What do founders get wrong after making millions from an exit?

Jason Kirby (00:15.118) Everyone, welcome back to the show today. Today we have Sriram Gollapalli on the show, former founder of iLabs, a health tech B2B SaaS company, exited and now the founder of Long Angle, a high net worth community of investors. Sriram, welcome to the show. Sriram Gollapalli (00:33.016) Thanks, Jason, love to be here. Jason Kirby (00:35.044) Excited to hear your story. And I want to jump right in for our audience, kind of have you explain to them, you know, give them a quick 10 seconds on what iLabs was, why you sold and kind of how you structured that deal to kind of create material outcome for you to where you were now a high net worth individual on the other side of the seed making investments. Sriram Gollapalli (00:52.886) Yeah, totally. Well, thanks for having me, Jason. Yeah, we were very fortunate. We bootstrapped iLab over a 10-year period from 06 to 16. We kind of stumbled into a small space in the streamlining operations for cancer research hospitals. We kind of started with paper-based processes and webified it, sassified it, back when SAS was more than just a four-letter, just starting to be a four-letter acronym, so to speak. We ran that. It was virtual. a company, we grew that to about 75 people. And it was interesting in year nine, we were we were always cashflow positive, a lot of ups and downs with bootstrap through the through that time. And in year nine, we were approached by sort of a partnership opportunity with clinical trials company and partnership to almost an acquisition offer and or trending towards there like that could have been the story. And we said, that's interesting. It's year nine. Things are going well. Still stressful about losing clients and so on. And we said, let's run a process and let's kind of see what this could look like if we took this for real, if we took this seriously and decided to think about it. So we kind of went a little more professional here. We kind of brought a banker in and ran sort of a full on process, which I'm happy to. kind of dive into, we ended up with 12 IOIs, which are indications of interest, six LOIs, or letters of interest from four PEs and two strategic's. And it was a wild ride for those, call it six to 12 months, especially the last six to 12 days. And we were very fortunate to find a really great strategic partner, Agilent Technologies. based in Santa Clara, they're a six, $7 billion life sciences manufacturing company. And we really appreciated both the fit from a tech software perspective, we were sort of gonna be one of the spearheads in a platform of software, so to speak, as well as culturally, you know, I think a lot of people miss that sometimes when you're looking at how these things go. And I'm very proud to say this is we sold 10 years ago. Sriram Gollapalli (03:04.236) We had about 75 people when we joined. And last I'd looked, I wouldn't be surprised if almost 50 people are still with Agilent, supporting the software or grown in their own personal careers at Agilent, which is the most rewarding. mean, the software is still being used by hundreds of thousands of people around the world, but just the culture fit was fantastic. And of course, the outcome was also really great for a number of people. It was structured as 100 % asset purchase agreement. So it's called an asset sale. So they purchased everything, kit and caboodle. And then there was a bit of an earn out. Typically structured more on escrow based as well as RSUs for a number of the leadership team that turned out to be pretty well in the macro Agilent story for the following, call it four to seven years. Sriram Gollapalli (03:56.622) Jason, can't hear you. Okay. Jason Kirby (04:02.331) And just for our audience to understand that the RSU kind of the retention package to kind of keep management on the team to kind of continue its efforts and manage the migration. So ultimately what you're communicating is that was a success. In a lot of cases, these are announced or these kind of continued relationships don't always work out. But as you kind of mentioned, culture fit, how did you kind of identify the culture fit from the LOI process? Sriram Gollapalli (04:27.31) Sorry, one second. Wow, okay, sorry, say it again. Jason Kirby (04:36.01) Sriram Gollapalli (04:39.118) Culture suddenly, some audio started. Yeah, it started. Jason Kirby (04:41.083) All right, so let me start over with that transition. So what's fascinating about this is you had a successful outcome with the retention package. So for the audience to understand, you had these RSUs, restricted stock units that essentially mature over a period of time and you get that cash if the perform, if you deliver on your performance, you stay with the company, you get this additional compensation, which is usually a lever for public companies to retain talent over a period of time. This is just as good as cash if you stay. But I guess, how did you know culture fit was going to work because that's definitely a problem that a lot of people they look at the dollar, look at the valuation, they look at the terms, they don't really think about what's my life going to look like for the next three years, five years, whatever it is. Sriram Gollapalli (05:29.184) Yeah, and I'll say, Jason, it's my life, my leadership team life, the founder life, but it's also the team's life, you know, and how that fits to, know, when we we look pretty closely at some of the PE offers, you know, I think there's the often second bite of the apple you roll equity in, like, it's a very, it can be a very lucrative story for a number of reasons, depending on the growth and the curve and acceleration of where you see the product market fit happening. I think for us, we knew there was growth, we also, I think part of us is funny, know, an entrepreneur is typically very risky just by nature, just by the fact of like, you know, I quit a full time paying job at Deloitte to jump in, you know, ramen eating someone and so speak. But at the same time, there is a weird