REAL AF with Andy Frisella - August 20, 2015


ASK ANDY： How to Pitch an Investor (And a Question About Supply and Demand)


Episode Stats


Length

19 minutes

Words per minute

193.23343

Word count

3,701

Sentence count

361

Harmful content

Misogyny

1

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

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

Transcript generated with Whisper (turbo).
Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
00:00:00.000 What's up guys, this is Andy Fursella. You're listening to the MFCEO Project. Welcome to
00:00:23.960 our Thursday Q&A. MF Q&A. Okay, MF Q&A. I stand corrected. Welcome to our Thursday motherfucking
00:00:33.860 Q&A. How about that? That's perfect. Otherwise known as Ask Andy. Okay. Today, we're going
00:00:39.040 to go through some questions. Vaughn's going to hit me up. Yeah. As always, I'm here with
00:00:44.180 my co-host, Vaughn Kohler. Yes. What's up dude? It's good to be here. Can I do the stuff
00:00:49.760 that you hate that I have to do, but I got to do it? Yeah. Okay. So, for those of you
00:00:55.180 who like to get full extensive show notes and links and all good goodies such as that, the
00:01:01.960 link, the specific custom link for this episode of the MFCEO Project is themfceo.com slash QA3,
00:01:12.560 QA3, I believe. It might be four. It's either QA3 or QA4. You'll go there. Trial and error.
00:01:19.560 Yeah. Trial and error. Anyway, you can go there and then, of course, our social media connections.
00:01:24.740 You want to go through yours, Andrew? Yeah. At Andy Fursella on Instagram. At Andy Fursella
00:01:29.460 on Periscope. If you want to see some behind the scenes shit, MFCEO-1 on Snapchat. Vaughn?
00:01:35.740 Yeah. I'm just at V-A-U-G-H-N-K-O-H-L-E-R for everything. Periscope, Snapchat, and well,
00:01:44.360 no, actually Snapchat. I'm V-K-O-M-F-CEO and then at Vaughn Kohler for Instagram. And I've
00:01:52.060 been telling people, I am going to debut on Periscope and I think what we're going to do
00:01:55.920 for me, I'm going to start the first couple ones I'm going to do are going to be MFCEO
00:02:00.000 focus groups. So, I'm going to get some feedback from people.
00:02:02.520 Dude, Periscope's badass, man. If you were not on Periscope,
00:02:05.740 go on Periscope. It's like watching a live television broadcast, but you can ask questions
00:02:11.360 live or comment live. And they can see it. It's really cool. If you haven't checked it
00:02:15.280 out, download it. Follow me at Andy Fursella. You'll see what it's all about. It either is
00:02:21.340 or isn't for you, but it's a good thing to check out.
00:02:23.680 Yeah, definitely.
00:02:24.180 All right. Let's get into the Q&As.
00:02:26.740 Yeah. So, the first Q&A or the first question is actually a pretty easy one. And that is that
00:02:32.180 in a previous episode, you talked about your great love for Lamborghinis and actually talked
00:02:38.800 not just about your love for the car, but for the company itself and the whole culture.
00:02:43.340 Yeah. Great entrepreneurial story.
00:02:44.960 Yeah. So, you mentioned reading a book that you thought was pretty helpful. And I mean,
00:02:48.900 obviously, I think if people wanted information, they can look it up on Wikipedia. But you mentioned
00:02:53.880 a specific book.
00:02:54.720 Yeah. I mean, you could either Google the company and read the history if that's all
00:02:57.820 you're interested in. But there's a book out there called Lamborghini 40 Years by David
00:03:02.400 Jolliffe.
00:03:03.180 Yeah.
00:03:03.480 We'll throw the link up on the website.
00:03:05.080 That sounds good.
00:03:05.520 So, that's the easiest thing to answer in this episode. So, now we go on to the next
00:03:10.920 one. You ready?
00:03:11.300 All right. Show's over.
00:03:12.280 Yeah. We're done. Thanks for tuning in.
00:03:15.180 Yeah. Let's get down to the real questions.
00:03:17.180 Okay. So, just as you know, normally I throw the questions out to Andy with no previous knowledge,
00:03:23.660 but I'm going to tell you right now that I actually read him the entire email for this
00:03:28.700 question. And there is some backstory, but I think in order to understand Andy's question
00:03:34.460 or answer, you don't need to have the whole backstory. However, I will be throwing up the
00:03:39.600 backstory on the show notes if you guys want to hear a little bit more about this particular
00:03:45.060 person's question and their business background. But anyway, here's the question. All right.
