How do you engineer a life-changing exit without VCs?

Jason Kirby (00:02.002) Welcome to episode 20 of Fundraising Demystified, the podcast where we uncover the untold stories of startup founders who have raised venture capital to bring their visions to life. Join me, Jason Kirby, as I interview these founders and dive into the hidden truths of how they got funded. And if you haven't already subscribed, make sure to visit join.thunder.vc. To get our weekly newsletter. That covers valuable tips and insights from those raising and deploying venture capital. Today, we dive into the story of Melissa Kwan, a bootstrapped entrepreneur who quickly learned that raising venture capital was not the right path for her or her company. And she shares her incredible insights as the co-founder of eWebinar, a SaaS solution to eliminate the repetitive task of running and onboarding and sales webinars. She opens up about her personal journey. of the stress of running her previous company that she led to an exit and sold, and how she basically shaped her career moving forward for her desire to be fully bootstrapped moving forward. We discussed what bootstrapping actually means and that actually raising a little bit of money is still a part of the bootstrap game. Melissa has some valuable insights that I'm excited to share with you. Let's go ahead and get started. Thank you so much Melissa for being on the show. Melissa Kwan (00:10.198) Thanks so much for having me, Jason. Jason Kirby (00:12.651) Well, you know, you have a very interesting story, you know, being co-founder of eWebinar and having a journey of pursuing venture capital, but having more of a mission now on only being bootstrapped and kind of promoting that as a message for other founders. I would think it would be great for the audience to know a little bit about you, your background, and kind of what led you to that path. Melissa Kwan (00:33.906) Yeah. So I've been in startups for 13 years. So you webinar is my third, third bootstrap startup. I guess I didn't choose to start this way 13 years ago. I just didn't really know there was another choice. Um, and we're talking 13 years ago before Y Combinator, tech stars, you know, all that stuff, right? Like I was living in Vancouver and there was just meetup.com, right? I don't know if you remember that, like you would like join groups and then you would go to a restaurant, like talk about your startups. And then there were like these things like coworking spaces and all that stuff. So, um, business. I didn't even know that a technology startup was called a startup. I had quit SAP and I wanted to start a business on my own and I had never really done it like 100% of my time. So my first company, it was a product company turned agency. So, you know, we needed the money, we were bootstrapped and therefore we had to say yes to everything. So what started as, you know, a real estate product, a real estate tech product became a custom apps company for real estate developers. And that was actually my first foray into like. you know, really getting into the startup community, traveling to New York, meeting other real estate tech founders. Um, and then my first company, you know, it, it just, it wasn't an investible company, right? It became an agency. Um, but that was where I learned about, you know, that, that world also going to New York. That company transitioned into my second company, which was my first SaaS product. Uh, it was an open house check-in, um, check-in app. So walking into an open house, instead of signing in on a piece of paper, Melissa Kwan (02:14.752) an app for open houses and we sold that to brokerages and franchises on the enterprise level and you know honestly that company took probably two and a half years before we earned the first ten dollars and You know, how we started that company was I took all the revenue from my first company, took out a loan against that. And that's how we got the initial capital. We had burned through so much of that, that I was always like, I was always in survival mode. And that was the reason why I moved to New York to be closer to my potential customers, to be closer to real estate. And in New York was where I learned about venture capital because everybody and their dog was raising venture capital. Every single event I went to, they were talking about different VCs and whether they could introduce me because they knew I was in survival mode and the, at that point, you know, we were so poor. that like I was always trying to make ends meet by taking consulting projects, side projects, you know, making a small website for people, trying to make payroll, you know, like we were just always trying to patch the next hole. And I was getting pretty exhausted. So the idea of building a company using someone else's money was actually pretty attractive. So, um, you know, I met with VCs, tried to raise capital, nobody would give me money. And then along the same time we had started closing deals, found the product with that people would pay for. And then within a year of, you know, the first $10, we became profitable, right? Also because our burden was so low having the team in Canada. And I had at that point already learned to live with very little. Um, and