0:00:02.2 Kurtis Baker: Searching for guidance in the startup world? Meet David Stengle, a seasoned expert in startup ecosystems with experience as an operator, investor, and advisor. He’ll share insights into startup community building, governance, inclusion, and metrics while highlighting his work with Startup Grind, Princeton and Board++ in empowerment, underrepresented executives. Tune in to learn practical strategies for growing your startup and fostering your innovation. David, thank you so much for coming on the show. I appreciate it very much. You’ve got quite, no pun intended, a diverse background here…
0:00:41.1 David Stengle: Yeah.
0:00:41.3 Kurtis Baker: So to speak. I guess let’s start off with, I think you’re involved in the Diversity Finance Authority, right? You’re a board member there? Can you…
0:00:48.8 David Stengle: Yeah. For the EDA Diversity Financial Advisory Board. So…
0:00:52.3 Kurtis Baker: Can you tell us a little bit about that and how you got connected to that?
0:00:55.2 David Stengle: Absolutely. So after a career as a startup operator primarily, I’ve been doing startup community organizing events for the last 10 years, and in that capacity have done work with the New Jersey Economic Development Authority, been on their technology advisory board, and had some EDA officials speak at some of my events. And last September, as part of the Murphy Administration’s focus on inclusion, they added a Diversity Financial Advisory Board to the EDA. And the idea really is there’s a lot of programs that the EDA provides, which have benefits, non-dilutive benefits, meaning it’s free money for founders, but not every community’s getting that message effectively. And so the Diversity Financial Advisory Board is really doing two things. One is thinking about the programs that are offered and making sure they’re a good fit for all of New Jersey. And second, going to groups that are overlooked or are not participating particularly and saying, what can we do to help you raise awareness about these programs and take full advantage of it? And it’s a little bit like when you do any government program, you want people to use it. If you’re giving out cereal coupons, you want people to not redeem the coupons. But if you’re giving out benefits programs, the whole point is to deliver the benefits to the people.
0:02:31.1 Kurtis Baker: You create that leverage, right? The government kind of helps come back.
0:02:33.8 David Stengle: Exactly.
0:02:34.0 Kurtis Baker: And do that leverage thing. So it sounds to me like you have two different areas. So I guess we’ll start with, I guess would be… Which would be the more generic, which would be the whole, like what’s the scope, what’s generally the scope of what their goal is there, and then we’ll get into like the overlooked or the other…
0:02:48.1 David Stengle: Sure.
0:02:48.8 Kurtis Baker: Communities that maybe need a little extra help. So what’s the big picture?
0:02:50.5 David Stengle: So the Economic Development Authority is a big 10, and they do all kinds of initiatives. The things that I’m most familiar with are for venture startups. So my focus is in the venture traditional cliche, Silicon Valley, Facebook, Google, kind of startups. And in that area, the EDA has done a number of things. They have a subsidy program for coworking spaces. So if you are a really early startup and aren’t ready to have your own office, or you wanna work in a coworking space, there’s a program that will underwrite part of the rent. There’s a program that gives tax credits to angel investors, so that’s good for the angel investor. If you’re an angel investor, you should definitely be aware of it. If you’re an investor looking to raise angel money, it’s an opportunity for you to get additional benefits if you’re based in New Jersey.
0:03:52.3 David Stengle: There’s a fellowship program that launched last year, and the first cohort of a dozen fellows launched in February, I think we had the formal announcement. And this is a way to have the state take a real bet on some exciting founders. They’re actively recruiting for the second cohort. And I wanna encourage anyone as an early stage founder to take a look at that program and apply if they see a fit. But go for it. And then there are…
0:04:28.7 Kurtis Baker: So what does that program provide to somebody that’s maybe in that position?
0:04:31.3 David Stengle: Some cash.
0:04:31.6 Kurtis Baker: Okay.
0:04:34.3 David Stengle: And being brought into the, I’ll say the EDA tent, but there’s an… Part of getting going as a startup is plugging into the local venture ecosystem. And so the Economic Development Authority has a group that focuses on venture activity. They have a bunch of industry contacts. They have a bunch of additional programs. For example, if you’re doing a startup that needs a wet lab, there’s a program where you can get funding to use a wet lab at a university. So this can cost plenty of coin at the beginning. And you can get something like $40,000 a year to use lab gear at Princeton or Rutgers, or… And that’s just one example. There are all kinds of programs. Part of why the the board is in place is there’s probably 70 EDA startup programs. And if you asked me to recite them all, I’d fail miserably.
0:05:31.6 Kurtis Baker: No. [laughter] I won’t do that to you.
0:05:33.5 David Stengle: Yeah. Yeah. But the point is the Murphy Administration in particular has leaned hard into this. First lady, Tammy Murphy took the initiative to help Golden Seeds, which is an angel investment group focused on female founders to launch a New Jersey chapter a couple of years back. And the Murphy Administration has also done this very innovative and I think globally leading initiative to identify some early stage venture fund managers that are targeting specific constituencies or segments. I had one of them speak at a recent event. So there’s Squire Servance founded a venture fund looking specifically at conditions that are prevalent in underserved markets, which is a poorly capitalized and… Area that has opportunity for innovation. There’s another. Red Bike Capital does consumer products and has… The MDs there are amazing. So the administration has partnered with specific funds, with specific investment theses that are aimed at helping the whole state of New Jersey and looking at groups that historically…
0:06:58.5 Kurtis Baker: Are there certain areas? I remember years ago, I know at the chamber they talked about how, at least one of the speakers did, he was talking about how New Jersey wanted to be kind of like, “The Silicon Valley of the East,” kind of thing. They wanted to really not lose these people. Like they get to a certain point and they just go to California. They go to Silicon Valley and it’s like, well, why are we letting that happen? Why don’t we keep them here…
0:07:17.4 David Stengle: Absolutely.
0:07:18.7 Kurtis Baker: And keep our ecosystem in place. Is this kind of part of that whole philosophy?
0:07:22.7 David Stengle: Yeah. So I think every business community wants to figure out how to keep businesses staying with the community. And so there’s, on the one hand, we have Choose New Jersey, which is trying to bring businesses in from every other state. And then we have programs designed to make it attractive for people to stay here. And part of it is, I kind of roll my eyes at the, we wanna be the Silicon Valley of which everybody says, and I think the right way to go through that is to say, what’s special about New Jersey?
0:08:03.4 Kurtis Baker: Right.
0:08:04.3 David Stengle: So New Jersey, we’re the medicine cabinet of the world, we have incredible fintech. We’re a highly educated, wealthy state leading the country, top five in per capita income, top five in education, engineers. There’s a rich body of technical talent. So it’s looking at the things that we’re good at, and the things that are here and not trying to say we’re gonna copy The Valley because The Valley’s great and it has its own strengths. And we’re gonna do better doubling down on what New Jersey’s good at than trying to imitate San Francisco.
0:08:40.3 Kurtis Baker: Oh, I would agree. Every place has their own personality. I guess I think the argument was, I think that was kind of like, to just turn it was thrown out.
0:08:45.8 David Stengle: Sure.
0:08:46.3 Kurtis Baker: I think the argument was, we don’t wanna lose these early stage entrepreneurs, they’re going other places to find venture capital, and we don’t want them to leave.
0:08:54.0 Kurtis Baker: There’s two parts to that. One is that quarantine really changed the game and it’s now possible to do fundraising without relocating in a much… It’s much more common than it used to be. And it’s much further down the pipeline in a venture investor assessing a company that they expect an in-person meeting. So there’s some democratization of access to capital. There are still and I think always will be two tribes around this philosophically. There are the Y Combinators of the world that say, you have to come to San Francisco and kiss the ring, and only then will you achieve startup enlightenment. And then there are the 500 startups of the world that say, entrepreneurs are everywhere, we wanna find you, we wanna support you where you are. And so don’t go to the Y Combinators if you wanna stay in New Jersey, right? But there are lots of ways to stand up a business and keep it here. So part of it is, as a founder, what’s the lifestyle you wanna lead? I can tell you that housing is cheaper here than in Palo Alto.
0:10:09.2 Kurtis Baker: I think almost everywhere… [laughter] Palo Alto.
0:10:12.0 David Stengle: Yeah, yeah. You can pay a zillion dollars for a closet.
0:10:16.2 Kurtis Baker: Right, right, right, right. Yeah. No, that’s awesome. So yeah, so we’re gonna take a quick break now. You’re listening to Master Your Finances. Welcome back. You’re listening to Master Your Finances. I’m here with David Stengle, and we’re kind of talking about the general NJDEA, right? The… So…
0:10:45.0 David Stengle: Sure.
0:10:45.8 Kurtis Baker: Which is great. And so you have the kind of the basic mission of the organization, but now you came in to join the board there, which is more focused on some of these nuanced areas where people might need a little extra help. So can you explain a little bit about who those people are, what their special needs might be, that might be a little different than the general population, and how do we address those to help them in ways that maybe they’re not currently being helped that maybe they need that other people may not need?
0:11:04.3 David Stengle: Sure.
0:11:04.4 Kurtis Baker: Does that make any sense?
0:11:04.6 David Stengle: So… Absolutely. I’d say that the Diversity Financial Advisory Board is still early days. And the way we’ve organized the advisory board is to have two subcommittees, one focused on entrepreneurs and one focused on investors. So part of what we wanna do is make it easy for investors to operate in the state and find good deals, get good access to founders. I am focused on the investor side, and my whole jam is about making it easier for first time founders to get into the venture club. I have been in that situation, and once you get in, a lot of nice things can happen and it’s harder to get in than it needs to be. So the focus of the subcommittee that we’re on, the entrepreneurship committee, is really helping to identify entrepreneurs that are thinking about doing their startup and in the early stages of that, and making sure that they’re tapping into all the resources that they need.
0:12:16.0 David Stengle: And so, I mean, one example that I give is, I live in Princeton. Princeton University has a tremendous portfolio of resources to help a founder. So if you’re a Princeton student, you can practically wave your hand and get mobbed by resources. But I had, for example, a guy, Anthony Frasier, who’s a successful entrepreneur many times over now, does work at Newark Venture Partners. But Anthony got his start because he was loading trucks at the graveyard shift at Walmart, and the rest of his shift didn’t show up. And he had… They were like, “Yeah, you gotta load everything yourself.” And he was like, “Man, I’m so done with this.” And he started looking for a different job and interviewed with the company and they were, “We need help on our website, and here’s how much volume we’re getting.”
0:13:18.1 David Stengle: He goes, “I get more than that out of my gaming site.” And they’re like, “Please come help us.” And now he’s doing podcasts, he’s on the Innovator 100 list. But in terms of where as Startup Grind as the EDA Diversity Financial Advisory Board, I’m looking to help the Anthonys of the world find their way into, how do I get coaching? How do I get mentors? How do I get non-dilutive capital? How do I get instruction? And there’s a ton of resources available on the internet. I think, Y Combinators University resources are incredible and every founder should study them. But there are also a number of programs. So for example, I work with I-Corps, and I-Corps is an initiative initially started by the National Science Foundation and now spanning many federal agencies.
