distinction to make for people
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because in this particular instance, he was, this is a company that it's, it's a very timely
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thing. That's right. It demands a sense of urgency. Right. Okay. And that's why I wanted
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to clarify. Yeah, no, no, that's good. That's good. But if you're in that situation, you have
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got to find an investor. You have got to reinvest your own money, do whatever you can. And when
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you look for an investor, not only have it fully prepared, but in those areas where maybe
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there are some holes, be humble, be open to improvement. No question. Okay. That's
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it. Well, that's it for, I mean, that's our Q and a for today. All right, guys. Thanks
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for listening. Um, we'll hit you up again on Tuesday and, uh, I'm not sure what the topic
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will be this Tuesday, but we'll figure it out between now and then. Yep. Thank you guys.