then I was also seeing. Melissa Kwan (04:00.658) that my venture-backed founder friends, while I was becoming more stress-free, they were becoming more stressful because they were also always trying to raise the next round and I guess strategically creating a narrative around their company such that they can do that. Right. And meanwhile, we were closing more deals and I was starting to live better, travel more, calling my own shots. So in a big way, I guess I saw both sides of the coin, like trying so hard to raise venture capital, getting rejected so many times and then. earning my freedom eventually, um, but then also seeing venture back founders kind of going the opposite direction. And that was when I realized that bootstrapping and raising venture capital was really less of a financial decision and more of a, more of a lifestyle choice. And it was since then that I became, you know, kind of a, I guess, a diehard bootstrapper and also an advocate for bootstrapping and hoping Jason Kirby (04:44.7) Thanks for watching! Melissa Kwan (05:06.744) you know, inspire other founders to know that success comes in many different forms and that they don't have to raise venture capital in order to have permission to succeed. And when I say permission to succeed, it's not like you know, a VC giving you permission to succeed, right? I think in a lot of times it's like, you wanna seek validation from your peers. At least that was the position that I was in because I never felt like I was doing the right thing. And I wanted someone else to give me money so that my community would see me as a success because that's how I saw them. And none of that is real because the only definition of success that matters is your own. And it was through that experience that I realized I didn't need someone else's money to be successful in my business. Right? The only thing that really matters to me, even right now is to live the life that I want where I can have fun in, where I could travel and spend time with friends and family and call my all of my own shots. Right. And all my own shots to me just means like, I don't set an alarm in the morning. I nomad nine months of the year. I have a completely remote team. I work with it. A full team of contractors. I have made an active decision to not have any employees cause I know I'm not great at managing people. And that's what I mean by calling all my own shots. It doesn't mean like I want to have a fancy car and have a yacht and fly private. Right? So that's kind of my background on, on how I arrived, um, at, you know, wanting to always boot trap my companies versus, you know, capital. Jason Kirby (06:37.415) You know, your story, I think is going to resonate with a lot of founders, especially a lot of founders I've spoken to and me personally, when I kind of made my first attempt to raise venture and failed, there was that seeking a validation of I want to do something bigger and kind of getting that approval. Yeah, albeit every founder has a choice to kind of find the right path for them. But I think it's important to kind of acknowledge that there's these other paths, you know, like venture is not the only way. And sometimes venture is very misleading because, because you want money. Doesn't mean someone's going to be giving it to you for what you're building. And it can lead you down a vicious trap that leads to burnout, you know, closing up shop and you know, you took a huge risk, you know, you took out a loan against your other business. and like that puts your other assets at risk that, you know, put your livelihood at risk and so on. So you put a lot on the line. And that's, you know, some founders are not comfortable with that. I know I did that with my small businesses. I basically funded the startup that we ended up doing that ended up not going anywhere because we spent all our time, all our productive time chasing money. And when we could have been serving our customers better, you know, refining our business model to extract more profitability from the business to give us a longer runway and give us more flexibility in the choices that we made. So I think your story. is not an uncommon one. And I think it's something that a lot of founders should realize that they should consider their options. And that's why I wanted you to have on the podcast. Because typically we talk about fundraising. We talk about how much did you raise? And we celebrate the raise and how'd you get there? And what was the hassle? But I wanted to have a fresh perspective on the alternative because there's a lot of societal pressure to kind of have this label of success. And there's ways to, and some of the most happiest and most successful founders running 10 plus million dollar Melissa Kwan (08:11.038) Yeah. Jason Kirby (08:29.845) plus your businesses, but they have high profit margins, live the lifestyle they want and they're comfortable. Whereas I know several founders that have raised tons of capital that only can pay themselves like 100K, 150K. They can't pay themselves the profits of the business. They aren't profitable. So there's, you can't really just give yourself higher salaries for the sake of giving yourself higher salaries. So from a lifestyle perspective, till