How do you use a corporate partner to fund early M&A?

Jason Kirby (00:01.812) Hey everyone, welcome back to Fundraising Demystified. Today we have Patrick Butler with us, co-founder and CEO of BizDefender. Welcome to the show, Patrick. Patrick Butler (00:13.048) Thanks for having me, Jason. I'm really excited. Jason Kirby (00:15.176) Yeah, you've got a really fun background. Not only do you have an exited startup under your belt, but you've also founded a European American football team, which I raised money for. And I'm excited to talk about that from different stories that are out there for founders to learn from. And then we'll get into your choice to pursue starting your next venture through a venture studio. So before we dive into everything, I think it'd be great just Tell the audience a little bit about your first venture, Talent Inc, what you did there, and then we'll get into the story of how you ended up raising money in a unique way there. Patrick Butler (00:51.544) Sure. Tellenink was actually not my first. I failed many times in lots of other things, which is a good thing to share. I was coming out of an era where I had had some successful day jobs. I went to business school, was having a really tough time finding a job. I was either overqualified or underqualified. It's a very common story. So I'd have soft spot for solving the career space in general, connecting valuable people to valuable companies. And I would say that anybody's listening, if somebody's interested in what is the one key piece of advice, I keep going back to one moment that I can pin down with talent. One thing I would prioritize kind of every in every venture going forward in the future was the moment I met my co-founder, Jeff. And I'd say leading up to talent, like I said, I had some modest success. I coming out of a couple of startups that didn't go so well for me. I learned a ton. was actually had just built a Shazam for TV and movies that I was very proud of, took a ton of work, but had no idea how to market it and take it to market. I was already kind of burned out and looking for something in some purpose. And I met Jeff. And when I talk about this moment, something clicked with him. I now had a lot of data points on what makes a good co-founder. we had the same energy. We got it. had wildly different skillsets. I would say he wasn't an immediate, like best friend, which was a good thing, but we left our first conversation with, have to do something. And so, he was, working for a Swedish research firm called Universal. they were very successful worldwide, making a mark on the U S and he was tasked with, managing all of the digital assets for them in the U S and launching it and trying to figure out. how to build revenue in unique ways. And so I said, yeah, let's, let's, I'll join you. I'll come work for and with you to see what we can do. And a year into it, we came up with our thesis for Talent Inc. It's a big ambitious name for an ambitious idea. We thought, we think, and we thought then the career space is, is really serving companies and recruiters. There isn't a lot of opportunity to, for a job seeker to take out their wallet and advance their career. Patrick Butler (03:06.742) In fact, in most business models in the career space, the job seeker is the product. And I just come off of this story where I felt that I wanted to spend a little bit of money. I want a little bit of help. I wanted to feel less lonely. This is 2012. And so we had this idea and nobody was advocating for the job seeker. And so we set out to build a product to do that. And so we started with the resume, which is. a very unsexy product that I can't think of a single person that advocates for, but still necessary in the job ecosystem in this day and age is still to connect people and their skill sets to the right opening. So if you've ever seen an online resume critique, a free resume critique, I apologize. It's so, so ubiquitous at this point. We started that about 12, 15 years ago, but it was wildly successful. The initial idea was, I can't sell you the value prop of a resume rewrite in 60, or in one second, but I can do it in 60 seconds. And so how can I get your attention? How can I build your trust? How can I shepherd you through the value prop? And the way we did it was building a free resume critique. Talk about what is a resume? Why would you use it? Where are you doing particularly well or not? And just demonstrate that we know what we're talking about. And so when we started, I built, I personally coded the prototype in a couple of weeks and we launched it against some of our internal assets at this Swedish company. We owned a couple of small job boards and right out of the gate, we had great union economics, we had traction and as a founder, these are the things that I was lacking. This is the stuff that I was convinced was not only just going to pay for my day job, but inspire investment and growth and make this a job I really wanted to work on for a long period of time. The Swedish company was very progressive, is very, progressive. And they did two things that were essential for the business. right out of the gate, they did two things. We carved out some equity for them. And in exchange and parallel to that, they fronted the collateral for us to take some substantial debt, the kind of debt that we couldn't do as two people in a garage. I could say that it was like $68 million at the time. Patrick Butler (05:27.886) And immediately we were able to make some acquisitions of service providers that we were using to get this off the ground, bring some stuff in-house, make some key hires and just go quickly. We were that confident in the business model that we thought we could pay it back. It was also the great era of 0 % interest rates and all that. But the parent company was very helpful and supportive because they had an equity stake as well as the assets to back this. So we ran for two or three years in that. that capacity. And as we grew, we spun out some new brands. We tried some new products. We turbocharged growth by partnering with people that could benefit from this product. The major