How do you go from a dot-com failure to two successful exits?

Jason Kirby (00:01.457) Hello everyone, welcome back to Fundraising Demystified. Today we have Shane Neman with us today. Welcome to the show, Shane. Shane Neman (00:08.642) Thanks so much. Thanks for having me, Jason. Appreciate it. Jason Kirby (00:12.32) Now I'm excited to have you. Uh, you have an extensive entrepreneurial background, you know, launching your company in early two thousands and you're kind of before it was cool to do, you know, tech startup and kind of that after the.com experience. And then, you know, into the mid 2010s, uh, selling your companies, having an extensive experience and having that opportunity as an exited founder, you know, it'd be great for you to share your background and kind of how you got started as an entrepreneur and kind of where you are. Shane Neman (00:42.434) Sure. My entrepreneurial background was pretty unlikely just to be on it. Well, listen, I guess it is unlikely and likely at the same time. My parents were immigrants that came here with nothing. And so they were entrepreneurs and I watched them, you know, come up the American dream. They came with nothing. I worked really hard, started businesses, started small businesses, built themselves up, worked 24 hours a day pretty much, and did a bunch of, they had the hustle, let's just put it that way. And I watched them do that growing up and better our lives over time. And so when it came time for me, I actually ended up after college going to medical school. Shane Neman (01:42.834) And that was the path that I thought I would go down, is becoming a doctor. It's the thing I thought I would always do. I did pre-med in college. I had a computer science degree because I thought maybe if I didn't get into medical school, I'd have something to fall back on. But I worked during college as a programmer, so I ended up making a a good amount of money and getting a little taste of what it makes, what it entails to do that and how it feels. Especially at that time, knowing how to do web programming in the early, well, like late 1990s, you know, I was getting paid what a lawyer would get paid per hour essentially to do that. And so what happened for me is... I had a college roommate who was a friend of mine from high school. He was working at Goldman. I was in, um, I was in medical school. He was partying, having a good time. And I was watching him make a lot of money. And he came to me on a Sunday while I was studying and said, what are you doing? You know, we can make millions of dollars. Let's, I can raise all the money and you can create. software and I have an idea and that was it. I quit that day and we went on a two year journey of raising money from people who thought it was a good idea to give 22 year olds millions of dollars, uh, during the dot com boom. And we created a company called offix, which is essentially Microsoft 365, but we use Citrix to deliver apps. So it was like a web portal that businesses can use. to log in and give apps to their customers, get to their employees. So all the Microsoft Suite, QuickBooks, anything that was web-based, I mean, Windows-based, they could do. So essentially we had an app store, we would host your files in the cloud, we were a SaaS business, but none of those words existed. Shane Neman (04:05.382) So we were trying to do that when no, first of all, we didn't have those words, but the second part is, you know, we didn't even know how to describe it properly and people didn't know how to consume it because they weren't used to paying for software on a monthly basis or on a yearly basis for that matter. They were used to buying software and then upgrading. So suffice to say that, That didn't work out after two years of dot com bust happened. And I left with nothing. I was pretty broke at that point. I ended up moving in with my girlfriend at the time and she was going to FIT. She was living in a dorm and I was living with her, uh, to save money. Um, and, uh, she would work at a few nightclubs here and there, uh, on, on off nights to make money. And I would go with her because. Nobody needed programmers at that time either anymore because all the dot coms went out of business. So if you can believe that programmers couldn't get any kind of. you know, love at all. Like now you can't, now you can't, you know, you don't let go of the best ones, right? Because they're impossible to find. So, what ended up happening is I started looking around me. I saw that everything was kind of antiquated in that business, in the nightclub business. And to kind of shorten it, I created a company called Joombug, which, really, I was really in her dorm room, you know, bootstrapped, really kind of scrappy, but ended up becoming the de facto tech stack for all the nightclubs. So we created a ticketing system, the marketing system, the system that they would run their nightclubs on. And eventually what we also did was we had a consumer facing website where we created a big email list of people who would go out. Shane Neman (06:15.978) Uh, to events and created a million person database, uh, monetize that database. So we had the SaaS business and then we ended up also doing events ourselves because we ended