00:03:49.540 Dear MF CEO, as a new, less than one-year-old company, how do we grow our inventory? We are
00:03:56.800 in the fortunate position to have more demand than supply. The unfortunate part is that we
00:04:02.660 lose customers due to lack of inventory, which means that they have to go to our competitors
00:04:09.480 instead. Banks won't lend to us because we are too new and investors don't find us appealing
00:04:14.340 because we aren't a hot tech startup. In other words, how do we overcome a demand is greater than
00:04:22.060 supply problem? Okay. First of all, there's plenty of investors out there that will invest in your
00:04:27.620 company, either for an interest rate, a typical standard loan, or an equity position in your
00:04:35.020 company. You don't have to be a hot tech startup. So, you think they just haven't beat the path?
00:04:39.540 No, I think that, yeah, I think it's an excuse. Okay. Okay. That's an excuse. I text people won't
00:04:46.100 invest in us because we're not tech startups. I mean, there's come, there's a million kinds of
00:04:49.700 businesses out there. All right. That's an excuse. You're not beating the, you're not beating down
00:04:54.680 the path hard enough. And I'm going to be honest. I read the whole question. I understand what your
00:04:59.940 business is. And if you don't go beat that path out and find somebody to invest, you're not going to
00:05:05.020 make it in business because you're, you're going to be passed up by the industry. Okay. The
00:05:10.660 technology industry, which you guys are a technology company. Um, what they do is certainly related to
00:05:17.700 it. Yeah. They make cell phone repair parts, screens. They figure out, uh, all the little
00:05:22.120 things that, that you can repair a cell phone with, um, or tablet or computer. All right. And
00:05:27.000 they, they have those parts, but here's the reality. The technology is going to pass you guys up.
00:05:31.680 If you don't get some funding to fund your inventory, that's the bottom line. There's certain
00:05:36.360 situations where you have to have funding. Um, we, my business, we were one of these companies who
00:05:42.840 constantly reinvested, which you're going to have to do too, but we didn't have to take money from
00:05:49.280 somebody and we didn't have to get banks to support us because we just went without pay and
00:05:54.280 reinvested all the money in it and grew it that way. We maintain all our equity. Um, we're in a good
00:05:58.760 position now, but it also took 16 years. You don't have 16 years to wait in 16 years. The
00:06:05.200 products that you're making aren't even going to be fucking made anymore. That'd be like saying,
00:06:08.500 you know, you're going to be the, you're going to be the eight track in 16 years. Okay. You have
00:06:14.660 to go out and find funding for your inventory. Um, you don't think we're going to have cell phones
00:06:18.620 in 16 years? Not the, not the kind that they're making parts for. Oh, gotcha. Gotcha. And maybe
00:06:23.020 not. It might be something totally different. Yeah. You know, who knows? Yeah. But the point
00:06:28.500 is, I was just clarifying. Yeah. The point is, is you can't, when you're in a, in a, in a fast
00:06:33.500 paced environment market segment, like these guys are, you are going to have to find funding. This
00:06:38.820 is one of those cases where you have to find it. There's plenty of people out there that will invest
00:06:42.820 in a company like yours. If it's showing the numbers. Now I agree. You have only been in business
00:06:48.100 for a couple of years and banks are going to be hard to do. So you're going to have to find
00:06:51.080 somebody who is, um, a person who invests their own money. And it's probably going to
00:06:57.000 have to be an equity position in your company is what's going to happen. Um, but the, the
00:07:03.060 alternative to that, which, you know, nobody likes that. Nobody likes giving up part of
00:07:06.120 their company, but the alternative to that is this, you're out of business. Okay. So don't
00:07:13.180 be too proud to go take those deals. They're out there. You just have to go look for them.
00:07:17.020 So look, cause I, I listened to you, but let me, let me, there's more people out there
00:07:21.460 looking to invest in deals right now than there ever has been before. Yeah. Ever, ever,
00:07:24.940 ever, ever in the history of birth. So your answer was basically either reinvest what you're
00:07:29.660 making back into inventory or find an investor at all costs. My answer was do both of those