0:14:16.3 David Stengle: But it’s about helping first time founders figure out what they should do. And the super short version of what they do is like, yeah, whatever great idea you have, nice, but shut up and listen to customers. Go out of the building, take off your lab coat, step away from the bench, stop looking at your tech. Go listen in the world and say, what are the problems out there? How might we solve those problems with some humility?
0:14:46.4 Kurtis Baker: Yeah.
0:14:46.9 David Stengle: And many of these founders… I’m old enough. In the ’90s, there was this music movement in Seattle called Shoegaze, and it was called Shoegaze because the guitarists would just stare at their shoes while they played. Like, they didn’t move, they didn’t talk, they didn’t jump around, they didn’t… Zero energy. And like, don’t be the shoegaze founder. Be the go out in the world and talk to people.
0:15:14.6 Kurtis Baker: Yeah.
0:15:14.6 David Stengle: And that’s part of building the community. It’s part of getting comfortable talking to angels. It’s part of telling your story. So there are pitch events. There are a number of groups that… In the state that do pitch events. Startup Grind does some, I’ve done some at some conferences I’ve organized, but there are many other groups. And it’s one way to polish your message, because at the end of the day, when you’re a founder, and I tell every founder this, first you’re selling a dream and then you’re selling traction. So when you’re selling the dream, you’re telling a story and you wanna tell a story well, you wanna get feedback on the story, you wanna see where people are like, what are you talking about? I don’t get it, to the point where it just hits the bloodstream like sugar. Like bang, you just get it. And then once you’re at that point and you find out who your audience is that really gets it, then you’re figuring out, alright, how do I convert that story into traction?
0:16:14.7 Kurtis Baker: Yeah. A couple things in there, which I think is interesting. I know a lot of people that start newer businesses, they’re always… They have this fear of, if I talk about it, people are gonna steal my business.
0:16:25.1 David Stengle: Yeah, right? It’s a rookie mistake.
0:16:27.5 Kurtis Baker: And I’ve found myself and I have to be honest, I’m guilty of that myself…
0:16:32.6 David Stengle: Sure.
0:16:33.0 Kurtis Baker: Years ago. But the more you share, the more you learn from everybody. In fact, I have great relationships with what you might call competitors.
0:16:41.2 David Stengle: Absolutely.
0:16:41.8 Kurtis Baker: Because we all do things a little differently. And what I do, even though we might have the same “title,” we do it differently. And our client base is just different.
0:16:50.7 David Stengle: It’s a great point.
0:16:51.7 Kurtis Baker: Yeah.
0:16:51.9 David Stengle: So I’d say a couple things around that. The metaphor that I like the best is every conversation that you have in the market with exposing your ideas, like seasoning for food, it just gets better. The first time founders often overrate the importance of their ideas. So typically as an investor, I’ve seen 50 or 100 people pitch me the same idea often. And they’re like, “Oh, if I tell you this, I have to kill you.” It’s like, okay.
0:17:22.1 Kurtis Baker: I just heard this 10 minutes ago. [laughter]
0:17:23.7 David Stengle: Yeah, yeah, yeah.
0:17:24.7 Kurtis Baker: Same idea.
0:17:24.9 David Stengle: Exactly. I got pitched on this last week. I got pitched on this the week before. So there’s that part of it which at best shows naivete about the market conditions they’re in. And at worst, is like, okay, you can’t really carry on a conversation. I think another… So I’m pretty harsh on this, but another punk move is, yeah, I can’t tell you that without an NDA. And it’s like, if you can’t tell me what you’re doing, I have no confidence in you as a communicator.
0:17:56.5 Kurtis Baker: Right.
0:17:56.5 David Stengle: I get that there’s some things that are secret. And I in fact started my career as a spook where, we couldn’t talk about our job much. But I could still say, I’m a spook, I learned Russian. I’m tracking the Soviet Navy. There’s something you can say. And if you can’t find a way to say…
0:18:12.8 Kurtis Baker: You just don’t give your exact coordinates at any given point, right?
0:18:16.3 David Stengle: Yeah. It’s really different to say, yeah, I track the Soviet Navy in the Middle East compared to, yeah, this sub moved here. You know, like…
0:18:24.0 Kurtis Baker: The details you don’t need to… [0:18:24.4] ____ You can get the concept over on the details.
0:18:27.2 David Stengle: Right. And when you’re introducing your startup, you better be able to say, this is what I do and this is why it’s shiny.
0:18:33.8 Kurtis Baker: Yep.
0:18:34.2 David Stengle: And why you should care.
0:18:36.5 Kurtis Baker: And I find you get great feedback from, especially entrepreneurs that are further along the path.
0:18:41.0 David Stengle: Yeah.
0:18:41.8 Kurtis Baker: If they’ve done the same thing.
0:18:43.5 David Stengle: Yeah.
0:18:43.5 Kurtis Baker: They’re like, oh yeah, that’s fine. But here’s the issues that we have found. And if you’re gonna do that, you need to be aware of these items.
0:18:49.0 David Stengle: Absolutely.
0:18:49.7 Kurtis Baker: And if you don’t, you’re gonna run into the same problem I ran into.
0:18:52.1 David Stengle: So you should know your competitors and you should figure out why what you’re doing is different and special. And if it’s not different and special, doesn’t mean it’s impossible to have a business, but then why are you doing it instead of selling for somebody that’s already done all those things if that’s what you want to do.
0:19:13.4 Kurtis Baker: I liked how you said that. ‘Cause a lot of times when they do that, like in marketing, is you model…
0:19:16.6 David Stengle: Yeah.
0:19:16.8 Kurtis Baker: You model your competitors, you say, well, what are they doing that’s successful? And how can I tweak that a little bit to make it my own. Because they are already successful. Listen to them for whatever, 80, 90% of what they’re doing, don’t copy it. Obviously that’s illegal, but you can certainly watch the methodology behind how they’re doing things…
0:19:33.3 David Stengle: Yeah.
0:19:33.3 Kurtis Baker: And what they’re doing.
0:19:34.2 David Stengle: And it’s not even always illegal to copy stuff. I mean, some stuff is just like, I’m gonna give advice and other…
0:19:40.6 Kurtis Baker: Well, that’s… Yeah.
0:19:41.1 David Stengle: People give advice or I’m a marketing firm, other people are doing. But it’s like, why am I the guy? And that can… There can be a lot of different whys, but you should have high conviction about this is why I’m a better deal for you. And if you don’t believe it, I don’t know why you’d expect anybody else to believe it.
0:20:00.4 Kurtis Baker: Right, right. And you mentioned something earlier on which I think is really, really important, is the coaching and the mentoring aspect of this because almost everybody I know of, including myself, that’s been successful, there was somebody you were following…
0:20:12.4 David Stengle: Sure.
0:20:13.1 Kurtis Baker: Or somebody that was coaching you and kind of walking you through the process. Because honestly, we can’t live long enough to learn the experience of all the other people that are out there that have done what you’re trying to do.
0:20:22.0 David Stengle: Yeah.
0:20:22.5 Kurtis Baker: You’re just not gonna live that long. So you better learn from others ’cause that’s the shortcut.
0:20:26.6 David Stengle: Absolutely. And there’s… Ben Franklin is one version of this quote, and I don’t think I’ll get it exactly right, but the idea is experience might be the best teacher, but it’s a really expensive one. There’s better ways to learn than, okay, that failed and I went bankrupt, right?
0:20:45.6 Kurtis Baker: Right.
0:20:47.0 David Stengle: So I think that every person for their company but for their life should think about a formal or informal board of advisors and who… I have people that I go to when I’m thinking about marketing, I have people that I go to when I’m thinking about life decisions, I have people that I go to when I’m thinking about health issues. Just build that network with intention and if you’re starting a business, look at the skills you have and your team has and look at the holes because there are holes. And think about who can I recruit that believes in my dream that can fill those holes? And maybe it’s a short term fill, like we’re doing a medical device and we don’t really know how the regulatory pathway works, and we’re gonna find somebody that’s done five medical device companies and has been through the regulatory pathway and know some people at the FDA. Or it can be something like, I’ve really never set up a sales commission plan before. And I know I need to do it, we’re gonna die if we don’t sell, but once I go beyond personal effort, what do I do? Because every salesperson that’s any good will be able to tell you why you should pay them more, right? So how do I push back against that?
0:22:10.1 Kurtis Baker: Yep.
0:22:10.7 David Stengle: In a constructive way.
0:22:11.8 Kurtis Baker: Absolutely.
0:22:12.5 David Stengle: So those are just a couple examples, but…
0:22:14.3 Kurtis Baker: Those are fantastic. We’re gonna take another quick break. You’re listening to Master Your Finances. Welcome back. You’re listening to Master Your Finances. I’m with David Stengle and we’re talking about entrepreneurship and how important it is to get help. And there’s some great programs that are available here in New Jersey. And you’re specifically part of the Diversity Finance Board, which is cool. And in there, you specifically wanna help like the underserved community. Can you tell us a little about who that is, if they’re out there, and how they might get connected, whether they’re part of that community or just part of the general population also might want to connect with the bigger programs as well.
0:22:51.0 David Stengle: Sure. So if you look at the composition of venture-backed company founders, they’re… And these numbers might be a year or two out of date, but they’re directionally correct. About 82% of venture-backed startups have an all male founding team. Venture, investors and founders heavily over index for Ivy League schools, especially Harvard and Stanford. It’s a very wealthy group and there’s a lot of conversation about, hey, if you do a startup, you’re gonna get this equity payout on the backend, so you should work for nothing or for limited wages. Well, if your family’s poor and you can’t live off your parents…
0:23:41.7 Kurtis Baker: That might be difficult. [laughter]
0:23:42.7 David Stengle: Right? That’s a harder conversation. And the most extreme example I’ll give is, I have a good friend that is just really well connected with money and did a startup and joined it and they did a friends and family round and she was tight with a whole bunch of hedge fund managers and they raised like half a million dollars in a week, and it was like, oh yeah, sure whatever. Right? And that’s not the world of most…
0:24:14.6 Kurtis Baker: That’s not most people.
0:24:14.9 David Stengle: Most of us, right?
0:24:16.0 Kurtis Baker: Right, right?
0:24:16.0 David Stengle: That’s not me, that’s not the startups I work with. So part of it is the whole… And that’s an egregiously extreme example. But the idea is there are people that come from money and it’s like, yeah, I have no college debt because my parents paid the…
0:24:33.0 Kurtis Baker: They haven’t known the struggle. [laughter]
0:24:34.3 David Stengle: Right? Right? And it’s like, this is not a problem. And then there’s people, it’s like, I need to pay my bills, how do I do this? And navigating into the system and making sure that they can find grant money, early stage investment and be scrappy and navigate it into getting ready for institutional capital is really, really important. So I think that part of it is making sure that entrepreneurs that are thinking about doing the startup journey understand how hard it is and I think there’s a tendency to romanticize the effort. And I see occasionally, oh yeah, I maxed out all my credit card bills and I mortgaged my house and I made it. And I don’t think, great job founder, I think you’re an irresponsible idiot, right?
