#57 – Bobby Robinson, IntellyDoc
March 29, 2021
Bobby is the founder of IntellyDoc, a contract management system. He also is an attorney with a history in M&A and a current focus on social media influencers. In this episode he gives the background on building IntellyDoc and selling it to Defiance. He also talks about challenges minorities face in law and entrepreneurship and how to turn those challenges into opportunities. He also discusses emerging legal issues related to social media influencers.
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Ep #57 IntellyDoc
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John E: Hello folks, and welcome to the podcast. I have a really inspiring guests today. I met Bobby Robinson a while back via a mutual friend. Bobby is a rockstar attorney and a tech company, founder defiance recently acquired and tele DACA contract management system. He developed first for his own law firm and then commercialize for other firms.
Bobby is a very motivational guy, always energetic and happy. I don’t think I’ve ever seen him upset or stressed, and he’s always busy on social media. I really have enjoyed watching him. Build out his social media personality through the years. Bobby, thanks so much for joining me today.
Bobby R: Thank you so much for having me, John.
I’m really excited about this opportunity. So thanks for inviting
John E: me. Yeah, no, I know you’re a busy guy with all the different things that you have going on. So I’m hoping to get into some of that today,
Bobby R: just to try and be reflective of you, man.
John E: You’re too kind by the way. Right now we are sipping on Angel’s envy.
Angel’s envy bourbon. At some point we’re going to switch to the rye and I want to get your live opinion on what you like between the text. No rush on that. There
Bobby R: we’ll get through this one
John E: first. Yeah, exactly. No, no keg stands with the with the Angel’s envy. Great. So first off, can you give the listeners your background, your education your career how you got here and you can start as early as it makes
Bobby R: Yeah so I’m originally from South Florida, Miami Fort Lauderdale area, and moved to Charlotte. 2012 to, to attend law school at Charlotte school of law. And then, I’ve been an entrepreneur all my life, right? So I’ve, endeavored in real estate and professional services with regards to consulting and, law school has always been something of interest to me.
Even after I got my MBA, it was just one of those things I wasn’t prepared to do this dual degrees scenario. And so I was a non-traditional law student per se, with regards to just not going to law school directly after undergrad. And so I had a lot of professional experience before entering law school.
So I was pretty clear in terms of like my path with regards to Hey, I wanted to do corporate work, or I was really interested in intellectual property. And so those were the practice areas in which that I, pretty much funneled my, my courses towards. And then after law school, I took a compliance job.
I’m not quite sure if I really wanted to practice law even after passing the bar. And then I launched my own boutique law practice the Robinson law group. And it was just a really fun and unique opportunity for me to support, startups and other folks athletes and other professionals with regards to their business endeavors.
And so we did a lot of M and a work. We did a ton of business formations and commercial agreements, and then more importantly, we did a ton of trademark work and licensing deals and things of that nature. And we grew that to a really large at least large by standards with regards to just a boutique practice.
And then. The opportunity with my current firm next and Pruitt came which I wasn’t looking for it sorta just came to me. And it was a great opportunity to come in as a partner in our Charlotte office to build out that office and to raise the profile of the firm and the Charlotte market.
And I know we’ll talk about networking later on. And I’ve fortunate. While I’ve only been in Charlotte for about eight years. I’ve quickly gotten on the scene and made some great connections to include yourself. And I think that was an important aspect in terms of, the firm looking at me and what I’ve built.
And and then that sort of leads us into IntelliJ doc, right? And developed and tele doc out of the need to say, Hey, there’s a need here. And as a small law practice, I really couldn’t find a, an M and a tool or contract tool that was sufficient for a small boutique practice.
Everything was sorted on the enterprise level. And I thought that there was a huge opportunity in the small to middle market space for a tool such as IntelliJ. And then as we, so this isn’t so hard into it.
John E: So this isn’t a tool that is replacing the data room. This is doing something that a data room wouldn’t do this as much more around
Bobby R: the workflow management.
This is the round contracts and the process with regards. And when I know we’ll get into it later on, but, as a transactional attorney, and you’re being an entrepreneur, who’ve had to hire. Lawyers in the past, it’s we bill by the hour. And if lawyers are spending the time, so you’re talking about the six by the six minutes to six minute increment.
You know that, and so there you go. And when you start to think about it yeah. At least from an operational perspective, it’s how efficient are these contracts and, what is our process around approvals and review and so forth. And it could get very expensive and there’s great technology around automating these processes.
And unfortunately, the legal industry it’s fairly slow with regards to adoption of innovative tech. And although we’ve seen an explosion in tech investments in the legal space, it’s relatively, still behind the eight ball with regards to where tech is today in many other mature industries. And so there was a huge opportunity for us to really feel a void.
That was long overdue and I’m sure we’ll delve into that a bit
John E: further. Yeah, we will. There’s so many places to want to take, but so it’s safe to say that you always had your eye on law. You law
Bobby R: and business, right? Yeah. It was just a very unique combination. And that’s the thing I enjoy.
And I feel as though John, I bring a different level to my clients because no shade to my colleagues who are very brilliant professionals. It’s one thing to advise how to form a business. And it’s another thing to build something from the ground up. It’s just a, it’s a unique experience.
And so my clients get both from me and I don’t know how to bifurcate or separate. The legal and the business. It’s just an all in one thing for me. Yeah.
John E: No, one of the biggest complaints that a lot of entrepreneurs end up with attorneys is there’s business advice and there’s legal advice.
And sometimes I’m going to make a business decision that an attorney doesn’t understand that doesn’t see that doesn’t see eye to eye with. And it’s I understand your business. I understand why you think this, but it may not be, I maybe I want you to focus on legal right now. And my guess is you can be a lot more pragmatic because you’re, you’ve worked on both sides of that.
Bobby R: Yes. And that’s huge. Because if I’m talking to someone such as yourself, you have certain priorities, you have. Return on investment. You have reputational risks, you have financial risks, and it’s important for me to speak your language within the framework of legal, right? Hey John, this is what you can and cannot do.
Ultimately it’s a business decision either way. You got to make it, but it’s my job to really frame it up for you to just understand what you’re facing. And then we can talk through the pros and cons of either option, but it’s always going to come down to it being a business decision.