there's like a real exit point, there's not a lot of financial freedom. So appreciate you sharing your perspective. You kind of talked about the real estate solutions that you had built out from agency to the SaaS, but you're also in a new company now called eWebinar. Can you tell us a little bit about that? Melissa Kwan (09:09.758) Yeah, so E-Webinar. Automates webinars, right? So we turn any video into an interactive webinar that you can set on a recurring schedule. So you can run hundreds of webinars every single month without actually being in front of a camera to do it live. So think about all the things you're doing repetitively or want to. So it could be like demos training, onboardings, especially if you're, you know, selling SaaS or any service, um, activation in turn is probably one of your biggest revenue drivers. So we help companies scale really themselves, um, so that they can more you know with their time and it's actually a product that I wish existed when I was running my previous company because I was so bootstrapped so I was the person after closing a deal doing all of the demos onboarding and trainings for people that don't show up but You know, you have to do those because if you know, your customers, you know, team or agents don't adopt your product, it's your fault, not their fault. So sometimes I found myself doing like eight of these back to back and they were all exactly the same just for different companies. So I'd always dreamt of this product that could, you know, do my job and, and that, you know, could clone me so I could go in and just live my life. Um, so after, you know, two months after I sold my previous business in 2019, I started this business. Um, and it's been, you know, now since we incorporated three years since the product has been live and we just crossed a million ARR. Jason Kirby (10:35.955) Congratulations, that's awesome. And you tell us, it's your last business, so you're telling us about the SaaS, was this a SaaS business for real estate open checking that you sold? Melissa Kwan (10:45.662) Yeah, yeah, it was called space you. Jason Kirby (10:48.595) Can you tell us a little bit about what that experience like, was like selling the company? Melissa Kwan (10:53.49) Yeah, I mean, it was so easy for me, right? Because I didn't shop it, I didn't want to. I was in a point in my life where I spent 10 years in real estate tech, like over two businesses. And frankly, I was just tired of where I was, right? There were a lot of cool things happening in the world that I wasn't a part of. I found that I was waking up every day, just hating what I was doing. I really didn't love the product. I wasn't in love with the industry. I didn't love my customers. And I was always frustrated in a way that like, I just couldn't feel the successes that we were having. Like I just didn't want to be there. And I couldn't tell my co-founder. because this is someone that I had convinced to join my mission and my journey. I couldn't show that to my team, so it felt very lonely. And at that point, I was just kind of complaining to one of my industry friends and mentors, Aaron, who ended up buying my company. So he was like, I just said to him one day, like, I wonder if my co-founder would let me sell my share so I could move on to something else. Like, I just wanted to be a part of something else here's being in the same place. And he was like, hey, if you're serious about that, like, you know, we're looking to make our first acquisition, but you're gonna have to stay. So we started having that conversation. October of 2018 and we closed that deal two months later in January of 2019. I didn't shop the company because I knew Aaron, I knew that the offer he was going to make me was going to be the best one. There were so few people in the industry that I would work for and I had spent so many years until that point earning my freedom because I was also nomading at that point calling all of my own shots that I didn't want to work for someone who would disrupt my lifestyle. Melissa Kwan (12:49.196) It was most important for me that, you know, it was a, it was a CEO that I respected, that it was someone that would take care of my team and that it was someone who wouldn't change my life. So I didn't want to jeopardize what I had at the time. Um, and also like, because he was my friend, I didn't have to put on like a dog and pony show to sell the company. Like he knew where I was. Um, he knew that my heart wasn't there, but that I would show up for him. And that was most important. So I think a lot of people think like when you sell a business, you have to get the highest price. But it's not like that's one element. Right. I think as long as the price is kind of in the range, there are so many other things to consider when you sell your business, because it's not like you can sell this business and move on. Like you're with them for, like, let's say one to three years. So I was lucky enough that I just came across someone who took care of me and took care of the team. Jason Kirby (13:52.711) And the fact that you kind of mentioned price and the acquisition, it's like wasn't the sole decision-making factor. That's often a very common I see in the negotiations