Breaking the Mold: FinTech Disruption for Raising Capital for Investment Funds and Startups

"RAISE CAPITAL LIKE A LEGEND: https://offer.fundraisecapital.co/free-ebook/"

Leif Hartwig is a seasoned finance professional with over 40 years of experience that has helped him raise over $200M throughout his career.  He is currently the founder and CEO of WealthVP, a SaaS company dedicated to bringing investors and deal makers together to bring more capital to all of you private market Carnivores 

What this means is that Leif is about to walk us through what's working today on Raising Capital, Building a Business, and Closing out your investment round in your pursuit of Making Billions.

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[THE GUEST]:  Leif is a seasoned finance professional with over 40 years of experience that has helped him raise over $200M throughout his career.   

[THE HOST]: Ryan Miller is an Angel investor in technology and energy.

Transcript

Ryan Miller  
My name is Ryan Miller and for the past 15 years have helped hundreds of people to raise millions of dollars for their funds and for their startups. If you're serious about raising money, launching your business or taking your life to the next level in the show will give you the answers so that you too can enjoy your pursuit of making billions. Let's get into it. 

Finding new and creative ways to raise capital can put you on the fast track to success. That's why this week's episode, my friend, Leif Hartwig, and I chop it up on his capital raising platform WealthVP, where he uses software to match investors and founders to help you raise capital. So the question is, what are you doing to place yourself front and center with investors? All this and more coming right now? Here we go. 

Hey, welcome to another episode of making billions. I'm your host Ryan Miller and today I have my dear friend Leif Hartwig. Leif is a seasoned finance professional with over 40 years of experience that has helped him to raise over $200 million throughout his career. He's currently the founder and CEO of WealthVP. It's a SASS company dedicated to bringing together investors and dealmakers in order to bring more capital to all of you private equity carnivores. So what this means is that Leif is about to walk us through what's working today on raising capital, building a business and closing out your investment round. So Leif, welcome to the show, man.

Leif Hartwig  
Thank you, Ryan, I'm honored asking you to be on the show. I'm a big fan of yours. And I'm really looking forward to our talk today. Thank you.

Ryan Miller  
Yeah, it's great to have you man. And, you know, we found to know each other a little bit offline here. But you know, I'm sure all of our fans around the world we can see leaf and all the cool stuff that you've created with wealth VP, and bringing investors and dealmakers together. But what I think I'd really like to know is how did you even become an expert in this industry? And where did it begin for you?

Leif Hartwig  
Wow, well, it begins probably about 40 years ago, I started my career as a as an investment advisor firm that spent 17 years doing that. So it was a smaller regional firm that was bought out by RBC Wealth Management, I was senior VP with them, I figured out near the end of that career, that I was never going to be my biggest client. And I had this entrepreneurial drive. And so I started on the road to become kind of a serial entrepreneur. And, and so I've done a number of things that led to this final chapter in my professional life. So I spent eight years building an international coaching company called True quest. And we're in over 70 cities in the US and Canada, major, major financial service firms. One of them that, you know, you've helped us bring close to a billion dollars of top line revenues to the company had a great run with that until about 2008. Everybody knows what happened during that time period. And so I started doing some other things that were really rewarding started a software company, that right now we're actually looks like that, that is going to exit at a nice value here. In the next few weeks. What we did with that company is we formed a software company that gave people a virtual office so that they could walk in to that, that platform. And instead of having to cobbled together all these pieces of apps have the drop boxes here and the Zooms there, and the the conference rooms there that we had it all together in one so wonderful software experience. And so but as as I left that firm in really great hands, I said, Okay, what am I going to do for the rest of my life. And the bottom line is I wanted to make a difference in the world. And what I recognize is I had a special talent, of helping raise money of being a leader, as a CEO, and working with startup companies that I had to go to higher level. And so as I took, you know, kind of under my wings, the first one that I did was an edtech company, and gosh, by golly, it worked really well, we raised over $3 million, in a short period of time, the company went to $20 million in valuation. And as they kind of progressed, they brought another couple companies in, and oh my gosh, trying to raise money in Phoenix, where I live in the summertime was near impossible. First of all, if you have money, you're probably not wanting to live in 115 degree heat. And I found that the community investment community here was mostly real estate investments. And so I took a step back. And I said, What's going on here? So I'm gonna stop there for a second and just say, so answering your question of what qualifies me to do this, I didn't know I was training my whole life to do this one thing, all of my experience added up to being able to raise hundreds of millions of dollars running successful companies understanding finance, and then uncovering a real need in the world for companies raising money because almost 90% of them go under because they aren't able to do that. And then working with these incredible investors and making sure that they can get great deal flow. Did that answer your questionRyan?