John E: Yeah. It’s interesting. Some of the, how Complicated things can become when lawyers get involved with it. But the reality is it’s much cheaper to think about it ahead of time. Oh my God, when
Bobby R: shit goes sideways, it’s it’s likely to go sideways. And folks shy away from having those conversations because of those six minute incremental billings.
But you ultimately end up paying so much more if you don’t right. And so it’s so important to have those conversations. Litigators
John E: tend to cost a lot more than you
Bobby R: guys. Oh my gosh. Yeah. You’d rather pay us. My job is to keep you out of court, and that, that’s important too.
John E: So I think you already answered this.
So you typically have practiced M and a law and gotten into the IP side of the
Bobby R: house. Yeah. It was fairly organic. M and a, you, weren’t seeing a lot of minorities. During corporate M and a and I thought it was just a fascinating thing. It was just an interesting thing for me to get into with regards to the buying and selling of businesses.
I just was intrigued by that. And then the IP side, again, a very underdeveloped with regards to representation. And so you didn’t see a lot of minorities doing IP work. And so I was just very excited about just intellectual property, trademarks and copyrights and all of that jazz. And me, let
John E: me ask you this.
I’m curious how you did. Business development. Cause you mentioned you were able to build up the practice and stay very busy. Did you focus on minority business owners and minority stake holders or what was the business developments?
Bobby R: Initially, yes, initially I started working with a lot of minority owned businesses.
My firm was certified as a minority owned business. I had no clue this whole world of supplier diversity and how a lot of corporations had a number of initiatives to do business. This was pre COVID, pre George florid and all that stuff. There’s a renewed interest in that now, but even back then there was fill an interest in it.
And many of those companies had to become certified in order to do business with some of these large enterprise companies. And so we went down that path and that sort of opened the door for enterprise, but then it also introduced us to. A broad swath of certified businesses that, in many instances we were the first law firm they’ve ever even thought about hiring, right?
They’ve never really thought about using a lawyer. Many of them may have went to legal zoom or may have used some sort of online provider, really not necessarily understanding that the true value proposition with regards to what an online service provider would be versus having a relationship with an actual attorney.
And so we were able to storytell around a lot of that, the relationship aspect, and that helped us build a lot of continuity. And I think it was just a multiplier effect of every entrepreneur kind of says who’s your lawyer, who’s representing you. You’re obviously doing great, helping you. And then it’s, it’s the account and it’s the financial advisors, it’s that whole, team that you work with. And we were able to build. A really good network, I’d say about at that time pre COVID I’d say 90 plus percent of my business was referrals. We really didn’t do a whole lot of advertising at some point in time.
Things were just organic,
John E: But at some point it was less about minority owned businesses. That’s
Bobby R: how it started. It’s a startup, right? Yeah. So as you began to just migrate as you, dip your toe and me being in the startup space as well, and then folks like, Oh, you’re a lawyer and you’re a tech founder.
I want to do business with you because yeah you understand and that goes back to our initial point, you sit in my seat as well. So what have you learned? What have you experienced? And so that, that is very helpful. And so it did migrate into other spaces to where we have at that time.
I had a very diverse portfolio of clients again startups to middle market. It was just kinda, it ran the gamut.
John E: So the next and improve it, acquire your firm and make you a partner then.
Bobby R: Yeah. Then that’s how it went down. How was that? And that’s my story. And I’m sticking to it. How is
John E: that sitting on net now?
You’ve done all of these M and a transactions and now it’s your transaction. How can you speak a little bit to that experience?
Bobby R: Yeah, it was so we kinda agreed late 2019 that the transition was going to happen. And we had been talking for some time and I knew that I was juggling a whole bunch.
My firm was in Charlotte, we ran it in Atlanta and I was doing a lot of traveling between the two cities. And we were thinking about going into Florida and other markets. So there was a lot going on there and it just made sense for me to work with a lot of larger firms, one of the core selling features or points as to why I’ve made the move.
Is that nice and Pruitt is a large regional player with international presence. And then I would have to farm out John a ton of work because I didn’t do it. I didn’t do employment work. I didn’t do litigation. I, I didn’t do environmental or tax law. And so those matters would still come to me and then I would have to find folks to handle it.
And now in this case, I, it still comes, but I now have a host of attorneys in house that I could turn to. To help me with those transactions. And so that was a selling point for me. And then it just gave me a larger platform to work on larger deals from a capacity perspective. And yeah, it was certainly interesting to watch nine down my own firm.
Yeah, th the drawback, no fault of anyone. It was really just the pandemic in that I had folks on my team who were going to come over and we had to put that on pause until, things pick back up because I was quite frankly, still impacted by the fact that I had some quite a bit of attrition in my.
Book of business. And now I don’t know if you know how law firms work, but partners bringing the money. Yeah. You eat what you kill. And if I got to make sure I’m whole, and before I can start building out my team, and so actually next month will be a year that I’ve been at the firm.
It’s been a rapid time. And so I’m still building, I’m still building and learning. Yeah.
John E: What is your role primarily now? Because I see that you’re doing some things that are more kind of influencer. Yeah,
Bobby R: man. I’m so excited about this question. Yeah. So we talk about the market.
So prior to COVID I was, my, my practice was split between corporate M and a and intellectual property. And I noticed. The market strength, right? When COVID occurred all of my M and a referral deals, they just weren’t, it just wasn’t happening. Unless you were in purchasing some sort of distress business, or you were, really good at healthcare acquisitions or spaces that were doing very well.
And I did very few healthcare deals. And so I didn’t see a whole lot of M and a transactions. I’m starting to see a bit more. So every great entrepreneur, I had to find a space that was emerging, that being social media that really didn’t have a ton of saturation with regards to attorneys that were playing in that space.
And so me being a millennial attorney myself, I thought that it was the most appropriate thing for me to investigate. What are the opportunities from a legal perspective for me to leverage my corporate background, as well as my IP background. And bring that to social media. And I discovered that brands who are working with influencers have the same needs, right?
They have to put contracts in place with influencers. They the content that influencers are producing that’s intellectual property. So that raises some issues. And then, there’s there are legal requirements when influencers are endorsing products. So that’s regulated by the federal trade commission.
So you probably have seen the hashtag ad and all of those disclosures that are required. And that was really exciting for me. And I’d said gosh, I could literally do this and make a name for myself in this space. And so I created this brand, the influencer attorney and that’s what I’ve been building.