for fundraising as well. Everyone gets so hung up on, I must get the highest price. I want to have the least dilution. I want to make the most money, whatever. But there's so many other terms that matter in both an acquisition or fundraise that can have a much longer impact on the future of the business, as well as the mental health of the founder. And it sounds like you're very conscious of that decision. And you know, your friend probably knew your deepest, darkest secrets. He probably knew the skeletons in the closet of the business and was probably comfortable with them and knew, you know, maybe there's some additional upside. What was the lockup for? Like, did you have to stay for a certain amount of time? Like, at what point were you kind of allowed to exit the business after the acquisition? And did he only buy your shares or did he buy the whole company? Melissa Kwan (14:44.482) Yeah, so they bought the whole company. We were actually part of their plan to exit themselves. So they wanted to buy our revenue so that they could piece together a story to have a much larger exit themselves. So that was also part of the attractive thing is like. You know, it's so rare that you sell a business and like the person gives you all cash or the company gives you all cash, right? It was like cash, stock and earn out. So the earn out was two years. Um, I managed to negotiate like a six months early out. Um, just because they didn't fully find a place for me. And I think that's a pretty familiar story. Like one company can only have one CEO. So it's very, very difficult that, you know, a CEO buys another CEO and then, you know, you also get to call the shots. And there, when I, when I joined that bigger company, like there were multiple people already doing my entire job. So there wasn't really a place for me outside of making sure that our customers felt comfortable because I was the business, right? Because we were a small business. So I was all of our relationships. So it was more important to that business that our customer stayed and all of them did. So I was there for that transition, but it just got to a point where I, I wasn't there for a good reason, like I was just there. So I think it worked out for everybody, but also because I started eWebinar two months after that business was acquired. So a year and a half later, eWebinar was about to go to market. So I basically just told them like, I'm not really here for any reason. I'd like to launch this new business. So we kind of negotiated a six months out that was beneficial for both sides. But I also want to bring up that the only reason I was able to sell that business is Melissa Kwan (16:41.144) strapped. There is no way that a VC would let us sell that business at the price that we did, because they would want me to go for a much larger exit. They want a certain return. Either I would have to keep going or they would have to hire a new CEO. So that exit was not retirement level, but it was certainly life-changing. And I can't imagine not being able to sell my business at a time that we did, because a third party who didn't spend five years building that business told me I couldn't. Right, that would have been also life-changing, but in a bad way, right? Like I would have had to quit and then give up everything and then maybe have to start a new thing without the capital and the confidence that I did get from that exit. Jason Kirby (17:33.315) Yeah, that's a good point of contrast and going back to kind of the bootstrap verse you know capital raise path and that kind of expectation that if someone gives you money for their business, for your business, they're locking up, they're saying goodbye to that money for years with the expectation that you're going to at least 10x, 100x, you know whatever that you know projections are meant to be and life happens. People have life changing events. things happen at home, personal reasons, whatever it may be, just disinterest in the work that you're doing may happen. And if an opportunity to sell comes up, are you in full control of that? And that's another negotiation tip when raising capital is who has veto authority in any potential liquidation event or the sell of shares. That can be a more important negotiation chip than a couple million dollars on the valuation of a deal. be. So it's interesting for you to kind of share that personal perspective of you would not have, you would have had to stay. Even if you raised a nominal amount of money, you know, there was still probably been some pressure and expectation that probably wouldn't allow you to think that you could sell it anywhere around that price. Melissa Kwan (18:50.598) Yeah, I mean, there's no free money, is there? Like, even though it feels free in the beginning, it's not free when you need to get signatures. Jason Kirby (19:00.317) Oh, another valuable point is, you know, when things aren't going well, and you need to go to your board, go to your investors and have them sign something that... Melissa Kwan (19:00.993) I'm sorry. Jason Kirby (19:11.187) could maybe put you in a healthy position, but puts them in a negative position. That's a very tough call and I've been there. I've had to deal with the down round after an