mental perception of risk. So when it came to Agilent, what was pretty interesting about them is they're a stable, in fact, they were like one of the other. they have culture from like the 60s. there are people, there would frequently be 20, 30, 40 year anniversary parties of people. So it was a bit of a one part culture shock to see like that kind of longevity in a company of any sort of fashion. So it wasn't a startup by any means. But what we found just pretty fascinating was the willingness to explore, listen, you know, Integrate so to speak and understand they they had an integration machine Which is also pretty helpful to see like it wasn't like we were the first acquisition We were one of the first software acquisitions, but we weren't one of the first integrations to happen. So some of that pain was actually Was mitigated and then the people themselves you get sort of a more warm and fuzzy, know It wasn't necessarily going to be grinding but it was also like results matter So we really appreciated the discipline, the financial discipline, the operational discipline that they brought to the table. And they really saw an opportunity to foster career growth. They have this legacy Silicon Valley classic DNA that you just don't normally see from some of the more tech companies that are being purchasers these days. Jason Kirby (07:39.3) No, it's kind of fascinating that kind of tenure just doesn't really click with me as a tech entrepreneur. like, how can I do like if it's not mine, how do I do it for that long? Sriram Gollapalli (07:48.842) Yeah, well, and to be clear, think very few, very, very few founders lasted five years. You know, we were on payroll for five. And the RSUs were structured very interesting, too. I think in our case, the RSU, well, not most cases, but in our specific case, the RSUs were very structured as, you know, performance of the company per se, but it wasn't actually fully tied to the company performance and how it did for the following four years. Sorry, our our software, like the iLab software performance necessarily, but it was also due to Agilent's corporate performance as well. Jason Kirby (08:25.243) So when you look back at that deal structure and you were considering all these deals, these otherwise from other buyers, what's something you look back and you're like, you wish you would have known after, before you took the deal, now kind of seeing the other side, like what was kind of a main lesson learned in the transaction? Sriram Gollapalli (08:44.044) Yeah, think the main lesson is one of the main lessons actually, I would say is don't necessarily underestimate the like cleanliness of an asset purchase agreement and not like trying to squeeze every, you know, dollar and sent out. You know, I think the the the piece that we struggled, I wouldn't say struggled a lot with but was there on the true second bite of the apple of sorry, a true second bite of the apple on the equity side with a typical PE deal. and that was, would say minor conflict because they're like, well, look, this could grow 10 X or 25 X or what have you. but it's, it was fascinating to kind of have that mental discussion with oneself and say, Hey, look, you know, you basically got the way we kind of structured it is like mentally is like, look, we just got 10 years of salary on one day. And, you know, that was sort of, you know, how do you think about being satisfied or like, happy with a result that you can then free yourself to do the next thing. That's the other thing too, I would say. I would say, think about where you're going next or how you're thinking about going next. And we didn't necessarily think we were going to quit. didn't necessarily think, you we were going to do this forever. But we also knew that we didn't, we weren't super passionate about what we were building. So I think the passion of what you're doing can also really influence how you structure the deal. Because if you see your baby kind of being thrown into a certain environment, and you're very comfortable with it and you don't need to be there anymore and you can move on to the next thing if you kind of scratch that itch I think that also will say something. Jason Kirby (10:19.182) I think it's fascinating. It's a good way to frame it. Like you just got a 10 year salary injection into your own personal bank account and then you keep a salary for five more years. So like you now have this nest egg that will grow compound and mature over time, which that's kind of what I want to get to now. So you have this success. This is 10 years ago. You get this 10 years of salary deposit in your bank account. What do you do next when it comes to managing that money? Sriram Gollapalli (10:49.486) I thought you were going say, do do next the next day? you still got to work. You get the check. You kind of share it with friends and family. There are not that many people you can really share it with for obvious reasons sometimes, just the way. celebration. Yeah, humans in Western society and you know, just like, yeah, humans really, as you said, you know, it's, it's funny, we, as an entrepreneur, especially, and, you know, you get risks, you take turns, and you, you generally feel like you kind of know what you're doing. And you feel like you can apply that to almost every single facet of your life for better or for worse. So the I don't know if it's obvious or not, but obviously, a lot of the banks come knocking on your door. whether it's private wealth, whether it's financial advisors, whether it's fee only, whether it's whatever, you'll start, however they get them, get your names. They will have scanned the press release and say, hey, we're X, Y, and Z. We're the private wealth management of X, and Z. Please, we'd love to chat with you. My wife and I, had several of these conversations. And we were very fortunate that we had, obviously, my co-founder going through a similar process. I had friends. that had exited companies in the last call at six to 12 to nine months at the time. kind of, kind of lend their, bend their ear for feedback. And, you