job boards, almost every major job board you've ever heard of, we'd go into their office and say, look, we have a product that's going to make your job seekers better to the people that are applying to your jobs. Would you like to partner with us where we can value this and offer some value? And our secret sauce back then and what's informed how I've worked going forward. Again, we knew the risk. It's very hard to convince somebody, hey, we'll sell a resume rewrite for $300. Do you want to split the revenue with us? They said, well, yeah, is the product good? Let's take a couple months. Let's go back versus how about you give your users a free resume critique? We'll front you a little bit of cash for that. or some value in kind. And that's a very easy pitch. It's like, it's a free resume critique. What's going to happen? We're not going to tarnish our brand. And then we took on the burden of upselling and extracting value kind of down the supply chain. And it was incredibly successful in getting to market fast and quick. so very, very quickly, almost every major job board was integrating our critique. And we were getting tens of millions of these free critiques. We built an infrastructure to both convert and educate job seekers. I spent most of my time in kind of a product and tech role, dreaming up products to extract or expand the lifetime value, but also keep people in a system. This wasn't a subscription model. If we're really good at getting somebody a job, typically they don't come back and start using our products. So how do we extend the relationship? And so we had a lot of success and along the way we took a little bit of equity to help speed up a couple of acquisitions. I think we made six or eight in the time I was there. Patrick Butler (07:53.646) where again, it was just kind of optimizing. Somebody was doing something similar, but not as well or not as efficiently. We could bring them in house and make money. And by 2020, we were making a very healthy profit in the millions range. And it was a very good time in the company's life cycle to have talks about private equity. And there was lots of funds that we're looking for. companies of our size to merge with others in a similar way that we had at a smaller scale. And yeah, so we made the decision to exit at the end of 2020 to BB Investment Partners. The company's still up and running. It's bigger, all the things that they wanted from it. It's now part of a bigger conglomerate. But I was very fortunate to kind of negotiate, but also find it right at the company's lifecycle to step off, step out myself. And so after eight years of working on that, I left the company at the same time that we were acquired. Jason Kirby (08:54.302) Wow. So that's, that's quite the journey. I want to kind of take a step back and go to a couple of points that you kind of glazed over, but I thought were pretty interesting. you didn't raise money the traditional way. And I want you to tell the audience a little bit more about what you actually did with this parent company and how you struck that deal. And you also alluded to before we hopped on the call here that you raised some outside money, but You went and did the dog and pony show for raising capital, but you didn't get the results you actually expected. Can you just share to the audience a little bit more about the actual fundraising strategy when you did it and how you approached it? Patrick Butler (09:34.306) Yeah, and I consider myself my own advisor and kind of like I'm a founder today and I'm constantly going back to the well of like, would, did that mean at the time? think the most interesting things were one, sure. It sounds great that we raised a bunch of debt and made it an acquisition right away. The founders were, there's a human beings that, of the Swedish company that we were constantly talking to. We, wasn't a negotiation. It was more of a collaboration of what makes the most sense. And they were very supportive throughout the entire journey of the company. But like any startup, if you're not moving fast enough and sweating the day-to-day bills at some point, that you're not doing a good job, there's a certain tolerance for that. You don't want to have too much sitting in the bank. What's the right amount? Raise too much, too little. So we were cash-leaning all lots and lots of times, worried about when we're going to run out for payroll and all the usual problems that people have. When we decided, we really did explore an honest equity raise a couple of years in where we have proven really good economics. We were on the verge of profitability with really good revenue and we had a good product and a good engineering team and good differentiation. was like the cusp of the beginning of like machine learning and all of like really cool stuff in tech. So we did, we went out and we put together the deck and we got meetings. And I remember one specifically of a big very well known VC where we walked in and there might've been 10 or 15 associates and matching fleeces kind of grilling us and all the individual unit economics, which I loved and we had great answers for it. And we came out and high five and we thought that was great. And the managing partner like called us afterwards and said, yeah, you guys are only gonna do 10X in five years. That's not gonna work for this particular fund. Our LPs are looking for something a little bit sexier or bigger, but I'll write a check myself. That's a very expensive and time consuming way to get to that money, but that was one in particular that was very rewarding on a personal front, also a little vindicating that like, and we ended up, yes, we made that 10X for that investor, which we're very proud of. But it was that. was a couple of just very smart individuals that got it, that had experience in Patrick Butler (12:03.918) similar ventures. And I would say to any founder out there that like, you if you have somebody that's been, has a very similar business model, this may be five or 10 years ahead of you, pick their brain and ask them how they did it. Because not only will they give you the advice, but very often if they've