Episode Transcript
[00:00:00] Speaker A: Foreign.
Welcome to the Victory Show.
[00:00:14] Speaker B: Hey Victors. Welcome to this episode of the Victory Show. If this is the first time you join in us, I'm Travis Cody, best selling author, 16 books and the creator of Bestseller By Design. I've had the privilege of helping hundreds of business consultants, founders and entrepreneurs write and publish their own best selling books. Through that journey, I've discovered a fascinating pattern. Most businesses really struggle to break past seven figures a year in revenue. So on this show we sit down with some of the world's Most successful founders, CEOs, leaders, business owners to uncover the strategies they use to scale way past that mark so you can do the same. So get ready for some deep insights and actionable takeaways that you can implement in your business and life. Starting now. Today's guest knows what it takes to scale, fund and exit high growth companies. Chris Van Dusen is a senior partner at solikoi Solico. Is that how I say it? Silico Silaco. I was way off on that one, man. Silic Capital, a private equity driven venture capital firm that provides capital solutions for late stage startups and growth stage businesses. With deep expertise in deep generation and capitalization, Chris has helped scale companies to successful exits including his former role as Chief Growth Officer and at Balanced Health Botanicals where he led the company through a major acquisition in 2021. He currently serves on the boards of AI IO Bonus and Athlete Agent and is a frequent speaker on leadership capital strategy and raising money the right way, sharing insights and global stages and podcasts like Making Billions and Sharkpreneur. Chris is also a national board member of Alder, a founding member of Forged Eagle Society and an active member of the entrepreneurs organization. So whether you're looking to grow, fund or exit, this conversation is going to have some gold in it. So please welcome to the show. Mr. Chris, thank you so much for being taking time out of your day. I appreciate it.
[00:02:03] Speaker A: Of course, thanks for having me. Big fan. Travis, this is great.
[00:02:06] Speaker B: So I love your specific focus on late stage startups because several of the people I've interviewed for this project so far have been early stage where their boots on the ground or maybe just they're just hitting revenue.
Like let's talk a little bit about like was that purpose, have you, was like a purpose choice for you to specifically go after that stage of, of capital or was there something appealing about that that just said I want to focus on this?
[00:02:35] Speaker A: Yeah, no, it's a great question. So at slico we do seed investing as well, but I think you Know, the landscape has changed, right. Really just a smidge. Right. And so, you know, whether or not it's us or another capital provider, right. Everyone has their own nomenclature for what things are, right. When we look at kind of these late stage startup, that means for us a few things. One, they found product market fit. They may not have scaled yet, but it's not an idea anymore. This is something tangible with revenue, with clients, a lot of times with actual positive. Right. That they need to fund.
So for us, when we looked at it, you know, everyone loves the story of being the first $25,000 check into an Uber, being worth $1 billion or you know, the first guy who did XYZ at Coinbase. Right. As a comms guy. Right. Everyone loves these stories. I get it. When we look at investing, we want to figure out this band of company, if you will, that gives us the best risk adjusted return.
You're in venture, which means you're already a little higher on the risk side than a traditional kind of capital markets play. It's a liquid, it's longer, traditionally five to seven years. And so when we look at that we go, okay, we want to get a return that's commensurate with that time period and the risk associated with it. But we're not a pre seed company. A pre seed affirm, excuse me, that's putting 2550, $100,000 checks and hoping one of them makes back everything. Right. That's more on that angel or pre seed type funding for us. I want to see revenue, I want to see great teams, I want to see product market fit. I want to be that capital that comes in and helps you go actually achieve it, not bring that product to market for the first time.
[00:04:27] Speaker B: Yeah, that makes sense.
So we'll get into that a little bit because what I, what I love about our conversation today is the fact that you know, you, not only have you done this with your own businesses, but now where you're at, you've, you've, you've got the outside looking in so you're able to look in at that, you know, and I want to have a conversation when we get there about what it, you know, how do you choose a company and you know, are there things you'll look at companies and go, yeah, no, that's a pass. You know what, and what are the things that create a pass for a company? But let's talk a little bit about balanced health botanicals.
