svsuccesses

Landlords and Overseas Startups pt 4 of 4 Ep 8

0:00

So can a tenant in negotiation ever ask, say, Hey, we don't have money, we want to give you equity in our company. Does that come up a lot

0:08

that came up in the early 90s when I was working for prologue just and some other, you know, counselor

0:13

told me a story there.

0:15

No, I just know that they that that's been a discussion, it's not something that they would always do. Okay. But potentially that came up quite a bit. Yeah.

0:26

Is that happened now that are you said back in well.com time. But

0:30

yeah, I think landlords a little more cautious because they you know, they could have been burned in the past with a lot of that. And they may have new guidelines to that that's not really their core business. So they should just be doing what they're supposed to be doing. And not not investing necessarily in their tenants business. But I know that some do.

0:49

So search, some you got to understand are some that are smaller landlords, they may take a risk big land or the institutional guys I have multiple tenants in your office building, that probably is not going to happen.

0:59

Right. Okay. Interested? So some of our viewers are overseas and countries such as China and Korea all over the world, how's it different for them? When they come to Silicon Valley? What questions should they be asking? I mean, they don't have a US credit history, they may not have a credit history at all, depending on where they're from, how does how did they go about finding a location?

1:21

Well, they partner up with folks like us, who can help us help identify where they would like to be. And this is after we find out you know more about them and more details about them. But, you know,

1:34

I have a group I'm working with right now. And it's just investigation as you go day by day, you know, because sometimes you're dealing with them on a whole different time frame, you know, like, I'm, I'm having conference calls at nine o'clock at night. Yeah. Which is like, their, their morning or Yeah, so you just try to accommodate and figure out what they're looking for. And when they're here, ask them as many questions as you possibly can on on, you know, how are you? How are you established already? Are you a California Corporation? Have you incorporated yet? What's the process that you're going about right now, in terms of how you're going to finance this operation? And

2:16

so if I'm a company from will say, Ukraine from unit city from mats area, who is a guest earlier and I come to Silicon Valley from day one, I found a location How long does it take from when I when I decide to location, or when I connect with you to start looking for a location to sign a lease to be able to move in? Can this be done in a month? Or is it a lot longer, lot shorter?

2:44

Yeah, I don't think a month will do it, in my opinion, depending on how ready their company is overseas. Because I work with a lot of companies overseas, that are just not aware of what the due diligence requirement from a landlord tenant are in a landlord. A lot of landlords, you know, sincerely coming from overseas, that level of trust is not as strong as a local company.

3:04

And it takes them time because they're traveling back and forth. And when they're here, they're seeing things, but then they go back, and then they're reporting their directors. And then maybe those folks need to come out and see the property. And there's, there's a lot of back and forth, back and forth, that initially can happen in the first two to three months of helping this client even identify space. So you'd recommend an overseas founder, one, one of the people on his team to come to Silicon Valley, meet a broker, build that relationship on maybe trip one

3:32

trip to come see a few locations, Chip number three, kind of make the decision and then trip for I mean, that's, that's normal. That's normal.

3:43

Yeah, and I would say anywhere from two to six months. But I, you know, it depends how large of a company you're dealing with to. And sometimes you can find a space immediately if it's, you know,

3:52

maybe it was a smaller space, and you've got a growing company, 10 employees, 20 employees, we've got plenty of options may not do take too long, you get into some bigger size requirements. And then, you know, you want to give yourself a longer window, do anyone from overseas come here with completely off the wall expectations, you know, I want this office, I'll pay this much you go, I'm sorry. That's, that's the price of a chair it Do you ever come across that

4:19

I do. I mean, like, it's not way off. But it's more like, you know, the send somebody else that's not really and real estate or tenant space acquisition environment, they may send somebody from marketing or something, and they may not know what the landlord expecting or how to work with a broker. So there's a lot of back and forth, and we try to help them prepare by telling them that we need access, or the landlord needs to look at your financials and your business plan and that sort of thing. And so they have to be ready to provide that kind of material

4:52

is there any like vocabulary, these, you know, price per square foot or things like that, that if they know before meeting, you could say they have a lot of time?

5:04

Well, you know, a lot of time we're educating them on the on these buzzwords like ti was, you know, tenant improvement. And sometimes we just say, you know, we're kind of tip looking for, and they don't the tenant improvement. And that's important because one client of mine wanted a lab within their

5:22

part of their r&d operation. So then I was asking them about the kind of power that they might be, you know, power needs that they might have. And he he wasn't so sure about that. So that's pretty critical. Because if you're going to do a lot have a lab component, you may need 200 to 400 amps of power in your space. So it's important because then now he'll go back and ask the key questions that he needs to be able to do you ever give potential tenants a list of questions and you

5:49

say, answer all these before the next time we talk? Yeah, yeah, definitely. Yeah. What up? What advice would you give a founder out there that hasn't found any office space yet that's still working at home on when they first talked to landlords or what they should be thinking of other than what we've already talked about. So far, we've talked about location of your employees, we've talked about transportation, we've talked about lease options. We've talked about talking to brokers who can make introductions, and this is all amazing. what's what's border to know.