up eating our own dog food. So I, I built that business to a very large, um, and over the next eight or nine years, uh, you know, We had about 100 employees, a little bit over 100 employees. We were doing tens of millions of dollars in the high tens of millions of dollars in revenue. And then about 2005, I realized that the efficacy of email was really dwindling because everybody and their mother had a MailChimp or a constant contact account. So now you're getting an email not just from Joombug, but from the promoter, the DJ, the venue, their grandmother, all of them. Right? And so I wanted to cut through the clutter. And during that time, BlackBerry's had come out and texting was starting to become prevalent. And so we realized that we want, we need to send text messages to everybody. And there was no out of the box office. So shelf solution, you know, right now there's Twilio, right? So, but Twilio didn't exist for another four years. Uh, and so as far as I know, and I understand, we became the first actual publicly facing SMS API in the United States, uh, after I built that, but we really more focused on a MailChimp model where you would, um, you know, uh, a business would pay 50, a hundred dollars a month and they would have their campaigns run through us and their contacts and they would get widgets. And. You know, the whole, the whole kind of. ESP, email service provider model, just really took it out of their playbook. Um, ran those two businesses side by side for about a year. And then I sold the nightclub business, the nightclub software business and focused mainly on easy texting and took a lot of that money and put it into there and ran that for another eight years and grow that grew that, uh, to, you know, about almost a little bit over a seat. Shane Neman (08:39.766) 15 million in ARR and then sold that in 2013 to a strategic who raised the money through Morgan Stanley and Investor Growth Capital. And I stayed on for a little bit over a year, moved to Miami afterwards. And for the last 10 years, I've been trying to learn how to run my own family office and investments. So doing real estate, private equity. But my passion really is an early stage venture. And so I spend most of my time doing that and working with founders and more on the earlier side, but not just tech. They do all different kinds of businesses, biotech, food tech, consumer packaged goods, anything that I think is opportunistic and makes sense. Crypto, that kind of stuff. Jason Kirby (09:39.404) You have such a fascinating story. I want to kind of unpack a couple pieces here that you kind of quickly gave the overview, but I think some interesting pieces here of one, being on the bleeding edge of new technology. And kind of before your time, imagine if the cloud was the word in 1999, people didn't really know what it was and trying to sell. through metaphors and other things must have been a nightmare, hence why that probably didn't work out, even though it was the future. It's what the entire world is built on now. You were kind of the early customer that just maybe too early and not the right timing with the capital markets. But then going into recognizing this opportunity for, I guess we'll call it a vertical SaaS for nightclubs and kind of giving them their infrastructure to support and grow and build their business. But kind of seeing, I guess, spotting a unique opportunity and solving your own problem. And then going out and building easy texting to basically go out and solve that problem, but then retain that business after you sold Junebug. So just some, some savvy deal making some very smart innovation, uh, you know, happening in your career to what now has put you in a very, you know, I would say, uh, an envy position by most founders that are still grinding today. Who would want to be in your seat? Shane Neman (11:00.888) The grass may seem greener, but the grind never leaves, actually. But yeah, listen, it doesn't suck. I won't bullshit you. But... Jason Kirby (11:16.704) But that's 16 years of busting your ass off, grinding, building a company that failed, and then building a company that was successful, selling it, and then continuing to build another company until the day that you've earned your seat to be more comfortable and get to choose what you grind on. Shane Neman (11:27.126) Yeah. Shane Neman (11:34.07) Yes, yes, that is true. The one thing that definitely I get to choose is how I spend my time. And that's the most important thing. But I do choose to work a lot still. So that's something that I think is either in you or it's not. And there's no replacing hard work. because you could be the smartest person. Hey, listen, this is all cliche stuff that I'm telling you anyway. So I don't need to reiterate what you can read in like every other book that tells you about entrepreneurship. Jason Kirby (12:12.756) Well, speaking of books, you have a book, Nightly Lessons, if you want to kind of tell the audience a little bit about what's in that book. Shane Neman (12:15.68) No. Yeah, I actually have it right here. I can show it to you. So this is the book. See, it's got that. So this book came out of... me reiterating the same stories over and over again to the founders that I've been