What were some of the strategies you guys used for growth? And, and were you doing that when you started it specifically for an exit or did you just. Were you. Did you just scale enough where it was like then somebody. You caught the attraction, somebody came in.
[00:05:18] Speaker A: Yeah. So if you think about the time when the company started, it was the end of 2016.
Right. CBD, which is what this was hemp derived. CBD specifically wasn't like it is today. Right. I think at the time there were maybe 300, what they call tracked brands were doing any meaningful amount of rap revenue. And it was still this gray area covered by the original farm bill. But. But really the new farm bill at the end of 18 hadn't kicked in yet. So this is gray area, right?
[00:05:48] Speaker B: Yeah.
[00:05:48] Speaker A: And you know, I met no Facebook.
[00:05:50] Speaker B: Ads, no YouTube ads, nothing.
[00:05:52] Speaker A: Nothing.
And so when we, when the company was originally started the end of 16, I joined February of 2017 as a partner.
I'm, you know, one of the owners.
What ended up being really interesting is there was this huge fan base for cbd, but there wasn't one trusted brand.
[00:06:13] Speaker B: Interesting.
[00:06:14] Speaker A: No one really. You didn't know what you were getting, Right?
[00:06:17] Speaker B: Yeah.
[00:06:17] Speaker A: I won't call it bathtub gin, but let's call it bathtub gin. Right. There's. There was, you know, I haven't heard.
[00:06:22] Speaker B: That phrase in a long time.
[00:06:24] Speaker A: There's the Charlotte, Charlotte's Web of the World, which was really that first big brand in the space.
And it was extremely expensive.
And so we looked at it and understood the costing around it and said it doesn't have to be.
And what we want to do is really democratize the ability to get this product at a fair rate. And so what we did was we built what we called the most trusted brand in the space.
And we did it by having coas. Right. Certificate of authenticity. When it came out, we put those online so you could track your actual bottle. There was a lot around understanding where it came from. And the reason I say that is that was our ethos. So we created more of a movement than we did create another brand.
[00:07:07] Speaker B: Got it.
[00:07:07] Speaker A: And so we stood for something that's first and foremost, I think a big piece, number two. And I was the chief marketing officer, eventually chief revenue officer at the firm. So I looked at it as well and said, okay, if we're going to be the most trusted brand, how do we get that out to the most amount of people? Well, you're right. I don't have Facebook ads, I don't have Instagram.
[00:07:28] Speaker B: Right.
[00:07:29] Speaker A: Twitter, I can't like everything that would be in our digital stack. We didn't have Access to.
[00:07:34] Speaker B: Yeah, you get shut down immediately.
[00:07:36] Speaker A: And so I almost. We flip flopped, Right. And before I was at Seab Distillery, I had created a marketing agency. So we did conversion rate optimization and high intent media buying.
And so I looked at it and said, okay, we've got to do something different because all of our arrows in our quipper are gone.
Right. And then you go back and look at. Okay, what is possible.
Well, let's go through the stack. Right? We can do content. Great.
We can do SEO. And that will build an SEO strategy around that content. Okay, great. This all takes time. What we ended up doing is working with the influencer and affiliate space meaningfully, which helped get into their networks.
And we kept pulling that thread. Right. And as we pulled that thread, we realized was as CBD became more ubiquitous in 2018 and 19 and people knew about CBD, you now had over 3,000 tracked brands.
So now it became even more difficult to get attention. But what we realized was if you, if you look at what influences people, right, and we think about that word, it's usually a friend, a family member, or a trusted advisor. Yeah. And so when you go to trusted advisor, you realize that on the coast, right, which is where the population density, everyone's fighting for the same customers. And what we realized was there's the entirety of the rest of the country that no one's touching. Well, who talks to them?
Hosts endorsed radio.
[00:08:58] Speaker B: Yep.