been successful, they're happy to write a check to follow on and, and, and see their vision you justified. And that's what we did. think half of the money we did raise a little bit of equity here and there. came from people that were very smart and understood that these guys are onto something, this is going to work. I'll make my money back, but I can also contribute something a little bit in the meantime. So it worked out and I'm very happy for that. Would I do things differently for that model? No, because I had learned a ton along the way. I've taken those lessons and incorporated what I'm doing now, but I thought it was really great. It was just always pragmatic conversations first. Nobody was ever saying, what is Okay, that's great. You doubled revenue this year. What's your billion dollar idea over and over again? There was a lot of, get this, how can we justify keeping the business going, keeping our employees happy, making this sustainable? It was just a good mindset. Jason Kirby (13:15.06) No, it sounds like it was a worthwhile exercise, you know, despite that, you know, maybe you didn't raise and how much equity did you end up raising in total? Patrick Butler (13:23.043) I was close to about $6 million over in the span of a year or two, right in the middle of the life cycle of the company. Jason Kirby (13:30.406) And was any of that from the death and the parent company or those all outside? Patrick Butler (13:33.698) Yeah, there was a little bit of follow on. It's a little kind of messy, the international conglomerate, but it was mostly individuals making the decision. There were not a ton of traditional firms or funds that were investing at the time. Jason Kirby (13:47.86) Considering when they invested, imagine everyone was pretty happy with your exit outcome. Yeah. That's always the positive pat on your back. Pat yourself on the back there. then you also mentioned how you did multiple &A deals. And just for a high level, like this is something that I talked to some founders about that, read some material success. I'll just buy you guys started real early on the &A, but ultimately it became a strategy. Patrick Butler (13:52.023) They were, yeah, very much so. Jason Kirby (14:16.402) What ultimately triggered the idea that buying other companies was in your best interest? And how did you just start that process? Patrick Butler (14:26.222) Yeah, there's a couple of different reasons we would acquire a company. It was very rarely like they had tech that we wanted, but I could see that as a strategy. It was always to speed things up. And that was the kind of the core thesis behind buying a company. I could give you like one example in particular that we, as I mentioned the business model, 10, 15 years ago, monster.com was a huge job board, still is very large. They had a resume writing service in-house and it was a company that was started 30 plus years ago. It was a brick and mortar resume business that literal mom and pop started in the Pacific Northwest. And they built this company up when they went online, they figured out a way to turn it into a digital product, but they didn't start the way we did as a digital product first. And they had the exclusive relationship with Monster. And as we're expanding and we're looking at what's the market, what's the best partner we want to work with for cache, for quality, for volume, and we were always targeting Monster, we couldn't figure out a great way to get in there and get inroads in a timely manner. The idea that we're going to come in and pitch and say, we're 20 % better margins. What was our differentiation? Why would they care to use a new supplier for resumes? And so we talked with that company and we got to know them very well and kind of the ins and outs of their economics. we did two things. First, we got the relationship with Monster, but it was also, you know, we could go through all of the unit economics of the deal and say, we do this better, we do this better, we do this better and work out something that was beneficial to everybody. was like, great. were looking to retire anyway. we could do their product justice. would not be a cheaper inferior version of their product. Monster would be happy because it would be consistent quality, all that good stuff. I would say in general, that was an instance where it just made sense to move faster. There was never a fundamental hurdle to prevent us from that one client or that one or finding somebody else to do it. Patrick Butler (16:41.112) But we instantly just were able to kind of grow and grow better. I think we also invested quite a bit in company culture early on too. We were based in New York City. We had a great kind of open layout for most of our full-time employees. So when we brought somebody in, and in that instance, I think we had six or seven key hires that came in, some of which are still with the company today. We were able to scale and not just treat it as like a cog in a machine across the globe. at all points in time. all of those kind of factors in general, for us to get there would have taken two or three years. And it was a very easy way to kind of model out, OK, if we do this now and we could get this on our balance sheet and we get these synergies and we get this relationship, we can focus the extra cash we do have on new features or whatever is going to grow this company at home. So just going faster, I think, is the big reason we did it. Jason Kirby (17:34.827) And were most of the businesses profitable that you bought or did they add? Patrick Butler (17:38.862) That's a great question. I'm thinking in hindsight, I think every single one was. think they weren't all exactly the same as ours, but they were adjacent. Very often, it would be like a sole proprietor running, spinning off enough lifestyle cash, where they were just grinding on something really interesting in the career space. And we had the muscle and the scale to turbocharge it. without sacrificing their vision and whatever value prop they were offering. And it worked out really well. And now I think about it, yeah, I think every single one was already profitable when we