6:21

Another thing that I like to do is recommend a good business attorney. Oh, because, as you know, we're here to help with this least process from start to finish. But when you get into the business points of the lease agreement on what you've negotiated in terms, there's also the boilerplate language within the Leafs and if you're if you know, foreign company company here, you're not really familiar with a lot of leafs language, okay, highly advise that they use business attorneys to review this documentation because we're not attorneys, you know, we help negotiate these deals, but to protect them, that's just an important part. Do you have a business attorney Do you need a reference to a good local real estate attorney Have you see a when that because they didn't have an attorney got in some hot water later on,

7:07

not too much hot water, that

7:09

never really hot water, but it's just something that they, you know, it's not easy language for them to review on their own. Yeah. Okay. And so they should have a second pair of eyes to take a look at that and what their needs are.

7:20

And Carlos, what advice would you give to a founder

7:24

before you met them, you know, any information you wish to pass on to someone,

7:30

as far as leases are concerned, most epic both seem to think about their distributed strategic location where they want to be and if it fits their needs. I mean, that's the bottom line. I mean,

7:42

I think that they allow them made think that they need a certain thing, but a lot of times, it's better for them to be in a shared environment, or maybe find somebody that has a complimentary type of business with them, that they can go in together, there might provide some synergy to them, and you can make those kind of introductions as well.

8:00

That's great. And married before time runs out. Yes, please talk about how people can contact you and a little brief overview of yourself for more time.

8:08

Sure. So again, Mary blazer. I'm with Newmark Knight Frank and folks can reach me at my email which is m blazer at n g. k. f.com

8:19

we have our company website WWW dot NGK f.com as well.

8:24

Carlos Carlos Toronto Kwan, one number 415-608-8409 and we have dedicated 10 representation agents in my firm.

8:34

That's great. So Mary Carlos, I want to thank you guys for taking the time coming here on Silicon Valley successes and people at home. For further information, please visit our website. Silicon Valley successes comm check us out on YouTube, Facebook, and all the other social media and we hope that you got a lot out of this. And in the future we're going to have more guests from investment bankers, bookkeepers, we have some amazing founders coming up with in the next few episodes. So we look forward to your future attendance. And thank you again for taking the time to to watch.

9:11

Thank you. From all of us at Silicon Valley successes. We hope you found the information presented today useful in your path to success. For further information on accessing the resources in Silicon Valley. You may visit us on the web at Silicon Valley successes. com on Facebook and YouTube. Thank you. And remember, we want to help you in your journey to become the next success.

Office Space Options and Startups Pt 3 of 4 Ep 8

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as so. So back to the startups themselves, when you interview them? How do you know that they're financially qualified or fit for that for that landlord? Is it they're about to raise their next round of funding, they have money in the bank, or they're talking to investors kind of what stages Could they be at for them to actually have a serious conversation? And do you turn any companies down?

0:25

Typically, I tell my clients that these landlords are looking for a profit machine, a balance sheet and income statement for the last three months, usually for the last two years, but they don't have two years worth of that kind of information. But whatever they can provide. So they're angel investing who their backers are okay, if some big name backers, or an angel that would have VCs, that helps a lot, right. And also, if they have money in the bank, so that they can show they've got so much cash in a bank account that they can support landlord just want to make sure they're going to pay their rent or whatever obligation of service that they have. Because you know, a lot of startups to burn through cash, they've got a high burn rate. So the landlords just want to make sure that because they're investing in that company, when you think about it, yeah, it's, you know, it's money that they're generating every month. And so they want to make sure they're going to pay their bills. And then there's personal guarantees that are often asked for, okay, from startups.

1:21

So with that personal guarantee, say, I'm the founder of the company, is it me and my whole team that's guaranteed Is it just me and the other co founders, the what's the guarantee on

1:30

it's usually a personal guarantee, it could be a person who is one of the corporate officers who would be willing to guarantee the least people are not always that inclined to want to do that, and put their own assets on the line. So sometimes they'll ask for a letter of credit, or an increased security deposit is another option, right. So, you know, they really want to just try to cover upfront costs, like commissions, tenant improvements, any sort of concessions that have been given to these startup companies,

2:00

tell me about the tenant improvements, exactly what that is. And before answering that, so on to make another statement. If you want more information on this or any other topics we've covered, please visit us at Silicon Valley successes. com was Silicon Valley successes, calm right back to you. So what's tenant improvements,

2:18

I'll turn it on purpose, really the the criteria and the preparation of the space for the tenant to operate in their own business operations. So it's a matter of, for example, putting up walls, putting up offices, conference rooms, it could be a kitchen at it could be something like that. So it really up to the specs and design of the tenant. And then that will be negotiated with the landlord who pays for what how much of free rent that they can get. And that's where this is where the brokerage come in. And you can negotiate that on behalf of the 10 and the landlord. So the broker

2:52

come in and you go to the broker, listen, I want one month free rent, or three months for your and what's common, and what areas can a broker negotiate for the landlord or the tenant?