[00:08:59] Speaker A: And so what we ended up doing was helping kind of. We were really the first brand to ever advertise on radio, both Sirius XM as well as, you know, iHeart and Cumulus. And we worked with the FTC and attorneys to get that all passed through. And once it did, we were on Hannity and Limbaugh and all the big hosts. And what we found was that clientele, the over 45, I was gonna say.
[00:09:24] Speaker B: That seems like a slam dunk because they're having joint pain, energy issues, everything that CBD is great for.
[00:09:29] Speaker A: And what we found was they were the most loyal as well.
So while everyone was fighting for the coolest brand that had the hippest taglines and the coolest packaging, we were straight down the middle, fair, trusted, and the audience that we went after loved our product.
And so we stayed in our lane. And what really that takeaway, if you want to think about it, would be, is understand who you're serving with your product, brand, service, platform, whatever.
You know, we'll talk later about due diligence, but red flag for me in diligence, is my product service good, is for everyone.
Well, sure, but really, who's it for? Right. And if you can understand that, then you can build strategies and understand how to sell to that. And you also get great feedback on if, in fact they are the right people for you.
[00:10:16] Speaker B: Sure.
[00:10:17] Speaker A: And so once we understood that, then we started building the brand. We would evolve the brand towards that audience as well as really build strategies that spoke to them.
[00:10:28] Speaker B: Yeah, well, you know, so what's fascinating and brilliant about that strategy is, is, is you're also choosing hosts that then in and of themselves were already had a loyal following. Right. So you're, you're, you're already marketing to an audience that has displayed, you know, like Hannity people, you know, they followed him. Every network he's gone to. Right. They follow him. Same with Joe Rogan. Right. And Limbaugh. Right. So you're not. So when they buy, you're now tapping into somebody who's already proven that they're going to be pretty loyal to something. So you've, it's kind of like a slam dunk there. And the other thing too, like from a business perspective, and you know, now you were talking about it five years later, right? You kind of go like, well, yeah, that seems like common sense. Of course we're going to go to those guys. But it never been done before.
[00:11:14] Speaker A: Never been done before.
[00:11:15] Speaker B: So when you started running ads or your competitors are like, look at those Yahoos over there running radio ads.
[00:11:20] Speaker A: Pretty much everyone's like, you're doing like, is that ever going to work? And I said, it might not work for a millennial audience that loves trial.
Why I say that is. And look, this isn't being stereotypical. This is facts and data. You can find.
[00:11:37] Speaker B: Sure.
[00:11:38] Speaker A: Women and at the time, people under 40 love trial. So think about shopping on Instagram, right? You get caught by a brand, you read this stuff, you want to try. It doesn't matter if you already have that product by another brand. You want to try the new one.
[00:11:52] Speaker B: Right.
[00:11:53] Speaker A: And then when you're trying it, you try another one, and then you might return back eventually. We could see this in our data, but what we found was the over 45 were loyal. So they would sign up for subscription and it would come and they would use it and it would stay longer. So why fight for people who you know are going to leave?
And that was kind of this point where we kept coming back to. Right. It doesn't mean we didn't serve all cohorts of people. It was really, where do you put your focus?
Right. You're going to draft into the other kind of.
[00:12:22] Speaker B: Yeah.
[00:12:22] Speaker A: Individuals.
[00:12:23] Speaker B: You got it. You got to be focused on what you're doing. Right. Like so, like.
[00:12:26] Speaker A: But yes, we, we were definitely called crazy more than a few times for some of our strategies.
[00:12:30] Speaker B: Well, I, I worked with a client in marketing for a while and, and he was in supplement space and, and he had some joint pain and some heart stuff and he was spending like 100,000amonth in newspapers and people were like.
[00:12:43] Speaker A: We did a 7 billboard installation in Times Square.
[00:12:48] Speaker B: Yeah.
[00:12:48] Speaker A: And everyone was like, what? While we were covering the Wall Street Journal pretty much hit our core demographic.
Right?
[00:12:56] Speaker B: Yeah, Right.
[00:12:56] Speaker A: And we were covered in ad age and all these other things. And it was great because the installation cost us money. Sure. But from a ROI perspective, when you looked at the media exposure, when you looked at the actual customers, that came off of it.