know, I think the thing that's always struck me the most Jason was sort of the fee structures that were involved when going down the professional route of money management. Learned a lot through that whole process. We, we kind of tested a few more of the. hybrid robo advisor kind of opportunities for part of the earnings. So where I think one of them took 80 points for part of the wealth in addition to 80 BIPs, 0.79. Yeah, 80 BIPs, sorry, 80 BIPs, 0.79, 79, 0.79%. And then what you learned or what I learned personally was a few things like the quarterly conversation with an advisor. Jason Kirby (12:40.027) 80 points or any bits? Okay, I was like, Sriram Gollapalli (12:58.318) to kind of review your holdings and your portfolio turned out to be almost a, oh gosh, there's this meeting and it seems like a waste of time. Or I feel like I'm being pushed some new product that they have that I can't fully understand, or I have to go ask my friend, like, what is this really? Or they wouldn't be able to answer the real questions I have, like, how should I structure, potentially structure a trust in a state for the children or something like that? So we, so I'd say a lot of it was DIY. A lot of it was kind of getting up to speed myself from an education perspective. And then based on what I do now, but even back then starting to talk to more friends who I felt more confident in that I could, know, it's the blind leading the blind, but at the same time it was my friends that I could talk to. And even if we were all blind, we were kind of doing it together. So I had more trust there because I wasn't being sold something. Jason Kirby (13:52.856) do you blame that approach on you just generally being an entrepreneur? Because I see this kind of dichotomy of like the entrepreneur community and the post executive founders who kind of have this like, I can do this myself. And then you have like employees that, you know, are just like, they'll just hand over the keys to their wealth and just like let it be managed and have a much more hands off approach as compared to most founders who are like, no, I can optimize this, like tweet this is like, essentially a new business in terms of money management. what was kind of your, do you think that was, you know, is that general sentiment in terms of your experience managing this community of high-need individuals? Do you see that dichotomy between the two personalities or there's no correlation? Sriram Gollapalli (14:39.63) No, there's definitely correlation. think there is, you know, I think the professional sort of approach is definitely risk mitigating. So I think a lot has to do with your risk tolerance. And look, I think there are very traditional portfolio, portfolio structures that are pretty much set and forget it if that's your cup of tea. And if that's something what we're trying to maximize, I think everyone, I think the biggest question that people are are always trying to grapple with, or at least one of them, I suppose, is am I doing this right? And did I make a mistake or what am I missing? Sort of, right? It's all blending different versions of the same question of like, I'm doing something wrong or I must have to go to someone else to do it. I must be paying. All these people are paying these people because they're doing something right. And I think that FOMO is almost something that causes a little bit of like almost like a mental challenge because it's like, well, I'm I'm now spending more time worrying if my friends are all paying these advisors, why am I doing it or things like that? And I think the entrepreneurial mindset to your perspective, I think forces you to kind of peek under the hood a little bit more. But at the same time, I'd say, Jason, people are generally risk, sorry, fee averse, right? Like I think as you kind of start looking at things, like would you pay, you know, another service provider an annual percentage of some growing amount of money for doing the same amount of work. So I think AUM based advisors I think are going to be challenged, generally speaking for our generation and especially our kids generations of wealth management. But that's not to say that there is some structure that offers peace of mind offers a set it and forget it. And I think the last thing I'll say on the professional service providers is I think there's the a number of transactional things that are actually helpful depending on the complexity of the estate. So, hey, do this wire for me or hey, can you send my kids this or hey, can you like that is I don't have one, but I'm doing those things. And I'm now I'm now 10 years later trying to say, well, hold on. Maybe it is helpful to have just someone that's kind of doing more of the transactional set of things. I think that's a tax tax prep getting not even not doing the taxes, getting the stuff to the account. Sriram Gollapalli (17:00.872) is can turn into a bit of a beast as well. Jason Kirby (17:04.389) talk about this like you know exited founder they have grinded they have not maybe had a material liquidity event and then boom they get five ten twenty million dollars what's kind of the biggest mistake that you've seen or maybe you made when it comes to that cash hitting your bank account Sriram Gollapalli (17:27.982) timing the market first and foremost. I think the, it back to this FOMO part, right? Like, I think it's like, okay, well, I just need to time it right. I just need to park it differently. I just need to get the best asset allocation. It's sort of, what is it? Analysis paralysis, right? I think that's probably the biggest mistake because it's one of those things where generally speaking, generally, generally it's been a little different, weird environment, but generally speaking, It always goes it being the markets always going up into the right. Right now it ebbs and flows. It has ups and downs. But especially with the younger founders, which are typically your audience in the 30s and 40s, we have a 50 year horizon, maybe more depending on how you approach investing in longevity. But so you will you