John E: spend more time? Connecting to influencers or building your own influencer presence. Cause I suspect it’s a little
Bobby R: bit, it’s a little bit of both, right? Because I have to braise my it’s, it’s such a big blue ocean, john, and that influencers, it’s a fairly new space. And so influencers have no idea what they need from a legal perspective.
And then brands are still trying to figure it all out. And so I have to do a hybrid of the two. I have to let folks know who I am and how I can help them and then make the connection with those individuals. So yeah it’s a hybrid for sure.
John E: Yeah. We hear so many people, both investments that we look at it defiance, but also clients of ours where.
The influencers are a big part of the marketing strategy. It’s rare that somebody doesn’t have some sort of influencer, right?
Bobby R: It’s huge. I was just looking at a survey the other day or some sort of market study, and it’s it’s a $13.4 billion industry now, and I’d saw somewhere whereabouts 60 plus percent of brands are now taking out of their marketing budgets and setting aside and establishing influencer marketing budgets as an independent budget.
And I find it very difficult to believe that, the traditional way in which brands have engaged, their audience has been, print and billboards and radio and TV commercials. And you can’t measure the return on investment, but you can with an influencer with their engagement and the number of sales that you can tangibly see and their ability to move product with their audience.
And so I really don’t foresee this space going anywhere. In fact, I’ve, we’ve seen more dollars go into influencer marketing since the pandemic. And I really don’t think that’s going to change once things technically go back to normal, your opinion,
John E: because I was as luck would have it, I ended up.
Recently making a connection to an influencer. That is my fiance’s client. Yeah. And we started talking about influencers. I was talking with somebody about it and I think they’re going to get it worked out and they’re looking at, Hey, should I give equity? Should I give cash? And then they’ll get that all sorted out.
But I was trying to describe. Let me ask you this. Do you think of 50 cent famously took a stake in vitamin water,
Bobby R: which paid off tremendous? Is that an
John E: influencer or is that a more traditional?
Bobby R: Is, and we’re starting to see that sort of, so what we’re just describing is just the form of compensation.
And we’re seeing even with influencers, entertainers who are becoming brand ambassadors, another colloquialism for influencers to say yeah, I can’t afford to pay you a hundred thousand dollars per post. But I’m interested in giving you some percentage, it worked out tremendously for 50, but then that, that, that has paved the way for a ton of. Particularly startup brands who want to quickly blitz the market and you have a baked in audience. It’s so much easier and quicker to give someone a couple percentage points in the company. And then you’re on main street with your brand.
And you’re starting to see it with a lot of direct to consumer products. Whether it just be shoes or, I don’t know, supplements or vitamins or whatever it is. So there’s so much that you can do. But it’s such a, it’s a good space. And, I want to I’m at that age, man.
I just want to do something that’s fun and exciting. And I enjoy it. So it’s a five month journey so far and it’s been going good with this brand. Very
John E: cool. I’m sure we’re going to come back to your current where you’re currently spending your time in the influencer thread, but I’d like to shift gears a little bit.
I met you. And you said I’m building this technology platform. I said, what have you done in technology? And you said, Oh, no nothing, man. So I think it’s awesome because you obviously were able to be successful with it. Can you speak to how you win? So you’ve got this idea for IntelliJ doc. You are the first and best customer for it because you own a law firm which is a great recipe for success, by the way, being your own first best customer.
How do you go about figuring out how do I build a product?
Bobby R: It was a lot of research. It was a ton of having conversations with folks like yourself, right? A lot of YouTube videos, a lot of conferences at the time. Here in Charlotte, we’re very fortunate to have a very thriving, startup scene.
And there were a lot of great opportunities. I would go to pitch breakfast and just sit in and really just try to understand this whole space of just startup and tech. But I’m fearless, man. I’m like I could figure it out, if nothing else you’re not afraid to, I’m not row.
And I’m like, let’s figure it out and let’s have a conversation. And I. I’m so fortunate to be in a position where when you have a great idea the nature of Charlotte, everyone that I reached out to, including yourself, it was let’s have a conversation, right? Let me tell you what I know.
And you were very helpful amongst several others, just to help me feel comfortable with making decisions. As I put my left foot in front of my right foot,
John E: and you didn’t raise money for this, you did
Bobby R: not pay for bootstrapped. It strapped it. And that was the investment I had in myself and the belief that I had in this product that we were going to be successful.
But I’m not also remissed that’s a very fortunate position for me to be in my firm was very successful. We were cashflow positive and that sort of helped me underwrite the costs. But yeah. I think we’re going to get to some comments around just some mistakes. I probably made a whole lot of mistakes in spending money too early, or investing in things that didn’t necessarily need to happen.
You don’t know what you don’t know. And I learned a lot in the process. It was frustrating. I had my moments where I think you and I would grab coffee. I’m like, John, I don’t know what to do. It, you calm me down and giving me some practical advice and I feel better about myself and I feel like I could go and conquer the world again.
And what will, and that’s just the cycle of entrepreneurship and you just got to figure it out as you go along and guys in the highs and lows man is unmatched. And no two highs and lows are the same, because it’s like, it was. It went from issues with sales or product development, or, just client engagement.
So there’s just so many facets of, building this brand or this company. And
John E: I like to use a metaphor for that. I like to think of systems as a series of potential bottlenecks. And for me, it’s what is my biggest bottleneck right now. And I’m going to go tackle that. And then I’m going to look at what the next bottleneck is.
So to your point, the bottleneck might be product management. Our product sucks. It’s not doing what we said. It’s going to do it’s buggy, by the way, we’re cracking open the rye. How does that taste compared to the burden to
Bobby R: you? The rye is awesome. But I like the bourbon and that it’s a lot
John E: smoother.
Yeah, it does have definitely more spice to it to
Bobby R: it, but it’s awesome. So my vote is the bourbon.
John E: Okay. Okay. What’s your dad had mentioned inventional thinker. I like the ride, but I think it’s great that you think the bourbon’s better. Yeah. And you’re sticking
Bobby R: with it.
Stick with, it may happen to be wrong. Totally joking, John, I’ll let you get away with it.
John E: No I’m joking. I think they’re both great. Yeah. That’s pretty great. Do you know why they call it? Angel’s envy. So when they when you make bourbon or rye, obviously you soak it or you store it in Oak barrels and it takes on the flavor of the Oak barrel and depending on the amount of temperature variation, So I can talk.