acquisition fell through the day before and crawling back to our investors to get the capital we needed to stay alive, we got hosed. And when we actually ended up selling the company, we got substantially less than we could have because of those negotiations that happened. You know, still life-changing, but still punched in the gut, you know, because the investors held the chips at that point. Melissa Kwan (19:40.562) I think if we, if we're on the topic of like raising capital, right, I think one of the biggest misconceptions about bootstrappers is we don't have any capital, like we don't have any external capital, which is untrue, right? Because between zero and VC, there are different types of investors and family and friends being, you know, a big source of initial funding, especially when you don't have anything revenue generating yet. So like, I don't think people think enough about how it doesn't matter how small the shareholder is, that's still a shareholder. And when you wanna sell the company, every shareholder needs to sign. And I've been in a position in the past where, you know, a family and friends investor, and while it's an investor, I think we traded equity for work at that time. And a lot of people do that, but they never think about, oh, it's just, you know, 0.2 or 1 or whatever it is. that 0.2% that you gave away will come and bite you if that person doesn't want to sign the document. And that happened to us in the previous company where we traded work for equity. This like, you know, it was a friend at the time, but it was no longer a friend years later. This person held the equity under his company, which he then sold to a public company without telling us. So that percentage mattered so little to him. They didn't even think about it. Didn't even offer it back to us or offer to sell it back to us and just did it. Didn't think about it. Didn't talk to him for years. When it came to signing those documents, for the life of us, we could not get that public company to respond. And I thought that because we had a drag along clause, that the deal could just happen without a signature. So two days before the deal was supposed to close, my lawyer was like, well, we're missing the signature. And I'm like, well, I can't get a hold of this person. So can you just do the, execute the drag along clause? He's like, what do you mean? The deal is not gonna close. Because even though you have a drag along clause, you need to take that person or that company to court and have a judge say that everyone's getting the same deal before we can drag, like before we can actually drag this person along. Having a drag along clause, at least in Canada, doesn't mean you could just drag everybody along because these laws are, there are natural laws in place to protect every shareholder. Melissa Kwan (22:06.422) So at that point I'm sweating bullets because I didn't know this. So I had to go through like every channel to somehow find the mobile phone number of the CFO of that publicly traded company and text him the sob story so that he would then go and sign those papers. So it doesn't matter who the investor is, even if it's a family and friends, small investor, a shareholder is still a shareholder. And that's something to think about when you're joining an accelerator, when you're trading equity for work, right? When you're taking a tiny check because you just need the money, think about whether this is someone that's going to be on your side when you're going to sell that company because it will matter. Jason Kirby (22:33.401) Thanks for watching! Jason Kirby (22:54.923) That's a tough, tough drag along. I'm pretty, that might be a Canadian thing only, because I know when we had drag along problem, we had drag along risks in our previous companies and we had the ability to kind of just ignore the fact that they didn't sign. They tried to push, but it basically didn't come into play. There was also just so many small checks we had to take, but that's, I guess maybe that's unique to Canada or maybe our terms are a little bit different, but that's tough and that's a very true, whether it was drag along or not. a reality to take into consideration. I'm glad you shared that with kind of raising capital. So you kind of mentioned earlier about taking capital and like getting smaller checks or work for, you know, work for equity, you know, type, you know, deals. How did you price them? How did you negotiate it and kind of what was your mindset around accepting those terms or drafting those terms? Melissa Kwan (23:48.382) Yeah. So I mean, um, I always, I I'm always erring on the side of everything should be as vanilla as possible. Right. Because even though we're not raising venture capital today, I can't say there's a zero chance that we're ever going to go that route, right? Maybe one day we'll decide, okay, well, this is the path we want to go. Um, and I don't want anything to be complicated and out of the norm, um, if we ever go that route. So we've always drafted everything properly as if we were a company that is raising venture capital. Um, we use, you know, we used saves, you know, um, convertible notes, everything is documented as if we're raising from institutional investors. I think