Right. Like it became a ROI generating opportunity. But everyone's like, it's almost like you're taking that big swing for the fence every once in a while. And we had built the company to a size where we were willing to take some risk on some of these campaigns and we baked it into the overall marketing strategy. Right. We had this opportunistic kind of set aside to say, look, we're going to do something a little off. Right. And the whole campaign was gimmick free cbd. And you'd have a picture of, you know, a pillow with cbd. Right. And it was where the gimmick free. Right back to the trusted. Because at the time, I mean, and I joke pillowcase with cbd, that literally was a product you could buy like a Bridgestone.
Right. They had it in CBD like infused in workout gear. Like it was, it got ridiculous at some points.
And so it came back to no gimmicks. Right. Just real trusted product. And it was back to our brand and back to what we were trying to convey.
[00:14:08] Speaker B: So obviously this has worked really well for you guys. How. Let's talk a little bit about the growth that came as a result of that. And can you talk a little bit about the pros and the cons to the scaling? Because I think most solopreneur, and I'm saying this through the lens of a lot of the people I work with that are kind of in the half a million to a million a year revenue mark.
There is a lot of times they're going, if I could just get to 5 million or I could get 10 million, all my problems are going to be solved. So let's talk a little bit about, you know, what's good about scaling and on the what, what's some of the drawbacks that come along that most people are not aware of that, that they're going to run into.
[00:14:45] Speaker A: Oh, so I make a, a joke that with bhb, right. Bounce out botanicals. We got a master's degree as an executive team on parabolic growth and parabolic compression.
[00:15:00] Speaker B: Okay.
[00:15:01] Speaker A: So company really catches its legs right.
As we get to the end is 2017 into 18 and 2019 was an unbelievable year. Right. And then covet hits in 20.
Okay. So for 17, 18, 19, we can't hire fast enough, we can't get product fast enough.
Right. And you think about that and go, okay, that doesn't sound like problems like you guys are making a ton of money. Well, yeah, if we can sell products, we're making a ton of money.
So think about the fact that you have to have revenue come in, hit, then buy inventory, manufacture it so that you can ship it. So you do 10 products, 20 products, 30 products. Yeah, that's fine.
When all of a sudden you're doing thousand products a day, how like there's no, like, hey, this month and this quarter we're going to have this 10 growth. So we're going to inventory and allocate it appropriately. It was parabolic. So every month kept going and going and going. And you couldn't forecast from like an FPA perspective correctly to understand when you're having 20% month over month growth.
Right. Let alone what you were doing before. Right. So it was tough. And then, oh, by the way, you have 40 SKUs, so which SKUs at what time are going to hit that growth inflection and then you'd get a great article that would come out or review and you'd sell out of something that wasn't a large seller for the three months.
It was insane. Right. And you now have. Because we did fulfillment in house, you had to do, you had to actually build fulfillment teams. Which means our modest fulfillment area became five more industrial areas that we kept blowing out walls to accommodate. Like it was you. You don't factor in this growth.
And so you're always behind, you're never on your toes. Now again, this sounds like an amazing problem to have, but every time you give a customer a bad experience or you're out of stock, they're going somewhere else.
[00:17:18] Speaker B: Yeah.
[00:17:18] Speaker A: So don't forget like you're trying to build the plane as you're flying it and oh wait, like we need more people. Like now you've got to Go through the process of. Now we need more people in a process of, over the next quarter we're going to hire this new marketing person. You're saying, no, no, no, I need it now.
So like you're trying to hire, you're trying to plan, you're trying to forecast, you're trying to keep market. Like this is just marketing now. Do operations, do every other function.
[00:17:49] Speaker B: It's so like being on a basketball team and you've got three players and you're playing against five and you're like, no, we need, we need to get the other. So you're in playing the game in the stands being like, where's number player number four, like get them down here.