He makes really good bourbon because of the temperature changes dramatically and the wood expands or contracts. And the more frequently it does that, the more flavor you get. So that’s why you can age a bourbon for a couple of years and in Kentucky, whereas a scotch, you might have to age 18 years in Scotland.
Now what they, so in the process of expanding and contracting, I think up to 3% of the product is lost every year to evaporation and they call that the angel. So this is what we get in the
Bobby R: angels envy. Amazing. You mentioned sorta, I got to recall the bourbon that stored in the ocean.
Have you ever had, so there’s
John E: a couple there’s Louie tray, which
Bobby R: yeah, I have not tried it as of yet, but I’ve heard, it’s amazing.
John E: It’s amazing. There’s a couple other really interesting ones. There’s another one that I was the last Kodiak that was. Harvested before the locus swarm of 1870. Oh my gosh.
Bobby R: Oh my gosh. So there’s, it’s an honor, the great historian. I’m probably
John E: getting most of this shit wrong.
So if I had Todd here, I’d have him look it up.
Bobby R: That’ll decide whether we keep it in or not.
John E: So Bobby and I disagree on Angel’s envy, but that’s fine. They’re both great products. Yeah. You’re still my boy. I appreciate that. Yeah. So now I completely lost track of where we were.
We were talking about building the technology product. We’re talking about, I was talking about the system of bottlenecks that you overcome. And so one minute it’s product management, my gosh. And then your next bottleneck becomes, I need to make sense. And then you make a sale and then it becomes customer support and it’s a feedback loop
Bobby R: and then it becomes customer retention.
Yeah. Yeah, it’s this whole sort of life cycle. And then, it’s a continuum and, particularly at the phase that we were in, we were started still MVP. We’re still figuring things out. We’re still learning our customers. And again, every industry is different and so there’s this sort of varying degree and I thank you.
One of the things I had to learn, it’s just, obviously when you have limited resources and you don’t want to stretch yourself to two thing, you certainly have to be very strategic. You gotta make some very tough calls and you just don’t know whether or not you’re going in the right direction.
And that’s again. Why I think I’m very fortunate to have folks like you and my circle to say, Hey, John, I am really struggling with this man. And I need some help. And and that has been very helpful. Just going through that process
John E: what surprised you the most in building a technology product?
Was there one thing or a couple of
Bobby R: things? Yeah. I think for me, obviously, that things were just going to cost money. But there were just these little nuances of something silly such as, Hey, we’re going to do this integration. You paid for the integration, but then there’s this.
Fricking expensive license that you got to get from the third party to do these other things. And so when you start to factor in the cost, it’s crap, I didn’t factor in another 20 grand for that. And then that you’re upper Creek because you’ve already done the integration. You, hadn’t done the next phase of it.
And you spend money and you’re spending money on the integration. So I think it’s really understanding how do we count the costs? Hey, again, nothing’s gonna be perfect and you’re not going to know it, but at least let’s get as close to it as we can. And so that was a very surprising to me and that, if I had, a hundred grand, 200 grand in my, in mind but then it bloons to another number.
It’s gosh, how, when is it going to bleed? Is there anything else I need to know about before we go any further? And I think
John E: that is what most of the time when I talk to technical. Product founders who don’t have a technical background, I’ve warned them. I’m like software costs a lot. Yeah.
Even if you know what you’re doing. Yeah. It’s just expensive. And I think one of the biggest challenges the technology industry has ironically, is that products work so well. When you think about how Gmail works it works in offline mode. It works in online mode. It works on mobile. It’s fast it’s response.
You think about Facebook and the sheer volume of transactions they’re processing. But what you don’t see is the hundreds of millions of dollars that these teams have built and the size of the teams that they’ve added things that look easy. Are never easy. I talk about Michael Jordan dunking, a ball would make you think it’s easy to make a donkey.
It doesn’t just because he makes it look easy. Canberra, man. Yeah. So that’s a that, that’s one thing that I think does surprise. A lot of people is just seemingly simple things that become expensive to do. I think the other thing is that a lot of people tend to stub their toe a little bit on let me spend money before I need to.
Bobby R: And I did that. And you can put things the cart before the horse, not really understanding what it is. And I was a S that was the other thing that, that surprised me how bad I needed a co-founder. And I think, I think we talked about this.
If I could do things over, that would be one of them is to find a co-founder. Early. Let’s talk about
John E: that because you ended up connecting with Chris Elmore. I think we were flying to talk about that. Cause it was clear. It was clear. It was clear for the for the announcement. And so for folks who don’t know, Chris is a character
Bobby R: I’m employing putting it mildly.
We love you. Chris
John E: had a drink when actually he was doing sober. Yeah. Oh
Bobby R: yeah. It was like Dr.
John E: He hung out with me, but but Chris was on my podcast. One of the first employees at avid exchange. He’s an entrepreneurship professor and just a really. Good startup resource. Just a really well known around town. So talk to me about how you thought about your relationship with Chris.
Cause he seemed to be the most important part of your team from that thought leadership. Oh man.
Bobby R: Chris was everything for me, man. Not take away the fact that you are on my advisory board and all that good stuff. It’s funny because Chris and I, we met happenstance at a networking event.
What are those? We haven’t had it. Yeah. Like how do we do that nowadays? So it was a very much like you and I, it just deepened over the years. And when I was building and tele doc and I correlated the automation with what was happening at avid.
Chris immediately got on board. And he’s whatever you need, just call me. And he, and I would have those same conversations. I think I would have you guys on like speed dial back to back. Okay. Let me call John. Let me call Chris. Okay. I’m going to take what I want from these conversations and execute on it.
And so over time, he really,
John E: Chris isn’t really a technology. Guy. I think he understands he definitely sales is sales. He said, he’s given over 6,500 present time. I got
Bobby R: have sales assist thing, man. He’s a base when it comes to sales, he gets the value prop. I think psychologically he connects with the customer to really understand their pain points and really just strips it down to which that it’s hard to say now.
So that’s where I go see your point. I’m great, John, at a lot of things, I had to really beef up my sales muscles. And I had to become a selling founder. Every founder has you just got to do it? There’s you can’t, there’s just, you can’t outsource it. And I tried that.
And it just didn’t work.