working with. And I would find that the most interesting stories came from Joonbuk, to be honest, because basically I got screwed every which way you could possibly get screwed in that business because of the people that I was dealing with and the industry that I was in. And so I learned a lot. I learned I learned what to do, what not to do. I learned how to look at psychology of your customers. I learned how to anticipate 10 steps forward of what may happen. And so the lessons are in this book. That's why it's called Nightlife Lessons. I structured it in a way that It basically is a lesson per chapter. And each chapter then also winds down with how I applied those lessons that I learned subsequently in either easy texting or right now how I use them when I'm investing and doing venture. So I thought that was unique. And I actually rewrote the book to do that. Shane Neman (13:56.23) It took me about two years to write this book, which is really a passion of, you know, a labor of love because not enough people will ever read this book or buy this book for it to be profitable for me. But if it can help a few people, I would love it. And I've had, I've got 65 star reviews so far, which is great because I don't even have 60 friends. So there's no way I could have faked that. Jason Kirby (14:21.048) Thanks for watching! Shane Neman (14:26.277) Uh, and so. I'm just really blessed to be able to be in a position to do that. And it was a bucket list item for me, uh, which I did. And I'm really proud of it at this point. Jason Kirby (14:40.928) No, it's a, it's an incredible, well, especially pre chat GPT days. You know, I feel like writing a book today is probably a lot easier than it was, but also kind of pulling from your experiences and showing those stories. So, you know, you kind of talk about getting screwed each and, you know, each and every way, which, you know, I feel like a lot of founders feel that way because, you know, it's, it's your baby. It's always on the line. It's your reputation, it's your effort. And then, you know, deals may go south. Things don't work out as planned, which is the common. Shane Neman (14:53.6) Yeah. Jason Kirby (15:09.496) you know, experience for most founders, it's very rare that everything's always perfect and you know, rainbow and sunshine and unicorns. So you know, maybe, you know, kind of share with the audience kind of some of your experiences. This shows a lot about like fundraising and capital, like what were some of the, you know, either fundraising or capital struggles that you've experienced in your past, you know, as an entrepreneur? Shane Neman (15:32.318) So, you know, I bootstrapped the last two businesses mainly because I didn't want to go down the VC route because we had a really bad experience the first time. What had happened was, first of all, we raised some from friends and family who didn't end up being our friends and family after we lost their money. So you have to always keep that in mind. if you are willing to lose those people because no matter how out of control it might be of you, you know, your business failing, you can lose friends because you lost their money. And money changes the way that people interact with each other. It's not the same after that. And so that was one. The other part was, you know, I think we might have survived if we had gotten the rest of the money from the VCs that were not willing to continue to give us the rest that they had committed to us. And so that was a real big blow. And so I was really jaded by that. I kind of really did not want to deal with a VC again. And so the only person I would answer to is myself. As a self-funded bootstrapped company, you act differently, I think. You're a lot more careful and cautious of what you do. Maybe you don't grow as fast because of that, which could be a good or bad thing, depending on your situation. But there are pros and cons to each one. Shane Neman (17:20.838) I'm a VC now, right? So I want people who will take my money. So I don't want you to not want the money, but as a practical matter, I could tell you that VCs want to invest in businesses that don't need their money. They want the deals where the business is so good and the founders are so good that they don't really even need the money, but they get access to it anyway. So as a founder, you want to be in that position. You want to be in a position that your business is so good, right? And you're doing so well that you don't need the VC and the VCs want you. So to the degree that you can do that, the better off you are and you have the upper hand. So that's. Jason Kirby (18:13.28) So I want to keep on that topic because this is something that a lot of founders struggle with, especially in the early days of kind of building a business and getting off the ground. And there's the chicken and egg problem is what every founder talks about. You know, I can't build it if I don't have the money. But yeah, there are many businesses that go on to be very successful and never raise any formal amounts of money. Shane Neman (18:29.346) Sure. Jason Kirby (18:38.424) You bring up interesting points about be careful with who you take money from if you're willing to lose those relationships. I find