00:07:33.780 things. Do both of them. Okay. So my answer was they better do both. Okay. Because they're
00:07:37.300 brand new. Okay. Yeah. You're not going to get paid for a few more years. Um, don't get paid.
00:07:44.380 They said in the email that they're not getting paid. Okay. Invest everything you have, go find
00:07:49.360 somebody and show them that you're investing everything you have. You know, there's nothing
00:07:54.660 worse than somebody comes to somebody with a deal and they say, Oh, well we need money,
00:07:58.340 but I'm paying myself X amount of dollars to live on blah, blah, blah. You know, it's,
00:08:04.180 it doesn't look good. Right. You know, it doesn't look like you're all in, right. You know,
00:08:08.360 go be all in, you'll find somebody you're going to have to beat down doors to make it happen.
00:08:12.520 Um, it's not going to be me just so we don't follow up the email and say, Hey, uh, but I'm
00:08:19.100 telling you, there's people out there that do this. Right. You know, and you're going
00:08:22.200 to have to go find somebody or you're going to be out of business. Right. So don't sit
00:08:26.740 here and put the mental block up of we're not a sexy tech startup. You know what's sexy
00:08:31.180 make a fucking money. And that's what investors care about. Right. So if you're making money,
00:08:35.560 if you're making margin, if you have a legit business plan, there will be somebody out
00:08:39.780 there that finds you quote unquote sexy. You just got to bang down the doors. You can't
00:08:45.000 quit. Yeah. You know, the, the, the first, there's an excuse in there. We're not a sexy
00:08:49.420 startup. I read that and cringed. Right. What do you mean? You think that's the only business
00:08:53.520 that gets funding? If you have a viable business people, you'll find the money period. So a comment
00:08:59.320 and then a followup question. The comment is that, you know, you were saying, Hey, don't,
00:09:03.540 don't send up a followup email because I'm not investing. But the reality is, is that,
00:09:07.720 uh, they shouldn't be super offended by that because you don't really, you're, you're
00:09:11.960 extremely, extremely, you can't look at situation like that. Like it's offensive. Right. Well,
00:09:18.040 no, what I'm saying about what, what you just said is I'm not going to invest, but you don't
00:09:21.660 at this point, you are extremely, uh, focused, focused. And you're, you're just, you just haven't
00:09:26.640 gotten into that yet in your life. Right. No, like you don't, you don't personally invest
00:09:30.860 in any startups, right? Not in startups. No, no. Um, I will, I will invest in businesses
00:09:39.680 that are established for an equity position that I bring a certain expertise to their
00:09:45.440 company and I have done so. Um, but I'm not, I'm not a startup guy. I'm not, I'm just not
00:09:52.420 that kind of guy. Um, and I'm very good at what I do and I like to invest in myself.
00:09:57.780 That's my position, which was my point. You're, you're very, a lot of these guys, a lot of
00:10:01.620 these guys who are investing, they invest because they sold their business and they're looking
00:10:05.440 for new things. I'm not at that point in my life. Right. I have a lot to growth to do
00:10:09.180 in my own and no offense. I trust myself better than anybody else outside with my money.
00:10:15.060 Right. Right. At this point in my life. Makes sense. So that's what I'm saying. It's not
00:10:19.180 me. It's, I'm not trying to be a dick and say you have a bad plan. Yeah. You know, that's
00:10:22.800 just not what I'm doing right now. I think that's what you're trying to get me to say. Right.
00:10:26.100 Because you don't want these guys to let you upset. No, no, no, no, no, no, no. I just
00:10:30.980 wanted to point out because I think there are probably a lot of people who listen to us
00:10:34.800 who have thought, and I know because I answer a lot of the, a lot of the emails. I know a
00:10:39.940 lot of people that are doing that. And I, and I just, I'm using this as an opportunity to
00:10:44.100 tell everybody, listen guys, it's not that Andy doesn't believe in your product or you're,
00:10:49.280 or it's just that you are. That's not my business. That's not what you're doing. Right. You're
00:10:52.840 not, you're not in that, in that area right now. You're very focused. Right. So my follow-up
00:10:57.420 question, and you know, I've, I've said this for other questions and I'm going to say it
00:11:01.760 for this one too. Don't be too thorough. I know that's your, I know that's your default