[00:18:02] Speaker A: And the landscape changes. And so you know, we built infrastructure for a large company because we were finally getting on our toes to say, okay, and this is gonna, I mean this is gonna keep going. Right. Like we see no signs. And then people started coughing.
[00:18:17] Speaker B: Yep.
[00:18:18] Speaker A: And then covet hit.
And I remember closing the office right back in 2020. And you know, we were very lucky in that we were, we were, we were a well run business. And I gotta tip my hat to the rest of the executive team. Right. My partners in the business, we were very well run business.
And so what ended up happening was we had planned for that next years in the current year.
But what we had planned for was a much larger company that ended up happening with COVID and so we had to pull all that back.
Now I would say compared to a lot of our competitors, we were insulated from COVID a lot. Didn't mean we weren't affected, but insulated a lot comparatively. But all that infrastructure was to support some things our competitors were already doing. Why I say that is we were really good on a direct to consumer basis.
It was my background, it's what I knew how to build.
Where we were emerging was on the mass retail side. So think about the large stores.
[00:19:24] Speaker B: Sure.
[00:19:25] Speaker A: And so where we were immune, or I should say didn't get hit as hard is that people were still buying online but now had no access to go buy in the store.
[00:19:34] Speaker B: Yeah.
[00:19:34] Speaker A: And so a lot of our competitors inventory were just sitting there on shelf. And these do have an expiration date.
[00:19:39] Speaker B: Yeah.
[00:19:40] Speaker A: So you can see these.
[00:19:41] Speaker B: So they. So they got clobbered in that way. Yeah.
[00:19:43] Speaker A: And so for us, with the majority of our sales being online, we had compression, but certainly a lot less because they had, you know, in some cases 50% of their sales channels gone.
[00:19:53] Speaker B: Yeah. Wow.
Oh well, I guess that's good. For competition. When you came out the other side.
[00:19:59] Speaker A: It was good for competition coming on the other side. But you know what you learned though is oh wait, we gotta still run this and we have to still run it well. And we have to start peeling back some of the decisions we've made over the last year.
[00:20:13] Speaker B: Yeah.
[00:20:14] Speaker A: Because we don't need xyz. Right.
[00:20:16] Speaker B: So was it because you were so well run during the that that 2020? Is that when the actual conversations for acquisition actually started or did the acquisition start before COVID hit?
Yeah.
[00:20:29] Speaker A: Really it was during that period and ladder that the conversation started and it was we found a great fit with a public traded company.
I will tell you the process is long.
So for anyone who is listening wants to do that process. I've been fortunate to have three exits, two mergers with Strategics and one was an actual outright sale.
And that the process takes longer than you think.
The headache, sorry, that's awful to say and why I say it's a headache is usually this is a momentous thing that happens in your life, right.
Your kids go off to college, you get married, you sell business. These are amazing things. Right.
[00:21:14] Speaker B: It's also what a thousand times more paperwork than you ever expected there would be.
[00:21:20] Speaker A: Yes.
And you know what I do speak with, we have a portfolio of over 35 companies at Slico in the venture side. And what I say is learn from our mistakes while I say we were well run. One thing we didn't have the minute we said we wanted to was a data room. Now what is a data room? Right. For those who don't know, Data room is basically the holy book that is your company, right?
It is every contract, it is every sales agreement, it is every thing that you have decided. It is numbers and marketing, it is costs on everything. If you have a product from the cap to the label to I mean it is everything that makes your business run. It is financials, it is historicals, it is everything, okay?
When you need to build that to the spec of what a buy co is looking for and each one is different, you're trying to still run your business while building out explanations and answers to everything they have. And if you don't have that data ready to be easily accessible to answer those questions, everything takes longer. Everything takes longer. The deal can fall apart at any minute.
And so there's this level of a lot of the advice, if you will, we give or opinions is get that done early. Have that historical every year you're adding to the data room. It doesn't mean you're going to sell tomorrow, but when you're ready, you've cut down the time dramatically.
The other thing is, which most people don't realize is like it, love it, hate it.
Six to 18 months is usually the process time.
It's not like someone comes knocking and you get a check tomorrow.