generally speaking, you can almost hit a dart and you will almost be fine. Right. And you can make some different sort of decisions based on risk aversion. But if you over time the market, what's the saying I recently told someone again that is obviously borrowed from Buffett and others, time in market has much stronger positioning than market timing. Jason Kirby (18:41.564) Got it. So market timing is not the goal. Time and market is the boat. Sriram Gollapalli (18:46.618) It's hard. Like no one has the crystal ball. No one knows when the next tweets coming out. No one knows when, you know, what's happening where and conviction. You know, I think the other thing I say is, and this is where I'm learning a bit more on the community side, but, you know, try to invest with things. guess the other piece of advice I would say is run diversification. And I think diversification is a personal preference, but I would argue that diverse. Like you could be a high believer in tech. You could be a highly believer in. what have you, real estate or whatever it might be, conviction in certain markets because that's where you came from. But diversification, I think, is something that is extremely important just for risk protection. The other mistake I would say is, it's pretty fascinating, Jason, and I'm not quite over this yet, but it's the lack of investment in yourself, I think is another mistake, interestingly enough, that people make where You have this exit, you're willing to put, call it, you know, a million dollars into Fang stocks or a 10,000 or 25,000 or $50,000 into, you know, different friends, startups and their companies to try to explore things based on diligence, either yourself or what have you. But you won't spend. $1,000 on a new rowing machine or you won't spend $5,000 on a health or personal trainer or and I'm fully guilty of this I'll be the first to say that but or you won't spend like $5,000 on like let's say a Claude subscription Claude pro because you feel like that's wasteful but you know it's empowering you to do something it could be or education it could be anything from all those things that I feel like it's like this weird mental block for myself again that Or like even small things like I'll spend like I took me really hard time to spend like a thousand dollars on like a new chair for my office. Right. Or a new laptop or a new phone. Like these are such like inconsequential expenses, the things that you use like every single day. And you're like, no, no, no, no, that's wasteful. But, you know, you'll put like ten thousand dollars or twenty five thousand dollars into whatever it might be. And it's. Yeah, into a startup. And the last mistake I'll mention is Jason Kirby (20:43.556) Yeah. Jason Kirby (20:57.66) What's your say, Jay? Let's start up, yeah. Sriram Gollapalli (21:05.758) You just because you went through this whole exit and you did really well You are not a professional investor So I think everyone says I'm gonna open up my own venture studio I'm gonna open up an angel like I'm gonna be a professional angel investor because I know all this stuff I think the whole different podcast but so many people go down that route and you know, it's each their own how to spend time but it just because you were great and one part of the journey does not mean you're gonna be amazing at this part of journey Jason Kirby (21:34.033) Dude, I resonated so much with everything you just mentioned from timing the market, which at least in my case, I was very lucky. I sat on my cash for two years and just had no idea what to do with it. Did not make any investments, just literally seven cash, not even in a high yield. I just like, I was so busy grinding back at, you know, the next thing that I just kind of have the cash sitting there. And then COVID happens. And I was like, well, I got a lot of time on my hands now and I got a and like market collapse. just, you know, rode the market and I was like, Oh, that was easy. I'm amazing. Then, you market started turning. I was like in like 2022 and I was like, I don't, I don't know what I'm doing. I don't know how to, was like, it was like skyrocketed to like obscene. I was almost like three, four X the entire portfolio at a year. And then, you know, then that portfolio fell like 40, you 30, 40%. I was like, okay, I'm just going to diversify and not think I'm, you know, have the golden touch. Sriram Gollapalli (22:15.266) Yeah, I had the same. Jason Kirby (22:33.886) I've kind of calmed down my expectations on investing and then definitely made the mistakes on angel investing. I put a good chunk of six figures into companies that are not going anywhere and or have already collapsed. There's a few that are still hanging there, but that was a waste of money. And then the Venture Studio, I think everyone I talked to that exited company has explored either buying a boring business and or starting a Venture Studio. Sriram Gollapalli (23:04.686) Yes. And then cash flow. think that's the other thing, too. It's so weird. think there's this like, oh, I don't have cash flow. So what do do to generate cash flow? And I think it's honest. Like, my wife asks me that, too, all the time. She's like, well, hold on. What's our cash flow plan? Right. Like, if I stop working, if she stops working, like, what's the cash flow plan? it's a very like, it's weird to take capital from sort of a sitting investment as your cash flow plan. And, you know, it's especially when you're 30s and 40s. And I think that sort of becomes a of a strange, a strange mental exercise because that's not something you're used to. Jason Kirby (23:44.765) Yeah. Definitely happens on a regular basis. Investing in real estate was kind how I supplemented cash flow to kind of come in and I run money through that business and all that kind of stuff. And it kind of gives some cash flow. then my wife's saying questions like, I was like, let's buy some time for the new business to kind of grow and all this kind of stuff. so yeah, I definitely went through all the ebbs and flows of everything you just mentioned from