John E: Yeah. You need the cell until you’re the, until you become the bottleneck. Absolutely. Because only you can
Bobby R: it really. I can sell it. Yeah. And I thought that too, to your point earlier, me being an attorney. I could relate obviously with my customers, particularly in legal departments and law firms.
And I think that certainly helped open a lot of doors, but there’s a science to this whole sales thing as well. And I thought Chris had a really good formula and does have a really good formula. And over time it became obvious to the two of us where our strengths and weaknesses lie. And it just made sense for us to do business together.
And so I’m really excited to have him on the team and, he’s opened a lot of doors that, he, he was very instrumental in nudging, also on the defiance front as well. The fact that I’ve known you for so many years, I’ve never once broached that topic. It has to
John E: Chris, it’s a hard conversation to have because I feel like you’re a friend like.
I mentor you to some extent, but I don’t, I think that was earlier on and there’s a lot of situations like that. We recently acquired Mike from fraction consulting and same thing, Mike and I work out every Saturday and it, and this is where having a partner who is every bit as bought in as you are, is very helpful because as soon as we make the connection that, Hey, there might be something here.
Yeah. I, I’m here for you to talk to I’m here. I was there for Mike, but it’s Hey, you’re going to work with Tarik and I are so on the same wavelength. Yeah, it just works. It works, man. It’s
Bobby R: hard to find partners. It does. And I always say, timing was everything.
You and I have been friends for years. You were there when it was just like an, I don’t think I even put the damn thing on paper by the time I had spoken to you. But you were always supportive. Making connections, having coffee. I can’t tell you how many damn coffees we’ve had.
John E: It was over there on
Bobby R: Commonwealth. What’s it called again? It’s like at central co was
John E: it central? We did a a lot was on the original was central Avenue. And then maybe, Oh, there’s one on Commonwealth that we met a couple of times. I can’t believe I’m
Bobby R: blanking on it. It’s been so many times I blame it on the Bri.
I blame it on there. It can’t be my age now. I, you notice I didn’t go there. It, that was important to me, preserving the relationship because you were so selfless with your time. And it was important to me that I respected that right at all times.
And it’s still that way to this day.
John E: I think that’s fine. Networking advice in general, because there are some networkers who only take and don’t give and who only think about what’s in it for themselves. And they don’t respect the time. And for someone like myself, who’s been in the scene for a while. I quickly figure out the people are not respectful of time.
I, And I try to avoid those. Now. I want to dig a little bit more deeply into this because I think you’re a very good networker, but I’d like to just real quickly, before we come back to that, talk about a couple of quick topics. What will you do differently when you do this again? Cause I know you Bobby.
Bobby R: No. I actually have two more ideas. I want to talk to you about yeah. I, as I stated earlier, I would certainly get a co-founder so much sooner, right? I don’t care about equity, we’re going to grow, we’re going to build let’s just establish a team and just based on all the pitches that I’ve done I knew that was a dig on me that I was just a sole founder.
They love me, they love the product, but it was also important that I build out the team. And so I would definitely do that differently. I would also take a bit more time on really deeply understanding and flushing out my customer journey and stories. We did a lot of it, but I thought we could do more.
And while we still learn during some of our initial client and customer onboarding, I would probably just spend a little bit more time, intimately peeling back the onion a bit more. I think we had some great Intel, but I also think that we could have probably done a bit. A better job on that piece of it.
So those two things for sure, because it’s all about the customer, right? They’re not if it’s not really solving a problem, because I think our MVP was great. But I also feel as though we probably did some integrations and things that could have waited and I could have invested those dollars into something else that was a bit more meaningful.
Correct. So I think now hindsight 20, 20, I’m like, Oh, did we really need to do that? And probably not. Yeah. And so yes, there, there are a lot of mistakes. And then I think too being more gracious on myself, because, you start to see this market validation of your product with all these other companies raising money and kind of, all this stuff is happening around you and it’s crap, When’s our time going to count and it’s just be patient, don’t rush the process, go through the process refine these things and the opportunities will come.
And, the relationship with defiance was at the right time.
John E: Yeah. It’s funny that you mentioned that angle seeing competitors raise money. I mentioned to you last night, we, I did an interview with Alex and Dan from from two, your laundry. And one of the things Alex talked about in this interview, and the first one that I did with him is he watched Washio and rent raise, I think a combined $30 million going, am I going after this market?
And you can sit there and you can say, you know what, I’m screwed, or you can say this validates what I’m doing, let me do
Bobby R: it in a more scrappy way. Absolutely. And that’s exactly how I viewed it to say, look, if those guys can raise money. On what I believe is not an inferior product, but it’s not really solving a true problem.
I think we have something here and I think we need to continue down this path. And I was very inspired by that knowing that our time was going to come. And when the market knew about our product, w it would be a good thing. And so I was excited
John E: about it. It’s funny. Another, my repeat guests, my second guest ever was Maggie Williams and I, and when I interviewed her, I’m interviewing her again on Wednesday to talk about her pivot.
So is that a three-peat? No, that’s a two PCP. Yeah. And I’m going to have to do a pre-workout drink to get ready for that. Oh yeah.
Bobby R: Yeah. She’s awesome though. She’s awesome.
John E: But when I talked to her the first time she goes and raised a $750,000, which is no small feat, especially for a female entrepreneur in a dog walking space.
And then I think I want to say a month later SoftBank announces a $300 million investment and their biggest a competitor. And it was you can just imagine you, you feel good that you raised 750,000. Let’s be honest, raising any amount of money is amazing. That’s amazing. But then you see 300 million and and she said, you know what?
We’ve we can get in there. We can be smart with our money. We can and look SoftBank in many ways, imploded since then. And that was one of their bets that did not work out. So I don’t think that accompany raising, we, we celebrate companies raising money as we should. But let’s not lose sight of what we actually want to do, which isn’t just raise money for money’s sake.
It’s how do we build a great company that sustains for generations and creates wealth for everybody involved in it?
Bobby R: Yeah. We could talk all day. So that whole notion of glorifying raising money is like a whole nother tangent of a topic. Cause it’s can you do it bootstrapping you’re starting to hear more of a, build out of an infrastructure of yeah.
Let’s go the bootstrapping route not raised capital. But there is something to be said though, with your competition, raising a crazy amount of money. Yeah. And knowing, that there’s, this whole Tam told, total dress Mark market out there for you to raise the cap on that thing.