[00:23:07] Speaker B: Yeah.
[00:23:07] Speaker A: They want to validate everything you're saying, everything. Because they're buying it. Right. And so it's a lot. And you know, again, I was fortunate. I had two in 21, so doing two simultaneously was its own thing. And then one in 19.
But yeah, managed to have all your hair.
[00:23:24] Speaker B: That's amazing.
[00:23:25] Speaker A: Oh, well. So I don't know if you've heard of alopecia, but I had patches of my beard that were gone during that period and I was probably about 550 pounds heavier as well.
[00:23:36] Speaker B: Yeah. Wow.
So out of that process, like when, when did the idea of starting your own venture capital firm start to bubble up? Was it after you had exited that you said, you know what, this is the next thing for me?
[00:23:50] Speaker A: You know, at the time I was doing, it was all simultaneous. Right. 2017.
I had had my agency for a few years. We were doing great work for clients, met the guys. We started bhp.
I also was very fortunate. Did a liquor distillery. We sold to a strategic and then a beauty care brand. Naturally, that we sold, we sold as well. And at the same time, I had a friend of mine from college, we raised two funds, two venture funds and actually precede and seed.
[00:24:20] Speaker B: Wow.
[00:24:21] Speaker A: Early stage in the cannabis space.
So we really focused on what I'll call picks and shovels. So the erp, systems analytics companies, things that didn't touch underlying commodity.
And so, you know, coming out of 21, I this kind of halo, if you will, of like, oh, this is someone who knows how to scale brands fast and can sell them. Right. Had some successes.
I'm sitting there going, you know, I'll probably start my own consumer goods fund and I can go operate, help these companies while also. Right. Deploying capital.
And the crazy thing is, back in 2017, I joined this group called Alder A L D E R. It's all around generational leadership. So think there's an old proverb, right? The world's a better place when old men plant trees whose shade they never enjoy. So think about that like as a organization, right? Doing great things for your community and hopefully for the country.
And I met this gentleman by the name of John Garcia. So John founded Seleco capital back in 2017 while he was building the Slico I was doing all the crazy stuff we've been going through and then invested in one of the deals that we took, full cycle.
So I've known John for years and we'd always tried to work together, figure out ways other than just them investing. And he asked me to join as a partner in January of 22 is when I officially joined. And so since then I've been at the firm now three and a half years. Unbelievable firm. And I could go on forever on that. I will save, save everyone from that right now. But I always wanted to be in this. And Salico's ethos is different because we are operators as well as capital. So, you know, we have 11 senior partners, 40 staff. We work a lot of times, not me personally, but our teams on secondment inside of the companies that we invest in.
So here's your.
[00:26:13] Speaker B: You'll invest and you'll. Then you'll come in and help install management teams and processes and that sort of thing. Yeah.
[00:26:18] Speaker A: So think about it more as like a private equity approach to, to growth stage venture. Right. And there's not a lot of firms that do that because it takes a lot of work.
[00:26:26] Speaker B: Yeah, right.
[00:26:27] Speaker A: It's hard.
[00:26:28] Speaker B: It is hard. But at the same time, like when, you know, when you've done it a few times and you've got the systems in place, then it becomes almost stupid of like, why do people not do that? Because your chances of success are so much higher.
[00:26:41] Speaker A: Yeah. You know, our, our strategy and venture as I mentioned was, is to both, you know, go in and add massive amounts of value during that formidable time as well as capital. But what's great about SLICO and everyone kind of puts us in that venture place is we're really a private investment firm now. What does that mean? Right. We have our venture strategy, we have a private equity strategy, we do private credit.
We actually do equipment management, like equipment leasing as well. We do it with one of our portfolio companies. We have a RA or registered investment advisory. So what we tried to put together, right. Is, is this company that has strategies in very different places, but expertise internally to go actually execute them. And so I spend a lot of time with our portfolio companies. I'm on the board of a few, as you mentioned, really trying to drive value for them as well as go out and identify great new companies that we can bring into our portfolio. We like to be ecosystem investors. So we like to say, okay, how does this one affect this one affect that one and how do we make it all work together to kind of make one plus one equal three.