3:03

Well, in a tight market where the rents are really high, and it's very competitive, landlords can call the shots if they don't want to give free rent. They don't have to give free rent in a softer market, I would say one month of free rent for every, you know, two years or two months free rent for a three to five year type term. But that would be really saying a corporation that right? I mean, just a start up what's a typical startup? least six months? A year? Two years? I would say about a year,

3:28

yes, about 12 months, okay.

3:30

And if, say, 11 months in the startup goes, you know, we're have to file for bankruptcy. Sorry, that personal gain T, I really have no money because I spent all the startup what happens that?

3:42

Well, we as brokers can help to market the space and try to get another tenant to backfill and take that obligation off of the tenant. Technically, they're still obligated until we can, you know, relate the space, we can tell the landlord landlord may have another tenant because they do a lot of marketing as well. Some of them, they may have someone that might want to just backfill that space. So it just really getting the word out and trying to help these people and and make it as painless as possible. Do landlords every go to tenants and go listen, I have someone else that wants to pay more than what you guys are currently paying. I'll give you some money. If you leave.

4:17

That's happened. It could happen. Yeah, a lot of times, what happens now is that, you know, the climate is very kind of like, unpredictable. So you have a lot of tenants that are either downsizing or they're expanding. And so they need new space, it may want to abandon the current space, so we can help sublease that space as well. And if they need to leave early, then we can help them something except space as well. So really determines a lot of our communication between us brokers and the tenants and allows Mike Phillips and as well, so how often should the tenant be talking to you every three, four months or monthly, I recommend it because I put a client in a space back in October, and by May of the following year, we were looking for new people, then they had signed a one year lease obligations. So every couple months is a good idea to be just on the chicken them. So you

5:06

say your broker is actually part of you, your team, almost like your lawyer, your accountant, bookkeeper, that one guy always they're looking for that next operator space for you?

5:15

Well, yeah, it's all about relationships. And you want to start early on having these relationships that hopefully build into longer future relationships and growth that you're helping them to achieve. Because I, you know, I've had a client that started small and about 1200 square feet, they, I then expanded them to, like 5000 square feet, and then they move to 15,000, now they're in 30,000, it's just a great success story. So you love when you can stay on that path with them and be in touch with them and, and help them in their growth, especially with

5:42

the amount of people that they're bringing on and their space needs to drastically change when they get to those levels of needing bigger space to brokers also make other introductions to maybe to investors or potential business partners or to brokers ever reach out to their personal network and say, Hey, I have this startup here. I'd like to introduce you to is that ever happened?

6:05

Yeah, that's a good that's a great question. Actually, for me, I do because I take an interest in the tenant, I take an interest in a company because I've learned a lot through the process of helping them qualify. And then in that process, I actually asked them, you guys need help with funding, when's your next event would you like to be close to another type of 10 our type of investors because we'll know who's in a building or who's nearby and so we I like to connect them and it makes sure that they're also successful nervous as hopefully we play a role in that because a stressful 10 that will be a successful future business and they might grow and we can help them there as well. And then the lender will also help out because they will know that the they want their tenant to be financially successful so they can, you know, grow and take care of their property.

Location Matters Pt 2 of 4 Ep8 Startups and Office

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So I have six employees, for example, and I would come to you and go, we need to move out of my apartment to an actual location right now, you would tell me, you know, this is where your next hires might come from these, these these companies, this is where your current employees live. And this would be the best commuting routes. What other information could you give me?

0:21

Well, I mean, what I would really give them as help them prepare for potential space that they're interested in, they may not know that it requires financial qualifications, as well as a business plan, as well as a personal guarantee because Atlanta are looking for a tenant as fully qualified and fits in their building. So it's a lot of preparation work that you have to do with a startup and they might not be aware of they can do you think they might be just like signing a residential lease, but it's quite different is more of a business relationship. And there's a fit with the building as well.

0:53

So you go into more detail about that in Mary, you'd like to add, because I really have no idea about this business really relationship, please tell me more about it.

1:02

Well, from a business relationship perspective, you know, we have our fellow brokers, and that we do a lot of work with, we have the ownership of buildings that we have relationships with, and other, you know, real estate professionals. So we have sort of this inside track on what's happening, and we're on the pulse of the market. So when these companies come along, and they're looking for space, we know, for example, a space that may have just been vacated, or something that's maybe going to come to the market that's not technically being marketed and available to just the mass

1:32

the public. And that's because, you know, the owner of that building, or the landlord, and, you know, the last person's least as six months from now, a year from now,

1:40

right. So we're, you know, that's our job to be real estate, to know what's going on in the market, so that we can service these clients to the best of our ability. And I think that it definitely helps to add value. Because when you think about these, these decision makers of these companies, and how much time they're trying to put into running their startup, you know, it's a lot of time and communication and trying to identify properties in the market. So if you're reaching out to professionals like Carlos and I, to help them identify the properties that could be well located and suited, and help them with understanding all these business points that need to be negotiated in disgust, it'll help save them a lot of time and effort now is the difference from a startup coming

2:20

from another state to Silicon Valley verse in other country to Silicon Valley of what types of problems or situations do the different startups depending on where they come from face when they come to Silicon Valley, I

2:33

think is pretty much the same thing. I think there's an expectation of

2:38

what the land or requires of them, I mean, a lot of them, for example, I experienced with the folks that are doing drones, so they have big, large propellers, or some of them are doing robotics that needs space where they can go down the aisle and these type of things, and they don't know what locations will allow that kind of a usage. So there's certain type of usage, for example, PDF, our production, production, distribution, repair some of the industrial kind of zoning and warehouses that can actually have offices in there as well. So the these are the type of usage is that some of these startups will require their your typical office won't have that type of availability. So

3:17

right. So for example, a client like that might go into an r amp D facility as opposed to a facility with

3:23

research and development, right.