mistakes made and questions asked. for our audience sake, haven't really addressed the elephant in the room. This is what you educate people on a regular basis by bringing people together. So if you can give everyone a quick, and I'm also a member of your community, tell everyone a little bit about Long Angle, why you started it, and what its purpose is. Sriram Gollapalli (24:33.038) Yeah, I appreciate that. right. We're actually, this is five years after the exit now and we were still working at Agilent and Tad and I were wondering, Tad was my co-founder of known in some high school almost 30 years now. We were trying to figure out, well, you know, we are happy to stay here. You know, Agilent is a great company, but maybe we want to scratch our itch and, know, we have maybe another turn in us to maybe build something or maybe at least explore things. So we said a number of ideas on the table, Jason, that's a whole other podcast. It was super fun. Kind of pitched ideas to our wives. from a vending machine for a baby formula, which doesn't exist, by the way, to kid SaaS companies to this one, portfolio X-rays and other kinds of things. And we said, hey, wouldn't it be great if we could chat with other people who are in their 30s and 40s, have been fortunate to have some event or just through savings or what have you, call it several million dollars to their name. and just have a safe space to have conversations where you're not being sold something to. So we polled like 50 friends and said, Hey, what do you think about kind of having a safe space to do this where we can chat, you know, more than a WhatsApp group, but less than sort of an email chain. And, um, yeah, I'd say 35 people were like, that's amazing. I'd love to talk to other people to see what they're doing. Five people were like, I'm going to be too busy or I don't know really about that. And a few people were like, that sounds really sketch. So we were like, okay, well, it's enough market signal, so to speak. So this is like late 20, early 21. And we said, look, we're going to interview you to see, you know, are you bringing something to the table and you're not going to solicit? And do you have at least $2 million to your name to kind of just set a bar for some capacity to, you know, set a metric? You know, I think a million dollars is super fascinating, but for better or worse, lot of people can hit that these days. you know Western you know place you can kind of do various things and then That's where we started. So we started like 50 friends call it late 20 early 21 and We put ourselves put them all into an online community space and that was really the premise that's still the premise today community first trying to figure out how you can chat with people where you can drop your wealth filter and ask real questions like hey Sriram Gollapalli (26:53.518) Is it okay to buy business class tickets and send my kids on economy? Or how do you think about asset allocation? Or how much are you paying for your accountant for tax prep? Am I paying too much? Like a lot of it comes down to this whole zip code tax problem, right? Where just because you're in the zip code, you're paying more. So the typical example is around lawn care, where just because you live in a good neighborhood, you're paying 50, 60, $75 per lawn cut. But the same lawn mower team is charging $20 like two towns over. I think that happens so often when you're just unaware because you're willing to pay sometimes for a variety of things. So we created this space, we interview everyone. And today we have just about 8,000 people in the community. We are community first. We do 300 events per year across all of our cities. It's completely free to join. There's zero obligation of any sort. We've now crowdsourced access to private equity. So once a month we do deep diligence on a specific kind of PE fund to help with your private allocation. This is another one of those things where we're community driven full and first and foremost. So we said, hey, one of the reasons that some people go with financial advisors is access to PE to get access to diversifying your portfolio. We can talk more about this, but basically, if you're just buying the general US public markets, you're missing a whole slice of private market opportunities that are just not being traded in the public markets. So the idea of having a fully diverse portfolio is to show that you're getting a fully diverse portfolio and not just called mag seven these days. So we said, well, I want access to privates, but how do you, how do you diligence this world of everything and everything? So we kind of created a whole mini machine around that. So we provide investment opportunities that we feel pretty transparently diligent and offer to people. And then we do peer advisory, similar to some of the more professional kind of groups. We launched something called Trusted Circles now where you go even deeper, you get even more close to call it six to nine individuals and you kind of share your portfolio. For example, the first meeting, you share your portfolio with your numbers and that becomes a very naked moment where Sriram Gollapalli (29:16.374) you don't share that sometimes even with your spouse, honestly, like where all the accounts sit. And that sort of sets the foundation for some pretty unique conversations that you can have with honestly, the friendliest group of strangers you'll ever have because now they know what's in your bank account. And that interestingly sets up a foundation for conversations that you don't otherwise think to have. with that information in the backdrop, you can ask certain questions that you would never, ever imagine asking otherwise. Jason Kirby (29:44.637) I think the concept is fascinating. also why I wanted to check it out, be a member. I think it's such a vulnerable thing. It's like, right, you grinded, you built this material wealth. In some cases, I think some of the members are also like Feng members. They were employees at the right time, at the right companies, and have stayed there long enough