Ryan Miller  
Yeah, absolutely. And so it sounds like so a couple of things that really stand out that are the hallmarks of entrepreneurship from what I've observed, which is you are in Scottsdale, and you're surrounded by people pretty much doing the same thing and sounds like all those people wouldn't be doing it if they weren't making money. So there was a success. A formula that tended to be real estate. But what many successful entrepreneurs do is we're kind of an interesting bunch where we're kind of we go against the grain. And so you found a spot where you're saying, following your passion, which Dare I say was you just wanted to make an impact? Look, I'm right there with you, brother. I remember the days where I was the CFO. And I'm like, This can't be it. I mean, it was fine. It was rewarding. And I love that company and the people that I worked with, but for me, as a person, as Ryan, I was like, I just this, isn't it, right? It's not that it's bad. It's just I feel like there's other work for me to do. And so the similar things where you just you almost feel called or you just have this desire to make an impact. And so you go out even against the grain, and you persevere, right, even in the real estate, riches of Scottsdale, and you said, You know what, I'm going to do venture capital. And so you found out that there was 1000 VCs trying to finance a million startups in America, I mean, talk about finding a gap, and then you found a solution and called it WealthVP, maybe you can walk us through a little bit of wealth VP, your current company, and why people listening should even care. Oh, thanks

Leif Hartwig  
for that. Yeah, I think you nailed it. And I'd like to later on in the talk, give some tips for all of those entrepreneurs, starting their companies, and one of them is when you start a company, it should be value oriented, that you want to give something to the world and make the world a better place. And that's all done with a value orientation of how can I serve my clients. And so when, when I started doing these companies, and I tried to raise money in Phoenix, Scottsdale area in the summertime, we had a really hard time and I said, What's going on out there. So I took my own coaching advice and took a couple days off and said, what's happening in the marketplace in this, this, what we call the middle marketplace, and that crowdfunding on the bottom, not public companies on the top, that companies that are typically already in revenues, have good management, and they want to grow. And so they're raising at least a million dollars or more. And these are the companies having the problems that shouldn't. And what I discovered it was there was less than 1000 venture capital companies, and even this last year, they've done less than 800 deals. Can you imagine that? Last year alone in the United States, there was 5 million startups of which I think maybe 200,000 of those are in the middle market. And they have no chance to raise money through venture capital, but they do have an opportunity to raise it through individual investors, ultra high net worth individuals and family offices. And so when I was trying to help two or three companies a year, I recognize that this middle marketplace was ready for disruption. It's trillions of dollars a year a year in capital raises, and yet a small fraction is done by VCs. And so I kind of took everything together that I had done raising money helping companies doing a software company, and I put together wealth VP, which long way stands for wealth venture partners. And we decided that this is the way that we can help the world help these great startups find money, and help investors find better deals that are of higher quality and less risk, put it all on a software platform with tremendous amount of of service and quality, both from an investor side as well as a company side.

Ryan Miller  
I love that. And so you've essentially created a platform where you saw a gap and you say, look, there's a funding gap. And I believe that's number one, if not top three reasons why startups fail is to just couldn't get enough capital to get off the ground have lift off. And so you've created this platform, maybe walk us through a little bit of the details of what someone can expect and just really help us understand what does wealthy pee in this platform that aligns investors with people who need capital? They walk us through a little bit of what it is.

Leif Hartwig  
Okay, fantastic. Well, I always think you'd like to compare something new with something you already know. And there was a big rip a $3 billion IRA, where the principal, Chris said, Leave I get it, you're like, match.com each Shark Tank? I said, Exactly. That's exactly what we are. So if any of your audience have ever been on a dating site, you post a profile, right? And if you're a man, you're Sam, this height and weight and maybe these religious beliefs and, and you have all of these attributes that you put on your profile, and they can be searched by the other side, right. And so the other side in this matching algorithm can search exactly what they're looking for and come up with something that you know, might be appealing to them. So on the match.com site, think of, of your company that you're trying to raise money, and you post a profile, generally, who you are, how much you're raising, is it a million dollars, is it $50 million? And what category area manufacture EV FinTech, med tech, all of these things can be searched. And why this is so important is because most investors don't go out of their local network to find companies. But imagine now that you not only find one company that you're being pitched but you have dozens of companies that meet your criteria all around the world. So the match.com is for for quality companies that are Already in revenue, so it's not for everybody, you have to kind of prove yourself, I'm a little bit of a Darwinian in that case that you have to make it to a certain level, and then have great management and that you're raising enough money to, you know, put you through maybe 18 months of runway. So that's the one side of the equation of the platform. The other side is investors, and who are they. So this is not just an angel investor group where you're an accredited investor. But in this middle marketplace, it requires more than friends and family to raise money. Because if you've ever tried to raise a million dollars at $25,000 per person, it is so hard, you have to talk to hundreds of people, tons of rejection. So we we decided that truly the greatest value for middle market companies was to raise money with people that could at least put in $100,000 or more. And so Shark Tank is kind of like that, right? They're wealthy people. And they're actually in a community that they know each other. So we've developed not just a matching feature, but a community where these investors can interact, talk to each other form syndicates and find those companies that are of greatest value to them.