3:24

And so in those types of buildings, you're going to have power requirements that can be different than your typical office building. So with their technology, they may need, for example, some higher amperage in power 400 amps, or up to 1000, and it just depends but they need but that's, you know, we need to ask those questions and, and help them figure out what their needs are. From that perspective. Clear, high rise building high ceilings will look toward the shortage archive doors for deliveries.

3:57

So how much do you actually have to know of the startup what they're doing their product, what they're working on in order to give them the best option for them?

4:05

Well, we that's a really good question actually. Because what I do, Mary is I might actually go visit them first, make sure to qualify First of all, and they say who they are, they say because I will on behalf of the land or the owner of the building, I actually have to go to a site visit and we're currently located they have a current location, understand your operation and see if it's a fit for them, or what's a fit interested.

Leases, Landlords and Startups Part 1of 4 Ep 8 Startups and Office Space

0:04 

Welcome to Silicon Valley Successes, we interview experts and entrepreneurs to get the world access to the knowledge and experience that is here in Silicon Valley. Our mission is to create opportunities for those who seek them and help you to become the next Silicon Valley success.

 

0:23  

Welcome to Silicon Valley Successes. So over the last few weeks, we've talked with investment bankers, we've talked with marketing experts. We even talked to a founder of an amazing start up here in Silicon Valley. Now, today we have two guests, Mary and Carlos, who work with startups to help them find office space or to help them get from their their garage or their living room to a physical location. But let I'll let them introduce themselves a little bit more. Mary, could you first introduce yourself and then Carlos? Sure. Hi, good evening, Shawn, thank you for inviting us to your show. Thank you Is my honor it

 

1:00 

Thank you. So my name is Mary blazer and I'm a commercial real estate agent. I worked for Newmark Knight Frank, formerly new Mark Cornish and carry so Cornish and carry was a boutique firm. Here in Northern California. We merged with Newmark Knight Frank. So we're now in about six continents with over 400 offices. So it's given us a bigger global platform to be able to service clients, especially those clients that are startups coming from foreign countries that need to come here in the Bay Area and establish you know, working opportunities for themselves for their for their startup businesses, and I've enjoyed a 30 plus career and my specialty is the leasing and sales of office and industrial properties here in Silicon Valley. Wow. Carlos, please introduce yourself. Thank you Shawn. My name is Carlos Serreno-Quan, the managing director of American real estate and we were formed last year with the partnership between virtual holdings as well as AGI capital. And so we specialize in leasing tenant representation and

 

2:00 

As long as well as land or representation, we have offices in Berlin game, Palo Alto, in San Francisco as well. Okay, so to start, let's have a quick question for you. So what issues do startups face when they're looking for office space?

 

2:17 

Well, some of their issues are that they, it's hard for them to figure out how fast they're potentially going to be growing. So finding that right sized space is initially a concern for them, okay, you know, you could lease a space that potentially is too small, that doesn't have enough breakout rooms, you create more noise, and then it you know, it creates some inefficiencies with how you flow in that space, okay, or you could take a space that's potentially too large, and then you've just got all these overhead costs that you're paying for, that you don't necessarily need. So I think finding that right sized space for startups and assisting them in that effort is is something that's pretty critical for a startup company. So with that, right, say space, say at a team of four.

 

3:00 

People are six people right now. And I came to you is that too early to talk to someone else at the right time? Or once did that first conversation v

 

3:10 

that time? Is it isn't it an important time? Because there are small spaces that can still accommodate that team that size team of people, okay? And then it's just determining from that point on at what future point are you going to double your size or triple your size. So when you're looking for space, you might want to be thinking about how long of a term you're going to be in that one first space okay, that'll last you through that period of time and then moving on to the next so with that I'm just going to keep going with this one question just because there's so much to it

 

3:44 

from one term to the next is that a normal six month one year how flexible is that so for some of the like Regis centers, executive suites, places where you can rent on a month to month basis, you could probably do something

 

4:00 

Short term most landlords and typical office space, I'd say that the minimum terms are about a year. Generally they would like a longer term lease. But if they've got the ability to move and expand tenants within their building or their project, then some landlords are typically a little bit more flexible than others. It just depends on the size.

 

4:20 

But as far as term, it just really depends too. On which landlord in the valley you're dealing with. So with the landlord in the valley, be flexible if they know your startup or not. Oh, yes, they would. Sure.