[00:27:44] Speaker B: Three. Oh, that's fantastic. So then let's talk a little bit from a, like the venture capital side. I'm sure you guys are getting pitches all the time.
What. What is it that will you look at? And you can immediately go like this company's. No. And. And at the same time, what is it that you'll see that you got? You and your partners will go, h. This one. This one deserves further look.
[00:28:06] Speaker A: Yeah. So it's interesting.
A big no is. Is. Is really the difference between a scalable business with enterprise value and a lifestyle business.
Now, what does that mean? Right?
Is this business to build something that's going to have great revenue and it's going to have nice ebitda, but I can never find a buyer for it.
That's a lifestyle business. Now, lifestyle business might be 30, 40 million in revenue, might make 5, $10 million a year in, in EBITDA, right? Like, whatever it is, can it grow to a place where there's a meaningful exit on the other side, you're doing something someone else wants truly to buy, or are you the key person or the key team? And that's without you, it can never go anywhere. Right? Because then I'm funding a business that I'm going to make an IRR Cash on cash return on. That's not traditionally what we're going to do. Might be a great private equity play, right? Roll up a bunch of companies like that and own it and just make cash.
But for our investors, they want to have a return and they want to have a return in a certain amount of time.
So that's my next thing. Okay. Can our capital go into this company and within a reasonable amount of time, Most things are underwritten five to seven years.
Can that money come back to our investors with a return?
If the answer is yes, okay, we're starting to clip, right? Enterprise value, does it actually. Can it return money in five to seven years? Is there something there?
And then is it truly disruptive?
Is it also interesting?
Now, if you're just building something because you think it's interesting, great.
But are you doing something disruptive in a certain category now that doesn't need to be. You built a new category.
Right. But that can be inside of an, you know, an existing endemic area or existing place of endemic customers, Are you building something that is different and why do you think it's going to be successful? We'll invest in something like that. But again, once you've shown that it actually is something people want, right. And you're on the path, that's when we're going to invest.
I will tell you, when it comes down to what we really look for, it all starts with the people.
And that is something I think is missed.
We talk about a lot internally. Due diligence is both an art and a science.
Right. I can shoot through spreadsheets. We can have our analysts go up and down, and we can show that this is the best thing that's since sliced bread.
But when I look at the founders, do I believe they are the ones who can actually do this or not?
And that becomes a little less objective and a little more subjective.
[00:30:48] Speaker B: Sure.
[00:30:49] Speaker A: Right. And, you know, specifically, I'll give it. I'm not going to give a specific example, but specifically around founders, if it's a solo founder, have they built the right team? Like, how do they look at this idea of vision, culture and capital? Right. Like, how does this stack work in what their framework is? If there are co founders, how do they get along? Because no one talks about the fact that a huge reason companies fail is because the founders are misaligned.
Maybe not generally, but specifically around certain things that can cause irreparable damages. Well, if my job as a professional investor is to give money, to get money back over a period of time, that red flag is something that says we might not be driving towards that return.
And the pace that I'm looking for.
[00:31:43] Speaker B: I asked somebody one time, I say, somebody, one, but he was on this interview for the book and he got a capital firm, and I was asking him what. What keeps a lot of companies from, you know, achieving the result that they could. And I've had. There's been four guys on the show now that they all said that one of the biggest hindrances to company scale is the. The founder being unwilling to let go of stuff.
[00:32:07] Speaker A: Yep.
[00:32:08] Speaker B: And I was like, that was really interesting because. And you know, and they also said it does determine. Not entirely, but a lot of times it does determine on age, where the younger founders have a tendency to wrap up their identity in the company.
And so then it gets hard for them to, like, separate those two. So to your point, right, you gotta have somebody, like, if you could have a fantastic company churning out cash, but if the. The founder is a jerk, you know, and abusive to staff, then, you know.
[00:32:37] Speaker A: Yeah, you know, I think it was. Mark Zuckerberg was on a podcast or.