were doing any kind of like, you know, seeking out some innovative tech alone. We did talk about that a bunch, but mostly it was just taking models that had already been proven by the market and turbocharging them. Jason Kirby (18:24.404) Man, that's great. I just, you know, note to the audience is just, yeah, it's not right for most companies, but it is a strategy and it's an option in terms of like sometimes acquiring these companies, if they are profitable, be relatively cashless or low cash to buy a company and add cash to your bottom line to boost your either top buy bottom line, you know, performance and numbers, and can help make you appealing to either bigger buyers or customers or whatnot down the road. So. I'm just glad you shared that story with us and I encourage founders to plant a little seed in their head for next time. All right, so you sell the company. It's 2020, peak of market, everything's like, everyone's at home, but for some reason, market's and valuations are through the roof. You sell the company, then what do you do? Patrick Butler (19:16.248) First, I took a year off. My wife switched careers. I just had my second kid, or my wife had my second kid. But I was able to stay at home and quarantine and really enjoy life with our second kid and support my wife. And I did some writing. I was thinking about processing all the lessons learned over my career and is there something I could share with people formally. Maybe I'll revisit that or keep continue that kind of going forward, but that was very cathartic for me. and I leaned on people that I really liked working with or just interacting with in general. and the first big opportunity that I took seriously was, I've had, I've had two very good friends for almost 10 years that were ex professional football players, American football played were stars in college and had a, what they call it kind of a cup of coffee with the NFL, John and Jason. that I've just admired as friends, but also like just kind of the grit they have in their career. You know, don't have to be a fan of sports or even football to kind of recognize that there's something inherently interesting and healthy about the work that people put in to be really good at sports. And just like sports in general, sure there's rivalries, but they're not as toxic as maybe like political rivalries and things like that. So there's all this like, I just admired their grit and their I always wanted to kind of do something with them. And so they called me up and said, hey, we have a pitch. We want to start an American football team in France. And I said, well, this is the most ridiculous thing I've ever heard. I have to take the call, right? mean, like, this is, I'm not doing anything anyway. And I take the call and I start asking questions. And my mind is still in due diligence and scale and &A modeling mode. And I'd say, what's the marketing budget on this? saw it, it almost felt like the matrix at the end of the matrix where I'm seeing these numbers come in. And these guys are really good at everything else, but I had this lane to run in where I thought I could really contribute. I could see putting in one euro and getting more than one euro out in two years, five years, 10 years. And so kept having these conversations. They said that you should get involved and they couldn't really figure out how to connect. It was a chicken and egg problem that a lot of founders have. It's like, we have this vision. We know what it looks like. We know it's going to work. Patrick Butler (21:43.288) We got lots of people that are interested. know that it can get there, but they can't figure out the traction, how to take it from zero to actually one. And together, I helped us come up with this tactic where the three of us were going to secure this expansion franchise for this team. And just at 30 seconds on football, and why we love it in general, is that the NFL is the biggest, valuable league in the world. Basketball. is now drafting many of its first rounders in the NBA straight out of Europe, something that didn't happen 23 years ago. We think there's a huge opportunity to do that. The NFL is playing all kinds of games in Europe. Every single one is selling out. And there's lots of teams there that are a little messy that have just in the last two or three years really gotten organized in a professional European league of football. There was no professional team in Paris and the opportunity they presented was to have the first in this elite, the most elite league in Europe. I thought that was awesome. And I helped us figure out what are the tactics? How do we get it from zero to one or zero to 0.1? And it was, let's talk to the league. Let's get the expansion franchise license. Let's find great French co-founders on the ground that originally brought this to us in the first place. What are metrics for success? It's very similar to a resume writing company in a lot of ways. You still got to get people aligned and marching towards the same goals. And so the three of us put enough money together to fund it till the first game of the season and then went out and raised money to turbocharge it and kind of take it to the next step. Jason Kirby (23:26.184) So kudos to you guys for conceptualizing that and taking a leap of faith, because that would not be the first thing I'd want to do when it comes to building a new... Patrick Butler (23:38.406) There's some emotional overcorrection going on there, too. Everybody in COVID doing technical startup due diligence versus like, I get on a field in Paris is probably the furthest thing from that. But thank you for that, yes. Jason Kirby (23:52.104) Yeah. And when you putting together a package, like, so you guys did some friends and family, round to, get this off the ground and to get it going. When it looked, because I've talked to other people that have invested in American, I mean, soccer teams or European football teams. And they all tell me the same thing. It's pile of, it's a money pit where you pile money in. It's kind of cool to put your name on it, but in material value, there's not necessarily an ROI. But usually