that to be incredibly valuable advice and it also shapes who I go out and raise money from for certain types of things because if my context of a relationship is not about money, then introducing money to the relationship could be complicating those types of relationships and it's important to keep in mind. So now looking back, so you raised money, no bueno, didn't like it. When bootstrapped, had success, now you're funding, you know, early stage businesses as an investor. You're actively engaged in funds and, you know, different investments. You know, when founders come to you or, you know, just kind of share your opinion on kind of the, you know, do you build it, they get money? Do you just never plan to raise money and build a certain way? Like what's your advice to those founders that always kind of complain about the, the chicken and egg problem when it comes to raising money before they build something. Shane Neman (19:33.841) Um. I think in this day and age, you can build anything without money, pretty much. Or very, very little money. It's not an excuse. So like, you know, even back then, when I didn't have tools like you do now that are free, like every tool you can imagine for businesses as a free trial or they're willing to give free credits from AWS to, I don't know. again, your email list to anything else that you want. There are no code, low code solutions. I'm not saying for tech startups or anything like that. I mean, even for, I backed a startup founder recently who got a patent because he convinced one of the larger law firms to file his patent stuff for him. for free because it was so good and that he would pay them back later. So there's always a way if you're willing to either learn how to do it yourself and put in the grant work and you can figure anything out at this point with YouTube and everything like that or look for alternate paths to get to where you need to go. And that's that may require being novel, right, in your approach to it, right? So I thought that was a pretty novel approach. I'll pay you back later, but if you think that this is a really good patent, then do it for me now because it's a chicken or egg thing. I can't get funding without it, right? Jason Kirby (21:24.2) Yeah. And I'm so glad you say it that way. And like, I'm much more in the camp of you should be able to get something off the ground. By convincing those around you to support you with small amounts of money or by doing yourself to a certain degree. And, you know, ideally getting to maybe some revenue before asking for money these days, I think is something that is kind of long and forgotten after, you know, the ZERP period of you know, free money for everything all the time. And now people are having to kind of go back to basic business principles. Shane Neman (22:00.334) I agree. I totally agree. I think you can do it concurrently with if you have another business or you work in, I'm sorry, not another business, if you're employed, you can do a side hustle and even getting a Shopify store off the ground is easy these days. You can have like AI write it, ChatGPD write it. Right, your product is, and there's no excuse anymore, really. Jason Kirby (22:32.849) No, the buried entry has gotten much lower, but it also means there's a lot more competition and you have to find ways to differentiate and be able to prove that you can sell to customers. And it's something that I run into often with a lot of say very early stage, idea stage, or just kind of getting off the ground with an MVP is you kind of have to be willing to do anything and everything to kind of hit those milestones and prove to people around you that you can. do what you say you're going to do to acquire the capital that you're looking for. So kind of saying on this topic, like going to your website, you have an extensive personal portfolio of investments. How do you look at investing and kind of what's your typical approach in particular for like early stage ventures? Shane Neman (23:03.796) 100% Shane Neman (23:25.874) Uh, so some of it is, uh, kind of cliche that you've heard before. It's, you know, you're investing in the founder, you're not investing in the product, but that's kind of bullshitty a little bit also because the, you know, the product does, it is important too. Um, uh, because you have to believe in the idea and you have to believe in what they're, what they're making. And, um, I don't have a formal process in the same way that like a venture capital firm does. First of all, I only answer to myself and not other investors. So that is a big plus for me. And I have a much bigger time horizon, longer time horizon than a fund does because a fund has to be like five years or seven years or 10 years. I can do whatever I want for as long as I want. And I can make as many mistakes as I want. And no one will scold me for it or I won't get penalized for it. I guess I'll get penalized in my wallet, but that's about it. So I'm really looking at right now things that are really kind of game changing. I see like a million AI things right now, right? and you being a rapper around chat GPT is not going to work, right? It's AI, but it's not AI, right? And so there has to be some edge for it. There has to be