March 4, 2024

192. Startup Maxims: Ask for Money, Get Advice

192. Startup Maxims: Ask for Money, Get Advice
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Season 4

Text your thoughts directly to Rich.

This week I'm covering startup maxims — those little phrases we all repeat to each other as common wisdom but may or may not be true, helpful, or relevant.

Today's maxim: "Ask for money, get advice. Ask for advice, get money."

About AVL Growth Partners
AVL Growth Partners, founded in 2009, is the leading fractional Finance and Accounting firm supporting organizations in pivoting from growth to scale. AVL brings an experienced team of CFOs, Controllers, and Accountants to your organization, delivering transparent, strategic actions for short and long-term success. Transform your financial approach affordably with AVL, supporting companies coast to coast - get to know AVL Growth Partners at avlgrowth.com. (Sponsored)

About SpringTime Ventures
SpringTime Ventures seeds high-growth startups in healthcare, fintech & insurtech, and logistics & supply chain. We look for founders with domain expertise, forging a path with a truly transformative technology. We only invest in software-based businesses in the USA. We bring a people-focused approach, work quickly, and reach conviction independently. Our initial check size is $600k. You can learn more about us and our approach.     

WEBVTT

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This is Rich Maloy with SpringTime Ventures, bringing you the VC Minute, quick advice to help startup founders fundraise better.

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This week I'm going to cover something that I've wanted to do for a while: startup maxims.

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But first, I can confidently say that our sponsor is a financial game changer.

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AVL Growth provides fractional finance and accounting services to companies pivoting from growth to scale.

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At AVL, they have a mindful growth approach and a proven methodology that are pivotal in making the right moves at the right time.

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Head to AVLgrowth.com and explore how they can be pivotal to your growth.

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AVL Growth Partners.

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Your success.

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Their expertise.

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What spurred me into action on this theme was that one of Eric Marcoullier's Thunderview CEO dinners, and we were talking about the maxim ask for money, get advice, ask for advice, get money." A founder said,"I'm asking for advice, but I'm still not getting any money." And I didn't have an answer for him.

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So I had to reflect on it for a while.

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I was thinking a lot about what is really at the heart of the matter.

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The first line,"ask for money, get advice" is really straightforward.

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I do give advice a lot.

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I was just on a call with the founder who was asking for money, it was a pitch after all.

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And I ended up giving him a lot of advice about the pitch.

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It needed a lot of work.

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But then I had to think, when has someone come to me asking for advice and gotten money as a result?

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That path is less straightforward and is really where the maxim breaks down.

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Indulge me here for a moment.

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As I read a wonderful quote from Benjamin Franklin.

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And I feel like I should be reading this in some old timey accent, but I will spare you that.

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Here it is.

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He that has once done you a kindness will be more ready to do you another, than he whom you yourself have obliged.

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The modern interpretation of this is,"if you want to make a friend, ask a favor." Asking for money as a transaction.

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Asking for advice is akin to asking for a favor.

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Someone that has done you a kindness may be more willing to do another kindness, such as make an introduction to another investor.

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And that to me is at the heart of the second half of this maxim.

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By asking for advice, what you're actually doing is building a relationship.

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Seed investing is very much about relationships.

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Those relationships may turn into investment.

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They may also turn into introductions that turn into an investment.

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So to the founder that sparked this discussion, focus on the relationship building.

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Ask for advice, and you may build a relationship from it.

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Continue with that relationship and it may lead to an investment.