buying into established institutions, things of that sort. Like, what's it like kind of starting something totally brand new and conceptionally new to the culture? Patrick Butler (24:35.736) Yeah. Well, I think it's worth pointing out a tactic because this is almost three years ago now, but it was probably the most rewarding professional experience I ever had. maybe I'll forward this to you, Ken, if you're listening. Thank you for this. We were hooked up with somebody, ex-Nike executive who was a hands-on product engineer, was like instrumental in designing the Air Jordan way back and starting team sports at Nike. Jason Kirby (24:35.923) What was that? Patrick Butler (25:05.166) just to positioning genius, when it comes to like, you know, the reason we all have the swoosh on our, our every Jersey, we got a weekend with him. and this is something that we probably could never have afforded in a typical setting, but because this is an interesting opportunity, you said it's like, well, it's American football in France. The first time ever. is a guy that's informed what all of the new, a lot of new professional Jersey reboots look like today. He works with all of them. He helped us walk through our vision over the course of a weekend and we came out with a blueprint of our values and our ethos. And, you know, I like a good offsite as much as the next guy, but I think he had a language that we refer to daily that when we're designing a Jersey, we're releasing the alt's merch. We're talking to a new vendor in France that transcends borders, that transcends a lot of the business that It hasn't changed. mean, our vision and our ideals haven't changed. And it's sped up so many conversations. it like sometimes it's just like, hey, we need to deck out a stadium, how much is it to cost? And we just send them the brand book and that saves a lot of time. But, you know, when we're talking to a sponsor and what's possible, we've already got all of our ideas and our five, 10 year plan as part of this. I would say I'm, very interested in doing that again for anything that I'm going to work on is, and it just is like a real, it's a comfort blanket. I kind of pull out every once in while. like when I kind of lose my way or have a tough decision to make, you just kind of pull it out of the closet and look at it and be like, yep, this is why we're doing it in the first place. So it's a very sports center, sports centric thing. Even the language we use is very much the kinds of the quotes that are in the locker room walls that you slap when you go out to the game. It's fun. I get those a little bit more now. But that's what's kept us going and helped us navigate. and grind. Frankly, it's like when somebody doesn't believe in something, there's a couple of ways you could convince them. could steamroll, go straight through, or you could learn their language and incentivize them to try it using something they're familiar with. Two examples I can think of with that when we started this, the vendors at the French stadium said, we can never sell hot dogs. This is France. This is the food capital of the world. Patrick Butler (27:29.166) But this is American football. It's like, can't have hot dogs. you know, we tried it, the fans, which are 99 % French showed up and we ended up with an elevated hot dog that's delicious with crispy onions that I love. But they came around to it and they said, you're right. And it was the same thing with a mascot, a cartoon mascot. is beneath France. Nobody's going to like this. And of course, the kids love it. Everybody loves it. And now it's like, you know, defining. It's uniquely American, but also uniquely French. I think it took a while to get there, but that's been our stance all along. We call it culturally real. We're not trying to put American culture in them. You go to a game, you definitely feel like you're in Europe. And it's real and it's authentic. So that's our mindset. And you talk about how we execute. That's how we go there. It's also made it a lot easier to attract partnerships and investments. Jason Kirby (28:24.096) I think you take some, anyone can take away some real key lessons on the value of going through those exercises, establishing values, brand books. As a startup, it's tough to justify slowing down to make those decisions, but it makes every future decision faster, easier, quicker. And you get to the meat of things much, much more efficiently. And it's something that I see people struggle with all the time and simple basic questions that if they don't go through that exercise. Like I said, it just happens much quicker. yeah, it does sound like quite the fortunate experience. Especially for me, it's such a big thing because it's not just about building a product. You're creating an event experience. You're creating a merchandise. You're creating a career for athletes to pursue their goal and play under the big lights and all that kind of stuff. there's a lot of moving pieces. So to have that kind of foundational element to it is impressive. So if don't mind me asking, I'm just curious, what are the economics of starting a team from scratch in a new country? Patrick Butler (29:30.67) Yep, there three revenue drivers today. The biggest is butts in seats, as we'll call it, people buying tickets. It works out. we are a fully professional team in that every single player is paid something. It's not outlandish. Many have to keep day jobs. This is not a we're taking them off the market. But it's rewarding them for something that they maybe couldn't do before. And almost every single one of these people never expected to play pro football. Anyway, they're either on the cusp of the NFL or have thought they were going to retire. And one more kind of caveat to make it really interesting is the league is very authentic as well as you're only allowed up to four Americans and six others that are not your nationality. So our team of 60, when we're a full roster, 50 % are actually French. So we're not bringing in gladiators for French people to see. These are their compatriots. These are their people. And as a result, we play uniquely French football