something really, really different and it has to be category changing. And a lot of this is being said by other VCs, but. That can also happen by changing just one critical part of an existing industry. So I'll give you an example. I've seeded a company called Alermi last year, and that founder, Shani, came to me two years ago. Shane Neman (25:44.886) and she had this idea of doing a nasal spray because her dad is an allergist and he made these custom compounded nasal sprays for allergy sufferers and she wanted to do a DTC in the same way that hims and hers does that right they do all different kinds of prescription stuff. She knew about me because I I seated in another company called Aposrophe, which did the same thing, but for dermatology, sort of for acne or luteus or those types of things. And so she came to me and she told me her idea and I thought it was a good idea, but I thought it was way too early. She didn't have any revenue. She didn't have any data to show that this spray is better than other things. And... I said, look, get to these milestones. I'll also introduce you to another friend of mine that's a VC. And let's see where you can get. And she worked for another year like that. And then she got to like 30,000 or 40,000 in ARR. And the reviews were amazing. So I don't suffer from allergies, so I didn't really understand it. But then I got to know it and then, you know, she had some more data. And that's when we realized that we have something here. And so if you are, you know, the allergy space is. I mean, there's big pharma that makes a flow nays and makes like Afrin and makes all these things. So like, who is she to go and kind of disrupt that? Right. Anyway, she did it. She really has done it. Her uniqueness was not to go against them, but to use the current prescriptions that are available through four of them and formulate different titrations based on your symptoms. And so they have like, I don't know, a hundred different formulations. Jason Kirby (27:38.644) for the future. And that's the end of the presentation. Jason Kirby (27:46.345) you Shane Neman (27:50.77) of these four different active ingredients, and they custom compound it, and they intake you with an asynchronous telemedicine consult with an allergist that's in your state, and then they figure out which one's good. They send you a free one. You try it, and then you go on a recurring revenue. A prescription, right? They ended this year with four million in ARR. from 40,000 to 4 million, right? And that's a success story. That's the kind of success that, so that we ended up funding them, by the way. We did about a $3 million seed round for them, in January of last year, and now they're doing their A round and they're getting like, they're getting a lot of attention, right? From big VCs. So. That's how I think about it. She didn't reinvent the wheel, she didn't reinvent the wheel, but she made the wheel better here, significantly better, right? To the tune of 6,000 five-star reviews over product, right? And so you don't have to be like creating something that no one else has ever created. You can just do things better and do it in a unique way. that makes you stand out. And so that's what I'm really kind of looking for in an adventure. And the fact that she actually listened and she was coachable and she came back a year later with exactly what we asked her for, I mean, how many people do that? I mean, I'll tell you, I was on a call with a founder yesterday and I said, listen, I don't really know much about your business, but I have four friends that do. And if you send me an email, a separate email, with a little, you know, a blurb and a, you know, your deck, I'll forward it. And then the founder replied to my original email with all this extra stuff and, you know, put the blurb and then put, you know. Shane Neman (30:10.95) attached it and then sent the email again and said, I forgot to add this. And I'm thinking to myself, does she really think that I'm going to like recompose her email and send it to at least four people? Like I asked her to send me an email, they'll separate, you know, it's like simple shit like this, right? Uh, I just knew immediately that I couldn't just never do it, do anything with this founder, right? So, um, I know it sounds like petty and stupid, but you know immediately who you're dealing with when you see things like this, right? Jason Kirby (30:47.752) So that's an interesting point. And I think a lot of founders just, they're just so wrapped up in the execution of the business and like the thought process of like, why isn't everyone a believer in what I'm doing? And that very specific example, I would completely agree. Like if you have to make it stupid simple for the other side as like a, as a founder, it's your responsibility to make things easy for those that you're trying to convince to give you money or. by your product, whatever it is. So I think it's really reasonable to use it as a judgment factor in what a 10 year plus relationship might look like if they're not able to kind of accomplish very simple things and make them easy for you. So that's a good advice. Shane Neman (31:25.846) Yeah. Shane Neman (31:30.691) I actually ask questions that are designed to