Ryan Miller  
Perfect. I love that. And so the people who are listening because we got, you know, this whole shows on private equity, venture capital, basically all things private market, including entrepreneurship does this work for, say, an emerging fund manager as well as it works for say, a budding entrepreneur can both go on there and look for investors?

Leif Hartwig  
Well, right now, we have two verticals. Imagine that the investors are up at the top of the market and kind of imagine like a pyramid up there. And then they can match directly with private companies in this category of the middle market, they can also match with real estate projects. Okay, so you can search both of those, we found that not only do investors want to have, you know, deals where they can venture deals that will knock the cover off the ball, but we also they're looking for, maybe they sold a real estate property, and they only have 180 days to find another property to roll those gains so they can avoid the taxes. But they can only find local deals. So we have real estate that would be 1031, exchanges, opportunity zones, and so on. So right now, we only represent investors that are individuals ultra high net worth typically starting about $30 million, or family offices, which have a formal arrangement that way. So when it comes to funds coming in, we will develop a vertical for them. But our family offices said, Hey, we kind of get hit up by these funds every day, we kind of like a place for ourselves. And so really, the funds are going to be more of in our marketplace at the bottom right there. Companies, real estate fund managers we have we're working on m&a. So we're truly developing a marketplace for these investors where they can pick and choose with investments they want, both internationally and domestically.

Ryan Miller  
Brilliant. I love that. So we've got a platform for people to raise capital, and it's continually evolving in many asset classes. And I did laugh when you you quoted family office to say these emerging fund managers. They hit us up every day. I was like, Yeah, I'm laughing because it's probably true from my experience. So thank you for for that.

Leif Hartwig  
Well, here's, here's I'd like to add to that a little bit. It's not that that I don't like funds, however, because as we all know, when you diversify investments into many companies, you reduce your risk in the future, we'll be very selective on those funds that will complement the other offerings that are on there. All right.

Ryan Miller  
Well, I got a good fund. We can chat offline. I happen to know the guy. He's also me but yeah, well, let's well appreciate that is a wonderful technology and you're solving a problem. For any of you listening who have actually gone out and raise money, like Leif and I, a big part of it is just where do I even start? Who do I talk to? And so given that it's such a fragmented market, and this is a wonderful startup idea for anybody is there's a fragmented market, consolidate it, boom, you got a business so it's, it's done very, very well at at centralizing a lot of things. So if you want to raise capital, wouldn't that be great to just go to a marketplace, you have everybody you need to talk to all in one spot. It's not Googling and chasing people down figuring out who's the the managing general partner at some fund, and now you just go to this platform WealthVP. And that can help accelerate your capital raising efforts. I love that!

Leif Hartwig  
If I can add just one more thing that please, we listened to a marketplace. And I that'll be a tip that I'm gonna give Max. But when we listened to the marketplace, we found that it's not just the software people want, but they want human being relationships, they want to have pitch events, they want to understand how's my deck is does that need improvement, they'd like a relationship manager that so they don't just go through the software, but maybe someone that could hook them up directly with a qualified investor. So we do all those things on the platform, even though we like to say we're software as a service or a SaaS company, the human being relationship investments will never go away. And so that's another part of the offering as well.

Ryan Miller  
I love that. So you mentioned you had some tips and some of those silver bullets in the chamber. I love to hear it. I'm sure you've been an SVP. I mean, you've done a ton of stuff in the finance industry over 40 years of experience. I have no doubt this is a very deep well of golden gets just talking to you, man. So maybe if we can distill it down to about three things or so what would there be about if you could leave behind some information that would summarize your experience, and just make it really easy for people who are starting out? Because you and I were there one day starting out, you want to raise money, you want to build a business? What advice? Could you leave behind maybe two or three things that you would recommend?