00:11:07.220 is to be thorough, but give me the nuts and bolts answer to this follow-up question, which
00:11:11.960 I would like to become an eventual full-length podcast. And that is in light of what you said
00:11:16.740 about them not beating the pavement and, and working to find an investor. Why don't you
00:11:22.000 give me the thumbnail strategery for how, what is the best way to pitch an investor?
00:11:30.320 Okay. I'm going to tell you what to not do because I just dealt with this this morning.
00:11:35.160 It's funny that you bring this question up. Learn the phrase, have your shit together. Okay.
00:11:41.500 Know what you're going to do. Know what your end game is. Understand that a hundred percent,
00:11:46.920 but be humble in your approach. Know the phrase. I don't know. I got this email from this guy this
00:11:53.880 morning that just really honestly pissed me off. Okay. It's this guy. I'm not going to say what
00:12:04.020 company he's with, but he's been trying to get our business and he keeps telling me how he's going
00:12:07.840 to save money on producing our product. And I'm like, look, dude, we produce our own product.
00:12:13.200 Our fucking Ross come in on fucking rails. You're, you're telling me that you, you're going to save
00:12:18.000 us money by rails. I mean a train you're going to, we're vertically integrated. You're going to save
00:12:22.500 us money on, on our production, you know, by us sending it out somewhere else. It doesn't make sense.
00:12:29.540 But my point in saying this is this,
00:12:31.400 don't go at somebody like you have the answers to everything because most people who are going to
00:12:38.340 consider lending to you are going to test you to see what kind of person you are by the way that
00:12:43.860 you react to certain things. And if you go in there trying to high energy, you know, overly sell them
00:12:50.320 and act like you have all the answers and this and that, they're going to know you're not coachable
00:12:54.000 and they're not going to give you any fucking money. Right. They're going to, you need to come in
00:12:58.180 humbly and say, this is what we know. This is our numbers. This is what we know about our products.
00:13:02.740 This is where we want to take it. And we're going to go here, here, and here. And then when you ask
00:13:08.660 something that you don't know the answer to be like, Hey, look, I don't know the answer to that,
00:13:11.200 but I'm going to find out. That's a great question. Don't act like you know everything.
00:13:14.320 Don't act like you know more than the person about your business because very well, they may know a lot
00:13:18.380 of shit that you don't know that you, that you can learn from and improve. And that person,
00:13:23.220 personally, I'm never, ever going to invest in somebody that has that, that mentality because
00:13:28.000 it makes me think they're uncoachable. All right. So be humble, you know, be confident,
00:13:35.140 have your shit together, have a plan, but be humble about taking feedback. And that's the
00:13:40.440 biggest thing I see about people pitching ideas. They think they have this awesome idea and there's
00:13:45.480 no holes in it. Be welcome to people poking holes in your idea because if people could poke holes in
00:13:51.460 your idea, that's an opportunity for you to improve. And if, and if, if I poke holes in your idea or
00:13:56.300 somebody that has the ability to invest in your product service or business can poke holes in
00:14:00.840 your idea and you're not willing to hear it, there's no way you're going to get the money
00:14:04.220 because they know that you're too, you're not, you've lost the ability to learn. Okay. Yeah. So,
00:14:11.480 you know, I've been around you for a long time or well, at least it feels that way. And, uh,
00:14:17.340 that guy must've really gotten under your skin. Cause you were talking about that earlier today,
00:14:20.840 but you know, I have to say in fairness to you, I mean, you, you, you know, you listen to you on
00:14:26.400 the podcast and you're this intense, you know, swearing guy, but the reality is that you're
00:14:32.220 actually a pretty nice guy. So for him to get under your skin like that, just don't come at
00:14:37.160 somebody. Tyler's laughing. Do you not think Andy's a nice guy? He has his moments. Okay. My point is
00:14:44.020 this. Don't go at somebody like, you know, everything, you know what I mean? Yeah. That's,
00:14:49.500 that's the biggest thing that you make a mistake on. You know, you don't know everything. I don't