 

4:32 

And, Carlos, if you had this same experience when with issues that that startups might face when when looking for an office. Sure, in my experience, it's really about the right location to attract the right talent as well as being a facility where investors may be as well so for example, I know that talent acquisition for startups as is really challenging and so they need to be an area where transportation tools

 

5:00 

Location is actually very attractive to allow their future employees or current founders and teams of that nature because have to get together frequently. So it could be something near bar something the Caltrain it could be anywhere from San Francisco to Palo Alto. But it has to be somewhere where it's easily accessible or some something like that, but also to be an area where their investors can use you go to so we're ready to pitch events, etc. and that sort of thing is a really big consideration as well. So when you're showing potential locations to start up, do you actually tell them that they say this offices that are available and you know, nearby are frequent pitch events nearby, or these VCs are these Angel groups. That's why this office space might be a good fit for you. Yeah, I think that's where we can be helpful at brokers to the businesses as well as, you know, the type of business that they may have. It could be a blockchain, it could be a real estate tech startup. It could be anything other startups that

 

6:00 

We are familiar with the community. And we know our own group of investors might be interested as well. And they get excited when they hear that, that we know what their needs are. Yes. And one of the things are from can do is we can, we can tour them in the markets. But we can also show them aerial maps of what companies are located in the areas where they would are potentially looking to go. So, you know, if they're trying to interview or recruit people, potentially from other competitive companies, they'll know where they'd like to potentially be located. So if I was a startup, and I knew I wanted engineers from maybe Google or Facebook, I would come to you and you go, Oh, well, if you want to recruit from these companies, a good office building potential might be in this area because they're already used to making that commute every day and go into your office wouldn't be right that's nice. I've never heard that before. And also they're looking at the demographics to of where their employees technically live, okay, and how close they're going to need to be in proximity to where they want to work. So that's

 

7:00 

Another absolutely important we can do

 

7:03 

we can run demographic studies for them by zip code, you know if they give me their the weather each of their employees live we can kind of map it out for them so they can also from another perspective, try to find a location that suits everyone's needs.

 

A Real Startup Founder Pt 4 of 4

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How was that switch with your co founders from going from a colleagues at the university to now kind of being their boss.

0:07

So my co founders, I think that's that. And everybody says that co founders are key. And getting along with your co founders is life or death. Okay? Is everything and I love my co founders. We were doing the advice and some point that we're doing a yc videos. Yeah. And we found ourselves having somewhere so much fun doing it that we almost put in bloopers. So this there is nothing more important than just fundamentally getting along with them. Okay. And is there any problems, any disagreements treated like, like a marriage, solve the problems talk it out, cuz you want to get back to smooth as quickly as you possibly can? Yeah, yeah. So that's, that's Central. The fact that my co founders and are such a great team. We're great as a as a three people. And we're also great in Paris. Okay,

0:54

that really helps what happens when you want to add people to your team? How have you gone about doing that? Because I'm a three person teams not going to make a billion dollar business, I may come close. But I mean, how have you gone about adding new people was thought process been to add new people to the team. So hiring is is very, very complicated.

1:14

It definitely, definitely much easier when you have more resources, been noticing, it's no surprise for anybody. But you really can get some good people before you have resources to work for equity, happily, what does that look like when you talk to them. So it's not it's a process. So for example, we're very, very fortunate to have a producer sound designer Dustin Morag there who joined very early and what I did what I felt comfortable doing, and it's actually something that I learned as a professor trial periods. Yeah. So even though we had hardly any money, okay, we gave him a little bit of money to do a one month contract to see how we get along before giving equity. Yeah,

1:51

and that was a very, very smart way to go. Yeah, that is trial period. Money than equity.

1:56

Yeah. Because if you can afford money, or thrive, by all means, why don't you know, until then, he's been fantastic. He's just there, you know, really there with us, really, one of us really wanting to see the company succeed in any way, help in any way possible. And those are the kind of people you want, people are gonna be like, I'm doing x, y, z, period, because that's because it's a startup. And if you guys are, you know, we stay up to three o'clock in the morning regularly. This is just this just a regular life. Somebody asked us recently, actually a really good friend. So what are your soft hours? Like, we plan time off? We don't plan time on Yeah, look like, okay, we're getting burnt out. We need an hour off. Okay. How does that look for, for the team to come together and say, guys, we need to just rest a little bit or does that not even happen? People always go, go, go. I mean, when do you see that burnout? Well, if we are, you know, getting very tired with a lot of time, all three of us were starting to get migraines. Oh, we were right.

2:50

I get migraines all the time. And my co founders don't say it was very kind of, I thought, Okay, guys, let's, I think, you know, next weekend, let's take it easier, not working as much. Okay, just so we can reset. You know, we need ourselves to be healthy. So that kind of moderation, but also we really care about each other. So we don't want to push each other to, you know, too far either. We know that we care so much. We're going to do whatever we can anyway. So would you say once you do a startup, like truly do a start, there's really no work life balance or

3:21

work life balance? That's hilarious.

3:23

I think that says it all.

