How do you save a round after your lead investor pulls out?

Jason Kirby (00:01.868) Hey everyone, welcome back to today's show. Today we have Edricio De La Cruz with us, founder of Arcos, sold a MasterCard, raised over 25 million, amazing founder with an amazing story. Welcome to the show today. Edrizio (00:16.91) Hey Jason, excited to see you again. Jason Kirby (00:19.274) I know it's great to have another chat. Last we spoke, we talking about venture studios and it looks like you've already made that happen and with the founder school, which we can talk about later. But before we get into specifics, I would love for you to just introduce yourself. What led you to launching your company? And we'll start there and kind of go into your journey. Edrizio (00:41.39) Thanks Jason. So I'm Dominican. I was born and raised in the Dominican Republic, immigrated to Harlem when I was 12 years old and ultimately went from the Air Force being an airplane mechanic, Wall Street, school, and then decided at the business school I wanted to tackle a problem that I had seen firsthand, which was money transfers. The process of money transfer hadn't really evolved from the time that I took to put in the U .S. to the time I was graduating from. Business School at Wharton. It was the same exact process and technology had evolved but the process hadn't evolved. So I thought about how do we dramatically make this process faster, cheaper, better with technology. And I called that company Regali. Jason Kirby (01:27.998) And so that's how things got initially started, but I always liked to kind of bring up the fact that you started your career actually in the military and the air force. How did that set you up? it did that set you up for success, that great opportunities? What was that experience like that ultimately led to this? Edrizio (01:30.645) and Edrizio (01:36.018) Mm -hmm. Edrizio (01:43.382) Yeah, I think Air Force was fundamental in my approach towards everything that I do. I think one thing that Nojia does very well is provide a rigor of discipline and precision in everything that you do. I think anyone that knows me knows that I'm a stickler for details, for being on time, for following processes. almost to a fault, I have to say. It's almost hard to get rid of that. But that's one of the attributes that I'm really forever thankful of my time there. It really set me up with success in a lot of other aspects. Jason Kirby (02:26.848) Well, let's talk about how you kind of transitioned from business school to investment banker to launching Regali to what eventually became Arcus. Tell us about how that journey worked out and when you kind of started to realize that you needed to raise money. Edrizio (02:45.806) Yeah, so I came out of Wharton, decided to the company. I really had no clue what I was doing. I think most of us, especially coming out of business, because you think you have a clue, but you learn quickly that you don't. And luckily enough, I applied to a bunch of accelerators. None of them said no. And one of them actually ultimately said yes. That was YC, of course. And very quickly transformed how I think about not only startups, myself as a leader. And I think the quickest way YC did that for me is by giving me access to the right room, putting myself with other people who were further along than me. I remember vividly our first group office hours where there was a bunch of companies that were ahead of us and one of those companies was Orvash and they were really like moving very quickly. And I quickly saw what the that the bar was not down here, but it was way up here. And I knew that in theory, I had never seen it in practice. And it's hard to be what you can't see, but when you see it in the flesh, it's a lot easier to aspire to what the top 1 % is. Jason Kirby (04:02.156) That is, and I think that's why, you know, other founders have come on that come from what YC have all said, you know, similar things in terms of the impact of being affiliated to these other high growth startups having that influence, especially 2013 was a pretty solid year, you know, to be in YC. And I got to ask, is that, is that sweater actually 11 years old? Still running strong in the morning off if you haven't bought me one. Edrizio (04:22.764) Yep, I've kept it. Yeah, yep, yep. I'd never. I don't think they make these photos anymore. They just give you a random, like, yeah, a random t shirt. Jason Kirby (04:35.008) Looks like you definitely wear it with pride, so they did a good job. And I love how you said, like, we applied to Xcelerators. They all said no, but YC said yes. The best one to get into. Edrizio (04:43.946) Yeah, that's a of the draw. Yeah, a of the draw. Jason Kirby (04:50.624) But no, it's a, yeah, would, don't call it the luck of the draw. You guys probably had something pretty solid put together. And at the time, it just you? it other co -founders? How did you guys bring together the team? Yeah. Edrizio (05:00.802) It was four of us. It was four of us. One co -founder from my undergrad and another co -founder from business school and another one from Google. So, you know, the