SPEAKER_01: 0:01

All right. So I had a podcast when I first started my business. And maybe this is probably helpful to kind of give some context around my journey as an entrepreneur and as a fractional. So I left Morgan Stanley in 2019. And when I was at Morgan, my main involvement there was designing and administering equity compensation plans. So stock option plans for the Fortune 500. My largest clients were, or the clients I worked with were Google, Chevron, Visa. And then my largest client at the end of my timeframe there was Tinder. And Tinder is actually where I met Alex, one of the CEOs I work with now. And Joshua, you had the pleasure of working with as well. I... I just love the dynamism of tech. I didn't value the mahogany credenzas and 11 layers of management at Morgan Stanley any longer. So I left and I started my own thing. Initially, I started kind of just as an ad hoc consultant. I was still trying to figure it out. And my initial two offerings really was just an initial offering. And it was essentially a sports agent using some of my professional athletics background for highly compensated executives in negotiating their equity compensation deals. So thinking of director levels up at name your tech company, I was assisting them when they would transition from one company to another and helping them negotiate better terms for their equity, different vehicles, if there were specific tax advantages for one vehicle versus the next, or if there were specific tax elections they needed to do, and usually helping them negotiate their true value because I knew what other executives were getting paid in the market just from my experience working at Morgan. So that was my initial thrust. And then I started out As well, during that time, I started with this corporate consulting gig. And it was very targeted. It was very niche to start. It started off as just designing startup stock option plans. And while that's really useful, it wasn't very broad. And it wasn't ongoing. So I didn't really have recurring income coming in at that time. So then I said, all right, well, what else can I do? So I started dabbling with a whole bunch of things. I created educational videos on my website, and they're behind the paywall. And you can get a couple of them for free if you really want to. They're sitting on equityapi.com and teach you all about stock options, investing, and all sorts of stuff. But there's about 40 of them that I created. and i started out on linkedin trying to get people to go see the site and do all of that um i put in a lot of work to those videos they're about somewhere between 20 to 40 minutes long each um and a lot of really good information but i never got people to convert ever um it just never happened which is surprising um it was rather discouraging because i thought there was a lot of value there um similarly i started a podcast um and up until i think the beginning of this year um it was still live on the apple store our app absolutely apple store podcast um store um but i removed it i think at the beginning of this year because i think i have to pay i had to pay for it or something like that to keep it listed and i just didn't do it maybe that's true maybe it's not but um i had probably 50 episodes And I was just talking. Just talking, I was talking about the business news of the day. I was doing it daily. And I had the business news daily. I had what was going on in startup land. I also was talking about different nuances within equity compensation. So I do a lesson per day, whether it was vesting, whether it was specific legislation that was working through the pipe. And then it sort of became a daily discussion on covid and all of the layoffs that were happening as a result of the pandemic um and but with that i topped out my listenership at five people um all friends um and my brother and i don't think anybody actually listened to it i closed it down after like episode 50.

SPEAKER_02: 5:12

It's a very interesting thing to try to create content and figure out how does that resonate with someone, right? I've often thought about this and I'm not surprised actually given your background and your drive that you would just go do something for quite a long time to make it work. How do you, learning from that, how do you test ideas a little faster to see if they're going to work or do you not worry about it and you just keep throwing yourself into directions and seeing what will happen?

SPEAKER_01: 5:40

I was using it as an acquisition channel. I was hopeful that that was going to be an acquisition channel for my business. The podcast, I was never going to charge for them. I just wanted people to listen. And I was posting on LinkedIn, and I was telling my friends to go listen to it, and I never got people to convert. Maybe people just don't like my voice. I don't know. Whatever it is. But I never got them to convert. I never got new people to pick it up that I wasn't... um talking specifically to to hey go download this thing um and then on the the educational videos that was also an acquisition method i was hoping to have like educational videos that were out there to the public maybe my mistake was like paywalling them and not giving up um more value up front um I think I'd probably do it differently now, and I actually have thought about doing that slightly differently now, but very targeted. I think I went into it where I was trying to mass scale acquisition. I wasn't targeted with who I was sending the message to. um and that was that that was the problem was that i wasn't specific to my audience and at the time it was very early it was 2019 2020 when i was starting up my business and i didn't know what to do i had no clue i had absolutely no clue i didn't have a strong acquisition channel for either the professional or the corporate consulting side of things. So I was just throwing a whole bunch of things at the wall to see if they worked. And those two particular things, they didn't work. But I learned a lot. I learned a lot. And probably the biggest thing I learned from both of those is that I didn't tailor it and target it to the people that I wanted to hear it. I spread myself too thin in terms of just who I was distributing