3:26

What type of time commitment is a startup? I mean, for people that think it's all glory,

3:30

glory, somebody thinks it's all glory. I think a lot of people do. Awesome. Yeah,

3:34

I should have a nice, yeah, I live on a boat. There you go

3:37

live on a boat. I think if your goal is to live on a boat, they're much better ways to get

3:44

easier ways to make money, Silicon Valley much easier ways. But it's not. It's not about it's not about the money because money is part of it. It's a package deal. Because you can't succeed with a startup. You don't care about money, fundamentally, right? But if you just care about the money, there are better ways.

4:02

Okay, let's go back. So right now, finding investors where the next steps for you, what are you working on your finishing up our round? Okay, that's, that's really, really exciting. Did you go I know, you can't go into too much detail. But can you talk about that, that that process of presented pitch decks, getting that together meet investors that a little bit more detail.

4:23

Honestly, I've never given the same talk so many times in my life. What's really amazing is that when I look at you, and I'm about to tell you about my company, I forget everything ever said about it. And I just want to explain to Sean what I've done. Oh, gotta keep it fresh. Otherwise, you're gonna die from board. But Ok. Ok. More seriously. Um, we had a lot to learn pitching is I mean, I've done academic talks for such a long time, you know, I've been in the media talking as part of what I do, you know, I'm also a singer. So, like, I live on stage, but it's a is very, very specific. You want to effectively communicate, and that's really important, your business, not your product. Okay. That was a big learning curve for me. Okay. So your product, wasn't it? So your business, right? It's about the team. It's about how are you going to make money, it's about your competitive landscape. And I'm the founder, you know, I know that this is unique, there's nothing like it. It's amazing. It's the best thing since sliced bread, in fact, quite a bit better.

5:24

But other people don't know that. And you have to be patient and careful and explain to them why your business is the most amazing thing in a way that they can understand. So are you adjusting this pitch based on the investor you're talking to them

5:38

a little bit about a lot of it has come off from feedback, tell me about the feedback.

5:43

So at first,

5:46

at first, it was difficult at first, it was your professor now someone's telling them professor, they could be wrong or change

5:53

as professors, you get used to accepting criticism. In fact, the professor is our one of the few people who readily say, okay, you're right, if you give them a good argument, but what I wasn't used to it was more the culture of it, I supposed to go. There's a lot to the culture of startups a lot of how you're supposed to behave when you talk to investors, just so that it fits what they're expecting,

6:15

will say one or two things of how very a beer because we're running a little bit at a time, what information do you wish someone had given you at the beginning of your journey that you know now, but you wish you had known at the beginning? Um,

6:27

yeah, there's a lot,

6:30

I'm going to even start. So we're pivoting for example. Okay. So that was something you know, I mean, I suppose everybody would have liked to know, their final pivot all the way in the beginning. But that came out of a long list of meetings with investors were finally we had an outstanding meeting or felt like somebody somebody was able to explain to us why our market was too small. Finally, they could explain it. Well, we were going to make plugins and somebody explained to us that the most success successful plugin of all time was very far from a billion dollar company. And we felt from the beginning the different products because it could work for everybody. And so we made a massive pivots remade our whole product from scratch. Wow. And created something so that anybody can write a song and five minutes so you don't have to, you have to have like, really zero expertise. Maya, can you tell everyone how they can reach you and your beta test one more time? Absolutely. So you can reach me at what actually all the information is on our website at with elisa.com A li si K. That's the spelling of Elisa, the with elisa.com. You can sign up for the beta, my contact information is there happy to hear from you. Oh,

7:37

so Maya, I really want to thank you for coming on Silicon Valley successes. And for anyone at home that wants more information on the Silicon Valley startup ecosystem. get in contact with any of our guests writing, please visit our website. Silicon Valley successes, calm our next interview is fascinating. We have two people that are going to talk about startups, leases, office space do's and don'ts and things to be careful of. So it's a very important meeting and I look to see you there. All right. Take care.

8:07

Thank you. From all of us at Silicon Valley successes. We hope you found the information presented today useful in your path to success. For further information on accessing the resources in Silicon Valley. You may visit us on the web at Silicon Valley successes. com on Facebook and YouTube. Thank you. And remember, we want to help you in your journey to become the next success.

A Real Startup Founder Pt 3 of 4

0:00

Let's go back to my my dad told me about that investor meeting that was I was so excited. And I remember what was

0:07

I felt like suddenly it could be real. Okay. I remember being unable to sleep. I remember being very nervous before talking to Eric on the phone. Okay. Eric doesn't know that

0:15

when you are going to talk to him on the phone. Did you know like, I'm gonna ask him for money? Or I'm gonna ask him to mentor Did you have any idea what you're gonna say, knew that investors give money. That's all I knew. back then. I didn't realize that they can be amazing mentors, I was gonna learn some of the best information from them. Okay. Um, I really didn't know it was it was kind of honest. But what I noticed is how nervous and excited I was about now this information that they could teach you. I mean, you're a professor of machine learning, is it more skills? Or is it more just business? Is it more connections? What type of information can they give you?