that's the way to go, right? Like we have, founders have investing schedules, shareholders agreements. But the way that I've done it with eWebinar is a little bit different than I've done it in the past. We do have family and friends investors, David, who's my CTO co-founder and my life partner, we wrote the first checks. Everybody has to have the exact same terms. And that's also because, you know, we're raising from family and friends. It has to be like, we don't want anyone to feel like they're being cheated or they're getting a lesser deal. Right. Um, so everything's transparent. Every everyone's on the same terms. If you can't agree to those terms and you just don't, you just don't come into the round. Um, the very different thing that I did with e-webinar, um, is we have, number one, we have a minimum. So we have a 50 K minimum because I don't want. a big cap table, right, for the reason that I just explained. And I don't want, like, I want as little people as possible on my cap table. I only want people who are on my side. I only want people who, like, are our best friends, like we vacation with, right? Because I envision a world where we can share our successes with friends and we can have investor retreats and all our friends are going to be there. And it's going to be, you know, one big party. Melissa Kwan (26:00.43) Um, and the major difference is the terms are structured such that this is a profit generating company, which means dividends are paid out according to your percentage of investment and not percentage of equity holding. So you can have 1% but have 10% dividends entitlement. Cause the idea that you have to wait until an exit to get your money back never really made sense to me. And because we want to be profit generating, because I'm not building this company to sell, and because I don't intend to raise venture capital, I want to make sure that people can get their money back long before we actually sell the company. And if we do sell the company, then it would be kind of a cherry on top. And these are all people that we don't have a lot of people on our cap table, but these are all people that are successful. but not entrepreneurs. Like they're not gonna go and start something else. And these are people that are maybe in their later stages in their lives, in their 40s and 50s. And they're looking for passive income. And I've sold this as a passive income company for them because this is going to be a passive income company for me. So I wanna give everybody involved a life that I envision for myself. And hopefully we'll get there sooner than later. Jason Kirby (27:25.343) That's not something I hear often and it's a refreshing perspective to hear in terms of dividend payouts because I've talked to founders that wholly own their businesses but when they raise a little bit of outside capital and treating it more as a passive income opportunity, which if you listen to TikTok and personal finance on YouTube, it's all the rage trying to get passive income and you're selling what people are buying. I guess, what are some of the mistakes that you see other founders make when trying to maybe raise friends and family rounds and trying to bring in, you know, either maybe some advisors or some people that can add value, but in particular, just that kind of that small round of the expectation that maybe they don't go out and raise a big round down the road. Melissa Kwan (28:10.326) I mean, I think the number one mistake I see people make is having too many friends and family investors to start with. I don't know how much a $5,000 check can have on your business, but I do know that means a lot of signatures. That's the one thing I think about because I feel like I have a bit of PTSD from like selling my previous company and not being able to get signatures. But you know, when things are good and you know, you're selling a dream and everyone's happy, like everyone that knows you wants to contribute a little bit, right? And of course you want that support and you don't want to turn them down and, you know, insult them in any way. But what you really want as a business owner is capital that makes a meaningful impact in your business. Right. And so I think if you start the company by having a really big and confusing cap table, if you ever want to raise, you know, institutional investor from institutional investors in the future, it's a bit of a red flag. Right. So I think you want to keep things as clean as possible. And also I think it sets a bad precedence for people coming in. Cause like one of the reasons why we had a minimum is because I don't want someone coming in and say, well, I want to put in 10,000. because this other person put in 10,000. Why aren't you taking a small check from me, right? So I wanna set a president's at like, this is not one of those companies where we'll take a check from anybody. But also it's almost like self-selection, right? I only want people who can afford it because the number two mistake I see people make is they take money from people who can't afford it. And Jason Kirby (29:54.559) Thanks for watching! Melissa Kwan (29:55.338) They're almost pitching their company to friends and families as if they're pitching to an institutional