SPEAKER_02: 7:40

it to. And that's a learning lesson. That's really cool.

SPEAKER_01: 7:43

Yeah, I wouldn't have known that if I didn't do it. I remember my wife, Amber, I was telling her, I was going to get all these podcast downloads and I was going to get all these people downloading my videos. And she was like, well, just because you put it up there doesn't mean anybody's going to care. And I was like, it's just going to happen. And then I was like, I'm going to create a TikTok channel. I'm going to be the cool startup finance guy on TikTok. Never did that. Yeah, it just threw a whole bunch of stuff at the wall. And it was more learnings more than anything.

SPEAKER_00: 8:20

Oh, man, that's a cool story. And so for those of you just joining us, welcome back to Fractional FM. We've got our guest Lee Sweat in here today telling us his story. And I think Lee just officially went on the record here for this audience to say his wife was right.

SPEAKER_01: 8:36

Oh, yes.

UNKNOWN: 8:36

Yes.

SPEAKER_01: 8:36

Oh, yes. And in so many ways, in so many different venues, that is almost always the case.

SPEAKER_00: 8:44

Awesome. Yeah. So thanks for being back. This is episode 13. Joshua, we're on a roll.

SPEAKER_02: 8:52

Happy to be here. Thanks, Lance.

SPEAKER_00: 8:53

Yeah. Awesome. So Joshua, you want to kick off some targeted questions for Lee here and we'll learn more about this story? Yeah.

SPEAKER_02: 9:05

Perfect, and then Lee, you can do whatever you want with the questions. My first one, what are you excited about right now? You

SPEAKER_01: 9:12

know, I think the last year in startup land, and just for context for the listeners out there, so I'm a fractional CFO in early stage tech from C to Series B. And most of my clients are consumer tech, so they have a consumer product of some type. all software. They're not B2B companies yet. And I say the yet part kind of tongue in cheek, but kind of not. What we've learned over the last year, year and a half in a lot of D2C or B2C companies is that it's really, really, really hard to find scale acquisition. And The thing that became very apparent, especially after the early 2021 change of privacy and IDFA on iPhones, is the difficulty it is to truly find scale acquisition. What was great about Pre-IDFA, everybody had a marketing marker, right? Like you had a unique user ID for marketers and you had an entire profile that was built out that any marketer in the world could find you. for pennies right because of the way the platforms were built on google and facebook and instagram that changed so dramatically and i don't think we all appreciated it when it did in early 2021 but every consumer company that i've been involved with has really struggled to find distribution as a result of that. So what I'm really excited for, just like a great story, we had the really dire 2022, late 2021, 2022 situation where every client that I work with, we've laid off somewhere between 50 to 80% of our staff just to survive. But I think in those companies where we have done that, we found potentially and this is what I'm excited about, scale distribution. And most of those distribution channels have aligned with some type of B2B sales motion, which is really unique for consumer products. And I guess that's probably my biggest learning across my last four years of doing this is distribution, distribution, distribution. You made

SPEAKER_02: 11:51

a comment that I just want to ask about. Do you find that the founders of startups are often looking to you to understand what's happening in the market because you are working across multiple consumer markets as a fractional?