four of us walked in there and yeah, I remember vividly like we walked in there, know, pioneer way, old office, not the new one. And we had to the left, had like the Airbnb, you know, box of cereal. like Obama Oaks, McCain's and to the right you have like this dingy little room and then we see like Gary Tan, Samov and Alexis Heine and Jeff Alston, but like they're all sitting right next to each other. And yeah, and it's funny thing is like when I went back as a partner, they still remember me. They still remember the interview, which is crazy because they don't like play it out interviews. So, so this is Jason Kirby (05:52.416) Yeah. Edrizio (05:58.111) It's a phenomenal ride. I love that place. Jason Kirby (06:01.164) No, it's great to hear. from what I found, you ultimately raised $25 million for Argus, correct? So walk us through that journey. You're building this product and give people context as to what the product ultimately was servicing the Lat -Tem market. But when did you decide that you needed to raise money? And what was that experience like coming out of YC? Edrizio (06:07.438) Correct. Edrizio (06:26.766) Yeah, think coming out, always see the expectation to raise capital. It's pretty standard. mean, it's everything structured around that. So it's a 12 week program and everything structured towards, you know, putting together a demo day presentation where you can show off your growth during that 12 week timeframe. Went out to demo day, didn't raise much. Then after that, really changed my pitch and I got a second opportunity to pitch at the TechCrunch disrupt. Which back then was really a big deal. was kind of like the... And I got opportunity to take part in Tecumseh Frump in September 2013. Made it to the finals. That went live, stream on CNBC. And about six months after that, I wound up raising a total of about $3 million seed. Which was a lot of money for back then, for seed round. And after that, was off to the races and... Jason Kirby (06:57.492) Yeah, much better. Edrizio (07:21.678) quickly learned that nobody wanted our product. So we ended up killing that version of our product and we ended up racing in small chunks a number of rounds up until we got to our A in 2017. Jason Kirby (07:38.956) So let's talk about that. This is often the untold story of fundraising because, know, in the press, you because you change your name, you know, you change the name of the company. So for bystanders, people that are just reading the headlines, it's like, where did this company come out of nowhere and raise all this money? Like, it's so easy for some people. And, you know, that kind of, you know, external facing lens that is not a true example of reality. Edrizio (07:40.824) Thank you. Edrizio (07:47.022) Yes, we changed our name in 2017. Edrizio (07:56.664) Mm. Edrizio (08:00.014) Thanks. Edrizio (08:07.96) Mm -hmm. Jason Kirby (08:08.064) So it sounded like you had multiple, you know, pivots and iterations. Like how did you navigate not landing, having all the expectations of YC, raise the money, not hit, you know, with PMF and product market fit, and then kind of subsequently say, sorry, we missed that one, but give us some more money and we'll try again. What was that like? Edrizio (08:10.697) yeah. Edrizio (08:34.222) Well, part of the great thing about YC and I'll say this about a lot of our investors, we raised predominantly at West Coast rounds. We had a lot of great folks from the West Coast. Is that they expected, I mean, this is part for the course. Like most companies don't hit it out of the gate right away. In fact, you know, again, when I went back to YC as a partner, think one of the other partners showed a slide that said 90 % of the companies fail. 9 .9 % of them succeed over the course of seven years and 1 % succeed overnight. So if you haven't succeeded yet, you're on the right track. So that gives you a little context in terms of like what the natural path is. And I think when you understand that you feel a little bit less anxious. So I knew and believe we were on the right path. And by every single pivot of which there were many, there were like four or five, I felt like We were just getting inching closer towards success. But yeah, it was a grind. 13 to 17 was like a number of small rounds, like a million here, a million there, putting together until in 2017, we finally got a term sheet for $10 million from a major bank. And as I indicated in my book, a hundred dollar founder, that was pulled with three days left to sign. I had to hop on a plane, go to a conference in Phoenix, know, schmooze, left and right. I was told, no, no, no, no, no, I've got one maybe, but that one maybe from a fun in Mexico. I flew to Mexico in 2017, we all know, in Mexico, the biggest earthquake on record happened. That was the day I was flying for the emergency landing. into the Mexican airport and then my meeting got canceled and he told me to go home and I was like, I'm not going home. For what? Like we got like almost, we got three weeks of runway. But what am gonna go home? I will not get on a plane without a solution. So I got a week later, got to