piss you off. And I want to see how you react. Jason Kirby (31:38.944) How does that go sometimes? I mean, what's an interesting story from that experience? Shane Neman (31:42.102) It happened to me a few weeks ago. Well, the founder got combative and I just said to him, listen, I could be nice to you or I could be kind. If I was nice to you, I'd just say, oh, thanks so much. Thanks for your time. Have a nice day. And I'd never call you back or email you back. But I'm going to give you some feedback right now. Your presentation sucks. Your attitude sucks. You're this sucks, you're that sucks, and you need to go back to the drawing board and I'm gonna ask you questions that you're not gonna like and you need to keep your cool because that's not gonna work. It's not gonna work. I don't need you, you need me. And so at the end, and I don't mean that to be like a dick. I'm just saying, I'm being that, like that's all VCs, right? They don't have to deploy money if they don't want to. Jason Kirby (32:24.568) It's reality. Shane Neman (32:32.33) And by the way, like, I'm the only one who would probably tell him that the other guys will just be like, I don't know, you know, they're working for a venture capital firm, they don't have time for this shit. They'll never respond, they'll never respond to you again. So as a practical matter. Jason Kirby (32:43.04) Yeah, that'll be nice and never respond again and they'll cut the meeting short. Shane Neman (32:53.778) It's important. Your bedside manner is important. Let's just put it that way, right? It's just as important of how, if you're gonna raise money, right? If you're not gonna raise money, you could be however you want. You know what I mean? But if you wanna raise money, then you need to play the game. Jason Kirby (33:14.484) I like that if you need to raise money, you got to play the game. And that game in particular, and the points we're talking about here, it's like, it's really like, I would say the common denominator here is building good relationships, like being combative and defensive over simple questions of a good to know you meaning are clear signs of what the relationship might turn into down the road. Um, and it's, it always is fascinating to me when founders get combative. Um, so go. To go to specifically maybe an example, like what's an example of a question you ask with the intent to kind of see if it riles them up? Shane Neman (33:49.15) Um, well, this one had like, you know, two failures before. And so I said, look, you had two failures before what's going to stop you from failing again. Why should I believe you're not going to fail again? You know, that, that pushed a button and then, you know, I kept on pushing him on that, on that subject. Um, so, you know, or if, if someone doesn't know their numbers, I, I will. Jason Kirby (34:18.232) Thank you. Shane Neman (34:19.054) push it into it, you know, and you know, they'll get upset at that point because they don't know the answers, right? That's another thing, you should know your numbers. If you don't know your numbers of your business, you shouldn't be a founder. Ha ha ha. Jason Kirby (34:39.257) Well, what I think is interesting is when founders try to lie, so they don't know their numbers and they try to make up or sound like they do know and then list a number. And then whenever they actually do pull the numbers and diligence and it's not matched up, that's pretty much a deal killer in so many ways and founders really hurt themselves. But I think those are good kind of questions to qualify. who the founder really is. Because just listening to a pitch, of course, that's the polished presentation. But in reality, once you write a check, there's a lot of back and forth. There's relationship building. There's an extensive relationship there. And so it's important to kind of feel that I feel to ask these types of questions. So good insights to be sharing to founders to be ready for this type of stuff and be able to mentally prepare for meetings to come with that intent in mind. Shane Neman (35:28.882) Yeah, that's the other thing is like if you're coachable, that's the best part. If you actually like listen to advice and you take it and you do it, that sounds so simple, but not so many people don't do it. And it sets you apart. Jason Kirby (35:49.152) Tell me what I ask you as, you know, like you would be essentially like what a founder would put in their head, like, oh, Shane seems like the perfect angel or like, you know, this would be awesome to have Shane as an investor. If I could just get in front of Shane, he would totally, you know, everyone thinks that, you know. How do people get in front of you and does it make a difference in how you make your decision based on how they get in front of you? Shane Neman (36:07.981) Yeah. Shane Neman (36:15.734) Um, well, listen, obviously, if it's like, I'm human, right? So if it's brought to my attention by someone I know personally, and I respect, and they're sending it to me. I'm going to obviously look at it differently than if you cold emailed me, but, you know, um, I try not to have that bias. Shane Neman (36:42.81) easier said than done, just to be honest with you. But I read every email that comes through my