SPEAKER_01: 12:06

100%. The breadth of my experience set is valuable to the executive teams I work with. It comes up actually quite often now. In a lot of ways, and I had to navigate this early on, I had to navigate whether or not do I bring up my other engagements? Do I tell them about what I'm doing? Because I wasn't sure. I wasn't sure whether I was... okay talking about other clients and what was happening over there and some of that comes from my investment banking background where like you just don't do that um but with um with this particular uh nuance to my business i found these executives are very very happy about me offering up these learnings um because it's it's a way for them to like It's not like a cheat code, but at least they have context from somebody they already trust that might be doing something similar-ish at a different company. Or I have seen it before and it didn't work out, or I've seen it before and it worked out. That allows them to kind of accelerate the learning curve, right? Because in startup land, your learning curve is your biggest thing. Time is your worst enemy. So like the faster you can learn and iterate, after you keep banging your head up against the wall with things that don't work um if i can help that in any way they love it um and a lot of times they actually connect the executives um to kind of talk about things

SPEAKER_02: 13:46

i i love that because When I was getting into fractional work, I'd done freelance for years, but when I was getting into fractional work last year, part of my inspiration was you were the first person who said they were a fractional and explained it to me and talked me through it and I realized, oh, this is a thing I might be able to do and I appreciated how you would, when it made sense... when you and I were working at Gregg together, you would say, well, here's what I'm seeing another founder do, another company do right now. And you would kind of advise maybe myself, maybe the founders. And I always found that valuable. And I always felt like we were your most important client. And you probably make all your clients feel like that. And that made me realize that this was a viable type of business to do.

SPEAKER_01: 14:32

Well, I appreciate that, Joshua. I really do. I do... really value where the companies that I work with and the clients that I work with and the founding teams I work with, I don't just take any role. I take on positions and work with executive teams that I align with. So like whether it's with Gregarious or whether it's a Fiveable or Tribest or all the different ones that I work with, there's an overarching purpose is why I'm interested in that project. And the overarching, like, the likability of the founder is also a big part of that. So like, I actually enjoy working with all of them, and I want them all to succeed. So it's kind of something that I should do is to try to help them in any way that I can. And not what's interesting, what I've also learned is that problems in most startups or in most industries, they might not be exact carbon copies of each other, but they're somewhat similar, right? And some of the challenges are somewhat similar. So like when I talk to an executive and I give that context of, hey, this is what's happening over at this other company I'm working with. It's not like a panacea that like, well, they're just going to do this now and they're going to be successful. It just helps I think with context that they wouldn't have previously. And it enables them to understand that this type of thing can be solved, right? Like it's not just a completely new issue or a completely new problem, right? Like there's similar things that have been done elsewhere.

SPEAKER_00: 16:21

I love that. I know we have at least one Canadian listener. I'm going to jump around on our agenda a little bit here. I'm curious if, If you'd share just a little bit about your background before coming into the corporate world. And are there any carryovers that are really meaningful in the work you do today from your sports career?