meet with the partners, I got funds, office. And then by the time I got back to the, by time I got to the airport, they told me that they were gonna do it. So I ended up racing. Jason Kirby (10:39.849) Yeah. Edrizio (11:00.91) in a new LA on November 2017. Jason Kirby (11:05.996) So let's unpack a couple things here. Let's talk about the Mexico meeting. Was this your first time ever talking to this firm? Edrizio (11:14.286) No, no, no. So they were already, they were part of the round already. So the time ended around, it was anchored by this bank in the US and the Mexican fund was going to be the co -lead second biggest investor. then the big bank kind of just did what big banks do and just decided not to do it with with now zero like reason why. Jason Kirby (11:37.484) Pull out. Edrizio (11:44.16) And I told this bank, I'm sorry, the fund in Mexico, like given context as to why they pulled out, why in fact we were better off without it. And in fact that we were doing very well in an upward trajectory and this is like the last opportunity that we're to have to be part of this trajectory with us. And we felt like they would add a lot of value given a lot of the work that we were doing in Mexico. And luckily enough for us, know, the They put into our vision a mission and they saw it as a strap and they came in and invested. Jason Kirby (12:21.162) You know, I always like to joke that as a founder, when you're fundraising, you're kind of like juggling a house of cards on fire, running around on a unicycle, cycling around on a unicycle and people are like throwing curve balls at you that are also lit on fire. And you're trying to like, no, like you're downplaying, I feel the situation quite substantially. Like you have three weeks of runway. You're like coming in, puffing your chest, demonstrating a position of strength. Edrizio (12:30.412) Yeah. Edrizio (12:43.564) Yeah, yes. Edrizio (12:49.773) Hmm. Jason Kirby (12:49.909) to have this conversation and get to a successful relationship and investment. But what's that stress level like when you're in that meeting having... Edrizio (12:57.49) it was, I've never been more stressed in my life. There were a lot of stressful moments at the company. I would say that's one of the biggest ones. remember, I remember when I got the news, it was a Thursday. It was a beautiful day in New York City, blue sky, know, great weather. Got the news. I almost felt like literally someone. swept that rug from under me. felt like I was in free fall. I felt so many kinds of dysophysiology to anxiety. I think it's a thunder. You know, we always feel existential angst, right? That anxiety that something bad's gonna happen. And then it happens. And then it's almost worse. When you feel like, whoa, that this hurts even more. So my anxiety was justified. And I went home. My wife and I shared like, I just got married by the way, I got married like that August. And these news came in like September. And you know, I was expecting to get a raise from, you because I was paying myself a little, my wife and I lived in a, your classical 300 square foot apartment in New York City, where you know, you could, could, know, touch a window in a bathroom. And yeah, I just got home, I stared at the ceiling for like, Jason Kirby (14:15.968) Yeah, exactly. Edrizio (14:22.69) hours my wife came in and asked me what I was doing and I like, I just broke down and cried man. I like, I cried, cried. And like the next morning I got on a plane and flew to Phoenix. I just, I just talked to everybody that would talk to me man. And you know, when I got like the maybe, I like, I had to take the maybe and take a shot on myself and go to Mexico. And I think the whole A fake thing happening was like serendipitous. I don't know, man. was like, like, this is really happening. Like there's something here. And, you know, I could have easily like got on a plane and gone back and just, you know, close to the company. Like that's what the average normal person would do. Like, listen, man, the world's telling you something, right? Maybe this is not the career for you. Go back with your little MBA and get a job like normal people. Jason Kirby (15:13.099) Mm Jason Kirby (15:18.854) Your cute little liniere. Edrizio (15:20.726) Yeah. I know, man. was like, I will not get on a plane until I resolve this in some way, or form. See it through the end. you know, you win or you die trying, right? And I was like, I'm without a fight. I'm not going down without a fight. And I was like, I'm going to fight to the end. you know, and I'm glad I did because, you know, that was only one of many more massive obstacles that You know, like the little did I know that things were only going to keep getting harder, but I just knew that in that moment in time, I needed to fight. Jason Kirby (15:57.764) I love that story. Now I see why you wrote a book. You're a great storyteller and you got a great story. For those that haven't heard yet, the book is called The Underdog. Get it on Amazon. But I love these stories because it really just kind of, this happens a lot. I deal with a lot of founders and their most