0:25:32.8 Kurtis Baker: Right.
0:25:33.0 David Stengle: So part of it is, and circumstances may vary, but that’s my gut reaction, right? Is you want to find a way to do right by your family to do right by your finances, there are programs, for example, aimed at you can do a soft launch of your startup evenings and learn about startups and learn about putting your business plan together and learn about putting your pitch deck together and not quit your day job, right? And there’s a whole keep paying the bills, don’t be crazy, be responsible. Part of what I look for in founders is, are you fiscally responsible? I want you to be tight with money. Right?
0:26:17.7 Kurtis Baker: Mm-hmm.
0:26:18.1 David Stengle: And not just, oh yeah, whatever. If I fail, you know, [0:26:20.1] ____ it all burns up.
0:26:22.3 Kurtis Baker: I think you bring out a key point is that if you… Is you start it with and maintain your existing job. Because I think they go, well, I have to work 40 hours a week or whatever, and how am I gonna spend it? How much time do I have to really get a job? I need to quit my job to have the time. And I think a lot of them don’t realize it when you actually are on your own…
0:26:38.6 David Stengle: Yeah.
0:26:39.0 Kurtis Baker: There are no 40-hour weeks anymore. It’s like…
0:26:40.6 David Stengle: Sure.
0:26:41.8 Kurtis Baker: Whatever you need to get it done.
0:26:43.5 David Stengle: Sure.
0:26:44.1 Kurtis Baker: It’s like, there is no clock anymore.
0:26:44.6 David Stengle: I tell my kids and pretty much…
0:26:47.1 Kurtis Baker: [0:26:47.4] ____ goes away.
0:26:47.7 David Stengle: Anyone that listens, what’s the difference between a job and a career, 30 hours a week…
0:26:52.2 Kurtis Baker: Right. That’s about right.
0:26:52.5 David Stengle: You know, you’re gonna be working and if you’re probably, this is generalization, but if you’re doing a 40 hour a week job and you’re doing 30 hours a week, getting your startup ready, when you do that startup full-time, you’re gonna be doing 70. So like…
0:27:07.4 Kurtis Baker: Yep.
0:27:09.2 David Stengle: You’re not… If that load is too much, then that’s already a, hmm, maybe this isn’t for you. It’s not for everybody.
0:27:16.1 Kurtis Baker: Right. Understood. It takes time before you see the guy hanging out on the yacht in the bay, with all day in the afternoon.
0:27:22.1 David Stengle: Yeah. It is a marathon.
0:27:22.8 Kurtis Baker: That’s a long ride.
0:27:24.0 David Stengle: And I tell founders when you do this, when you take your first investor check, look across the table and think, I’m getting married to this person for at least seven years. And if that makes you throw up in your mouth a little bit, then don’t take that check because this is like the best happiest moment you’re gonna have for those seven years.
0:27:47.5 Kurtis Baker: You just brought up something interesting. I wonder if you could talk about that relationship, how investor, entrepreneur, that relationship is really key.
0:27:54.6 David Stengle: Sure. Yeah.
0:27:54.6 Kurtis Baker: Like, it has to align for both sides. You wanna talk a little bit about that, how that works and why every investor and every entrepreneur are not made to match up with each other, you know?
0:28:02.6 David Stengle: Sure. So part of it is chemistry. And that’s true for your co-founders as well. Part of it is there are style differences and structure differences, especially at the angel level. There’re angel groups that are extremely formal in their methodologies and what they look for. I would give a New Jersey example, is Keiretsu Forum, which is a very disciplined, thorough, financially oriented assessment process. There are people that are really like, look, if I think the founder’s good, really I’m picking a jockey, not a horse, and it’s early enough. Yeah. Makes sense. Go try it. Go see what… If your model is good, I’m willing to write a check of this size for you to go prove the next points. And I’m really believing in the team and I’ve never met an investor that said that anything was more important than the team. So…
0:29:04.0 Kurtis Baker: Okay.
0:29:06.5 David Stengle: So it’s all about that. And I think every founder should remember that the first thing they’re selling is themselves. And part of that is, be the person you’re proud to sell. Do your homework, learn about venture deals. Learn why you should have a safe note and not a convertible note. Right? Learn… Just be be ready, be smart, be educated, be prepared. When you go in and talk to an investor, you should know every board seat they hold. You should know the last 10 checks they wrote. You should be prepared in that conversation and drop your understanding into… Weave it into what you’re saying to them. Because if you’re not… It’s sort of like if you read your resume and you have a typo, I’m not gonna believe that you could do any document.
0:29:44.8 Kurtis Baker: True.
0:29:56.1 David Stengle: Right? It’s just, if you didn’t care about your resume, we’re done. Right?
0:30:00.0 Kurtis Baker: That’s pretty bad.
0:30:00.1 David Stengle: And it’s sort of like that as an investor, if you’re not taking me seriously when you’re asking me for money, how are you gonna do a sales call? So remember to represent and do your prep.
0:30:15.3 Kurtis Baker: That that makes a lot of sense. You do due diligence on the investor just as much as… ‘Cause the investor is certainly gonna do due diligence on you.
0:30:21.3 David Stengle: Absolutely.
0:30:21.9 Kurtis Baker: They’re gonna wanna know who you are and what’s your…
0:30:24.1 David Stengle: And they will respect you more if you show them preparation. I mean, if you have a choice, okay, here’s somebody that comes to a meeting and they’re like, yeah, what do you do? Who are your partners compared to, oh, I see that, you know, you’re a former Lacrosse player. And my co-founder used to play Lacrosse or whatever, you know, just…
0:30:46.0 Kurtis Baker: Yeah. I was invited… This reminded me. I was invited to an, I think it was like, what’s it called? New York Summit venture capital, like something.
0:30:51.3 David Stengle: Okay.
0:30:52.4 Kurtis Baker: Whatever it was. It’s in New York City.
0:30:54.4 David Stengle: Yeah. Sure.
0:30:55.3 Kurtis Baker: I was invited there by an entrepreneur… I mean, these capitalists. And we were watching his presentations. He was one of the judges of like who gets this award? It was for competition. One of these deals.
0:31:02.3 David Stengle: Yeah.
0:31:02.7 Kurtis Baker: And literally, a woman got up there and goes, you can tell I’m not prepared for this presentation, but here we go.
0:31:09.9 David Stengle: Yeah.
0:31:10.2 Kurtis Baker: Basically. And I was like… We kind of looked at each other and we’re like, “Why did you even come into the building?”
0:31:15.1 David Stengle: Yeah.
0:31:15.3 Kurtis Baker: We were like, I don’t understand. And I was amazed at how many were not prepared knowing they were coming to give a presentation in front of all these different angel and venture capitalists. It was shocking to me. In fact, my comment to him was like, “Isn’t there a business to prep people to do these presentations?” He goes, “Yes, there is.”
0:31:35.4 David Stengle: There is.
0:31:35.9 Kurtis Baker: So I think people need… I just… I guess what I’m saying is people need to take it more seriously, and I saw it actually in play.
0:31:40.2 David Stengle: Absolutely.
0:31:40.7 Kurtis Baker: Most of them are not. So you’re gonna be ahead of like 80, 90% of it if you just take the process seriously.
0:31:45.8 David Stengle: Right, right. So invest in it and tell your story. And what I say about pitch events is they’re an important part of the chain. They’re fun to attend for me anyway. The goal of a pitch event from a founder’s perspective is very rarely to win the prize. There are a few prizes where it’s a million bucks. It’s real. Most of them are, you have 10 or $20,000 in soft services. So it’s like, yeah, you can take a meeting with us and we won’t charge you. Right?
0:32:17.9 Kurtis Baker: Right.
0:32:18.2 David Stengle: And it’s like, okay. But the feedback is magic. And when you start, you’ll get advice, conflicting advice. Part of your job as a founder is to… People will tell you to go left and go right? And you have to decide who to listen to. But when you stop getting new advice, then start going to pitch events.
0:32:40.1 Kurtis Baker: Okay.
0:32:41.2 David Stengle: Because you’re there for the new advice.
0:32:43.0 Kurtis Baker: Okay.
0:32:43.2 David Stengle: And when you hear something once, whatever. If you hear it repeatedly, then take it seriously. So that’s… I mean, there’s a lot more nuance to that, but that’s…
0:32:52.2 Kurtis Baker: That’s good. That’s good advice.
0:32:53.5 David Stengle: Too long, didn’t read. Just if two people tell you the same thing, I didn’t understand what you were talking about on your unit economics, then you’re probably aren’t explaining your unit economics well. And once you hear nothing new, don’t waste your time unless you feel you need practice on the presentation side. You should be able, as a founder, to tell your story in your sleep.
0:33:15.8 Kurtis Baker: Okay.
0:33:16.4 David Stengle: In an elevator, anywhere, anytime to any person with conviction. Okay.
0:33:22.6 Kurtis Baker: Awesome. We’re gonna take another quick break. You’re listening to Master Your Finances. Welcome back. You listening to Master Your Finances. I’m here with David Stengle, and that was great, great advice as far as the going to the pitch events and to get information, feedback. I think a lot of it’s about feedback, right?
0:33:39.8 David Stengle: Yeah. Absolutely.
0:33:39.8 Kurtis Baker: You get out there, you talk about it, you get feedback. You’re also involved in some other things, one of which is called Startup Grind. You wanna tell us a a little bit about that and how you got involved?
0:33:48.7 David Stengle: Sure. So Startup Grind is a global network in hundreds of cities across the globe, over 125 countries and millions of members. And it’s about educating, connecting, and inspiring entrepreneurs. So I started the Princeton chapter in 2014. We’ve had 133 startup events since then. And we do one or two every month, workshops, fireside chats with founders and investors, a couple of parties a year, occasional. We had a big AI conference last month, and we’ll do one of those every year, I think going forward. I’m a big believer in AI. But Startup Grind is just a way to help you connect with this startup ecosystem. And I encourage anyone and everyone listening to this to find a chapter near them and attend those events. The philosophy is make friends, not contacts. Give first. It’s a very nurturing community. I’ve made lifelong friends there and totally drink the Kool-Aid, so I’m completely biased. But we hold events locally here. If solidity…
0:35:02.2 Kurtis Baker: Is that for all stages of entrepreneurship or certain stages?
0:35:04.0 David Stengle: Yeah. It is.
0:35:05.9 Kurtis Baker: What do they mainly focus on as far as who attends?