And it, that part is like dope and exciting, to know that. And so that, it just means a sky’s the limit, if you do it the right
John E: way. AB absolutely. Do now we talked about it. Did you raise money along the way? All boots. Do you wish you had done that differently at any? No.
Bobby R: Now I, I’m not a fan, obviously giving away equity very early, right?
I think there’s something to be said, certainly about folks who, believe in your vision very early on and willing to take a risk on you. But. I’m just ready to take a risk on myself. I feel as though if I take the risk, it mitigates your concern that I don’t have skin in the game. And I need to have skin in the game.
And that was my mind, the book
John E: skin in the game. I haven’t, it’s a collection of essays by Nassim, Nicholas to leave. Have you read his black Swan and fragile red, black swine. So you ought to read skin in the game. He talks a lot about in any, in anything, not just an industry, but politicians.
He frames a lot of where we introduced tail risk in the systems and the frames. A lot of his other concepts around this notion of you want to be, you want to work with people who have skin in the game. So you mentioned skin in that. And I think skin in the game is one of the most important topics.
There’s a difference between, and I talked about this with Alex and Dan last night. There’s a difference between the relationship. Alex has with Dan because Dan has skin in the game. And so does Alex and even your top employees, and, we want to think of everybody as a partner, but at the end of the day, there are people who have skin in the game and that it’s a different mindset.
Bobby R: We, we move differently when we have skin in the game, it’s no small feat to put six figures into a business. And then it’s this damn thing can not work out. And then that means it has to work. We gotta figure out how to make this thing work. And so for me, that was important, right?
So when I came to an investor, it wasn’t about, I have this idea that I’m so passionate about. And that people are interested in. It’s no I put my own money behind this thing. And so no we did not raise any capital not to say that. I didn’t try though. I did have an opportunity to get a million bucks from a VC firm out of Alabama.
But I would have to move to Alabama. I love Charlotte. We just built a house here a few years ago, so
John E: I love Charlotte too. I have a friend, actually, a very good friend from grad school who moved down to Birmingham for a startup, but it’s actually, yeah, it’s not bad, but I’ll have Charlotte
Bobby R: better. I do.
I do. So I did, I had to politely decline after months of going through due diligence and all that stuff. But so there were opportunities for us to raise again. It was, I wasn’t hard pressed to raise just because I was okay with where we were, but I was certainly actively pitching the company for capital.
John E: So I want to address the elephant in the room. And you mentioned George Floyd, but minorities, especially African-Americans are underrepresented in tech. First of all, I guess my first question based on an earlier comment is are they more underrepresented and. Law or in tech and startups, both
Bobby R: man. I’m like I’m like a unicorn in both.
So there’s this stat that we all minority lawyers like to quote, it’s like we make up like 5% of the profession. And even in the corporate space it’s even less IP, even less. So that sort of supports my initial sort of thesis around, like why I chose corporate and IP initially coming out of law school because I knew we were fairly underrepresented, but we were actively in these spaces.
And it was at a time where we’re always looking for, as, we do business with people we know and trust, and sometimes we do
yeah, love it. And that’s a phenomenal, business model. And folks are actively looking for that. And to get to your point, we are very much underrepresented in these spaces, but I’m certainly encouraged now that we’re starting to see this coalition of, banks with various initiatives, VC funds we have a long way to go.
It’s certainly disheartening to see folks who can write an idea on a back of a napkin and raise crazy money. And then, minorities have to, check every box. And if women owned businesses, women-owned businesses are the same. But I
John E: want to get to that.
Cause that brings me to a concept that I’ve. I’ve had my eyes opened, especially by our mutual friend, rod Garvin. Rob did introduce us while he was with the chamber and shut off the rod. So I think that there are opportunities that look what, whether you should do it because it benefits you or not.
There are opportunities. And rod opened my eyes to this. I hired rod to do a DNI initiative for level fairly early on because we were admitted oddly, a very white, very male company and not, I don’t, obviously we had some biases, but I don’t. I think that we were fairly open-minded. It is just, it is hard in technology to, to be more inclusive for a variety of reasons.
It’s no excuse they’re just, it does happen. But I said to rod, I said, rod, I told my recruiter that I want to, I want, 20% of our candidates to be minority. And I want I want to make five offers and I want to hire two people and we ended up with. Three candidates who had massive offers from Google or Microsoft that we couldn’t compete with.
Wow. And rod looked me in the eye and, rod, he was John, where are you recruiting? Yeah. And I said Duke, UVA, UNC. And he’s the Hunter.
Bobby R: Yeah. You, ain’t going to get no blanket w but, but that’s so
John E: important. And again, I try to, I think I’m, open-minded about these things but it didn’t occur to me.
And then I said, okay let’s go to Johnson, C Smith and Howard university, and start recruiting there. And yeah, the business opportunity, there were candidates that aren’t getting looks from Microsoft and Google. They’re not, and I’m sure it’s changed since then, but we found way more candidates just by taking that simple step.
The other interesting thing that I noted along that just happened recently. I caught up with a firm out of the UK that I’m friendly with, and they own a portfolio of 17 businesses. A variety of digital industries. And I asked him how has, how have things been? And very white, British guys, but yeah, but he said, he’s John, we one of our products is just taken off.
He’s I will call it dumb luck. We decided it’s a communication tool and a collaboration and learning management tool. And he’s we decided a year ago that we were pivoting it towards diversity and inclusiveness. Wow. And he said, we’ve rolled out. Like we rolled out the that module in the software, like literally a month before George Floyd happened.
And he said, we now every single company that wasn’t taking our calls, they, they need it. And so I think that I would say to other entrepreneurs and investors, don’t do this out of a sense of it’s something that you. Oh, or that you need to correct for past mistakes, do it because there’s opportunity in this
Bobby R: right opportunity, but more importantly deserving opportunity.
We mentioned earlier that I’m fortunate, I was fortunate that I built a law firm that was able to underwrite the cost of this platform, historically my background, I come from poverty. And I’m the quote, unquote black Swan of my family.
I’m the success story. And I think it’s important that, there, there are a lot of, black coders and, but then more importantly, how do we get off the investment? Huh? I can’t, I have great idea. I can’t even get the funding to get it off the ground.