stressful moments when it comes to orchestrating a capital raise. I've seen situations where term sheets get pulled that happen to me a couple of times. Edrizio (16:00.556) Yeah Edrizio (16:07.246) You ready? Yeah. Jason Kirby (16:26.24) You you just say, can't count your chickens until they've had, until it's like money's in the bank. You just can't recognize something being done until it's actually there. and when that gets pulled out from underneath you, when you thought it was going to be there, it's just atrocious. so, but, you know, I love that story, but you want to take one more step back in terms of the chunks that you raised, like the keeping you alive, you know, capital raises. Edrizio (16:51.864) Bye. Jason Kirby (16:54.408) You kind of had your big win, the big capital raise, all that, but how did you convince investors to keep betting on you? Were these insiders? Did you to go chase new money? What was kind the insider perspective of that raise or the subsequent raise? Edrizio (17:09.582) Yeah, I think what they call now C plus, I think back then they call it an extension or you often say the bridge rounds, which has a kind of negative connotation. But they call it C plus now. That means we're an innovator, we're head of our career. Yeah, it was a mixed bag of existing and new ones. And I think a lot of fundraising Jason Kirby (17:17.484) Rolling safe. Edrizio (17:38.7) And I tell this to the founders I work with, it's it's really storytelling under massive distress. you know, and you need to come from a position of leverage, from a position of strength. never, you're never asking for money. think that's a wrong framework. I think what you're doing is you are inviting people to be part of the journey. and investing is just a vehicle in doing so, right? We're partnering up together. So please come on this journey. Jason Kirby (18:07.19) That's the emission fee. Edrizio (18:09.302) Yeah, exactly. So I always approached it that way. And I really did believe that we were in the right trajectory. We just needed to, you know, watch the next feature or do the next product or attack the next market. And I did believe that we were in the right trajectory. And I think that that conviction really helped me raise kind of small rounds to keep us going. Jason Kirby (18:35.64) And this is super common. lot of founders have to kind of go back to the well and that's the joke. know, founders are always fundraising all the time and it seems like that was the case for you. But you get that series A. How do you feel after that money hits the bank? It's realized, it's real. And then how do you look at your next year or so? How was that experience for you? Edrizio (18:51.351) you Edrizio (19:01.238) it was great. I immediately after that I entered like an immediate honeymoon phase, quite figurative and literal because you know, my wife, because I got to go to an actual honeymoon. was literally signing the paperwork during my honeymoon. So your traditional found a honeymoon. And it was fantastic for, you know, I think 2018. If you read the book, like there's a Jason Kirby (19:08.5) Did you go on your actual honey bed? Edrizio (19:27.374) Like I skipped from 2017 to like 2019 is because 2018 was kind of literally honeymoon year. Like a lot of things were starting to develop. started building a team, really hitting the ground in Mexico, developing our product. We had just kind of pivoted into an API for bill payments in Mexico. So we hit our stride. So it was a very good honeymoon phase and it was kind of... really does have that the calm before the storm that came right after is very much necessary. So it was a good break, I would call it. Jason Kirby (20:06.536) Yeah, things started to work. With the capital coming in and the momentum coming, can you add a little context to the audience as far as what the product did? And I think this is also when you did the brand swap, right? You launched the new brand. So just walk us through a little bit of what the product and solution was. Edrizio (20:08.781) Yeah. Edrizio (20:20.035) Mm Edrizio (20:27.938) Yeah, so when we closed DA, we had just pivoted away from the traditional cross -border remittance play into more bill payments via an API. What that means is basically instead of neo -banks and banks in Mexico launching their own consumer bill pay interface and structure that would just leverage us. In Mexico, unlike the US, things like bill auto pay or bill payment presentation, it's not as autonomous or asynchronous as it is in Mexico. Like typically you have to take a physical bill and go to a physical location to pay the bill. And in that process, it really translate very well on mobile phones. So what we did is we kind of created this abstraction layer on top of all of the local billers. Fed it'd be an API and it was consumed by a tiny fintech or a major bank. And that started to work because at the same time there was this massive tidal wave of venture capital coming into Latin America. Companies like New Band, Walla, there were all... And a lot of companies were launching wallets back then. And part of the wallet they need