0:35:07.4 David Stengle: And different chapters have different areas of concentration? My theme is really about wider access. So I’m focused on what I call pre-napkin, which is you’re not ready to write three bullets on a napkin yet. You haven’t incorporated, you’re not sure what to do up to A round. And by the time you’re doing your A round, you’re raising millions of dollars. You have professional money in and they are helping you navigate that process. So I’m really, how do you go from the outside to the inside?
0:35:39.4 Kurtis Baker: Okay.
0:35:40.1 David Stengle: And for example, every year, I do a workshop that’s, here’s all the things you need to know to incorporate without spending too much money. And you can spend $3000 and incorporate and get everything you need. You can spend $15,000 and incorporate in…
0:35:58.0 Kurtis Baker: I’d go with a three as a startup, personally.
0:36:00.5 David Stengle: Well, so… And you can do it in ways that, you know, five years later, you’re gonna pay a lot more taxes. And there are just a few hygiene things that every founder should know. But if you’re not… If you haven’t done it before, there’s no reason that you would know them. So that’s just one example.
0:36:16.4 David Stengle: So that Startup Grind, it’s very chilled. The vibe that we try for at most of our events is to have an interesting fireside chat where you think about being at a bar and the next table over is having this conversation and you kind of lean in, like what do they say, and that sounds interesting.
0:36:33.9 Kurtis Baker: Do these tend to be fairly large or small or intimate or various sizes?
0:36:36.9 David Stengle: So it’s a couple dozen. So…
0:36:38.2 Kurtis Baker: Okay. That’s pretty good.
0:36:38.6 David Stengle: So most Startup Grind cities are Beijing, New York, London, there… And Princeton is quite a bit smaller than that.
0:36:46.9 Kurtis Baker: Okay.
0:36:47.2 David Stengle: So we get a couple dozen people…
0:36:48.1 Kurtis Baker: That’s great.
0:36:50.5 David Stengle: But we’re… I just got back from Startup Grind Global where I go every year. That’s in Redwood City, in the heart of Silicon Valley. I’m gonna brag a little bit, but was the sole inducting into the Hall of Fame this year.
0:37:02.1 Kurtis Baker: That’s awesome. Congratulations.
0:37:03.4 David Stengle: But we’ve also won inclusivity awards and Humblest Brag Award, and here I’m bragging, and…
0:37:09.0 Kurtis Baker: Humblest Brag Award. I like that, kind of a contradiction term. Is it a little bit?
0:37:14.1 David Stengle: Yeah, a little. But it’s…
0:37:14.2 Kurtis Baker: Humblest brag.
0:37:14.8 David Stengle: So it’s supposed to be for somebody that just does the work and doesn’t…
0:37:17.5 Kurtis Baker: I gotcha. I gotcha.
0:37:19.1 David Stengle: Might be the lame social marketing award. And then some awards for being one of the most active chapters globally, but it’s a great way to just plug in and get introduced around the ecosystem.
0:37:32.6 Kurtis Baker: Okay.
0:37:32.7 David Stengle: It’s not focused on a particular technology or industry, but it is aimed at venture-backed startups. So if you’re ultimately looking to raise venture money.
0:37:43.6 Kurtis Baker: Okay. So it’s a great way to make context and learn a little bit about the process…
0:37:47.8 David Stengle: Super. Yeah.
0:37:48.4 Kurtis Baker: And how to save some money and get things done a little more efficiently, it sounds like.
0:37:49.8 David Stengle: [0:37:49.9] ____ Come down. There’s also a chapter in Trenton, there’s a chapter in New York.
0:37:53.6 Kurtis Baker: Oh, wow.
0:37:54.7 David Stengle: There are the Trenton chapters new, but I’ve been working with John Snee, who’s doing a great job there.
0:38:00.3 Kurtis Baker: Excellent. Yeah. And we need more of that.
0:38:02.2 David Stengle: Absolutely.
0:38:03.3 Kurtis Baker: Yeah. I think it…
0:38:04.2 David Stengle: I’ll tell you, I go to his events and he comes to my events and…
0:38:07.0 Kurtis Baker: There you go.
0:38:09.4 David Stengle: And Trenton and Princeton are 10 miles, but sometimes it feels like a long distance, you know? And we get different people…
0:38:15.0 Kurtis Baker: Different flavors and feelings and as far as what’s going on. Yeah.
0:38:16.9 David Stengle: And so part of it is bringing everyone together. And I think that’s just important.
0:38:22.0 Kurtis Baker: Well, you learn from each other. I mean…
0:38:22.8 David Stengle: Absolutely.
0:38:24.3 Kurtis Baker: As you know, they’re both very different locations demographically, economically, etcetera. I’m sure you learn from each other a lot of things, I would think, so…
0:38:29.6 David Stengle: That’s the goal.
0:38:32.8 Kurtis Baker: That’s awesome. Another thing you’re involved in is Board++.
0:38:36.5 David Stengle: Yep.
0:38:37.3 Kurtis Baker: You wanna tell us a little bit about that and how you’re involved in that?
0:38:38.5 David Stengle: So here’s the thesis of Board++ in a nutshell. If you look at the research on the behavior of any group, you really wanna have a wide range of opinions. If you have a board where everybody had exactly the same opinion, even if you had 10 board members, you’d only have one idea, right? So you wanna have board members that have different networks, different perspectives, and the venture community is very inbred.
0:39:12.8 David Stengle: So you’ll get typically a board member from your lead institutional investor. You’ll get the founder, that’s you. And if you are a founder and you’re driving the process, you can appoint an independent board member early.
0:39:30.5 David Stengle: And if you pick one that has a different network than yours and a different network from your lead investor or a different network than what you anticipate you’ll get from your lead investor, you haven’t taken the investor in, you can drive a lot of value and de-risk your business. And there are a ton of people from overlook groups, however you wanna call that. But that, I mean, that can be veterans, that can be pick your minority group, that can be women, which are not well-represented in venture, for sure. And there are some embarrassingly bad stories about a bunch of rich White guys in a room talking about some product for women and not making smart decisions.
0:40:17.5 Kurtis Baker: Well, that’s not a good idea.
0:40:18.9 David Stengle: Right?
0:40:20.7 Kurtis Baker: That’s a pretty bad idea. That’s a very bad idea.
0:40:22.7 David Stengle: Just like… It’s happened more than once. So the idea is…
0:40:24.9 Kurtis Baker: The women notice it when you try to sell it to them too.
0:40:26.7 David Stengle: Yeah, yeah, they do.
0:40:28.0 Kurtis Baker: Pretty quickly.
0:40:28.8 David Stengle: Yeah, so there’s an opportunity there. And what Board++ does is it finds talented, high performers in corporate America that are looking for their first board seat. And the sad reality of the way boards work in the United States, and it’s pretty funny, but [0:40:50.5] ____ one sad I like is the average public board seat lasts longer than the average marriage in the United States.
0:40:58.5 Kurtis Baker: Really?
0:40:58.9 David Stengle: It’s about nine years and change to eight years and change. But that’s not… So there’s this very low turnover, very old hierarchy, looks much more like the US did 50 years ago than it does today. And if you’re trying to sell into the US today, you wanna have input that looks like the US today. So we find people that have deep industry experience in corporate America, typically, that are interested in getting a board seat, which is a great way to grow your own executive skills.
0:41:29.5 Kurtis Baker: Sure.
0:41:30.0 David Stengle: I will tell you, every founder, get on a board seat too. There was this great talk I heard from the founder of Rent the Runway. And she got the founder of The Knot to be on her board. And the founder of The Knot was like, I’m running a startup, are you crazy? Like, I don’t have time for this. But it was really good for both of them. And you will be a better CEO if you serve as a board member somewhere.
0:41:56.4 Kurtis Baker: Okay.
0:41:57.7 David Stengle: Because you’ll understand how to manage your board better. You’ll understand board dynamics better. You’ll understand speaking to power better. These are all skills, and I’m a huge fan of this. So I tell high school kids, like, if you wanna be a CEO, think about your first board. Think about your leadership roles. Think about… Because speaking to power is an important skill.
0:42:16.5 Kurtis Baker: So how would somebody go about this? I mean, what if you’re one of these early stage entrepreneurs? Like, you’re talking about these high school, college kids getting out, and like, oh yeah, I’d love to be on a board. They’re like, well, wait a minute, what do you know? How… What are you gonna add to the board?
0:42:27.1 David Stengle: There are different pathways, for sure. So you can volunteer, you can… There are all kinds of non-profit boards. Non-profit boards will take anybody, and you have to write a check of a certain size. You can look for that kind of leadership role. You can signal your interests. You can work your network. It’s not easy to break into boards. So I don’t wanna diminish the effort. But intention matters so much in everything you do. And have a plan. Talk about… Go talk to board members about how did you get your first board seat? I’m looking for one. Do you have somebody young on your board that would represent people that are not on social security and what their interests might be? That kind of stuff.
0:43:13.9 Kurtis Baker: Okay.
0:43:13.9 David Stengle: You can put your name out there.
0:43:16.5 Kurtis Baker: Use your weakness as your strength, right?
0:43:17.6 David Stengle: Yeah, absolutely, absolutely. I met a guy that he got a job in Japan as basically a American market youth whisperer to the board. And they were like…
0:43:31.0 Kurtis Baker: That’s really funny.
0:43:31.6 David Stengle: Okay, man, what do young people in the US think? And it’s this bunch of old Japanese guys that like…
0:43:38.2 Kurtis Baker: They probably have no idea what young kids in the US think.
0:43:41.9 David Stengle: But they recognize their own blind spot to some degree. And so there’s those things. But think about… Look at boards, and it can be any kind of… Pursue your interest. Signal your intentions. The profile that we take at Board++ typically is you’ve got 20 years experience at least in an industry. You’ve got… You’re either managing hundreds of people or you’re a subject matter expert. So you might be like chief counsel or… And it depends. If you worked at Goldman, you don’t have to be chief counsel.
0:44:19.4 Kurtis Baker: Right.
0:44:20.2 David Stengle: If you work at a smaller firm, you probably do have to be. But something that has the appropriate gravitas. And then what I’d say, when you’re pursuing a board seat, beyond signaling your intentions, you should be really articulate about what your board superpower is. So when you market yourself, and this is true for any job, but at an executive level, so a board you should have your nose in and your hands off the business, right? And what can you do to really change the arc of their success path? And be crisp about that. And if you don’t know it, that’s some soul searching that you should do.
0:44:56.9 Kurtis Baker: Right.
0:44:57.3 David Stengle: Okay?
0:44:57.7 Kurtis Baker: Yeah. Alright, we’re about to wrap up. Any final thoughts before we leave today?
0:45:01.8 David Stengle: Just entrepreneurship is hard. There’s a reason Startup Grind has grind in it. There are resources out there to help you. And if you go on that journey, getting help is part of what will make you successful.
0:45:15.7 Kurtis Baker: Alright. Well, thanks again for coming on board.
0:45:17.4 David Stengle: Thanks.
0:45:17.4 Kurtis Baker: You’re listening to Master Your Finances.