SPEAKER_01: 16:41

For sure. To my fellow Canuck. I'm not a Canuck, but I played for the Canucks a long time ago. So I... I'll give a little bit further background. I grew up in Chicago. I went to school out in Colorado, played for Colorado College, Division I hockey program. And I played there for four years. I got my economics degree. I was captain of the team my final year. And then I played professional hockey for five years, four years in Europe, played in Finland, Russia, Austria, Sweden. And then my last year, I played for the Vancouver Canucks. up and down between Vancouver and the minor league team. And the minor league team at the time was the Manitoba Moose, which is now the Winnipeg Jets. So before Winnipeg had the NHL team, again, they had a minor league team and I was on that team. So I was fortunate to play with a lot of really good players in my career that made me a lot better than I probably was to get to that level. But The things that I took out of being a pro athlete and apply them to today is number one is the stick-to-itiveness and determination that you have to have in order to be very, very successful and to be elite. To get to the level that you need to be at to play in the NHL or any high, high level of any industry, the pinnacle of any industry, is you have to become an expert and you have to do it day in, day out, live and breathe it every day of the week. And in hockey, I started skating when I was four years old. And during the summer, when there was no ice, my brother and I, we played roller hockey. So we were playing the game just on rollerblades. And we had some very high-level success there. Both my brother and I played for Team USA in the World Championships for roller hockey. We won a couple of world titles. And we did that when we were teenagers. The thing that I took out of that, and even beyond that, to my upbringing. My father made a very strategic decision when I was eight years old. And he was a former Division I athlete and played semi-pro for the Baltimore Colts before they were the Indianapolis Colts back in the 60s. He made a very specific bet on my brother and I for us to be collegiate athletes. And he knew that we weren't getting enough time on the ice as kids. He saw that. We just weren't going to be excellent at that game. um without more time on the ice so he moved us out to this neighborhood 45 minutes outside of the city of chicago which had a gigantic unfinished basement in our house and my brother and i strapped our rollerblades on and we shot hundreds of pucks we scrimmaged against each other we passed we did all of the stuff all the skills that you do um that would only usually be available to you if you were on the ice we had a cheat code around that we had our basement um And because of that, just knowing how long and how many hours that we had to put in day in and day out to be truly excellent at our craft, I bring that into what I do now. And being a fractional executive and owning your own practice, you have to keep all the plates spinning in the air yourself, right? And Joshua, you're probably experiencing this as well, If you aren't out there either developing new business or servicing your clients, there isn't anybody else that's putting a paycheck on your kitchen countertop. You got to go do it. So there's almost no way around that. If you have the privilege of being able to be an entrepreneur and being a founder and having high valued skill sets that people want, it comes with incredible responsibility as well. And part of that is the dedication and the stick-to-itiveness that you have to have with your craft to continue to iterate, to continue to get better and spending the hours. Because if it was easy, everybody would do it and I wouldn't have a job. So I make sure that I dedicate the hours to drive value and to continue to learn every day. So that's truly the principles that I take away from my hockey career is that.

SPEAKER_02: 21:37

You like to travel a lot. That's something I know about you. How do you line that up with enjoying being in different parts of the world and working? What does that look like?

SPEAKER_01: 21:47

So this is actually really top of mind right now. So my wife and I, we are kind of figuring out where we want to live. um so we've been nomads since before the pandemic um and really once the work from anywhere thing happened as a result of covid uh we really hit the gas pedal on it so we've been we lived in mexico we lived in colombia we lived in europe for a little bit um we've kind of been all over the place um and we are doing this tour right now of different locations around the world that might be interesting to us because we have a little nine month old boy. We're in the position where I can do this from anywhere. Amber's a photographer, so she can work from anywhere as well. So it's very, very privileged to be able to do this. But where we're at right now is we're looking at Hawaii, We're looking at Southern California, specifically Encinitas, Del Mar, Lucadia area, which is north of San Diego. We're looking at Portugal, which is where we're at right now. And we're looking at Costa Rica. What's interesting about both Hawaii and Portugal is that there's time shifts, right? And the time shifts... are very very valuable depending on how you structure your day so like in hawaii it's five hours later than central time so six hours in eastern time and so i wake up early i'm an i'm an early riser i'd wake up at five o'clock in the morning my morning or my meetings would start at 6 00 a.m and they would go until 11 maybe noon uh and that was it i'd be done for the day Obviously, I'd be doing my tasks and doing all the other stuff that I got to drive the ball forward with when I'm not having calls. But in general, I'd be done with my day at noon. So I'd be able to go explore Hawaii and do everything with my family the entire afternoon. Wouldn't even have to worry about it. And then I'd just check back in in the morning at 5 a.m. The opposite is true here in Portugal, where everybody's sleeping in the morning. I just started my day at 2 p.m. Today, I'm going to be going until 10 at night. That's only because I have a couple later meetings, but my entire morning's free, right? So, like, that's how I balance it, right? It's very difficult. It's more difficult to actually live in the States right now than it is to live either, well, Hawaii's a state, but I digress. Off

SPEAKER_02: 24:34

mainland time

SPEAKER_01: 24:34

zone. Mainland time zone, continuous 48. It's actually harder to work there because I still wake up at five every day. I don't start my meetings usually until nine or 10 and I'm working until five or six o'clock at night, right? So like I'm putting in 12 hour plus days, if not more on most of my mainland time that I spent. But if I'm in Hawaii or if I'm in Portugal, I have much better work-life balance. Because of the time zone shifts, which is kind of wild.