to materialize the growth of their stock. Sriram Gollapalli (30:02.958) Yeah. Sriram Gollapalli (30:13.452) or in some cases months if you're at SpaceX like, you you just joined and you leave. mean, yeah, but yeah, that's right. Jason Kirby (30:19.26) It's insane. And that's that's a whole other conversation of the talent hopping and like option accumulation strategy that exists out there for, you know, kind of high end, high level employees at different, you know, kind of the mag seven companies, but I want to go back to this kind of experience of diversification. As founders, we tend to have this conviction mindset of like, I think I can create more material material value doing what I think is best, which is Adventure Studio, angel investment, or venture fund. But when it comes to proper diversification, you mentioned the exposure to kind of the macro markets, S &P 500, which in reality is just the VAC7 carrying the entire weight of this S &P 500, which is absolutely insane to see these days. But then you have this venture into private or, you know, it's a private credit, private equity venture directs. You know, there's financial advisors that basically tell you, don't do that. Don't invest into private because, you know, the S &P 500 grown 11 % year over year, like, and these things could fail, you don't know what's going on. But like, what do you say to those financial advisors, wealth managers that are kind of pushing you more into the 6040, call the stock and bond portfolio, and how that's kind of maybe phasing out from your perspective, or least for the type of people in your membership, how that's not necessarily the diversification strategy anymore. Sriram Gollapalli (32:00.59) Pause for one second. I'm getting a lot of echo on your side. I don't know if hopefully it's not being recorded but Just this last Minute and a half or so there was just some slight garble or echo I got from your perspective. So No, I still get it. Wait, so keep talking Jason Kirby (32:16.6) it in now is it okay? Are you hearing me okay? How's this right now? Sriram Gollapalli (32:23.822) It's like you're like 98 % quality, like up until now you were great, but something. Jason Kirby (32:32.216) Nothing's changed. I'm not seeing any echo. Sriram Gollapalli (32:36.686) Okay, well hopefully the recording is fine. So with respect to the private allocations, what I've found... Let's start again actually. had a thought and I cut myself off. Sriram Gollapalli (33:16.78) And actually, Jason, give me one hot second. I just want to see if that was my maintenance advisor. Sriram Gollapalli (33:29.976) Hi there. Perfect. How are you? Okay. Sriram Gollapalli (33:44.494) Okay, no problem. Do you know roughly what time you'll be here? Like 45? Sriram Gollapalli (33:52.046) That's perfect. Okay. Okay, we'll see you then. Sriram Gollapalli (34:03.98) Okay, cool. I got till 45. So with respect to private, are we still recording? Yeah. Jason Kirby (34:10.041) We are, but now I'm getting echo from you as if when you hit the phone, I got some bounce in your mic. It sounded like. Sriram Gollapalli (34:18.606) Okay, let's see here. I didn't move anything. that... Are we good? Okay. Is that a baby? Do you have a baby? Jason Kirby (34:25.456) Yeah, it should be good now. Yeah, yeah, you're fine. Yep, that's my one year old, my nanny brought her upstairs to play in my older daughter's room, which is right next to mine. Sriram Gollapalli (34:35.31) That's cute. Sriram Gollapalli (34:42.656) Okay, just ask the last part of your question again. I had a really good question. Jason Kirby (34:45.66) I was just asking the diversification, like everyone's doing 60-40, founders tend to want a little bit more control and they're more pushed towards private. So what's the allocation strategy amongst your members? Like how are you seeing things shift and be different? Sriram Gollapalli (35:01.486) Hmm. Yeah, I think the what I'm finding. that's right. What I'm finding these days, Jason, is that I think history has been sort of interesting. And I think what people need to think about is the last 10 to 15 years have been pretty much the longest bull market ever. Like just period in history of like basically stock market trading and covid aside. You can't totally discount covid. But generally speaking, like we're hitting new highs literally, I think, yesterday. depending on when this podcast airs, like, you know, I think in late April, we hit yet another high despite having pretty much massive global like strife of some sort or the other and everything's happening. And what people sometimes forget, myself included, is that it's so easy to say, well, I can just throw everything into the market. Like I need nothing else to provide diversification or return profiles because anything that I would do outside of a broad S &P allocation is just going to be net negative for me because none of those, especially if you live in the US, even my world sort of allocation, my ex US allocation has also been doing abysmal and that's usually where you get some protection as well, let alone within the private markets in the US, they're, you know, There's so much of the economy that's not tradable in the public market that's proving and creating a creative growth. So all that to say, you know, I think for the person that's in their thirties and forties and has call it a five, 10, I'd say 10 plus typically, but 10 to a hundred million plus portfolio. They are. Sriram Gollapalli (36:51.136) you're doing yourself a mild disservice by not at least exploring the alt side to get exposure from a risk diversification perspective. within the, asked about the community, we have a great allocation study. Anyone can download it. I think as you move up the net worth chain, the minimum is about a quarter, you know, 10 to 25 % in terms of privates. And that can mean many things to many people. but typically it's gonna be access to either a fund that's providing the stuff. It could sometimes be some sort of real estate trust or these different kinds of entities, but it's also been really fascinating