He's not a podcast, sorry. He was interviewed by somebody, right.
Called a podcast booth. Probably some big fancy interview.
And he goes, you know, I don't Believe in full delegation. I want to be involved in the decisions I want to be involved in. And you go, okay, that's an interesting concept because I would call management 101. Right. And especially if you try to build a company that can survive you. Right. Is you need to work yourself out of a job. And if we look at those as like the two polar sides of it. Right.
Somewhere in between is probably the right answer. Right.
And the only way you can get true scale and is human output. And if everything is log jammer limited to you, to your point, then you can't grow as fast as you need to. So you need to hire partner, whatever the word is for your company. The right people that you have trust. Right. That they're going to make the right decisions and a culture where if they don't, you can be supportive and fix them. Right. Because that's usually the problem.
There's also another great quote.
One way door and two way doors, I think it was.
Bezos talks about this. I don't know if you've heard this. There's one way door and two way doors.
Two way doors are. I can make a decision and walk through the door, but if it's wrong, I can turn around and walk back through the door.
Right.
If it's a one way door, think about pivoting a company totally. It's really hard to come back from that. Right. But if it's a one way door, then it requires a different matrix of decisions.
So you can start setting up at its most basic this idea of if it's a two way door, the decision doesn't require you. But if it's a one way door. Oh, it definitely does. As the founder. Right.
And so I mean again, that's at his most basic.
[00:34:33] Speaker B: Sure. But I mean that makes a lot of sense.
Yeah, I love it.
So let's talk a little. I know we're going to pivot here a little bit, but I'm just very curious about the Forged Eagle Society.
[00:34:44] Speaker A: Yes.
[00:34:45] Speaker B: Can we talk a little bit about what that is and why you created it and were involved in that?
[00:34:50] Speaker A: Yeah. So I was actually asked to be one of the first 51 members. Right. But it's all around Special Forces. So inside of Alderman, we built something called Project Obsidian. It is a Skillbridge program for tier one special operators who are transitioning from the military into civilian world. Right. And so they skill bridge with an alder and then with an amazing gentleman that I met who's transitioning out.
There's a special forces club in Alexandria at 113rex. And so they built the Forged Eagle Society as a membership organization within that specifically for tier one. And it's really a supportive community for Tier one and.
Excuse me, and intel professionals, right. Getting out to get the support they need. It could be partnering with an Obsidian at older, it could be getting support through other things they may need, it could be mentorship. And really it was. It's housed at the Special Forces Club. And it's really just this amazing community of individuals who did serve and like myself, who didn't, who care about that community and want to do what they can to help. When we go back to talking about Alder, I said it's all around generational leadership, right. Like planting trees. This was. Is something that I'm involved in both internally at Alder and externally with Forged Eagle is really to support this tip of the spear community.
And what's amazing is we don't realize they are unbelievably cerebral and smart and have these skills that we in corporate America don't really realize they have. We all think that these big boot kickers, right. Or jamming down doors. And they are smart, they are team first, they have amazing leadership qualities and they're everything you want in someone to work with.
And a lot of times as they transition out of 20 plus years of service, they don't know what we know. They don't have the same networks we have. And so being able to create that community, we believe long term will help with that transition.
[00:36:54] Speaker B: Yeah, that's fantastic.
So if somebody's listened in reading this chapter, listening to the show, they want to get involved in, in some of the stuff that you're doing, like, what's. Where should they go? Like they want to go into Solico or do you want them to go? You're like find you on LinkedIn and Instagram. Like, where's the best place where somebody could reach out and connect with you?
[00:37:13] Speaker A: Sure. LinkedIn and Instagram, the easiest places, they're both the same. Chris M. Van Dusen, you can also email me. It's cvandusenolicocapital.com I'd love to chat.
[00:37:26] Speaker B: All right, Chris, thanks so much for your time. This has been a fantastic conversation. I appreciate you taking time out of your day.
[00:37:31] Speaker A: Awesome. Thank you so much for having me. This was great.