to have like... on basic products and one of those products was bill payments. And guess what? Who had the access to the best bill payment API was us. was a very unsensitive product that no one really thought about that we would just kind of niche down. So that started to work really well after we pivoted from Regale to what we see in our... Jason Kirby (22:17.546) And that, you know, I know when you sell it to like a big company like MasterCraft, we'll talk about it a little bit. There are certain things you can and cannot disclose, but can you share kind of what scale you ended up reaching as a company? yeah. Edrizio (22:19.234) Thanks. Edrizio (22:25.975) you Edrizio (22:29.614) Yeah, so we were in 2020, we were turning along, growing, scaling. were probably 100 plus customers, 200, sorry, 200 plus customers, 100 plus employees. I think we got up to like 110. And then we have the metric necessary to raise the series B. Typical A is 10 million, typical B is between 25 and 35 million. And you've given up, you 20 % each round. That's the standard, right? So, you know, we were growing and scaling and, you know, my wife and I moved to San Francisco to raise our series B and early that year. And of course, the pandemic happened. And the pandemic happened. We kept raising our B. We wound up, you know, the world kind of fell apart. So we wound up doing, kind of shifting to kind of a rolling close. And that's where, you know, Citi, Softbank and a number of players came in. And then ultimately got an offer for a B from a major corporation, which I can't name, then MasterCard came in and offer us an &A deal. And we actually did not want it. We were growing very well. were going to, that set on Series B, after reform heading the... the offer and the structure, we approved it internally by the board and decided to go with &A route. Jason Kirby (24:05.36) And just getting to play Captain Hindsight here, looking back on that decision, the desire to pursue the series B, knowing what was coming in terms of the market collapse a couple of years later and how it became impossible to raise money. Would you say you made the right decision or you wish you could still be the growing Arcus? Edrizio (24:08.108) Yeah. Edrizio (24:12.429) Thank Edrizio (24:25.202) I mean, I look like a genius in hindsight, right? But no, think on one end, like Arcus has grown exponentially. think Kudos to Mascar has done a very good job at scaling Arcus, well, keeping the brand first, which most, I mean, you know this better than I do, most companies I got acquired don't keep their brand. So they kept the brand, know, changed my logo that I created, but I kept the name. Jason Kirby (24:27.894) you Edrizio (24:54.62) so that's still alive up here. and, and it's, it's scale, like wildfire. and, you know, you're always, you know, as a father, you always miss operating. It's there's something wrong with us where we miss operating. I do miss operating, leading, interacting with the team. think that was probably my favorite part, coaching people and helping them scale. I do miss those days. Jason Kirby (24:54.72) A little bitter. Edrizio (25:21.282) But for the most part, I'm very happy with the outcome. I'm happy with what has become. I think we feel privileged that we did sell to a great acquirer that's really taken it under its wing and scaled it to places that we couldn't get to. I think it's one of those few cases where &A was done correctly. So I'm very happy with the Jason Kirby (25:48.896) No, and that's great story. And I love hearing when that actually ends up being the case where all parties win. So it sounds like investors won, your team, employees won, and the acquirer wins. But let's kind of go into that decision to raise the B. It sounds like you were not running an &A process. You were running a series B process, correct? And then two parties came in saying, we'll give you cash. Or we'll take you off the table. Edrizio (25:55.544) Yeah. Edrizio (26:10.03) Correct, Jason Kirby (26:18.316) and when it came to, mentioned that you wanted to keep at it, you know, conversations were had, but when it came to like managing your board and like how that board meeting went, like what was your, what was going through your head? How did you look at the options and what ultimately, you know, swayed you towards the, the &A deal, which again, ended up being a great option, but what was, what was kind of the trigger for you? Edrizio (26:43.746) Yeah, I'll provide some context and I share a lot of the details in the book. So there was a lot of things happening at that time. Like on a personal level, I was going through a lot of turmoil. Like, you know, my wife and I, we got pregnant and know, second term ester, had a miscarriage. So that was an issue. And shortly after that, I got really sick with COVID. And then shortly after that, my grandmother passed away from COVID. And on top of that, you know, had a lot of internal turmoil, which I discussed in the book, you know, part of ways with one of my co -founders, was like one of my best friends. That really hit home. And my other co -founder remained with me. We