0:48

Well, really, all of the above I'm doing a startup is, um, it's different. It's kind of it's some of the skills of being a professor. transferable experience in managing people. I've experienced, inspiring people doing original ideas, getting projects to completion lot about a startup about the business ecosystem, about the culture, even Oh, how you relate as business people, he's not the same way that you relate to your colleagues. For example, I will never forget how interested in an investor meeting that was going very well. Yeah, the investor asked me to brag about myself, okay. And that really threw me off

1:23

because it's just in academia, you know, personal, you know, you're talking to, okay,

1:27

based on their research papers, or their titles,

1:29

like credential these like, you shouldn't have to tell anybody that you are an amazing researcher, that you've done some really important work that you know, that you're on the committee's reviewing on all the most important conferences and journal reviews, okay, for AI. Because for me, people that are taught in academia know that about me, they know they've done find that foundational work in clustering, they hear me talk for 10 minutes about my work. They know I'm amazing. So I don't have to say six, like, okay, but the startup ecosystem brand new, I mean, they're not in my world

2:00

didn't connect on LinkedIn with you.

2:01

They're not Sean.

2:07

And also they're not in my industry, they might not know what does it mean to be a computer science professor? How does it How is it different from just having a PhD world of a difference, but it's not fair of me to expect them all to know that Okay,

2:19

so you would you say that startup founders might have difficulty bragging about that, or, or selling themselves, you just have to be honest about who you are, and understand that investors are not in your world, you simply need to tell them who you are in the clearest way possible. Okay, if people want more information on that, look at the episode where we interviewed doors from Silicon Valley speaks she a lot of great information on your presentation. But my please talk a little bit more about your encounter with investors. And what's happened since then. So this was this was a long time ago, so called capital really helped us get started. And it made it real. So I had a lot of super basic questions like, how do I open an entity? What kind of documents design is really simple?

3:02

Yeah, but it's at first, it seems so obvious right now, it seems so obvious. But back then you have zero experience with it. Nobody around you had any experience with it. When you go online, you get a whole bunch of controversial opinions. That's the biggest problems was just googling you just get these extreme of people being sensational and arguing really unusual perspectives. Yeah. When you just want the basics, okay. And books are often outdated. Yes.

3:25

So I really found myself in this state where I needed the advice of real people, okay. And the mentors are that investor was the one giving you this real advice, yes. How'd you know you could trust the investor and or not?

3:37

Um, for the most part, I mean, I think I think part of it was that we were lucky we really had a person who had our best interest in mind, who really believed in what we were doing overtime, I did learn pretty after a few months that people really have different perspectives. Okay. But I do think that he he really helped us get started on the right foot. Okay.

3:55

And then a few things in a few ways. We also got lucky. So we got a good lawyer pretty quickly. Okay,

4:01

so right now I five question the very often call my lawyer, we have them on retainer. Huge, amazing resource of the people I get along with really well, oh, what resources Did you outsource or go for? That's really up to the team, a lawyer on retainer, an investor, that's a great mentor,

4:19

because we have more, we also eventually you need to go back and look at your own network. In fact, that would be a better place to start. And I know better. So kind of the burger, who is it's been a longtime friend and colleague, he's started 15 businesses, and many of which are successful up IPOs and sold very well. So he is right now our advisor, okay, so how you go about finding your advisors. So it's the he was in our network, and it's so it's sometimes even if you're pretty well connected, you might not people are drawn to business, sometimes they're not used to even using their own network, because you're not used to thinking like that because in regular jobs, even in the professor job, which is fairly flexible, it's somewhat similar to having a business it's a lot more structured, we don't even realize how much structure there is, in our lives. I told there is nobody above you and your company, there is nobody to blame. There is nobody to you know, there is nobody to share the well I have co founders but still there is nobody above me. Yeah,

5:16

then I can sort of defer to Well howdy how that switch go from being the professor where you had people you had to report to, to now being the boss, how was that transition? It's,

5:26

um, it's very interesting.

5:30

Overall, I think I like and I think it's, it's who I am. And it's a kind of very kind of healthy progression in my career. Okay.

5:37

But in a way, there is a very interesting self redefinition that happens it's very profound, okay. I found a lot of time finding myself thinking feel like I'm rediscovering who I am.

A Real Startup Founder Pt 2 of 4

0:00

Then what was the tipping point that you're like, Okay, there's so much demand, I gotta do this. You know, the one advice I would give people is to move faster. Okay? Because in the beginning, I didn't do a startup to do a startup. Let's, let's make that perfectly clear. Okay, I did a start up because we discovered this thing. And the world has to have it. Okay. It has to have it. And the only people who know how to do it are the people who did it. So we have to do it. And I think that's the only reason to do a startup. how insanely difficult to do that if you have something that you must share with the world. Wow. So that's how it came about. And so to be honest, I realized this has to be a start up almost right away. Yeah, the moment I came up with an idea, and then we had the early prototype after about three months, I started using it. I remember this amazing day, when, how long ago was this? Just, what, three years ago?

0:53

Three years ago? Yeah, okay, go forward.