00:14:54.560 know everything. There's a lot of shit that I don't know. Right. But what I do know, I fucking
00:14:58.680 know really well. Right. Okay. And that's the attitude you have to have. Do you think the idea
00:15:03.900 is when people are pitching investors, they're thinking if I don't have every single detail
00:15:10.400 ironed out, then I'm not going to get this guy's money. Yes. But what they also couple
00:15:14.860 that, that, that idea with is that they're going to somehow bullshit this person into
00:15:20.160 fucking investing. And that's what I'm talking about. Don't bullshit people. Don't lie to
00:15:25.120 people. If you don't really fucking know, don't say you don't know. Right. You know what
00:15:28.360 I mean? Right. Don't go in somewhere. I mean, okay. You've got a guy sitting across the
00:15:34.620 table from you that's, let's say he's worth a hundred million dollars. You're trying to get
00:15:37.860 two million bucks for him to start your business. This guy didn't get a hundred million dollars
00:15:42.140 by fucking accident, most likely. And even if he did inherit it, let's say he's family
00:15:46.920 money, this and that he's probably been around business his whole entire life. Right. Okay.
00:15:51.920 He's not stupid. So don't think that you're going to come in there and somehow enthusiastically
00:15:58.560 bullshit somebody into giving you money. Your job is to take their money, go out and grow
00:16:05.600 a business and give them a return. It's a business arrangement. They don't care about 0.55
00:16:09.480 you. They care about getting their return. How are you going to get that person their
00:16:13.060 return? It goes back to my talk on sales. It's not selling. It's helping. How am I going
00:16:17.440 to help this investor get their money back? That's what you need to answer. And that's how
00:16:22.300 you need to think. You don't need to think like, Hey, I'm going to get my 2 million bucks
00:16:25.160 and run off and I'm going to, you know, do my thing. They want to hear how you're going
00:16:30.040 to get their money back. Focus on that. You see what I mean?
00:16:34.940 Yeah. Makes total sense. Makes total sense. So if I would offer my pithy summary of what
00:16:40.780 you just said over the last 15 minutes, it would be if you have a greater demand than
00:16:46.400 you have inventory, there's no question you find an investor, you reinvest your revenues.
00:16:53.200 Before you get into this, Vaughn, there is an exception to this. Okay. Let's say you're
00:16:57.260 a different guy's kind of business. If you're not a tech company or you're not in an industry
00:17:03.540 where it's going to pass you by, you know, you can choose, like, let's say you're selling
00:17:10.620 lumber. All right. And in your certain area, you know, you're selling more two by fours
00:17:16.260 than you could keep in stock. You can choose to not take somebody's money if you're in that
00:17:22.980 industry because in 10 years, we're still going to be using two by fours. You know what
00:17:26.600 I mean? And you can grow your company slowly. Are you going to lose opportunity? Yes. Are
00:17:30.880 you going to lose customers? Yes. Are you still going to grow? Absolutely. And it will take
00:17:35.840 time. So if you're in a business that the industry is not going to pass you by and you
00:17:41.460 choose to do it the slow way, good for you. It takes discipline. It takes heart. It takes
00:17:45.820 grit. I respect that. That's how we did it. That's a good distinction to make for people
00:17:51.120 because in this particular instance, he was, this is a company that it's, it's a very timely
00:17:56.680 thing. That's right. It demands a sense of urgency. Right. Okay. And that's why I wanted
00:18:00.920 to clarify. Yeah, no, no, that's good. That's good. But if you're in that situation, you have
00:18:05.120 got to find an investor. You have got to reinvest your own money, do whatever you can. And when
00:18:09.540 you look for an investor, not only have it fully prepared, but in those areas where maybe
00:18:15.180 there are some holes, be humble, be open to improvement. No question. Okay. That's
00:18:19.600 it. Well, that's it for, I mean, that's our Q and a for today. All right, guys. Thanks
00:18:25.260 for listening. Um, we'll hit you up again on Tuesday and, uh, I'm not sure what the topic
00:18:31.260 will be this Tuesday, but we'll figure it out between now and then. Yep. Thank you guys.
00:18:34.060 We'll talk to you soon.
00:18:45.180 All I do is work.
00:19:04.660 All I do is work.
00:19:07.680 All I do is work.