were just kind of fighting like every single day. Like everything was felt like a fight or became a fight ultimately. So, so it was just, there was a lot going on and I actually got temporarily like fired. I went back to the board and I told him, that's great, but we need to raise capital. And I'm the only one that knows how to let me stay here and raise capital. And then in that process, we started raising the capital from South Bank and Citi. then the Solider Party came on to offer a serious fee. And then Meshwara came on with what became like &A offers. I'm already running this process of Mattis Wealth Stay. stay here and run it through. Because otherwise it's like me leading will cost a lot of friction. yeah, I like went through all of that and kind of went back in to the company to ultimately execute while we came down. Jason Kirby (28:28.236) And this is why I like to ask these questions, because the first version was, we got these offers, we took one, it was great. And I was like, what was the real shit going on behind the scenes? Edrizio (28:33.332) Yeah. Yeah, yeah, man. Now, you know, know, you the other difference between like the average podcaster and somebody that's done it like, like you did it. So yeah. Yeah, man. Yeah, dude. There's so much there is. And there's so many I mean, you know, just like your line of work is like, you know, when you do an &A at a particular level, like there's so many different communities you have to manage, you have to manage your board or co founder. Jason Kirby (28:43.382) Yeah. Yeah, it's there's so much pain, so much pain. All of rest is so Edrizio (29:06.238) your investors, right, your employees as well, and the acquirer, and the prospective investors, right, you still have to keep communication. So there's all these communities you gotta... Exactly. Jason Kirby (29:17.418) and your loved ones and your family and like your friends. It's like, why you're not available? Why you can't say one thing to that person, but you can tell the other person this thing. And I don't know about you guys, but we couldn't tell our employees until the deal was actually done. You know, and it's very common. So all your employees are like, why are we building this? This doesn't make any sense. Like, just trust me. Just don't ask questions. I can't handle you right now. Edrizio (29:22.818) Yeah. Edrizio (29:29.93) No, we couldn't. Yeah. Yeah. Edrizio (29:39.406) yeah, no. Yeah. it's like, and, you know, us, you know, we started in 2020 and we didn't, you know, because of a lot of regulations and, and external approvals that we need to go through, we wound up taking us into November of like 2021. And quite honestly, Jason, we didn't know if we were going to sell. I was ready to like be fired and get a new job. like I didn't think it was going to happen, you know, we're in the middle of COVID. And then we got the approval and then we were able to kind of figure, finally announce it internally, right? Like at the last, I feel like we were announcing it and people were like, when did this happen? Like this happened like a year ago, but we're just letting you know now. Yeah. Jason Kirby (30:25.589) Yeah. Jason Kirby (30:29.584) man. Yeah. No, I feel all your pain. you know, it's, and that, and I love having the, having you on the show and just hearing the raw story just to educate founders. Cause there's so much hustle porn out there of like, you know, like that, you know, helps keep us going. Like, you know, don't quit, don't stop. like, it's not like the rosiest page. You had a six very successful outcome, but there was so much blood, sweat and tears to get there. Edrizio (30:52.524) Yeah, yeah, yeah. Jason Kirby (30:54.836) And it's as long as founders know what they're getting themselves into and know that that's the fight they have to fight because if you don't, know, if you weren't juggling all that at once and managing all these personalities to ultimately march it towards the finish line, it's rare that these things just fall into place. If you would have said one wrong thing to your chairman who then accidentally said something to one of the choir, it could all like blow up. So it's like that very sensitive. Edrizio (31:21.613) Yeah. Jason Kirby (31:23.348) you know, communication management, which I spent a lot of my time with founders. I'm like, okay, you can say this to this person, but don't say this to this person until we know that this is like the logistics of managing the flow of communication. But, I want, I want to switch over now to what you're doing today. it's very relevant to, our audience. obviously have your book sharing your journey, called the underdog, that anyone could pick up on, on Amazon. But. Edrizio (31:25.655) Yeah. Edrizio (31:30.562) Hmm Edrizio (31:40.386) Yep. Jason Kirby (31:51.072) You also have your venture studio called the founder school. So you can give the audience a little bit about why you started it and what's the, what's the offer there. Edrizio (31:53.612) Mm -hmm. Yep. Edrizio (32:02.542) Sure, so I saw my company, SmashCard, a year later I went up going back to YC. This time as a visiting