SPEAKER_02: 25:06

That is opposite of everything I would have thought. And I've told my wife if we go on like a long extended trip somewhere that it has to be within time zone, but you've just blown my mind. And I'm going to

SPEAKER_01: 25:18

be thinking about this. I'm here to 100% just break down anything that any predisposition you have with that. because it's actually i have found it personally so much easier to be time zone shifted the only times that we can't do are southeast asia like i i will tell you right now if like if i could if i could be on asian time new zealand australian time we would be there but because it's literally the exact opposite of the world that becomes pretty unworkable

SPEAKER_02: 25:50

Because you're still awake in the daytime, right? Wherever you end up in, you are a daytime person. So that would not work for you.

SPEAKER_01: 25:56

Exactly. And as you go further east in Europe, so once you start going to Greece and you go to some parts of like more Eastern Europe, it gets harder as well because that's like two or three time zones ahead of where we're at. And we were actually in Turkey in 2021. That actually was really hard. because there's three time zones ahead of where we're at now. So that would be nine hours ahead of New York. It got pretty difficult. It got pretty difficult because I had to reorganize my entire schedule. With this, I don't even have to organize my schedule any differently. It's just my time is shifted into the afternoon and evening hours. So it's just very different. So if I could encourage you to do anything, highly consider... Time shifting. It actually does benefit, at least in my experience, it benefits.

SPEAKER_00: 26:50

I'm going to think about that too. Now my wheels are turning. That's awesome. What advice would you have or direction would you give somebody who's at a crossroad saying, do I keep pursuing a job or do I venture into this self-employed fractional career? marketplace. What do you see as pros and cons and what words of advice would you give someone to help make a decision in that situation?

SPEAKER_01: 27:21

The first thing that any person that's considering this jump has to be truly honest with themselves about is whether or not that they can shoulder and bear the risk because it is incredibly risky. Right. And I mentioned it earlier on this chat that leaving a job where you just show up and, you know, some days you can just mail it in. Right. Like you can put your put your brain on the shelf and go to the water cooler, go have lunch, maybe send a few emails. You're still going to get your paycheck. Right. Like so the risk of like putting food on your table is pretty minimal in most in most jobs. When you are thinking about doing this fractional work, you really have to come to grips with what are the sacrifices that I need to make on the front end in order to ensure that i give this the largest amount of time or the biggest sweet spot for me to actually succeed here right and i say that because i have a couple friends that are just starting this journey and leaving their corporate jobs um as well the biggest advice that i give them is make sure that you cut your own personal burn rate to the bone like give yourself as much length and as much time as possible, because especially in this environment right now where people are skittish about a recession happening next year or in the tech world, we've been living in the recession for the last year and a half. But if you're not in tech, it hasn't been as acute. Deals are taking longer to close. Spend is taking longer to close. So my advice to all of them is to make sure your personal burn and or your savings is built to a place where you can not be forced to have to go jump back to just go get a corporate job. That would probably be the biggest thing. But before all of that, it goes back to the first thing, the first point I made. Do you firmly believe that if... Push came to shove. Could you start cutting things that would be your holy grail to ensure that you would be able to survive and go get more business? And the other part about being intellectually honest with yourself is, are you a salesman? Are you able to sell your value? Do you know what your value is, right? A lot of people might be good at tasks, right? That's very... specific right but it's not like strategic value add right where if you're going to be doing fractional work you need to be able to have more strategic value than just someone that's just going to be doing tasks for somebody right um and you need to be able to package that up into a easily digestible and understandable value prop to anybody that you speak to in your target market And you have to be able to sell it. If you are a bad salesman, you're never going to get business. If you are a good salesman, even if your offering sucks, you're at least probably still going to close some business. You might not keep it, but you'll at least probably close it.