0:00:02.2 Kurtis Baker: Searching for guidance in the startup world? Meet David Stengle, a seasoned expert in startup ecosystems with experience as an operator, investor, and advisor. He’ll share insights into startup community building, governance, inclusion, and metrics while highlighting his work with Startup Grind, Princeton and Board++ in empowerment, underrepresented executives. Tune in to learn practical strategies for growing your startup and fostering your innovation. David, thank you so much for coming on the show. I appreciate it very much. You’ve got quite, no pun intended, a diverse background here…
0:00:41.1 David Stengle: Yeah.
0:00:41.3 Kurtis Baker: So to speak. I guess let’s start off with, I think you’re involved in the Diversity Finance Authority, right? You’re a board member there? Can you…
0:00:48.8 David Stengle: Yeah. For the EDA Diversity Financial Advisory Board. So…
0:00:52.3 Kurtis Baker: Can you tell us a little bit about that and how you got connected to that?
0:00:55.2 David Stengle: Absolutely. So after a career as a startup operator primarily, I’ve been doing startup community organizing events for the last 10 years, and in that capacity have done work with the New Jersey Economic Development Authority, been on their technology advisory board, and had some EDA officials speak at some of my events. And last September, as part of the Murphy Administration’s focus on inclusion, they added a Diversity Financial Advisory Board to the EDA. And the idea really is there’s a lot of programs that the EDA provides, which have benefits, non-dilutive benefits, meaning it’s free money for founders, but not every community’s getting that message effectively. And so the Diversity Financial Advisory Board is really doing two things. One is thinking about the programs that are offered and making sure they’re a good fit for all of New Jersey. And second, going to groups that are overlooked or are not participating particularly and saying, what can we do to help you raise awareness about these programs and take full advantage of it? And it’s a little bit like when you do any government program, you want people to use it. If you’re giving out cereal coupons, you want people to not redeem the coupons. But if you’re giving out benefits programs, the whole point is to deliver the benefits to the people.
0:02:31.1 Kurtis Baker: You create that leverage, right? The government kind of helps come back.
0:02:33.8 David Stengle: Exactly.
0:02:34.0 Kurtis Baker: And do that leverage thing. So it sounds to me like you have two different areas. So I guess we’ll start with, I guess would be… Which would be the more generic, which would be the whole, like what’s the scope, what’s generally the scope of what their goal is there, and then we’ll get into like the overlooked or the other…
0:02:48.1 David Stengle: Sure.
0:02:48.8 Kurtis Baker: Communities that maybe need a little extra help. So what’s the big picture?
0:02:50.5 David Stengle: So the Economic Development Authority is a big 10, and they do all kinds of initiatives. The things that I’m most familiar with are for venture startups. So my focus is in the venture traditional cliche, Silicon Valley, Facebook, Google, kind of startups. And in that area, the EDA has done a number of things. They have a subsidy program for coworking spaces. So if you are a really early startup and aren’t ready to have your own office, or you wanna work in a coworking space, there’s a program that will underwrite part of the rent. There’s a program that gives tax credits to angel investors, so that’s good for the angel investor. If you’re an angel investor, you should definitely be aware of it. If you’re an investor looking to raise angel money, it’s an opportunity for you to get additional benefits if you’re based in New Jersey.
0:03:52.3 David Stengle: There’s a fellowship program that launched last year, and the first cohort of a dozen fellows launched in February, I think we had the formal announcement. And this is a way to have the state take a real bet on some exciting founders. They’re actively recruiting for the second cohort. And I wanna encourage anyone as an early stage founder to take a look at that program and apply if they see a fit. But go for it. And then there are…
0:04:28.7 Kurtis Baker: So what does that program provide to somebody that’s maybe in that position?
0:04:31.3 David Stengle: Some cash.
0:04:31.6 Kurtis Baker: Okay.
0:04:34.3 David Stengle: And being brought into the, I’ll say the EDA tent, but there’s an… Part of getting going as a startup is plugging into the local venture ecosystem. And so the Economic Development Authority has a group that focuses on venture activity. They have a bunch of industry contacts. They have a bunch of additional programs. For example, if you’re doing a startup that needs a wet lab, there’s a program where you can get funding to use a wet lab at a university. So this can cost plenty of coin at the beginning. And you can get something like $40,000 a year to use lab gear at Princeton or Rutgers, or… And that’s just one example. There are all kinds of programs. Part of why the the board is in place is there’s probably 70 EDA startup programs. And if you asked me to recite them all, I’d fail miserably.
0:05:31.6 Kurtis Baker: No. [laughter] I won’t do that to you.
0:05:33.5 David Stengle: Yeah. Yeah. But the point is the Murphy Administration in particular has leaned hard into this. First lady, Tammy Murphy took the initiative to help Golden Seeds, which is an angel investment group focused on female founders to launch a New Jersey chapter a couple of years back. And the Murphy Administration has also done this very innovative and I think globally leading initiative to identify some early stage venture fund managers that are targeting specific constituencies or segments. I had one of them speak at a recent event. So there’s Squire Servance founded a venture fund looking specifically at conditions that are prevalent in underserved markets, which is a poorly capitalized and… Area that has opportunity for innovation. There’s another. Red Bike Capital does consumer products and has… The MDs there are amazing. So the administration has partnered with specific funds, with specific investment theses that are aimed at helping the whole state of New Jersey and looking at groups that historically…
0:06:58.5 Kurtis Baker: Are there certain areas? I remember years ago, I know at the chamber they talked about how, at least one of the speakers did, he was talking about how New Jersey wanted to be kind of like, “The Silicon Valley of the East,” kind of thing. They wanted to really not lose these people. Like they get to a certain point and they just go to California. They go to Silicon Valley and it’s like, well, why are we letting that happen? Why don’t we keep them here…
0:07:17.4 David Stengle: Absolutely.
0:07:18.7 Kurtis Baker: And keep our ecosystem in place. Is this kind of part of that whole philosophy?
0:07:22.7 David Stengle: Yeah. So I think every business community wants to figure out how to keep businesses staying with the community. And so there’s, on the one hand, we have Choose New Jersey, which is trying to bring businesses in from every other state. And then we have programs designed to make it attractive for people to stay here. And part of it is, I kind of roll my eyes at the, we wanna be the Silicon Valley of which everybody says, and I think the right way to go through that is to say, what’s special about New Jersey?
0:08:03.4 Kurtis Baker: Right.
0:08:04.3 David Stengle: So New Jersey, we’re the medicine cabinet of the world, we have incredible fintech. We’re a highly educated, wealthy state leading the country, top five in per capita income, top five in education, engineers. There’s a rich body of technical talent. So it’s looking at the things that we’re good at, and the things that are here and not trying to say we’re gonna copy The Valley because The Valley’s great and it has its own strengths. And we’re gonna do better doubling down on what New Jersey’s good at than trying to imitate San Francisco.
0:08:40.3 Kurtis Baker: Oh, I would agree. Every place has their own personality. I guess I think the argument was, I think that was kind of like, to just turn it was thrown out.
0:08:45.8 David Stengle: Sure.
0:08:46.3 Kurtis Baker: I think the argument was, we don’t wanna lose these early stage entrepreneurs, they’re going other places to find venture capital, and we don’t want them to leave.
0:08:54.0 Kurtis Baker: There’s two parts to that. One is that quarantine really changed the game and it’s now possible to do fundraising without relocating in a much… It’s much more common than it used to be. And it’s much further down the pipeline in a venture investor assessing a company that they expect an in-person meeting. So there’s some democratization of access to capital. There are still and I think always will be two tribes around this philosophically. There are the Y Combinators of the world that say, you have to come to San Francisco and kiss the ring, and only then will you achieve startup enlightenment. And then there are the 500 startups of the world that say, entrepreneurs are everywhere, we wanna find you, we wanna support you where you are. And so don’t go to the Y Combinators if you wanna stay in New Jersey, right? But there are lots of ways to stand up a business and keep it here. So part of it is, as a founder, what’s the lifestyle you wanna lead? I can tell you that housing is cheaper here than in Palo Alto.
0:10:09.2 Kurtis Baker: I think almost everywhere… [laughter] Palo Alto.
0:10:12.0 David Stengle: Yeah, yeah. You can pay a zillion dollars for a closet.
0:10:16.2 Kurtis Baker: Right, right, right, right. Yeah. No, that’s awesome. So yeah, so we’re gonna take a quick break now. You’re listening to Master Your Finances. Welcome back. You’re listening to Master Your Finances. I’m here with David Stengle, and we’re kind of talking about the general NJDEA, right? The… So…
0:10:45.0 David Stengle: Sure.
0:10:45.8 Kurtis Baker: Which is great. And so you have the kind of the basic mission of the organization, but now you came in to join the board there, which is more focused on some of these nuanced areas where people might need a little extra help. So can you explain a little bit about who those people are, what their special needs might be, that might be a little different than the general population, and how do we address those to help them in ways that maybe they’re not currently being helped that maybe they need that other people may not need?
0:11:04.3 David Stengle: Sure.
0:11:04.4 Kurtis Baker: Does that make any sense?
0:11:04.6 David Stengle: So… Absolutely. I’d say that the Diversity Financial Advisory Board is still early days. And the way we’ve organized the advisory board is to have two subcommittees, one focused on entrepreneurs and one focused on investors. So part of what we wanna do is make it easy for investors to operate in the state and find good deals, get good access to founders. I am focused on the investor side, and my whole jam is about making it easier for first time founders to get into the venture club. I have been in that situation, and once you get in, a lot of nice things can happen and it’s harder to get in than it needs to be. So the focus of the subcommittee that we’re on, the entrepreneurship committee, is really helping to identify entrepreneurs that are thinking about doing their startup and in the early stages of that, and making sure that they’re tapping into all the resources that they need.
0:12:16.0 David Stengle: And so, I mean, one example that I give is, I live in Princeton. Princeton University has a tremendous portfolio of resources to help a founder. So if you’re a Princeton student, you can practically wave your hand and get mobbed by resources. But I had, for example, a guy, Anthony Frasier, who’s a successful entrepreneur many times over now, does work at Newark Venture Partners. But Anthony got his start because he was loading trucks at the graveyard shift at Walmart, and the rest of his shift didn’t show up. And he had… They were like, “Yeah, you gotta load everything yourself.” And he was like, “Man, I’m so done with this.” And he started looking for a different job and interviewed with the company and they were, “We need help on our website, and here’s how much volume we’re getting.”
0:13:18.1 David Stengle: He goes, “I get more than that out of my gaming site.” And they’re like, “Please come help us.” And now he’s doing podcasts, he’s on the Innovator 100 list. But in terms of where as Startup Grind as the EDA Diversity Financial Advisory Board, I’m looking to help the Anthonys of the world find their way into, how do I get coaching? How do I get mentors? How do I get non-dilutive capital? How do I get instruction? And there’s a ton of resources available on the internet. I think, Y Combinators University resources are incredible and every founder should study them. But there are also a number of programs. So for example, I work with I-Corps, and I-Corps is an initiative initially started by the National Science Foundation and now spanning many federal agencies.