investor, which is not the same. The first thing I tell my friends and family is, you could lose this, I could lose this. So don't write me this check if you can't afford to lose it. Like assume you're not gonna see this money for the next 10 years, what would you do? Or assume you're gonna lose it, what would you do? Right? So, and, and in the past, I've had people who wanted to invest in our company, but I knew they worked really hard for their money. And I knew even if they told me, yeah, I don't mind losing this, that it would make a big impact for their life if they did. Or taking that chunk of money away from them right now would make a big impact on their life. So I've actually in the past turned down checks until we got to a later stage where I was comfortable. Jason Kirby (30:38.076) Thanks for watching! Melissa Kwan (30:48.458) taking that money from a friend. Right? So I think that's the second mistake is like, you're taking money from people who can't afford it. And. investors and institutions, like maybe it's okay to do that, but if it's your friends and family, you should not put that, you know, put them in that in that position. And I think a lot of people, like when they need the cash, like don't think about the impact that they could have on someone else that is just not as well off as a company. Jason Kirby (31:05.625) Thanks for watching! Jason Kirby (31:19.227) And not only is that out of respect to your friends or the other person that might be interested in writing that small check, it again saves you the burden of responsibility down the road because things don't always work. most things fail and when that fails, that could kill the relationship. You know, and like, hey, I gave you that money and you lost it, like, it can turn things pretty negative pretty quickly. And I think it's smart to have that level of foresight and respect for, you know, other people's money when, you know, not just taking anything and everything you can. And, you know, one thing I wanted just to add as some input for our listeners is an alternative to kind of prevent the signature problem and the too small of a check problem, assuming the affordability is not enough. Melissa Kwan (31:34.848) Yeah. Jason Kirby (32:01.349) issue. Something like a founder led SPVs where founders can basically aggregate a bunch of small checks as one line item in the cap table, kind of solving the too many people in one on the cap table and then it's one signature and it's led by the founder and the founder signs it off. So basically the investors have to agree to that. They basically get no representation but they get a piece of the, you know, whether it's a dividend structure or payout or anything like that and goes through the SPV and gets distributed from that as opposed to having to be all individual line items attributed back to the company. So just food for thought for those listening. Melissa Kwan (32:21.355) Yeah. Melissa Kwan (32:40.022) The, the other thing that, you know, when to take note of when you're raising money from family and friends and, you know, and maybe even new funds, right? That are not used to investing in this type of asset. You have to know that if they need that money and they've given it to you, they are going to call you all the time to ask you when they're getting it back. And that's happened to me before where, um, you know, it's. It's a person that, you know, you know, wrote us a hundred thousand dollar check. He's never invested in this thing before. And then he just called me like every two months, like asking me when I was gonna, you know, when I expected to sell the company. And then I felt really bad, right? And I, you know, like, it just wasn't a great, it wasn't a great position to be in. So something to think about when you're raising from like not, like non-experienced investors, is like that is a potential, you know, that that's a potential scenario that could happen. Um, because they're, they're thinking about like, they're not really thinking about it as an investment, but thinking about like almost losing it. Cause you know, in their bank, if they put this in like a GIC, they could cash it out. But now they've written a check to you. Like they maybe mildly regret it, like a low gray regret and they just want it back. So another reason why you'd want to like raise money from people who are either well off or like experienced. Jason Kirby (34:11.083) Yeah, focusing on credit investors that have exposure to private markets and understand that this money is gone for the foreseeable future, especially in private companies, five, 10 plus years is kind of the baseline to expect. And it sounds unfortunate, you kind of had the dealings of all the kind of negative experiences. So I'm glad you're sharing so that hopefully people will take a lesson from your book and Melissa Kwan (34:30.84) Hahaha Jason Kirby (34:40.917) more strategically and think about the long term ramifications and the qualifications of what comes with that check. Melissa Kwan (34:48.534) Well, the reason why I had such interesting experiences, I would say, is because I was so desperate in my previous company, right? I just needed to make payroll. And... Unfortunately, that's what happens when you