SPEAKER_00: 30:59

That's such an interesting point because so many people who are coming from an employed background, they don't spend time talking about themselves. And you're just chatting with someone yesterday, like the hardest thing to sell is probably yourself. That should be the easiest thing to sell.

SPEAKER_01: 31:19

That should be like the holy crap, easiest thing that you could sell anybody is telling them why you're cool and why you're value add. That should be the easiest thing in the world.

SPEAKER_00: 31:31

Should be, but it comes very unnaturally to many people. How do we talk about ourselves?

SPEAKER_02: 31:36

Is that an extrovert, introvert thing, Lee? Or where does that come from that you feel very like you're excited to say, hey, here's what I can do for you because it's going to do such great work for your company, right? You have no problem calling that out. Where does that come from?

SPEAKER_01: 31:50

Well, I agree. I have probably a decent level of self-confidence. Let's just say that. That comes from my hockey career. That comes from my hockey career. It comes from my entire life, my entire life. And Joshua, you've seen me in person. I'm not a normal-sized athlete, right? You'd look at me on the street and you'd be like, oh, that guy, he's just kind of built like a square. That's cool, but I wouldn't peg him as a pro athlete. I'm not 6'2". i'm not 220. i'm five nine barely uh on a good day if you stretch me out um and 205 pounds 210 pounds right my entire life i got people telling me that i was never gonna make it ever i was never gonna make it in hockey uh i was never gonna i was never gonna play college hockey I was never even going to play D3. I was never going to play club college hockey. I was never going to be good enough. My entire life, I've had people say, you're never going to be good enough. And people are like, you're making the NHL as a pipe dream, right? So certain people react to that in certain ways. I reacted to it, and I was just like, well, F you. I'm just going to go do it then. And I don't know if that was, if that's my, like if I was born with that instinct or if that was developed somehow by my parents, but just from my earliest like interactions with people and I would have coaches, my own coaches would say that I'm crazy to think that I was ever going to be anything in hockey. Like that's kind of crazy, but it was the eighties and early nineties. People said a lot of different stuff. But yeah, I always took it as a challenge. And there's just a lot of people who won't take that as a challenge, right? So I took it as a challenge and I built this kind of like self-confidence over time because of that. And I don't know, it's always sort of just sort of worked out for me. And maybe in a current iteration, it could be called manifestation. Because some people are all into manifestation. If you believe it, you think it, you do it, it'll happen. And I don't disagree with that. I don't know how much the heavens and earth are moving based on my level of desire of doing something. But I don't know. It's just sort of always worked out that way.

SPEAKER_02: 34:30

I feel like I need you to... record a little podcast each morning for me to listen to before I start work. A little motivation from Lee.

SPEAKER_01: 34:40

There you go. Maybe that's it. Maybe that is it. Maybe I should be a motivational speaker.

SPEAKER_02: 34:45

Heck yeah. I think so. I would love to hear content from you on that. If you do anything, let us know. We'll do it. So this has been a recurring topic that Lance and I have had for a little bit about how decisions should get made in the workplace and What do you recommend founders do when you see maybe a founder has to decide between A and B and they're just stuck? Or maybe a team is getting large enough that you feel there's a lot of red tape. What advice do you give? How do you look at the best way that things should just get done in a company?