to educate yourself on the way that really the economy works in a number of capacities, whether it's the oil and gas, music royalties, pieces of major league teams. These are all economically producing assets. that sometimes one forgets are also part of the way the effectively the larger economy is working. So getting pieces of that into one's portfolio really can prove to have uncorrelated risk. On the bond side, the traditional 60-40 and things like that, look, I'm not an economist and I won't really claim to say I have a lot of experience on the bond market. My personal perspective is I've been burned. by having too high a bond allocation when first sort of being told the 60-40 and things like that. And I was watching the bond portfolio actually shrink when I was watching the private side, or not a private, the public side grow. I've built up a small position in gold of late to provide a little bit of hedging, but I have little to know. my personal, this is Sriram's portfolio, little to no bond exposure other than maybe through retirement. And I think it's really important to just know. I think the other last thing I'll say on this is just know what you're investing in and just be comfortable with it. Right? Like I don't think you should take a full set it and forget it strategy unless you've really pieced it out and say, look, I'm comfortable to, as you alluded to, I think last I checked Mag7 was what 35, almost 40%. Sriram Gollapalli (39:10.668) of the SMP and if you're comfortable with that, you know, that's great on you, but just know it and don't just expect it. It's just magically gonna be fine for you. Jason Kirby (39:20.668) And so obviously in disclaimer, this is not financial advice, to be very clear for anyone, this is more experiencing sharing of kind of what you're seeing in this, was it 8,000 high net worths in your community? you see a lot of data that I imagine, with a very high caliber group of people, think at least my AI was telling me it's average net worth is like 15 million in the group, which is impressive to have those types of people at the table. Sriram Gollapalli (39:25.602) Yes. Sriram Gollapalli (39:32.982) It doesn't, yeah. Jason Kirby (39:50.815) some of which are obviously exited founders, which is this audience is particularly interested in. I guess what do you see behavioral wise in your community of say an exited founder versus a max evident employee who made their money materially different? Sriram Gollapalli (40:06.744) question. I think there is definitely higher risk. There's a higher appetite for risk with the founder. Well, it's interesting. There is typically a higher risk appetite for the founder because they're willing to experiment. And I think there's also this innate sense of like, well, I can do it again. Now, whether that's true or not, I think it's a different story. But You know, you'll make some changes, you'll make some mistakes and you're comfortable with that because it's on you. I think the Mag7 employee, typically speaking, it's a timing play. You know, they might've made a calculated risk of moving to a company when it was smaller or what have you. Well, in the Mag7 case, actually, no, they would have just joined, you know, joined a Meta or a Google and gotten a $5 million RSU package and... it probably just paid out the 5 million that you were expecting. There was probably some modest growth that was built in based on Epson flows, but, that sort of experience is actually very different because you kind of effectively earned, effectively you're under a high W two income for that, that period. And that's not necessarily going to happen again. And you probably ground yourself very differently to get there, to get there. And that also has sometimes shown experienced itself in a way that has had it. Let start again. The W2 employee that has gone through that process, I think is definitely more risk averse and sometimes unsure because it's not they don't have the mental mindset to say, well, I can just earn this again or things like that. Depending on I think the last point I'll say is many people have a bit of the retirement philosophy of like, how do I want to spend my time? I think it's a major conversation that happens in the community around it's a whole philosophical discussion, like what's enough and what do you invest in? I think that becomes a very interesting discussion that very few people spend any time thinking about, like any time. you're sort of, especially on the Western culture perspective, your only measure of let's call it success is from a financial bank account perspective. Like the number goes up and I'm doing well. Sriram Gollapalli (42:27.5) myself personally or what have you. And I think people quickly forget that there are other aspects to a life, I suppose. And you can make trade-offs and you can start spending. And I think that's been opened up as well too. Jason Kirby (42:41.564) You know, I'll go back to that comment you were making earlier, like, you know, buying the cloud max subscription or not buying the better laptop or the like, I struggled with that for so long. Um, you know, when I first had my kind of material outcome is 2018 and, uh, it wasn't really until like I had kids that I started to be like, I'm going to spend the money, you know, it's like, I'm going to buy the nicer things. I'm going to buy the higher quality stuff. Like, I don't know why I haven't been doing this for so long. Sriram Gollapalli (42:45.71) you Jason Kirby (43:11.518) I'm going to get the better house. I'm going to get these, these things. It's like, I was just so conservative of like fear of loss or, just kind of also just like the scrappy mindset as a founder, like, oh, I don't really need these things. And it wasn't like, you know, buying super lavish or any like ultra luxury or like first class, the business class or anything of that sort. But it was more of like, um, the value of time and convenience, I think is more of where my time and allocation of spend has shifted, um, in the last like, like four years since I've had my first