don't have choices. Right? Like I didn't feel like I could say no after being in survival mode for so long. And finally, this private investor agrees to write me a hundred thousand dollar check. And it just didn't matter at that time who they were. It mattered that I made payroll and that I could breathe a little bit. Because not only could I like, could I miss out on payroll, I was also like not paying my own vendors. So, you know, so I had not just my own like my own debt, but I hadn't paid my lawyer for two years. I hadn't paid my accountant for two years. Like, these are people that keep my company running. So unfortunately, in those positions like you make quick decisions that may not be the best, right, for your company in the long term. And even thinking back now, like, I'm not sure, like, knowing what I know today if I could have made different choices because of where I was. But hopefully having this conversation and maybe someone listening, hopefully this conversation can help them think deeper into who they led into their company. Jason Kirby (36:19.431) Wow, I really appreciate the level of transparency in candor in terms of expressing that because that's a very valid point here. It's one thing for us to kind of say, oh, don't do this. But then when you're kind of in the trenches and you don't have a lot of choices and someone's kind of giving you a lifeline, there were certain strings attached. Either you can not take that offer and die or you take that offer and deal the con. You live another day to suffer consequences down the road. Melissa Kwan (36:29.554) Yeah. Melissa Kwan (36:44.382) Yeah. Jason Kirby (36:47.759) That's a valid input. Well, Melissa, I'm curious for founders to know kind of where can they learn more about you, what you're doing? You have a podcast yourself. You want to kind of talk about that a little bit? Melissa Kwan (37:00.242) Yeah, so where you can learn more about me, just connect with me through LinkedIn. My last name is spelt Kwan, K-W-A-N. So that's Melissa Kwan. I actually post daily about my experiences bootstrapping three companies. So if you ever want to learn about my war stories or whatnot, that's the best way to connect. And of course, ewebinar.com, if you're wondering how ewebinar can help you in your business. But my podcast, Profit Led, I mean, I started it really to talk about, you know, talk about other success stories from bootstrappers and invite other people to share how they were able to grow their business without venture funding and hopefully to inspire more founders to know that there are different faces of success and that the only definition of success that matters is your own. and not appearing on the cover of TechCrunch. Actually, we're launching our season two, which is going to be focused on our own journey to a million. So instead of inviting other founders to talk about their Bootstrap War stories, we're actually going to spend one episode, one topic per episode, talking about our trials and tribulations growing to a million around things like how to recruit on having no resources, Jason Kirby (37:52.959) Thanks for watching! Melissa Kwan (38:19.404) misconceptions about bootstrapping, you know, customer horror stories, you know, things like that. Jason Kirby (38:26.659) the de facto Bible of bootstrapping, it sounds like, of what to do and not to do and lessons learned from people that have already kind of been in the trenches to, again, part of the reason why I have my podcast is to help founders know what's ahead so that they can start thinking about it because other people have already been through this. There's very few stories that are completely original and unique. Everyone's going to have their similar exposure, similar experience, and it's grateful that you and your podcast are out there for founders. Melissa Kwan (38:28.65) haha Jason Kirby (38:56.193) to know in terms of navigating the bootstrapping world. And also just to take it as a genuine consideration. I think every founder that wants to be VC backed should just take a step back for at least a minute and acknowledge that there is an alternative and what that might look like if they chose that path. And I think it's a challenge we're taking into which I think a lot of companies did that kind of in the pandemic and post pandemic when the capital dried up. Uh, so how do they get to, how do they get to profitability? It's kind of been the big ask for a lot of VCs, uh, where it wasn't the case before is grow at all costs. Now it's like get to breakeven, get to profitability. Yeah, it's cool again. And, uh, it's good. You want profit. Profit enables opportunities. Um, but Melissa. Melissa Kwan (39:32.152) Yeah, profits cool again. Melissa Kwan (39:36.982) Yeah. Jason Kirby (39:41.283) I really appreciate you being on the show, sharing your journey and sharing your advice with the founders that are listening to Fundraising Demycified. And it was nice to have a change in our typical programming and kind of hear your story today. Melissa Kwan (39:55.071) Thanks so much for having me again. Jason Kirby (39:57.103) Awesome, appreciate it. And stuffing. Well, awesome, thank you for that. That was a good show. Melissa Kwan (40:03.714) Cool. Yeah, thanks