0:14:16.3 David Stengle: But it’s about helping first time founders figure out what they should do. And the super short version of what they do is like, yeah, whatever great idea you have, nice, but shut up and listen to customers. Go out of the building, take off your lab coat, step away from the bench, stop looking at your tech. Go listen in the world and say, what are the problems out there? How might we solve those problems with some humility?
0:14:46.4 Kurtis Baker: Yeah.
0:14:46.9 David Stengle: And many of these founders… I’m old enough. In the ’90s, there was this music movement in Seattle called Shoegaze, and it was called Shoegaze because the guitarists would just stare at their shoes while they played. Like, they didn’t move, they didn’t talk, they didn’t jump around, they didn’t… Zero energy. And like, don’t be the shoegaze founder. Be the go out in the world and talk to people.
0:15:14.6 Kurtis Baker: Yeah.
0:15:14.6 David Stengle: And that’s part of building the community. It’s part of getting comfortable talking to angels. It’s part of telling your story. So there are pitch events. There are a number of groups that… In the state that do pitch events. Startup Grind does some, I’ve done some at some conferences I’ve organized, but there are many other groups. And it’s one way to polish your message, because at the end of the day, when you’re a founder, and I tell every founder this, first you’re selling a dream and then you’re selling traction. So when you’re selling the dream, you’re telling a story and you wanna tell a story well, you wanna get feedback on the story, you wanna see where people are like, what are you talking about? I don’t get it, to the point where it just hits the bloodstream like sugar. Like bang, you just get it. And then once you’re at that point and you find out who your audience is that really gets it, then you’re figuring out, alright, how do I convert that story into traction?
0:16:14.7 Kurtis Baker: Yeah. A couple things in there, which I think is interesting. I know a lot of people that start newer businesses, they’re always… They have this fear of, if I talk about it, people are gonna steal my business.
0:16:25.1 David Stengle: Yeah, right? It’s a rookie mistake.
0:16:27.5 Kurtis Baker: And I’ve found myself and I have to be honest, I’m guilty of that myself…
0:16:32.6 David Stengle: Sure.
0:16:33.0 Kurtis Baker: Years ago. But the more you share, the more you learn from everybody. In fact, I have great relationships with what you might call competitors.
0:16:41.2 David Stengle: Absolutely.
0:16:41.8 Kurtis Baker: Because we all do things a little differently. And what I do, even though we might have the same “title,” we do it differently. And our client base is just different.
0:16:50.7 David Stengle: It’s a great point.
0:16:51.7 Kurtis Baker: Yeah.
0:16:51.9 David Stengle: So I’d say a couple things around that. The metaphor that I like the best is every conversation that you have in the market with exposing your ideas, like seasoning for food, it just gets better. The first time founders often overrate the importance of their ideas. So typically as an investor, I’ve seen 50 or 100 people pitch me the same idea often. And they’re like, “Oh, if I tell you this, I have to kill you.” It’s like, okay.
0:17:22.1 Kurtis Baker: I just heard this 10 minutes ago. [laughter]
0:17:23.7 David Stengle: Yeah, yeah, yeah.
0:17:24.7 Kurtis Baker: Same idea.
0:17:24.9 David Stengle: Exactly. I got pitched on this last week. I got pitched on this the week before. So there’s that part of it which at best shows naivete about the market conditions they’re in. And at worst, is like, okay, you can’t really carry on a conversation. I think another… So I’m pretty harsh on this, but another punk move is, yeah, I can’t tell you that without an NDA. And it’s like, if you can’t tell me what you’re doing, I have no confidence in you as a communicator.
0:17:56.5 Kurtis Baker: Right.
0:17:56.5 David Stengle: I get that there’s some things that are secret. And I in fact started my career as a spook where, we couldn’t talk about our job much. But I could still say, I’m a spook, I learned Russian. I’m tracking the Soviet Navy. There’s something you can say. And if you can’t find a way to say…
0:18:12.8 Kurtis Baker: You just don’t give your exact coordinates at any given point, right?
0:18:16.3 David Stengle: Yeah. It’s really different to say, yeah, I track the Soviet Navy in the Middle East compared to, yeah, this sub moved here. You know, like…
0:18:24.0 Kurtis Baker: The details you don’t need to… [0:18:24.4] ____ You can get the concept over on the details.
0:18:27.2 David Stengle: Right. And when you’re introducing your startup, you better be able to say, this is what I do and this is why it’s shiny.
0:18:33.8 Kurtis Baker: Yep.
0:18:34.2 David Stengle: And why you should care.
0:18:36.5 Kurtis Baker: And I find you get great feedback from, especially entrepreneurs that are further along the path.
0:18:41.0 David Stengle: Yeah.
0:18:41.8 Kurtis Baker: If they’ve done the same thing.
0:18:43.5 David Stengle: Yeah.
0:18:43.5 Kurtis Baker: They’re like, oh yeah, that’s fine. But here’s the issues that we have found. And if you’re gonna do that, you need to be aware of these items.
0:18:49.0 David Stengle: Absolutely.
0:18:49.7 Kurtis Baker: And if you don’t, you’re gonna run into the same problem I ran into.
0:18:52.1 David Stengle: So you should know your competitors and you should figure out why what you’re doing is different and special. And if it’s not different and special, doesn’t mean it’s impossible to have a business, but then why are you doing it instead of selling for somebody that’s already done all those things if that’s what you want to do.
0:19:13.4 Kurtis Baker: I liked how you said that. ‘Cause a lot of times when they do that, like in marketing, is you model…
0:19:16.6 David Stengle: Yeah.
0:19:16.8 Kurtis Baker: You model your competitors, you say, well, what are they doing that’s successful? And how can I tweak that a little bit to make it my own. Because they are already successful. Listen to them for whatever, 80, 90% of what they’re doing, don’t copy it. Obviously that’s illegal, but you can certainly watch the methodology behind how they’re doing things…
0:19:33.3 David Stengle: Yeah.
0:19:33.3 Kurtis Baker: And what they’re doing.
0:19:34.2 David Stengle: And it’s not even always illegal to copy stuff. I mean, some stuff is just like, I’m gonna give advice and other…
0:19:40.6 Kurtis Baker: Well, that’s… Yeah.
0:19:41.1 David Stengle: People give advice or I’m a marketing firm, other people are doing. But it’s like, why am I the guy? And that can… There can be a lot of different whys, but you should have high conviction about this is why I’m a better deal for you. And if you don’t believe it, I don’t know why you’d expect anybody else to believe it.
0:20:00.4 Kurtis Baker: Right, right. And you mentioned something earlier on which I think is really, really important, is the coaching and the mentoring aspect of this because almost everybody I know of, including myself, that’s been successful, there was somebody you were following…
0:20:12.4 David Stengle: Sure.
0:20:13.1 Kurtis Baker: Or somebody that was coaching you and kind of walking you through the process. Because honestly, we can’t live long enough to learn the experience of all the other people that are out there that have done what you’re trying to do.
0:20:22.0 David Stengle: Yeah.
0:20:22.5 Kurtis Baker: You’re just not gonna live that long. So you better learn from others ’cause that’s the shortcut.
0:20:26.6 David Stengle: Absolutely. And there’s… Ben Franklin is one version of this quote, and I don’t think I’ll get it exactly right, but the idea is experience might be the best teacher, but it’s a really expensive one. There’s better ways to learn than, okay, that failed and I went bankrupt, right?
0:20:45.6 Kurtis Baker: Right.
0:20:47.0 David Stengle: So I think that every person for their company but for their life should think about a formal or informal board of advisors and who… I have people that I go to when I’m thinking about marketing, I have people that I go to when I’m thinking about life decisions, I have people that I go to when I’m thinking about health issues. Just build that network with intention and if you’re starting a business, look at the skills you have and your team has and look at the holes because there are holes. And think about who can I recruit that believes in my dream that can fill those holes? And maybe it’s a short term fill, like we’re doing a medical device and we don’t really know how the regulatory pathway works, and we’re gonna find somebody that’s done five medical device companies and has been through the regulatory pathway and know some people at the FDA. Or it can be something like, I’ve really never set up a sales commission plan before. And I know I need to do it, we’re gonna die if we don’t sell, but once I go beyond personal effort, what do I do? Because every salesperson that’s any good will be able to tell you why you should pay them more, right? So how do I push back against that?
0:22:10.1 Kurtis Baker: Yep.
0:22:10.7 David Stengle: In a constructive way.
0:22:11.8 Kurtis Baker: Absolutely.
0:22:12.5 David Stengle: So those are just a couple examples, but…
0:22:14.3 Kurtis Baker: Those are fantastic. We’re gonna take another quick break. You’re listening to Master Your Finances. Welcome back. You’re listening to Master Your Finances. I’m with David Stengle and we’re talking about entrepreneurship and how important it is to get help. And there’s some great programs that are available here in New Jersey. And you’re specifically part of the Diversity Finance Board, which is cool. And in there, you specifically wanna help like the underserved community. Can you tell us a little about who that is, if they’re out there, and how they might get connected, whether they’re part of that community or just part of the general population also might want to connect with the bigger programs as well.
0:22:51.0 David Stengle: Sure. So if you look at the composition of venture-backed company founders, they’re… And these numbers might be a year or two out of date, but they’re directionally correct. About 82% of venture-backed startups have an all male founding team. Venture, investors and founders heavily over index for Ivy League schools, especially Harvard and Stanford. It’s a very wealthy group and there’s a lot of conversation about, hey, if you do a startup, you’re gonna get this equity payout on the backend, so you should work for nothing or for limited wages. Well, if your family’s poor and you can’t live off your parents…
0:23:41.7 Kurtis Baker: That might be difficult. [laughter]
0:23:42.7 David Stengle: Right? That’s a harder conversation. And the most extreme example I’ll give is, I have a good friend that is just really well connected with money and did a startup and joined it and they did a friends and family round and she was tight with a whole bunch of hedge fund managers and they raised like half a million dollars in a week, and it was like, oh yeah, sure whatever. Right? And that’s not the world of most…
0:24:14.6 Kurtis Baker: That’s not most people.
0:24:14.9 David Stengle: Most of us, right?
0:24:16.0 Kurtis Baker: Right, right?
0:24:16.0 David Stengle: That’s not me, that’s not the startups I work with. So part of it is the whole… And that’s an egregiously extreme example. But the idea is there are people that come from money and it’s like, yeah, I have no college debt because my parents paid the…
0:24:33.0 Kurtis Baker: They haven’t known the struggle. [laughter]
0:24:34.3 David Stengle: Right? Right? And it’s like, this is not a problem. And then there’s people, it’s like, I need to pay my bills, how do I do this? And navigating into the system and making sure that they can find grant money, early stage investment and be scrappy and navigate it into getting ready for institutional capital is really, really important. So I think that part of it is making sure that entrepreneurs that are thinking about doing the startup journey understand how hard it is and I think there’s a tendency to romanticize the effort. And I see occasionally, oh yeah, I maxed out all my credit card bills and I mortgaged my house and I made it. And I don’t think, great job founder, I think you’re an irresponsible idiot, right?