daughter, because time is so limited with them and working and things of that sort. I think that's kind of shifted my perspective quite a bit and been a little bit more conservative on the investment side as opposed to where I was less than saying more conviction in my investments in the past where I had the time to do that. Now with kids, I don't get time. I'm going to hang up on this call. I'm going to go deal with the two kids right after this. the point I want to bring up with Long Angle and this peer-to-peer communication and collaboration. What would be your advice towards and not investment advice. advice towards exited founders of what should they do? They just got 10 million, like we talked about the mistakes that happened, but what would be your advice for them to consider as they just see this large amount come into their bank account? Sriram Gollapalli (44:43.662) Yeah, it's a great question. A lot of thoughts on the time investment side of things. I did want to make one other comment. You I mentioned the thousand dollar chair that I recently purchased, for example. It's funny. I couldn't bring myself to spend the fifteen hundred dollars that I'm using a steel case right now. It's like a office chair. And I looked at it online. was like fifteen hundred dollars. So I kind of did the thing that I would normally do. was like, well, there must be another way to get it. So I looked around. Sorry. Jason Kirby (45:06.332) gotta be a coupon. Gotta be a coupon or buy used. Sriram Gollapalli (45:09.454) It has no use exactly. I found an office liquidator and I spent 550 and I bought, you know, two chairs for a thousand one for me, one for my wife. And it's like the most I've ever spent on a chair, even though was used. And it's great. Like, you know, I see why, but it's one of those things where sometimes that initial entrepreneurial mindset just never goes away, depending on how, you go through things. Um, you know, I'd say it's, it's really around, you know, you know, I'm biased here, obviously, but finding people that you trust. that you can bounce ideas off of. You're not doing this alone. I think that that's something else that I find a lot of people are just worried about. And then so finding people you can trust, whether it's a friend group, whether it's like communities like what we have or trusted people, trusted people that you're just not being sold something to. It's so easy to get preyed on. It's so easy to get scammed these days, especially with what's available out there. putting the right security layer in place around yourself. I have lot of thoughts there too. But I think, then the last thing I'll say is just don't, you're not gonna do it wrong. Like just don't over optimize. Like life is short. Like, and as you said, like it's okay to spend. Like I think I was recently trying to come up with some number with my wife and I think we said something like, oh, like I think it was like 1 10th percent, 1 10th of a percent of our net worth. you should feel comfortable spending. And that turns out to be a lot of actual dollars in some cases. If you have a $10 million net worth, that's $1,000. And don't be frivolous about it, as you said. Don't spend $1,000 a day, necessarily. But guess what? You probably could spend $1,000 a day forever, and you're probably going to be OK in some capacity. Sorry? No, it wouldn't be that big of a deal. Jason Kirby (46:56.989) Yeah, wouldn't be too big of a deal. Less than 3 % of your portfolio annually, which you should hopefully be hitting that kind of return to where $1,000 a day doesn't really matter. Sriram Gollapalli (47:11.724) Right. And you're not going to do that just based on your mindset. But the point is, it's like sometimes you second guess these things like the new MacBook Pro was like, you know, I spent like twenty four hundred dollars on it. I would have never spent that when I had my exit. But like two years ago, I was like, I use this thing every day. Like, I'm going to just buy the extra RAM because it's going to be better for me. Like, what am I saving the hundred dollars for? Jason Kirby (47:34.589) Wish I would have gotten the 64 gigs. Sriram Gollapalli (47:36.43) I know, I got 48, so, you know, yeah, exactly. These things you can't open up. Jason Kirby (47:42.109) It's like, ah, Chrome's already lagging. Should've spent the money. Well, Sharam, it's been absolutely glad I was talking about kind of the post-exit paradox of what do you do with the money and what happens, you know, kind of like the common pitfalls that occurs. For founders that are watching that either have had an exit or might be experiencing one in the near future, what's the best way for them to learn more about you and the community at angle? Sriram Gollapalli (48:09.728) Yeah, totally. You can follow me on LinkedIn. You can email me directly. It's shreerum at longangle.com. then yeah, all that stuff's on the website, free to join, free to apply. We just do a quick phone call to make sure you're not trying to sell something. And we'd love to have you. Jason Kirby (48:25.659) I will say it was quite vulnerable when I joined and I had to share my screen of my net worth. I was like, I don't think I've ever done this before. Sriram Gollapalli (48:33.006) Yeah, no, we delete everything. We only need to see proof of just over 2 million. And yeah, it's really just to make sure that, you know, you're you're human. Well, you're human, hopefully. And you're trying to now it's getting tougher. But no, it's been great that in persons and just having that safe space has been just really revealing and vulnerable, as you Jason Kirby (48:42.557) Well nowadays you can't be sure, yeah. Jason Kirby (48:53.214) Awesome. Well, thanks for coming on the show. Make sure to include those in the show notes down below. And if you'd like an intro for the audience, if you'd like an intro directly to just run, just let me know in the comments down below and I'll be to make that intro for you. Awesome. Thanks for coming on. All right, we'll go ahead and... Sriram Gollapalli (49:07.64) Thank you, Jason.