website. I don't, I'm very different in that matter. Sometimes I get a lot, sometimes I go weeks without it. But then sometimes I get hundreds of them. So it may take me a while to get through everything, but I respond to everybody, even if it's a no. I just feel like you went through the hassle of doing that with me. I should have the respect to do that, tell you no back, backward, back. And to the degree, if it's not for me and I have someone that it is for, I'll share it with them. So I found that to be helpful for founders. But look, I think what people don't, What other founders don't realize is that this is a marketing game also. So you got to use marketing tactics. And so you have like the first two sentences to get me my attention. And if you don't do it in the first two sentences in the subject line, then likelihood is I'm not going to look at it, right? Or I'm going to pass on it. because I have other shit to do and I got a lot of shit to do and so I have to make decisions quickly. And how do I do that? I read the first three, four, five sentences, maximum, maximum five, right? And I immediately know if this is good or bad, right? And so you have just about that much time to... concisely and completely telling me about your business. As a practical matter, if you can't do that, you're like not, you don't know your own business. Is it? Jason Kirby (38:54.39) Or you're not running a business that's fundable in a lot of ways. Shane Neman (39:00.274) Well, or yeah, or maybe your business isn't good. It's like too many things or it's like, it's too complicated or it's, that kind of thing. I think founders really need to sit down and think, how do I explain what I do in two sentences? And if you can do that, first of all, you need to be able to sell your product or whatever your service. So you need that anyway, regardless, right? to actually sell the product to customers. Then you need it to rip fund, fundraise, right? So the better the pitch in the first two sentences, the more likely you are to do that. Jason Kirby (39:42.636) Do you find in those kind of like, you know, whether it's cold email or, you know, a referred email, like in those first couple sentences, what usually has stuck out to you that clicks for you? Is it, because everyone's got their, you know, kind of preference. Sometimes it's like the quick pitch on whatever they're doing. Some focus on traction, some focus on how they know you and trying to connect the dots. Like what do you think usually works for you? Shane Neman (40:09.942) What usually works for me is exactly what you do in one sentence and then some stats. I want to know quickly what it is that I'm looking at. So can I figure out what you're doing in one sentence and can I see what your traction is? The other bullshit of, oh, I know this person who knows you or kind of thing, anyone can look that up online, right? Like you can just go and look at my LinkedIn, find someone that they have no one thing or, you know, I don't know, go look at my Crunchbase profile and look at another company that I've been invested in. In fact, this whole thing of, oh, I saw you invested in this, so I thought you would like to invest in this and mine is totally false. Like... I already have exposure to what you're doing. So why would I want to invest in you? Like, it makes no sense. Unless you're doing something completely different that will obliterate this other company that I'm invested in. I mean, how many companies that do the same thing am I gonna invest in, right? Jason Kirby (41:20.372) Well, and also, again, I'm sure founders think like, oh no, we are the ones that are going to blow up by the water. Yeah. Shane Neman (41:26.39) Yeah, I actually think that's counter-intuitively wrong. Right, you may not wanna go after the people who invested in your competition because, yeah. Jason Kirby (41:36.328) Yeah, I completely agree. It's usually the blacklist for me in terms of sharing your deck and who you send information to. They might understand the market, but there's very few funds that invest in competitive or very similar products, mainly because they're focused on diversification across different sectors. But I want to kind of switch up the conversation here and we're talking about how to get into deals, assessing deals. Shane Neman (41:44.171) Yeah. Jason Kirby (42:06.22) But something that's often not talked about, getting out of deals, making money, actually generating returns. What's some of your, what's been some of your stories or experiences on that front from your investment side? Shane Neman (42:13.239) Yeah. Shane Neman (42:22.846) So I haven't had an IPO. Well, no, actually I did. I had one IPO this year. So that was, but you know, you still don't get liquidity because you're locked up for six months. So we'll see. So far, if things stay good, I may end up doing really well on that. It was a biotech IPO that happened for me. Shane Neman (42:49.302) So there's different ways to get liquidity. One is through acquisition. Another way is through a secondary transaction of selling. I think the secondary transactions. Oh. are far and few between and very difficult. So I wouldn't bank on it, let's just say. Listen, you have to be patient. That's the