0:25:32.8 Kurtis Baker: Right.
0:25:33.0 David Stengle: So part of it is, and circumstances may vary, but that’s my gut reaction, right? Is you want to find a way to do right by your family to do right by your finances, there are programs, for example, aimed at you can do a soft launch of your startup evenings and learn about startups and learn about putting your business plan together and learn about putting your pitch deck together and not quit your day job, right? And there’s a whole keep paying the bills, don’t be crazy, be responsible. Part of what I look for in founders is, are you fiscally responsible? I want you to be tight with money. Right?
0:26:17.7 Kurtis Baker: Mm-hmm.
0:26:18.1 David Stengle: And not just, oh yeah, whatever. If I fail, you know, [0:26:20.1] ____ it all burns up.
0:26:22.3 Kurtis Baker: I think you bring out a key point is that if you… Is you start it with and maintain your existing job. Because I think they go, well, I have to work 40 hours a week or whatever, and how am I gonna spend it? How much time do I have to really get a job? I need to quit my job to have the time. And I think a lot of them don’t realize it when you actually are on your own…
0:26:38.6 David Stengle: Yeah.
0:26:39.0 Kurtis Baker: There are no 40-hour weeks anymore. It’s like…
0:26:40.6 David Stengle: Sure.
0:26:41.8 Kurtis Baker: Whatever you need to get it done.
0:26:43.5 David Stengle: Sure.
0:26:44.1 Kurtis Baker: It’s like, there is no clock anymore.
0:26:44.6 David Stengle: I tell my kids and pretty much…
0:26:47.1 Kurtis Baker: [0:26:47.4] ____ goes away.
0:26:47.7 David Stengle: Anyone that listens, what’s the difference between a job and a career, 30 hours a week…
0:26:52.2 Kurtis Baker: Right. That’s about right.
0:26:52.5 David Stengle: You know, you’re gonna be working and if you’re probably, this is generalization, but if you’re doing a 40 hour a week job and you’re doing 30 hours a week, getting your startup ready, when you do that startup full-time, you’re gonna be doing 70. So like…
0:27:07.4 Kurtis Baker: Yep.
0:27:09.2 David Stengle: You’re not… If that load is too much, then that’s already a, hmm, maybe this isn’t for you. It’s not for everybody.
0:27:16.1 Kurtis Baker: Right. Understood. It takes time before you see the guy hanging out on the yacht in the bay, with all day in the afternoon.
0:27:22.1 David Stengle: Yeah. It is a marathon.
0:27:22.8 Kurtis Baker: That’s a long ride.
0:27:24.0 David Stengle: And I tell founders when you do this, when you take your first investor check, look across the table and think, I’m getting married to this person for at least seven years. And if that makes you throw up in your mouth a little bit, then don’t take that check because this is like the best happiest moment you’re gonna have for those seven years.
0:27:47.5 Kurtis Baker: You just brought up something interesting. I wonder if you could talk about that relationship, how investor, entrepreneur, that relationship is really key.
0:27:54.6 David Stengle: Sure. Yeah.
0:27:54.6 Kurtis Baker: Like, it has to align for both sides. You wanna talk a little bit about that, how that works and why every investor and every entrepreneur are not made to match up with each other, you know?
0:28:02.6 David Stengle: Sure. So part of it is chemistry. And that’s true for your co-founders as well. Part of it is there are style differences and structure differences, especially at the angel level. There’re angel groups that are extremely formal in their methodologies and what they look for. I would give a New Jersey example, is Keiretsu Forum, which is a very disciplined, thorough, financially oriented assessment process. There are people that are really like, look, if I think the founder’s good, really I’m picking a jockey, not a horse, and it’s early enough. Yeah. Makes sense. Go try it. Go see what… If your model is good, I’m willing to write a check of this size for you to go prove the next points. And I’m really believing in the team and I’ve never met an investor that said that anything was more important than the team. So…
0:29:04.0 Kurtis Baker: Okay.
0:29:06.5 David Stengle: So it’s all about that. And I think every founder should remember that the first thing they’re selling is themselves. And part of that is, be the person you’re proud to sell. Do your homework, learn about venture deals. Learn why you should have a safe note and not a convertible note. Right? Learn… Just be be ready, be smart, be educated, be prepared. When you go in and talk to an investor, you should know every board seat they hold. You should know the last 10 checks they wrote. You should be prepared in that conversation and drop your understanding into… Weave it into what you’re saying to them. Because if you’re not… It’s sort of like if you read your resume and you have a typo, I’m not gonna believe that you could do any document.
0:29:44.8 Kurtis Baker: True.
0:29:56.1 David Stengle: Right? It’s just, if you didn’t care about your resume, we’re done. Right?
0:30:00.0 Kurtis Baker: That’s pretty bad.
0:30:00.1 David Stengle: And it’s sort of like that as an investor, if you’re not taking me seriously when you’re asking me for money, how are you gonna do a sales call? So remember to represent and do your prep.
0:30:15.3 Kurtis Baker: That that makes a lot of sense. You do due diligence on the investor just as much as… ‘Cause the investor is certainly gonna do due diligence on you.
0:30:21.3 David Stengle: Absolutely.
0:30:21.9 Kurtis Baker: They’re gonna wanna know who you are and what’s your…
0:30:24.1 David Stengle: And they will respect you more if you show them preparation. I mean, if you have a choice, okay, here’s somebody that comes to a meeting and they’re like, yeah, what do you do? Who are your partners compared to, oh, I see that, you know, you’re a former Lacrosse player. And my co-founder used to play Lacrosse or whatever, you know, just…
0:30:46.0 Kurtis Baker: Yeah. I was invited… This reminded me. I was invited to an, I think it was like, what’s it called? New York Summit venture capital, like something.
0:30:51.3 David Stengle: Okay.
0:30:52.4 Kurtis Baker: Whatever it was. It’s in New York City.
0:30:54.4 David Stengle: Yeah. Sure.
0:30:55.3 Kurtis Baker: I was invited there by an entrepreneur… I mean, these capitalists. And we were watching his presentations. He was one of the judges of like who gets this award? It was for competition. One of these deals.
0:31:02.3 David Stengle: Yeah.
0:31:02.7 Kurtis Baker: And literally, a woman got up there and goes, you can tell I’m not prepared for this presentation, but here we go.
0:31:09.9 David Stengle: Yeah.
0:31:10.2 Kurtis Baker: Basically. And I was like… We kind of looked at each other and we’re like, “Why did you even come into the building?”
0:31:15.1 David Stengle: Yeah.
0:31:15.3 Kurtis Baker: We were like, I don’t understand. And I was amazed at how many were not prepared knowing they were coming to give a presentation in front of all these different angel and venture capitalists. It was shocking to me. In fact, my comment to him was like, “Isn’t there a business to prep people to do these presentations?” He goes, “Yes, there is.”
0:31:35.4 David Stengle: There is.
0:31:35.9 Kurtis Baker: So I think people need… I just… I guess what I’m saying is people need to take it more seriously, and I saw it actually in play.
0:31:40.2 David Stengle: Absolutely.
0:31:40.7 Kurtis Baker: Most of them are not. So you’re gonna be ahead of like 80, 90% of it if you just take the process seriously.
0:31:45.8 David Stengle: Right, right. So invest in it and tell your story. And what I say about pitch events is they’re an important part of the chain. They’re fun to attend for me anyway. The goal of a pitch event from a founder’s perspective is very rarely to win the prize. There are a few prizes where it’s a million bucks. It’s real. Most of them are, you have 10 or $20,000 in soft services. So it’s like, yeah, you can take a meeting with us and we won’t charge you. Right?
0:32:17.9 Kurtis Baker: Right.
0:32:18.2 David Stengle: And it’s like, okay. But the feedback is magic. And when you start, you’ll get advice, conflicting advice. Part of your job as a founder is to… People will tell you to go left and go right? And you have to decide who to listen to. But when you stop getting new advice, then start going to pitch events.
0:32:40.1 Kurtis Baker: Okay.
0:32:41.2 David Stengle: Because you’re there for the new advice.
0:32:43.0 Kurtis Baker: Okay.
0:32:43.2 David Stengle: And when you hear something once, whatever. If you hear it repeatedly, then take it seriously. So that’s… I mean, there’s a lot more nuance to that, but that’s…
0:32:52.2 Kurtis Baker: That’s good. That’s good advice.
0:32:53.5 David Stengle: Too long, didn’t read. Just if two people tell you the same thing, I didn’t understand what you were talking about on your unit economics, then you’re probably aren’t explaining your unit economics well. And once you hear nothing new, don’t waste your time unless you feel you need practice on the presentation side. You should be able, as a founder, to tell your story in your sleep.
0:33:15.8 Kurtis Baker: Okay.
0:33:16.4 David Stengle: In an elevator, anywhere, anytime to any person with conviction. Okay.
0:33:22.6 Kurtis Baker: Awesome. We’re gonna take another quick break. You’re listening to Master Your Finances. Welcome back. You listening to Master Your Finances. I’m here with David Stengle, and that was great, great advice as far as the going to the pitch events and to get information, feedback. I think a lot of it’s about feedback, right?
0:33:39.8 David Stengle: Yeah. Absolutely.
0:33:39.8 Kurtis Baker: You get out there, you talk about it, you get feedback. You’re also involved in some other things, one of which is called Startup Grind. You wanna tell us a a little bit about that and how you got involved?
0:33:48.7 David Stengle: Sure. So Startup Grind is a global network in hundreds of cities across the globe, over 125 countries and millions of members. And it’s about educating, connecting, and inspiring entrepreneurs. So I started the Princeton chapter in 2014. We’ve had 133 startup events since then. And we do one or two every month, workshops, fireside chats with founders and investors, a couple of parties a year, occasional. We had a big AI conference last month, and we’ll do one of those every year, I think going forward. I’m a big believer in AI. But Startup Grind is just a way to help you connect with this startup ecosystem. And I encourage anyone and everyone listening to this to find a chapter near them and attend those events. The philosophy is make friends, not contacts. Give first. It’s a very nurturing community. I’ve made lifelong friends there and totally drink the Kool-Aid, so I’m completely biased. But we hold events locally here. If solidity…
0:35:02.2 Kurtis Baker: Is that for all stages of entrepreneurship or certain stages?
0:35:04.0 David Stengle: Yeah. It is.
0:35:05.9 Kurtis Baker: What do they mainly focus on as far as who attends?