partner, I spent about a year there and I got to see firsthand how to run an accelerator from, basically the ground up from end to end. from the very best, which always helps. Jason Kirby (32:23.936) the best. Edrizio (32:29.45) And I found that I learned a few things, predominantly around how much, first of all, like how much everything looks the same at the beginning. It doesn't matter if you're a SaaS company or a submarine company, everybody has the same intrinsic problem at the very beginning. I also learned the right way of kind of coaching and communicating to young founders in order to get them. from point A to point B, how to standardize a lot of the lessons learned from other founders into very digestible bite -sized advice. And I also learned, quite honestly, that I really enjoy sharing these lessons. Something about us founders is once you go through the process of pain, you almost get satisfaction out of... hearing advice that will reduce that pain for others. It's really weird. I think you and I could describe it, but other people probably can't. And so after I left YC, published a book, a lot of people approached me about giving them advice and being their mentor. And that kind of ultimately led to me standardizing a number of lessons learned into what became the Founder School, which is a 12 -week program. Jason Kirby (33:32.384) Yeah. Edrizio (33:52.846) dedicated to helping diverse tech professionals launch tech startup in about 12 weeks. So we work with people that are mostly currently employed at their firm, typically engineers, people that want to know how to launch a company successfully, but don't know yet how. So we give them all the tools, the frameworks, we really go head first into everything from how to get ideas, how to talk to customers. how to launch a no -quant MVP, how to get paid for it, to the point where you have a product that's ready to get into accelerator. So we quickly hand them off to another accelerator right after we're done, typically tech cells or YC. Jason Kirby (34:38.826) Nice. So it's kind of like a, yeah, I guess they call it more of an incubator, you know, incubator to accelerator. Edrizio (34:41.152) you Edrizio (34:45.346) Yeah, mean, it's incubator. exactly. We were incubator companies into top accelerators or seed pumps. Jason Kirby (34:54.398) No, that's great mod on getting there very early, adding that extra value. And as you said, it's predominantly focused on diverse founders. Edrizio (34:58.561) Yeah. Edrizio (35:04.162) Yeah, diverse technical founders, typically engineers, data scientists, managers, currently working at a CSA company or at Google. One, it's not a company, but don't want to take the leap into a certain company or get into jobs yet. it's probably a safe space to ideate and experiment. And in weeks, the goal is that you have a real business that's generating real revenue. with customers and then you're ready to go into an accelerator. we've had, so far we've graduated six companies last year. On average, this company went up raising quite a many bucks each. We had a number of successes. We had one company called Linker Financial. We just raised 3 .7 million from commerce. Another one called Chatforce, just raised a million dollars from that capital. And just, you know, just keep, you know, run the flywheel. Jason Kirby (36:03.532) No, it's a, seems like a good model in terms of feeding it into each other. Accelerators, which you already have the relationships with and creating that, that safe space. Cause yeah, getting, getting someone to leave a very cush comfortable salary to make the leap, especially if that's how they started their career is with a cush comfortable salary with a certain amount of expenses that they are associated with that. It's hard to kind of take that hit. It was like, are you making 200 something a year, know, okay. A year. it's like, how about, how about maybe zero or 50 K a year? How's that sound? Edrizio (36:11.463) you Edrizio (36:21.954) Thank Edrizio (36:26.657) Yeah. Edrizio (36:30.804) Yeah, yeah, Amen. Jason Kirby (36:33.712) but, I wouldn't change it. I wouldn't change anything, that I've done as far as, know, the ability to create and control, is something beautiful about being a founder and, know, probably why a lot of people do what we do. so, you know, being that you have so much experience working with founders, these are the early stages. What have you seen in as far as like common mistakes that, you know, you, you see it happen and you just, you just. Edrizio (36:44.579) Yeah. Jason Kirby (37:01.43) can't help but jump out of the seat and want to help someone, what are those common mistakes that you see? Edrizio (37:06.574) I think the most common mistake I saw, especially at YC, was just taking too long to launch and getting a product in front of customers. I think a lot of founders fall victim to this whole notion of perfection and wanting to be their first product to be an extension or a representation of themselves. And it's hard because, We learn in school and at work that things need to be of a particular standard. That's fine. I think it's