Banks won’t lend to tech companies. So I got to get private money and. No one in my family, you talk about the succession of funding, right? It’s like friends and family, no one in my family has $10,000 laying around. So how am I supposed to make this work? I don’t know any wealthy people in my network.
John E: That’s the hard part is what we tell everybody is get, as far as you can with friends and family. If you’re starting your start, if you’re starting behind and you don’t have friends who have made half a million dollars,
Bobby R: what do I do? And so to your point about there are founders out there who are super talented, committed, and dedicated, and, but for the lack of funding, Those products will never get to market.
And I think we’re doing ourselves a disservice by not providing the appropriate amount of resources and support and investing in those companies. And I think it starts with, making sure you have women and black and Brown folks running these funds who are sensitive to the plight of what’s happening.
It’s no fault of anyone’s. But we have to create the opportunity and it’s important for all of us.
John E: Some people just of
Bobby R: course, living today. And but it’s important for us to be mindful of that. And then more importantly, as opportunities arise to say, yeah, we’re going to take it and it’s not even taken a chance.
You evaluate that deal like you would any other deal. Yup. The fact that there are black or Brown or wanting to founder should be erected
John E: well. And I think that’s what people who want to do the right thing get wrong. And I think it’s what I got wrong until I. No hire abroad helped me. Like my heart was in the right place.
I just, wasn’t
Bobby R: looking in the right place. And that’s the thing, right? It’s where do we look? Whether it’s an attorney corporations say why can’t find. Black attorneys to do, blah, blah, blah. Have you used the internet to Google garden, where are you looking?
If you’re using the same recruiters and they’re only going to the same schools and that one kudos, certainly to, to plug next, improve it. And that’s something that we’ve been considering, are we recruiting from HBC use? Are we really putting ourselves out there to really develop the pipeline of legal professionals that are women and diverse, then you gotta go where they are.
We know that as business one-on-one, if I’m, if I want to connect with entrepreneurs, where are the damn entrepreneurs and wherever they are, that’s what I, where I want to be, whatever they’re reading, I need to be in those publications. And so the same is true when you’re sourcing talent.
If you’re not there, but then more importantly, if we’re looking on the website and we don’t see diversity. And it doesn’t match up to your messaging that you’re diverse and inclusive. We’re not coming there. Yeah. We’re not coming. Cause so that’s important
John E: too. I was with one of our investors pretty early on at level.
We were really on fire and go and get like gangbusters and luckily we had an investor, white, rich male middle-aged male. Not even middle-aged, he’s probably the age I am now, but
Bobby R: he not to cut you off, but this it’s growing up.
John E: No but our investor he called me up one day and he’s look, John, I don’t think you have biases. I don’t think you have he’s I think you’re a fundamentally good human being, but he’s yeah. It is embarrassing to look on the website right now, we look very white, very elitist he’s and that works when you’re selling the way we’re selling, but we’re the way we want to sell.
He’s you’re going to have an SVP at a bank or an SVP at Verizon or at 18 T or you’re going to have apps. And there’s no, he’s you don’t have, he’s if you don’t have it well-represented and he’s the good news is I think we can fix it now. And that’s what drove us to hire rod. We were just very lucky to have an investor who thought that way.
And that, to me, that’s what you need investors for. Not just for diversity and inclusiveness, but you, in general, they need to help you see around the corners that you don’t see because you’re so focused on. I just want to build the business and build a team. I’m guess what? I’m going to call the people who are around me, but, and then, but the problem is if you get to 200 people and you look like that, you’re never going to fit,
Bobby R: Fix it.
Yeah. It’s tough. And, The other part too, about diversity and inclusion, it’s just good for business. So to your point, you don’t want them on a culture, if you don’t man. And I think that, folks bring so much to the table and that, with all of this crap, that’s just going on, it’s just folks are just good human beings who just need an opportunity to bring, to live their best life.
And sometimes there are these barriers, right? Very well-intended. We just got to do some course correction and that, that is applicable in tech it’s applicable in legal. And I think people are starting to wake up to these issues, but I do feel as though we still got a long ways to
John E: go.
So let me ask you this, not to put you on the spot, but are there any resources that you found useful for minorities in particular looking to get into either law or technology?
Bobby R: Yeah. Definitely. On the legal side, I definitely reach into bar associations. There are some, minority affinity groups and there are some minority leadership, legal groups that you could join and be a part of.
I also think just reaching out to minority attorneys, whether they be women or. Black or Brown folks who are interested in just mentoring and having a conversation with you. I get tons of law students who reach into me on LinkedIn. I think that’s great advice.
John E: My fiance is a Latino and very successful real estate
Bobby R: agent.
She’s killing the game out there. She’s
John E: killing it. She’s doing really well. And any Latina that, or woman who wants to get into real estate, she will take their time. They
Bobby R: just have to reach out. Yeah. And I, that happens and I always, man, I owe it to them. Because I will say everyone that I’ve always reached out to, and I’ve had a few that, that haven’t been responsive, but for the overwhelming majority folks have always been responsive to say at minimum, I’m willing to get on a call and have a conversation.
And my path is non-traditional right. I didn’t have all the means. I didn’t go to a tier one school and I didn’t. Yeah. So nevertheless we did okay for ourselves. We made it okay for ourselves.
John E: That’s awesome. How long have you been in Charlotte? Again? I know you mentioned
Bobby R: it earlier, but yeah, I got here 13 2013.
Okay, cool. Yeah.
John E: Yeah. The city changed for better or for worse since you got here and not necessarily strictly from the diversity. Yeah.
Bobby R: Broadly speaking, man. I love Charlotte man. Coming from like Miami Fort Lauderdale. I love that vibrant lifestyle, but Charlotte is it’s me. It’s enough.
Vibrancy there’s also has a chill to it. And I’ve just seen the explosiveness. I remember getting here and, uptown was cool, but then now it’s it’s,
John E: was just starting at more than
Bobby R: a couple of, I think they had finished the light rail by that time. But
John E: yeah,
Bobby R: No, they didn’t.
And yeah I love Charlotte. I think it’s a great, and that was the whole point of moving to Charlotte. Because I felt as a young professional I could grow with the city, it was, it was like DC, Atlanta, Houston, we had looked at other markets and Charlotte and most of our family still in Florida.