0:35:07.4 David Stengle: And different chapters have different areas of concentration? My theme is really about wider access. So I’m focused on what I call pre-napkin, which is you’re not ready to write three bullets on a napkin yet. You haven’t incorporated, you’re not sure what to do up to A round. And by the time you’re doing your A round, you’re raising millions of dollars. You have professional money in and they are helping you navigate that process. So I’m really, how do you go from the outside to the inside?
0:35:39.4 Kurtis Baker: Okay.
0:35:40.1 David Stengle: And for example, every year, I do a workshop that’s, here’s all the things you need to know to incorporate without spending too much money. And you can spend $3000 and incorporate and get everything you need. You can spend $15,000 and incorporate in…
0:35:58.0 Kurtis Baker: I’d go with a three as a startup, personally.
0:36:00.5 David Stengle: Well, so… And you can do it in ways that, you know, five years later, you’re gonna pay a lot more taxes. And there are just a few hygiene things that every founder should know. But if you’re not… If you haven’t done it before, there’s no reason that you would know them. So that’s just one example.
0:36:16.4 David Stengle: So that Startup Grind, it’s very chilled. The vibe that we try for at most of our events is to have an interesting fireside chat where you think about being at a bar and the next table over is having this conversation and you kind of lean in, like what do they say, and that sounds interesting.
0:36:33.9 Kurtis Baker: Do these tend to be fairly large or small or intimate or various sizes?
0:36:36.9 David Stengle: So it’s a couple dozen. So…
0:36:38.2 Kurtis Baker: Okay. That’s pretty good.
0:36:38.6 David Stengle: So most Startup Grind cities are Beijing, New York, London, there… And Princeton is quite a bit smaller than that.
0:36:46.9 Kurtis Baker: Okay.
0:36:47.2 David Stengle: So we get a couple dozen people…
0:36:48.1 Kurtis Baker: That’s great.
0:36:50.5 David Stengle: But we’re… I just got back from Startup Grind Global where I go every year. That’s in Redwood City, in the heart of Silicon Valley. I’m gonna brag a little bit, but was the sole inducting into the Hall of Fame this year.
0:37:02.1 Kurtis Baker: That’s awesome. Congratulations.
0:37:03.4 David Stengle: But we’ve also won inclusivity awards and Humblest Brag Award, and here I’m bragging, and…
0:37:09.0 Kurtis Baker: Humblest Brag Award. I like that, kind of a contradiction term. Is it a little bit?
0:37:14.1 David Stengle: Yeah, a little. But it’s…
0:37:14.2 Kurtis Baker: Humblest brag.
0:37:14.8 David Stengle: So it’s supposed to be for somebody that just does the work and doesn’t…
0:37:17.5 Kurtis Baker: I gotcha. I gotcha.
0:37:19.1 David Stengle: Might be the lame social marketing award. And then some awards for being one of the most active chapters globally, but it’s a great way to just plug in and get introduced around the ecosystem.
0:37:32.6 Kurtis Baker: Okay.
0:37:32.7 David Stengle: It’s not focused on a particular technology or industry, but it is aimed at venture-backed startups. So if you’re ultimately looking to raise venture money.
0:37:43.6 Kurtis Baker: Okay. So it’s a great way to make context and learn a little bit about the process…
0:37:47.8 David Stengle: Super. Yeah.
0:37:48.4 Kurtis Baker: And how to save some money and get things done a little more efficiently, it sounds like.
0:37:49.8 David Stengle: [0:37:49.9] ____ Come down. There’s also a chapter in Trenton, there’s a chapter in New York.
0:37:53.6 Kurtis Baker: Oh, wow.
0:37:54.7 David Stengle: There are the Trenton chapters new, but I’ve been working with John Snee, who’s doing a great job there.
0:38:00.3 Kurtis Baker: Excellent. Yeah. And we need more of that.
0:38:02.2 David Stengle: Absolutely.
0:38:03.3 Kurtis Baker: Yeah. I think it…
0:38:04.2 David Stengle: I’ll tell you, I go to his events and he comes to my events and…
0:38:07.0 Kurtis Baker: There you go.
0:38:09.4 David Stengle: And Trenton and Princeton are 10 miles, but sometimes it feels like a long distance, you know? And we get different people…
0:38:15.0 Kurtis Baker: Different flavors and feelings and as far as what’s going on. Yeah.
0:38:16.9 David Stengle: And so part of it is bringing everyone together. And I think that’s just important.
0:38:22.0 Kurtis Baker: Well, you learn from each other. I mean…
0:38:22.8 David Stengle: Absolutely.
0:38:24.3 Kurtis Baker: As you know, they’re both very different locations demographically, economically, etcetera. I’m sure you learn from each other a lot of things, I would think, so…
0:38:29.6 David Stengle: That’s the goal.
0:38:32.8 Kurtis Baker: That’s awesome. Another thing you’re involved in is Board++.
0:38:36.5 David Stengle: Yep.
0:38:37.3 Kurtis Baker: You wanna tell us a little bit about that and how you’re involved in that?
0:38:38.5 David Stengle: So here’s the thesis of Board++ in a nutshell. If you look at the research on the behavior of any group, you really wanna have a wide range of opinions. If you have a board where everybody had exactly the same opinion, even if you had 10 board members, you’d only have one idea, right? So you wanna have board members that have different networks, different perspectives, and the venture community is very inbred.
0:39:12.8 David Stengle: So you’ll get typically a board member from your lead institutional investor. You’ll get the founder, that’s you. And if you are a founder and you’re driving the process, you can appoint an independent board member early.
0:39:30.5 David Stengle: And if you pick one that has a different network than yours and a different network from your lead investor or a different network than what you anticipate you’ll get from your lead investor, you haven’t taken the investor in, you can drive a lot of value and de-risk your business. And there are a ton of people from overlook groups, however you wanna call that. But that, I mean, that can be veterans, that can be pick your minority group, that can be women, which are not well-represented in venture, for sure. And there are some embarrassingly bad stories about a bunch of rich White guys in a room talking about some product for women and not making smart decisions.
0:40:17.5 Kurtis Baker: Well, that’s not a good idea.
0:40:18.9 David Stengle: Right?
0:40:20.7 Kurtis Baker: That’s a pretty bad idea. That’s a very bad idea.
0:40:22.7 David Stengle: Just like… It’s happened more than once. So the idea is…
0:40:24.9 Kurtis Baker: The women notice it when you try to sell it to them too.
0:40:26.7 David Stengle: Yeah, yeah, they do.
0:40:28.0 Kurtis Baker: Pretty quickly.
0:40:28.8 David Stengle: Yeah, so there’s an opportunity there. And what Board++ does is it finds talented, high performers in corporate America that are looking for their first board seat. And the sad reality of the way boards work in the United States, and it’s pretty funny, but [0:40:50.5] ____ one sad I like is the average public board seat lasts longer than the average marriage in the United States.
0:40:58.5 Kurtis Baker: Really?
0:40:58.9 David Stengle: It’s about nine years and change to eight years and change. But that’s not… So there’s this very low turnover, very old hierarchy, looks much more like the US did 50 years ago than it does today. And if you’re trying to sell into the US today, you wanna have input that looks like the US today. So we find people that have deep industry experience in corporate America, typically, that are interested in getting a board seat, which is a great way to grow your own executive skills.
0:41:29.5 Kurtis Baker: Sure.
0:41:30.0 David Stengle: I will tell you, every founder, get on a board seat too. There was this great talk I heard from the founder of Rent the Runway. And she got the founder of The Knot to be on her board. And the founder of The Knot was like, I’m running a startup, are you crazy? Like, I don’t have time for this. But it was really good for both of them. And you will be a better CEO if you serve as a board member somewhere.
0:41:56.4 Kurtis Baker: Okay.
0:41:57.7 David Stengle: Because you’ll understand how to manage your board better. You’ll understand board dynamics better. You’ll understand speaking to power better. These are all skills, and I’m a huge fan of this. So I tell high school kids, like, if you wanna be a CEO, think about your first board. Think about your leadership roles. Think about… Because speaking to power is an important skill.
0:42:16.5 Kurtis Baker: So how would somebody go about this? I mean, what if you’re one of these early stage entrepreneurs? Like, you’re talking about these high school, college kids getting out, and like, oh yeah, I’d love to be on a board. They’re like, well, wait a minute, what do you know? How… What are you gonna add to the board?
0:42:27.1 David Stengle: There are different pathways, for sure. So you can volunteer, you can… There are all kinds of non-profit boards. Non-profit boards will take anybody, and you have to write a check of a certain size. You can look for that kind of leadership role. You can signal your interests. You can work your network. It’s not easy to break into boards. So I don’t wanna diminish the effort. But intention matters so much in everything you do. And have a plan. Talk about… Go talk to board members about how did you get your first board seat? I’m looking for one. Do you have somebody young on your board that would represent people that are not on social security and what their interests might be? That kind of stuff.
0:43:13.9 Kurtis Baker: Okay.
0:43:13.9 David Stengle: You can put your name out there.
0:43:16.5 Kurtis Baker: Use your weakness as your strength, right?
0:43:17.6 David Stengle: Yeah, absolutely, absolutely. I met a guy that he got a job in Japan as basically a American market youth whisperer to the board. And they were like…
0:43:31.0 Kurtis Baker: That’s really funny.
0:43:31.6 David Stengle: Okay, man, what do young people in the US think? And it’s this bunch of old Japanese guys that like…
0:43:38.2 Kurtis Baker: They probably have no idea what young kids in the US think.
0:43:41.9 David Stengle: But they recognize their own blind spot to some degree. And so there’s those things. But think about… Look at boards, and it can be any kind of… Pursue your interest. Signal your intentions. The profile that we take at Board++ typically is you’ve got 20 years experience at least in an industry. You’ve got… You’re either managing hundreds of people or you’re a subject matter expert. So you might be like chief counsel or… And it depends. If you worked at Goldman, you don’t have to be chief counsel.
0:44:19.4 Kurtis Baker: Right.
0:44:20.2 David Stengle: If you work at a smaller firm, you probably do have to be. But something that has the appropriate gravitas. And then what I’d say, when you’re pursuing a board seat, beyond signaling your intentions, you should be really articulate about what your board superpower is. So when you market yourself, and this is true for any job, but at an executive level, so a board you should have your nose in and your hands off the business, right? And what can you do to really change the arc of their success path? And be crisp about that. And if you don’t know it, that’s some soul searching that you should do.
0:44:56.9 Kurtis Baker: Right.
0:44:57.3 David Stengle: Okay?
0:44:57.7 Kurtis Baker: Yeah. Alright, we’re about to wrap up. Any final thoughts before we leave today?
0:45:01.8 David Stengle: Just entrepreneurship is hard. There’s a reason Startup Grind has grind in it. There are resources out there to help you. And if you go on that journey, getting help is part of what will make you successful.
0:45:15.7 Kurtis Baker: Alright. Well, thanks again for coming on board.
0:45:17.4 David Stengle: Thanks.
0:45:17.4 Kurtis Baker: You’re listening to Master Your Finances.