fine to have to unlearn and unwind a lot of these kind of best practices that apply to the corporate world that don't apply at all to the startup world. Because the goal of your first product is not really to get a representation of yourself. It's really an experiment. And you, and people think that the first product is their business, not an experiment. Experiments you can go out and learn. No, you just step up there, give yourself an opportunity to learn and ultimately you will find a way. so, you know, I've worked now with a lot of founders, not founders to understand that that is a very common. Issues. So another founder school, we, we force people to kind of launch a very lightweight, no code MVP in the first. you know, a weeks of our founder school. Because otherwise, we just went up spending the whole batch just kind of regurgitating ideas. And so that's been my like my number one. Number one, that's the number one thing I've seen our founders have issues with. Jason Kirby (38:46.632) No, I like that. I appreciate that. hate perfectionism. So no one has a fun question here. And then, you know, I'm not sure what you'll say, I always like to ask founders, what's in either in your fundraising experience for Arcus or for the companies that you help. know, pitch deck is always something that's synonymous with fundraising. Edrizio (38:49.868) Yeah. Edrizio (39:09.452) Yeah. Jason Kirby (39:10.964) Is there anything that you did that you felt was particularly unique or that you were extra proud of when it came to building your pitch deck? Edrizio (39:20.128) That's a great question. So I think there's two aspects to that. First, I'll say, at YC, we follow a particular template, which I'm a big fan of, and I teach that. It's very simplistic. It's all about kind of the simple concept is every slide, you have a main point, and you should bring up your strongest point up front, not at the end. If your strongest point is traction, you should bring that up. your team that should bring that up. So it's all around succintness and delivering very strong points and whatever that point is should be on the headline. And everything else should support that main point. Because I see a lot of decks just go ramble into random stories and like, what's the point here? So that's the standard thing I teach at the founder school as well when we get to fundraising, which is like week 11. The other aspect that I did that I think was very personal to me and again, I think the picture is still up there for TechCrunchesRub. I think it still happened on YouTube. I made it very personal and I think that was the biggest shift from like my YC demo day which happened in August of 2013 to my TechCrunchesRub presentation which happened in September. I made it very personal so I brought in pictures of my idea and my weather. my grandmother and I was like this is the reason why I'm doing this you know better than the money and it was right and that completely that shifted the entire feeling of the presentation like it made it much more personal and and I think that was the biggest factor behind my me going from raising like zero cash to raising all kind of $3 million dollars I see that's the story I have on Jason Kirby (41:16.996) I that. You know, it's a, always get a different story and yeah, I see as it's templates, but what did you break out that template of like the typical pitch deck narrative that everyone follows? Like what's your unique story? And I appreciate you sharing that. So this has been a great conversation. Appreciate you sharing all your insights, your stories and getting into men in terms of the chaos that you went through to get to a successful outcome. Edrizio (41:31.726) Of course man. Jason Kirby (41:41.824) What's the best way for founders that are listening to follow you, learn more about you, buy your book? What would be the best way for them to learn more? Edrizio (41:51.018) Follow me on LinkedIn. It's Edricio. There's probably not that many on LinkedIn. My book, The Underdog Founder, can be found. You can find it on Amazon. And you can learn more about the work I do with Founder School. Just follow me on LinkedIn. And I answer most LinkedIn messages as well. So we are opening up our applications for a batch coming up in November. Jason Kirby (41:56.364) You Jason Kirby (42:17.738) There you go. If you are an aspiring founder that love to read you a story, then maybe reach out to learn more and apply now. Well, apply when it's open, I should say. But really appreciate you being on the show, sharing your insights. So make sure to include all the links to your book, your website, and where people can apply. Actually, what is the Founder School website? Edrizio (42:33.452) Christmas. Edrizio (42:44.238) It's phoenixfounders .com. Jason Kirby (42:47.242) Got it, Phoenix founders, that's what it is. So, Phoenix, nice, I get it. Well, I appreciate you joining us today and look forward to getting this out for our audience. Edrizio (42:48.951) Yeah. Edrizio (42:52.578) Yeah. Edrizio (43:00.686) Thank you, Jason. Appreciate it. See you, brother. Jason Kirby (43:05.473) Awesome.