SPEAKER_01: 35:19

Oh boy, that's a loaded question. Yeah. It really, truly depends on the circumstance. I would say circumstance determines that. And I would never in a million years provide advice or any type of recommendation without a full discovery of both potential outcomes or both potential options or whatever options there are. I... I refuse to actually provide advice without actually going through a discovery process. I just will not do it. It's not like I've gotten burned from that. It's because I don't think that's overly valuable. And when I come into a situation, and this example has happened quite frequently over the last year and a half, it's whether or not to cut certain employees. right? Because you have to make hard decisions in startup land, right? Like in 2020, 2021, money was easy. It's late 2021, 2022, and now 2023, money's not easy. So yeah, you're confronted with a lot of difficult decisions. And I think the thing that I stick to the most with all of this is that in some ways your gut is a really good guiding principle, right? But, and I think whenever you have to deliver news or make a decision, it's usually best to like, if you can test out the alternatives and get a little bit of signal from one or the other, that's great. But in some cases you just can't. And it's usually best, usually best. If your gut's telling you something, it's probably the right, it's most likely right. And yeah, usually what i usually recommend is making it faster making that decision sooner and living with it and then just moving on to the next thing right um it's almost impossible to know it actually is objectively impossible to know whether one decision you make is going to be better versus the other one before you make the decision um it's like impossible to know that um We can't read the future. If we all had a crystal ball, it'd be great, but we can't. So my usual advice is let's start the process sooner and just start down that road. And if we have to fix it or if we have to do something else, then we do something else, right? And what I've learned is a lot of people, especially founders, get very nervous and skittish about making certain decisions, right? And then I just pose the question, what's the worst that can happen? Objectively, what is the worst thing that could happen based on these two decisions? And usually, most decisions are like, well, it's not going to be that terrible. It's going to hurt, but it's not going to hurt for a long time. Or it's like, well, we might miss out on this opportunity now. It's like, well, are you forever going to miss out on that opportunity? Or is it just going to come around in a slightly different flavor? so like to me i i always usually recommend going with the gut which is probably against most business advice but i've seen it enough that like the gut usually most founders have a pretty good gut instinct they had to take a whole leap to start this whole business usually their gut's pretty good if their gut's not really good that's a that's a different that's a different conversation um but that's usually what i say and shorter Doing this decision sooner, the better. This way you can start moving and figuring out what to pick up on the other side of it.

SPEAKER_00: 39:16

I'm curious about how you keep your funnel full. How are you finding leads? How are you driving opportunity? What channels are working the best for you?

SPEAKER_01: 39:28

This is so hard. This is so hard because... I'm in a position now where I don't have to do outbound and I get people based on their interactions I've had with executives previously, they will get a question from some other CEO, right? And they're like, oh, well, you should go talk to Lee. And it's sort of just become that piece of it. I will say though, that has while great that's not a long-term solution right it's not a long-term solution to scale this business um so i have put some thought into how do i go down market right and what i've learned so i'll give you a broader just kind of strategic view of my business my business now with what i do as a fractional cfo is pretty broad it's uh all of the strategic finance FP&A function. It's the bookkeeping and accounting. It's the full HR function. It's cap table and equity plan management. It's liaison between the company and the attorneys for legal documents, contracts, things like that to save costs and be more efficient versus founders talking to the CEOs or founders talking to the attorneys. And then it's the strategic view. of pulling it all together to help make strategic decisions. That's a really broad scope. And it's useful for clients that understand the value of all of that scope. And those are usually companies that are post seed and in series A, right? Or seed companies that raised institutional financing. Where I've run into difficulties is bringing that whole whole block of ammo to early stage seed, pre-seed level companies that want accounting and strategic advice or want some HR stuff and strategic advice, want cap table management and an equity plan developed and strategic advice, but they don't need my full horsepower, right? So what I have kind of What I'm trying to conceptualize now, and you kind of hear me digesting it and talking about it on this call right now, is building in a funnel of pre-seed, seed stage companies, think companies that are in accelerators and whatnot, and productizing a certain offering, whether it's the accounting and bookkeeping, which seems to be a very natural extension, and then layering on a little bit of strategic guidance and strategic planning, but not the full here's your fractional CFO that a series A level company would need. And why I'm doing that to try to productize an offering is so I can expand my funnel at the bottom or earlier stage, if you will, to companies that need my services. They aren't going to pay me a whole lot on a month to month basis, but I'm also not overextending myself in terms of workload, but they get into my funnel. And now that's partnering with accelerators, that's partnering with incubators, that's just talking to VCs or other people within the communities that might have a whole suite of companies in this situation where they're not quite ready for fractional CFO work, but they might need a piece of what I do. And they want to have a strategic view, but they don't need the full... the full force. So that's actually where I'm trying to place my funnel development at the younger, earlier stage and growing with those companies as they progress into the full suite of what

SPEAKER_02: 43:44

I do. This ties into something else that Lance and I have been discussing. Where do you fall on sharing your prices publicly versus customizing your prices once you're talking to someone and understanding what they need?