against the German teams and the Polish teams and the Italian teams. it elevates it to that kind of fun you get every four years in the Olympics, where there's a little bit of patriotism. And they aren't used to playing the La Mercie as the national anthem at beginning of sporting events. We do that. It's a great way. So economics, get people to the games. Football does not play a lot of games like baseball. So we get six home games each year. That's going to be a revenue driver. The second is merchandise and anything you could sell on top of that. Always experimenting, but people love it. I love it. I don't know how much stuff. mean, I've got some stuff. I got throw pillows. I got all kinds of stuff right here. So that is fun for me because we're always experimenting with ways to interact with people and keep it fresh. And then the last is I'd say partnerships and sponsors. Very hard to get upfront, but we are a vessel for Jason Kirby (31:09.298) Yeah. Patrick Butler (31:25.344) lots and lots of brands to get their message to market. It's not just about synergies and like, can we get a patch on your jersey so you can see us on TV? There are really interesting things. We have an engaged audience. We'll get up to 5,000 people at a game. What can we do with that? There's no rules in the script. Like we can go in halftime and say, here's your product. We're going to talk about it. We're going to put it up on the Jumbotron. There are the perks that are typical with normal sports. Like you get the luxury box and the... the free tickets and all that and meet the players. But what is so special about this league at this scale is that we have an audience, but we're also really nimble. I've been trying to get a QR code painted in the end zone for a partner of ours. I'm experimenting with like, it work with 1080p? Do we need 4K? But that's never been done in sports. And that's something that is as a sponsor, I would be incredibly interested in doing because there's no ROI, but it's also not a marketing stunt, but it's a really interesting story to tell. It's like, we tried this thing the same way that we're trying. And, you know, all of the benefits of sports, what I pitched to the value prop is yes, at scale, there's only a handful of teams in the world. Many of them lose money and they're still valuable. This is not just a value play, a brand play. This is very much like, you know, we think we're at like in that sweet spot of we're small enough to be nimble and do really, really interesting things, which is the reason I did this in the first place. If it turns into money and power and fame and riches, that's great. mostly, we're just trying to make a collective smile. Jason Kirby (32:56.21) And you don't live in Paris, do you? Patrick Butler (32:58.062) I don't, I do not. I speak Pigeon French as well. Fortunately, most of the things I talk about are colors and numbers and these are all the things that the first thing you learn in France. can talk about that, but I can't pretend that like, I know the slang and the players are all 20 years younger than me too. So there's a whole level of like different generational psych, but I know I don't live there. I do spend a lot of time over there. Jason Kirby (33:22.622) Yeah, I think it's absolutely fascinating. And just for fun, just for all our SAS founders here, do you measure LTV to CAC ratios for your fans? Patrick Butler (33:34.088) I, so I do, everybody else on the team thinks I'm a huge nerd and they hate my frameworks. they liked my frameworks, but they do not like having to follow up with it. there is an entire market of sports tech out there. If you want to get into something interesting, where they, they're doing these profiles, you know, they, can just think about the technology. Somebody came to a game, we have the data from Ticketmaster or this or this or this, and then they opened an email two days later. this multi-world cross device tracking is just top notch. We're just in the infancy here. But you can imagine custom drip campaigns based on like, they sat in this section or they brought their kids. And we do this all the time. We throw promos of like, this audience, can we send them something that is uniquely them and makes them feel special? But very much we're trying to target in LTV. It's like, what's the likelihood? They come to the game. What is the action? Are we trying to get them to bring a friend next time? Come back themselves? Yes, is the answer. I've got spreadsheets on spreadsheets of CAC to LTV. Jason Kirby (34:39.252) I love that. you know, would imagine some of the bigger agent franchises, you know, work on this stuff at this scale now, but it's awesome to see it as like kind of the scrappy, nimble, you know, stage of drin now. all right, so you spent a couple of years, got that off the ground and you know, that's sounds like it's, you're going to continue to go on, which is great, but that's not where you stopped. You have recently launched a new company called Biz Defender and why I think this is a very unique is you look at your track record, you've had a lot of success, and you went down a similar path to which I chose and full disclosure, we're part of the same Foundry ecosystem. you started to start your next company through a Foundry or what most people call like a venture studio where you're not doing a hundred percent of everything by yourself, but you're still kind of founding the entity through another entity to kind of get it off the ground. Just kind of speak to that a little bit. Maybe give people a little bit of context to to enter play and why you chose to come on as kind like an operating partner to to launch what is now Biz Defender and then we'll get to Biz Defender. Patrick Butler (35:49.506) Yeah, you know, even in the limited amount, we've just had a conversation right now. You could probably sense when I feel vulnerable and when I get really excited about something. I've been through the wringer emotionally and been demoralized by like feeling alone about something, even when I thought that the tech or the product was great. And, you know, success is important. It's what it's how