Leif Hartwig  
Yeah, you know, there's a few things that come to mind. But I would like to tell everybody, I feel your pain. If you're in this, if you're in this market area right now, I've probably made more mistakes than all of your listeners combined. And so but that also qualifies me to give you advice and don't do that, right. So let's talk first about what's what's the first step in your business that you need to focus on. And that is, when you create something, listen to the marketplace, and create value, don't think about money right away. Because if you think about just raising money, that the product will come out different than when that's value oriented. Okay? So once you have your foundation in helping, creating value, and do it with honor, integrity, character, all those things, you're gonna find that life is a lot easier, and you track wonderful people like that. But let's, let's take it down to three things. And I think the three things that come to our mind is, you know, what do you need to do with raising capital? What are the amounts you're looking for? I think another thing and I'll go into detail on these three is probably management and and people that help run the company. For an investor side, that's number one for them, they hardly even look at the product, but they they'll look for your team. And then then I'm gonna go ahead and talk to kind of the order of how you raise money with who So raising capital right away, if you're in this middle of marketplace, you should be raising a minimum of a million dollars. And that that reason is if you say to investors, you're raising less than that, they really don't think it's enough. And when they put in money, they think they're going to lose it. So at least a million dollars. And the rule of thumb is project 18 months of your monthly expenditures. And that in aggregate is what you should be raising. If you do that over a million dollars, that you've already raised some money through family and friends at 510 and $25,000, you can't do that. So that's tip number one, you can't continue that low res. And even though asking for 50,000, or 100 or more, is going to feel uncomfortable for you that you'll get what you asked for. So remember, raising a million dollars at $25,000 a person, you've got to raise it from 50, some people and you have to talk to 10 times as many you don't have that kind of network. So first tip, as you grow with this, ask for higher dollar amounts, and you'll get those if you have the courage to do that. Okay. Second of all, I'd like to see you all hire those people that are excellent, or in the elite level, no, on the job training, okay? Because you don't you want people that you hire to have made their mistakes with other companies, basically, right. And as you bring in an advisory board, that is excellent. As you bring in employees and executives, when you pitch to this higher level, that is the number one thing that they look for, and think about it yourself, wouldn't you rather have people that had made their mistakes with other companies in the past, and we all know those people that have made money in the past with one company, they do it quicker and faster with the next one, they just know how to do it. So that would be tip number two, and number three, and I forgotten this so many times. But when I've done my startups in the past, that you you invite people in to invest and they will. But you know, a lot of people don't want to be the first in investors, they want to see you have what's called a lead, I think all of you out there know what that means. And that means one investor that has maybe a higher amount, let's say if you're raising three to $5 million, that first lead is going to come in one to two, if you're able to secure a lead investor, everybody else follows much more quickly than if you were to do what I lovingly call onesie twosie. He's having a smaller amounts of investors. So the three things that that I would recommend is raising capital, and higher amounts. Probably number one should be excellent employees, leaders and advisory board members. And then third, that you need a lead investor that makes life a lot easier if you can find one

Ryan Miller  
perfect. And as we as we round the corner and we round third base, take it home, is there anything else that you would want our friends around the world to know anything at all? How to contact you your name? Yeah,

Leif Hartwig  
as a business coach, your goal is is to help people I would say right now, I see in that marketplace of raising money, a lot of fear that we found is that you only can have a company if you solve a problem. And the problem in this marketplace is so enormous that companies even great companies, you could have the cure for cancer and you can't find enough money to invest because there's so many companies to invest in. And so what I would approach these these marketplaces and get help from other people, get people that can refer you to investors, and then you have to have an attitude of never ever quit. Okay, that's That's so critical, and that you can do this thing, but you can't do it yourself. So whether you you come to WealthVP and and help us or you get our help for raising money or you go somewhere else, you need to have a lot of hooks in the water. So don't try to do it yourself, look for experts that can help you out. And you don't have to just go to one, we don't ask for exclusivity in our program, we just want to be another one of those groups that can help you. So this is a team sport. And it's one that if you seek out additional help from everybody that you know, and contact, and they will believe in you. And we'll help you do this.

Ryan Miller  
Awesome. Perfect. Well, just to summarize our conversation that Leif and I have had is ask for big dollars when raising capital. In other words, you get what you asked for, and sometimes going to small because you think that'll get your deal is actually going to have the opposite effect when you're raising capital, going bigger tends to get more people interested. So ask for the right number. Don't be onesie twosie, as we've said, these tiny little add on investors, but really go big and expect that and that reflects, I would argue an add to that, that also reflects the value that you have for your deal and for yourself. The second thing we mentioned was you want to hire for excellence but expect growth to the elite. What he means by that is you don't want to hire people don't do on the job training that can be really hard and so the company down and sometimes erode value in the short term. And so what Leif was saying is hey, man, you want to shortcut you want to cheat code, hire excellent people who can become elite performers with within your company. That was the second strategy. And then finally, number three is just fine lead investors to smooth out your round and make it a lot easier. You do these things and you too will be well on your way in your pursuit of making billions.

Wow, what a show. I hope you enjoyed this episode as much as I did. Now if you haven't done so already, be sure to leave a comment and review on new ideas and guests you want me to bring on for future episodes. Plus, why don't you head over to YouTube and see extra takes while you get to know our guests even better. And make sure to come back for our next episode where we dive even deeper into the people the process and the perspectives of both investors and founders. Until then, my friends stay hungry. Focus on your goals and keep grinding towards your dream of making billions