SPEAKER_01: 43:56

there is there's two pieces of that right like i know exactly what my pricing is for a seed stage company i have a range and for series a level companies i have a range for the full fractional cfo thing i'm working on productizing my offering for the what we were just talking about the the corporate accounting and and bookkeeping with some strategic view right I'm happy to give all those prices publicly because to me, I know my value and I don't need to not tell people what my ranges are. The reason why I have a range is that I either go full cash compensation or I take a little bit off of the top in terms of cash compensation and take an equity piece. I no longer do equity only deals. I don't even do deals that are 50% equity, 50% cash. There has to be skin in the game. But for me, having all of this information public to me is kind of a no brainer because it helps with alignment, right? It helps get to that alignment stage. And what I do now, like I really firmly know exactly how many hours that I'm gonna be spending on a specific engagement. because I've been doing it now for three years and I have a really good understanding of that.

SPEAKER_02: 45:21

Do you share your hours projected with the clients or is that just internal?

SPEAKER_01: 45:26

I don't go by hours. I go by stipends. I'll always start. I give my rack rate. Here's how I sell this. I start with my rack rate. I anchor them with my rack ad hoc sales consultant rate. That's$300 an hour. That's what I charge for like one-off consulting, right? I don't really do that very often. It's very rare where somebody actually pays that, but it happens. But that's what I anchor them at. Then I talk about all these other things that I do, and then I offer my ranges. My ranges are pretty straightforward. I'll share them here. My seed round or my seed stage companies, companies that raise seed round, I'm$6,000 to$8,000 a month. So I'm less... then i'm far less than uh i'm less than a hundred thousand dollar a year full-time salary right and you're getting the fractional cfo experience right and the range again goes from cash only to cash plus equity right that's how that gets figured out um that's what the range is then i go to series a it's eight to ten thousand dollars a month and that's monthly flat fees now you can back into the math if you want to and all all the founders do to figure out how many hours i'm putting in based on those rates right and you can get a pretty good understanding of how many hours i spend on a particular project that way i discount the monthly stipends to get the business because i prefer recurring revenue versus uh ad hoc consulting where I have to track hours. That's not useful to me. I would much rather have contracted monthly stipend engagements. And I think it aligns better with the individual companies because they don't view me as an attorney. If I charge$300 an hour, I'm viewed as an attorney and they don't go to me, yet they need my help. Where I try to disincentivize them thinking of me as an attorney and like, oh, this guy is just like a really cheap part-time resource.

SPEAKER_00: 47:36

Yeah, totally. Yep, that aligns strongly with the way we've talked about this as well. Man, this has been super informational, Lee. Thanks so much. Where can somebody find out more about you if they wanted to learn more about you, your business, what you do, or hire you?

SPEAKER_01: 47:52

Yeah, for sure. LinkedIn is the best to kind of figure out the companies and see what kind of type of companies I work with. So just my LinkedIn page. I think it's just backslash Lee dash sweat. I have my corporate website, equityapi.com. Um, that is somewhat useful, but being a one man band, you don't really have time to fix up your website from when you first built it. Um, I built it in 2020 and it has, it has a couple of seasons of spring cleaning that it needs to go through to get to where, uh, it needs to be today. So I wouldn't overly recommend that. All of us have that. Um, it's actually built towards the initial, uh, scope of what I was trying to do with professional consulting and acting as an agent for executives. It's not really built for what I do now. So it's actually not overly useful. But if you want to email me, lee at equityapi.com. That's the easiest way to

SPEAKER_00: 48:53

get ahold

SPEAKER_01: 48:53

of me.

SPEAKER_00: 48:54

Awesome. Thanks so much.