you keep score would define it, even if it's money or it's like the people you work with. I'm in position where I can be very picky about what my day job looks like. And that's what I've been most protective of. It's not the, I have X percent of a company or a little bit less? I've always believed that like the biggest, the best way to grow your own pie is to grow the pie for everybody. So your slice is bigger. But that's not inherently why I did it. The fun story is I started working with an executive coach. Eileen, if you're listening, shout out. And one week she tasked me with a co-op plie to three jobs, which felt very uncomfortable and weird. And I know why she made me do it. It got my pitch honed. It got me thinking about the landscape. I wasn't just sitting by myself just daydreaming about what could be. But I didn't know if it was like, I want to found something? I want to work for somebody? I kind of was just at a crossroads. And so I did it. And it's a strange market and somebody that started a resume company to do that again and to be emotionally involved, really do some introspection was a top exercise, but I did it and it felt low risk. And one of the jobs was at a pitch at Interplay. I talked about that spark I had with my co-founder, Jeff. Interplay took my call and I started talking to them and it was the only time I've really gotten that since that first call with Jeff, you know, 22 or 10, 12 years ago now. So Why did I pursue this and how did it go down? One, I got that spark. I thought that was really worth exploring. At Interplay, Dan, an operating partner who's essentially been a co-founder in this with me, felt like he had a very similar mindset and energy, but also a wildly different skill set. He's a successful banker that took a bank public. And here I am as a product hacker. Jason Kirby (38:09.865) Ha Patrick Butler (38:10.158) but the big, big reason is that I didn't want to grind for two years in a garage. Like I know what it's like. I just did it. Like with the Paris team, I did it with my last company. I did it with every company I've ever done where if I could get a headstart for a year, it's not that I didn't like those tasks. You become a better person. You get very interesting stories. I'd burn out and I know that about myself and I've, I have burned out a couple of times in my career. And so I am hungry and fresh and have this two year headstart where the idea is vetted. I have a. an immense say in it. There isn't a lot of empire building or like turf disputes here. We're all in it together. It's a really great model. so those are the big reasons I got into it in the first place and why it appealed to me. We're taking just a very similar risk reward profile. just felt like the kind of, this is the only way I'm going to have a job in five years that I really like is to do it this way and not to just grind. And I'll let that kind financial success chips fall where they may. Jason Kirby (39:12.904) You know, I felt pretty much exact same feelings you felt when I made the decision to launch Thunder. similar type of spark of the relationship with Mark and Kevin and stuff like that. So I think it's very interesting that you share that. And I bring, I asked you this question to bring it up to the audience because everyone chooses their path for their own reasons. Equity is not always the hundred percent number one priority. But often when raising money and talking to founders, I always see them like fighting for every percent they can or basis point. In reality, sometimes it's a lot more fun to do things with other people and not kind of go on it alone. And not everyone has the right makeup and organizational structure to go from zero to one. So thank you for sharing that background. Ultimately, it will lead to you launching Biz Defender. So what is Biz Defender? Patrick Butler (40:07.394) We are the first and only mass market affordable solution for small business to prevent fraud. Fraud, especially small business fraud, is rampant and it's growing quick, mostly born out of the advancements in tech, a lot of which started in COVID. We have lots and lots of conveniences, be it video chatting and mobile deposits, the tech is just outpacing the risks. And as a result, as much as like five, six, seven cents of every dollar that's transactional to small business is subject to some kind of manipulation or fraud. And so we've come up with a solution that we think is, that I know is we can operate at a unit economic level at scale and offer value to small businesses. And we have a really interesting way we think we're going to get to market. So it's 33 SMBs in the US. Many are single people, sole proprietors, couple of employees. This is half the US economy. And they're neglected. And it's hard to understand what fraud is. Most fraud solutions are really expensive. They take a lot of data and education. And typically, you have to know what you're looking for. I want to offer a product for the laundromat down the street for the two startup founders in their garage that is easy, nimble, low efforts that can educate and prevent risk for them kind of going forward. Jason Kirby (41:37.684) And I thought this was pretty interesting from that perspective because you touch on fraud in different areas that a lot of people don't realize is going on until you're hit with it. Until it becomes a problem, most people don't really know it's a problem because one, it's embarrassing. So a lot of people don't like talking about it. And two, it's just, kind of blindsides you. It just kind of hits you out of nowhere. And there's all these creative crafty ways of someone maniacally trying to manipulate. how they present themselves to take advantage of a business owner or business owner, customers, things of that sort. So I think it's not only big market, 33 million SMBs, but also kind of a noble cause as well in terms of helping support the little man. So that's the idea. That's where the company's at. You've launched, people can check it out. We'll leave a link down below. But from going from the... Joining Interplay, you decide to join the Foundry. There's like a