0:56

Yeah, okay. And I remember that evening, David and I were, by the way after that. We had Chris joined the startup as a founder, but this was very, very early was Chris roll white. Why bring him in. He was my students. And he started he got involved in festival research projects super early, okay, kept the project alive, kept to the growing until we finally decided to start up. So he got in on the ground. Okay. So three years ago, a group of three people came together because of all this demand for a paper that they wrote to actually make it a reality, basically. Yeah, but it was a project for two years. It was a research project at the moment that I realized it has to be a startup was when we had it. We had this very, very early prototype of Elisa and all it did back then. Which is amazing. And nobody's ever ever been able to do it before is to take lyrics. Yeah, any lyrics in English? Okay, and create vocal melodies for them. Well, let's say you type in it is so great to hang out with Sean that sounds a glaring exactly, okay, then it will give you a melody like, it's so great to hang out with Shawn, right. Or that's how I would assign.

2:00

So we got this original version, right? Yeah. And it was terrible. It was in a sense of, there was no user interface with displaying no to normal notation. It we had, like, number of corresponding to each node, and I took it down to my piano and barely managed to read Okay, to create that melody. Okay. But suddenly, I could write songs. Okay. And which I could never before I tried for three years, and I couldn't

2:24

solve the problem that you had. Yeah. Okay. And you knew other people would have the same problem? Yes. So. So team of three right now you're in Florida. When did you said to come to Silicon Valley? Why come to Silicon Valley? Why not go to Waterloo or someplace else?

2:40

That's right. I actually spent a year living in Silicon Valley before, what were you doing? I was I was actually a postdoc

2:48

at UC San Diego, and I commuted every week. Sounds like an amazing University, those alumni from the university probably top notch,

2:55

they are excellent. It was really one of the best years of my life, living in Los Gatos and flying every every week to San Diego. And the whole year I tried to figure out why do I prefer Los Gatos or San Diego and I couldn't decide the whole year

3:07

I mean UCSD alumni for the record. Okay,

3:10

that's right. I knew that. Okay. So.

3:13

So you were in Silicon Valley for a year teams in Florida, and you convinced them to move here. Why it's more it's so expensive here, compared to Florida,

3:21

it took a while It took a while to bring everybody over here. Actually, Chris just recently joined us, he already finished his master that Georgia Tech. Ok.

3:31

And now we're all finally here. It was a process, you know, everybody had to get jobs here at first, because you know, the startup you don't make any money at first. Okay, so if everyone's working, how are you able to do your startup? Was it people had nine to five, and then you guys worked at nights and weekends? How do you guys plan to actually move forward? What was kind of the process was

3:49

a research project for two years. So we did it on the side for a while. And then we decided that he stopped publishing papers about it. Okay,

3:56

and start actually what actually happened to us as an investment board. Okay, tell me about that. Well, how did you get that meeting with the investor has you get the funding? And what would that process look like, you know, think of a brand new startup, the advice you can give them for that,

4:10

you know,

4:12

my advice would be, don't wait for that investor. That actually would be my advice. My problem was, I didn't know how to start. There were no people in my life doing startups, okay. My parents are not business people. It's not, you know, I really don't come from the kind of background where you'd imagine me becoming a CEO. It was a very foreign concept.

4:34

And so I wanted to a few times we were thinking about six months into the research project that occurred to us to do a startup out of it. Okay. And we sort of tried to form it and it didn't completely catch on and we moved on why didn't catch on there wasn't a CEO or a leader of the group for didn't really I think we weren't ready. I think that was we just we didn't have that.

4:56

No, I don't know. I mean, I don't want to make up reasons. That point somehow it didn't stick. It's we knew we wanted to continue working on it. But it just stayed at the Richard project. And we didn't even officially decided to not do it a startup we just sort of, we had the synergy for a while. And I sort of dissipate it for a bit. And then I kept thinking about it more and more, I met up with this wonderful woman, her name is see mom helps helps a lot of women with branding and following their dreams. And she told me that I should go for it. If I'm thinking about it. That was kind of beautiful meeting. Okay. And then she invited me I give a lot of talks and panels and I gave them gave a panel talk at Silicon Valley, it's already in Silicon Valley of the professor already here and see, introduce me to somebody is there an investment group, okay,

5:42

and I gave them my card and I wasn't sure if there were ever gonna call me back it was very ad hoc when compared to the kind of serious fundraising we've been doing recently to this investor group was just a bunch of people in a room and then you present it wasn't just a dinner was it was

5:57

so ad hoc. We got in a way, if you look for so lucky. It was literally a quick introduction after my panel. Okay, I see my introduced me to this person. I'm not even sure if she really knew them. She said, he is Maya. She has an amazing idea for a startup. Yeah, I gave him a card and send a few weeks later. It was a big gap. he emailed me Yeah. Which is really amazing, given how busy investors are. Yeah. And then we met up and then he said, he'll introduce me to some early stage investors. Okay, he introduced

6:25

me to exactly one investor, kilowatt capital and they made it an early investment. Before we talked about that investment. I just wanted to mention that if you want more information on the testers, and a whole startup ecosystem here, please visit Silicon Valley successes, calm and information will be there and more so.