reality of it. And some people say it's a seven to 10 year game, but it's really more like a 12 year game. So, you know, you may have some lucky stuff, you know, like I was, for example, and by the way, like a lot of it is imaginary, right? Like, so I'll give you an example. Like I invested, I was one of the larger investors in figure AI, which is a human humanoid robot. Yeah. And we, we funded last year, Brett. when no one wanted to do it. First of all, the market was shit, and so people were afraid. And second of all, people didn't believe that he could build a prototype in a year. And so it was a really binary reaction. Either you thought he was bananas, and... he would never do it or you thought he was the next Elon and he'll do it. So I was on the other side of that coin where I thought he could do it. And that paid off for me theoretically now, right? Because Microsoft and OpenAI and Nvidia came to lead the next round and his progress is astonishing pretty much. Jason Kirby (44:35.54) I saw that demo. I don't know if you posted it in the group, but the figure AI demo where it's open AI kind of LLM in there while the robot's actually doing the... Shane Neman (44:47.17) Yeah, yeah, it's like, yeah, it was, he posted it yesterday on his Twitter, it was insane. It like, it talks to you, it's very dextrous, it can pick things up, it can tell you what's edible, it's pretty crazy. It's shockingly crazy. And so. Jason Kirby (44:53.7) It's amazing. Shane Neman (45:10.986) point of that is that okay great I got a 6x markup in a year which is crazy right but that's imaginary so like I could sit there and you know celebrate that but you know as a practical matter it's not real it's not like I could really you know sell those shares or anything like that so as a you know you just have to be really, really patient as an investor. It's not going to happen. And you have to also have this mental mindset where you're okay with losing a lot, a lot of times, let's say frequently losing, right? And so that is not something that is really ingrained in most people. It is counterintuitive to most human nature. And it's the reason why you see a lot of the people who are really great investors are on the spectrum probably. because they don't experience emotion the same way that we do, right? And so, Buffett and all these other guys, they definitely are on the spectrum a little bit, at least. And so, it's hard to change yourself to be like. Jason Kirby (46:26.072) I think that's very well said in terms of just the timing, the understanding of failures and just, and also just the fact that it is 12 years. I got, you know, all these venture funds are seven to 10 year time horizons. And if you're early stage, it's just like, you know, who's exiting and you know, that quickly, at least an entire fund. So I think you share a good perspective for, I think not just for the founders listening and understanding this, but also the investors that tune in. Shane, it's been absolutely awesome having you on the show and kind of sharing these details. Now, this is a good dialogue and I think it's unique being able to have kind of exited founder turned investor and kind of sharing the perspective and the mindset that you have and the types of deals that you do. Shane Neman (47:02.854) I had a lot of fun. Thank you for having me. I appreciate it. Jason Kirby (47:15.5) What's the best way for our listeners to learn more about you and potentially connect with you? Shane Neman (47:21.934) So for me, my website, I have a contact page that works really well, or LinkedIn. Those are the two ways that I really get contacted the most. And I check those, and I respond there. So that's the easiest way, for sure. Jason Kirby (47:39.416) We'll make sure to put those in the show notes. And then just a fun way to end, you know, what would be one piece of advice to, to founders that are chasing angel capital right now? Shane Neman (47:54.145) Um... Shane Neman (47:58.37) The one piece of advice is just be as persistent as you can. The minute that you feel like you're going to quit, don't do it because that next one will likely be the one that hits for you. That's really it. Persistence is the game. No matter how distraught you are and how dejected you are. It may take longer, but it'll eventually happen, I think, for most people. Jason Kirby (48:35.224) I know that's always the challenge is like, keep at it. Keep going even, yeah. Then it's like, at what point does it actually, punch through or add in and it's that. Shane Neman (48:45.134) I mean, listen, I mean, you know, it's easy to say, but like, obviously, if your idea is complete shit, you shouldn't do it, right? But if you truly believe that that's going to be good, then you should pursue it. And it could take a really long time. Jason Kirby (49:05.896) Yeah, that's a good way to say it. Like I think to summarize, if you have doubt as the founder, everyone will have doubt. So you have to be a full believer in what you're doing. Awesome. Now, it's my pleasure, Shane. It was great having you on the show. And I look forward to staying connected. Shane Neman (49:16.358) I agree. I agree. Well, thank you so much. Shane Neman (49:24.298) Yeah, me too. Thanks so much. Thank you.