little bit of seed capital that gets thrown in there. But ultimately, what was that timeline from, I like this idea at Interplay to taking that as small amount of seed funding to where you are now, where you actually launched and are taking on customers. Patrick Butler (42:53.836) Yeah, I formally incorporated on Valentine's Day. I'll remember that, which is only seven, eight months ago now. And I was the sole founder at the time. I still might consider co-founders. I'm not so proud that I wouldn't afford, know, if the opportunity was right for somebody. So in that time, in the most valuable things I've been doing, I've certainly been doing a lot of soul searching and spreadsheet modeling, all the things I'd like to do anyway. But one thing that Interplace has been hugely valuable at is trusted intros, warm intros, contexts. I sped up so many conversations rather than me just knocking on doors. People take calls and they listen and they're hopeful and they understand it. And even when they have a criticism or they don't believe this business is going to work, They work with me and they have just a great conversation. And I've done this enough. I just did it in France, of all places. And I know that this is a hard thing to do. It's been awesome. every day, it's like, can't wait to get feedback, negative feedback, so that I can learn from it and harden the business model. And the second is that they do offer access to fractional resources. They have in-house companies that they've built. This is not Uncommon for a studio, but what I think is interesting is I know a lot of the tools I want to use in this. You talk about like fraud is a solitary thing and you start putting the parallels together. The reason I was drawn to this in the first place is a job seeker applying for a job and not knowing what's wrong with their resume is a solitary thing. It's very important. Nobody talks about it. There's a lot of parallels there, which is what I'm to flesh out this business model. But as a result, I know what I need in marketing. I know what I need in this and this and this. I'm not interested in standing up a huge bloated team just for the sake of doing it, where maybe if I was younger, I did. I want the ego. I'd want the interaction. I want to do what's right. And I want to do what I want to start the culture in the company the right way. But they offer these fractional resources through growth marketing or legal or accounting that are very kind of almost at cost. Patrick Butler (45:09.058) but really smart people that can flex up or down based on kind of a crazy idea I have. Something that was the exact opposite starting a business in France, football, can imagine the number of vendors and stadiums and things like that, that every single conversation has to be started from scratch. I was craving that in a big way. And so, you know, I can prove something up. I can try something if it works and get traction, then I go find full-time hires and the ethos of what we want in this business and scale it up from there. So, That's where we've been in. We're now in just a tiny bit of C-cap, but we actually have an alpha product live. It works. There's a free and a paid tier. And visit Defender.com. And I have five or 10 different people working either for me as an employee or regularly with me as part of one of these fractional resources. And I couldn't like it more. it's like, as we grow, I'm ready to pour gas on the fire. There's Not a lot of conflicts with culture. This is just like, feels like a wide open playing field to bring back the sports reference. Jason Kirby (46:14.363) To be, to be expected. Well, no, Patrick, I appreciate you sharing that transparent experience and educating founders that again, like what we learned in this is there's, you know, we've talked about bootstrapping, venture capital, but in you raise money from internally from a parent company to raising debt, doing &A, know, doing friends and family rounds to start a football team and then doing a venture studio. So I just loved having you on to talk about the breadth of diversity of capital options that you chose that were appropriate for your path and encourage founders to make those same types of considerations when they're building the next business. Patrick, before we part ways here, what would be the best way for people to learn more about you and VisDefender? Patrick Butler (47:01.922) could either go to my personal site. has all my, my socials and a little bit more backstory of P Butler P B U T L E R.com. but biz defender is one click away from that. And, I'd like to be very transparent. You can click through and see how I'm talking about it in public. I'm very much hiring, but I'm also a geek about mentoring and learning from you. You can hear it in the passion. just like bouncing ideas on people when I get the time and I tend to, this is the learning, but this is the honeymoon period where, I was talking to Jason separately. It's like, nothing has gone wrong yet. So I can take every call and I can take the constructive feedback and incorporate it. So yeah, please reach out, connect. I love serendipity too, where it's some of my best, most rewarding career experiences have come from really untraditional places. The other day, our wide receiver who had retired called me up and was asking for her advice. And I learned something about myself that helped my Biz Defender product roadmap as part of that journey and that conversation. So I'm a big fan of that. Yeah, connect, shoot me a note and I would love to pay anything forward if possible. Jason Kirby (48:11.188) No, it's amazing. appreciate that. And it's not often that you get to say my wide receiver called me for career advice. Since I don't hear it. All right, Patrick. Well, thank you so much for being on the show. It's been an absolute pleasure. And we look forward to getting this out. Patrick Butler (48:17.752) That was, that was a purposeful. Yeah. Patrick Butler (48:26.05) Thanks so much, Jason. Big fan of your product and your podcast and appreciate the time. Jason Kirby (48:31.538) That's my pleasure. Thank you. Patrick Butler (48:32.984) Thanks.