It wasn’t too much of a hassle for us to get back home. And so it just made sense. And so we love it, man. In fact, we actually live in Harrisburg, but I spent most of my time in Charlotte, so I still claim Charlotte.
John E: Yeah. Yeah. I live in Marvin and I still claim Charlotte. So you mentioned the pitch breakfast and mixing it up in the Charlotte startup in texting.
How involved do you try to, do you try to stay now with your new role at next and pro it? You, do you still go to those meetings? Do you still it’s been
Bobby R: obviously, yeah. Yeah. It’s been hard. Hard for
John E: me. I used to be the consummate networker and it’s, I can’t do a zoom
Bobby R: networking. It’s hard. It’s hard.
And that’s that’s been the challenge for me. So yeah. I’ve not been as actively involved. I, of course, I read Charlotte business journal. I, I try to show them, Charlotte and now and all that good stuff. And so I try to follow at least like the news aspect of it, but I haven’t been to like virtual events and things of that nature.
I’m looking forward to just the opportunity cause I, yeah, I’d always bumped into you at these numbers.
John E: That’s right. Yeah. I try to go. I explain to people like you, you take meetings, you take calls, you go to events that you really don’t want to go to because you don’t know when you’re going to meet the next Bobby Robinson, when you’re going to meet the next Chris Elmore, right?
That’s the non-linearity of this journey requires that you invest in those things. And for me, the zoom is just impossible.
Bobby R: Impossible. It’s not as personable, you and I are very relational. And it’s hard to really get to know someone. There’s no substitute for coffee or Angel’s envy, right?
There’s no substitute for it. So I am, I’m definitely, and I consider myself, Johnny, you probably disagree with this, but I’m very introverted, to some degree,
John E: surprised to hear that actually, but please go forward
Bobby R: outwardly you extroverted. I suspect that it probably SAPs your energy.
It does. Yeah, it does. Because as entrepreneurs, it’s like, we have to. It’s just part of what we have to do. But I didn’t realize how much I missed going to the net. It became such a fabric of my routine that it was, it’s something that I’ve missed. So I’m certainly looking forward to it.
But yeah, absolutely. Man if I didn’t have to do it I wouldn’t. Yeah. That’s probably why you and I get along so well.
John E: No I enjoy speaking in public. I enjoy moderating panels, speaking on panels. Yeah.
Bobby R: It takes a lot of preparation.
John E: It takes a lot, it takes a lot of preparation and through the years I’ve gotten better about not having to as much, but sure.
It exhausts me. There’s nothing more exhausting than going and shaking hands with the a hundred people that you saying
Bobby R: I’m ready to go.
John E: So you probably don’t have one given your answer on that, but are there any startups right now that you have your eye on?
Bobby R: Yeah it’s been hard, but of course I think we have a mutual friend Desmond with battery exchange.
You need to get him on the podcast. Yeah. Yeah. So I’ve been, he’s been doing phenomenal and I’ve been watching him talk
John E: about a guy getting thrown a curve ball for those who don’t know, Desmon owns a battery. Company where he literally, he manufacturers in China, these battery kiosks. So if you’re at an, a public event and you’re running out of power, you can basically, he partners with the venues to deploy these kiosks where you can then charge your battery.
And then he shows you a display ads. It’s brilliant. It’s brilliant. But Jesus Christ, could you, I don’t have a worst
Bobby R: no, one’s moving around. Yeah, no, one’s going to going around. No, one’s going to con
John E: people but he’s chugging along and I can’t wait to hear it. Okay. I haven’t even reached out to him yet, but I’m like, I’m literally, he’s in my next round of people that I want to enter.
Bobby R: He’s definitely going to be a success story for sure. It,
John E: I don’t know what it is, but
Bobby R: he’s awesome. So apart from him, I haven’t really had an opportunity to really like, identify like the next up and coming. I may just be that, that next thing.
John E: So I can’t wait to hear about it. We’ll have you back on.
Yeah. For a tech entrepreneur, somebody who has a technical background, the opposite of where you were, but they want to build legal technology. What advice would you have for them
Bobby R: understand the industry. I think it’s also important to just understand the language of your customers what their pain points and, there’s, this, there’s a formula to it to some degree.
And that was interesting because, I’m in that space, I understand it. And it made it a lot easier for me to articulate what that value prop is. So yeah, whatever space it is, I think you just really got to intimately understand the issue, but then more importantly, you can’t be stagnant in terms of what the issues are today.
Kinda, you gotta forecast, where’s the space going. What’s happening. And I think that’s important and that’s going to be very intuitive with regards to how we develop this product. Because, we don’t want to build a platform that’s 10 years behind and before we even get out the gate.
John E: I liken it to remember Microsoft zoom or soon, what was it called? It was that they built an MP3 player and it was an amazing MP3 player. The problem was they built it to be the iPod killer, but Apple had moved on from the iPod and it was now on the iPod. The, that they had the one that was just, that had no display.
And it would just randomly play songs from
Bobby R: your list, the shuffle.
John E: And it was interesting because Microsoft remember that they deployed the resources to kill the iPod after Apple already killed the iPod. And you don’t want to do you don’t want to spend billions of dollars or yeah. In our case, hundreds of thousands of dollars solving a problem that doesn’t exist, that isn’t gonna exist in
Bobby R: five years.
Yeah. And so I think to say that I think that’s universally applicable. But you gotta be intuitive. I think you can’t be heavy handed. And you’re just trying to take this one thing out because it’s whack-a-mole right. Tech is growing and it’s expanding so quickly. And if you’re not abreast to where it’s going, you’ll be left
John E: behind.
Yep. So th this is all good. I want to shift gears a little bit. I want to talk a little bit about M and a, since you’ve practiced that, what size companies do you typically reference?
Bobby R: Yeah most of my companies were most deals were less than 15 million and fairly industry agnostic. I’ve done buy side sales side.
Really didn’t matter for me. So you don’t have
John E: a preference on, because a lot of people, and then my fiance included as a, but your law not the investment banker, but in her case, she’s she much prefers to list houses because if you list a house. You still have to sell it. Yeah. You represent a buyer.
Bobby R: They may never buy. Yeah. And I
John E: know a lot of investment bankers think that way, but as an attorney, it’s not, I guess it’s not as big a deal because you’re generating fees. Yeah.
Bobby R: Either, either way. Yeah. I think it’s, the level of preparedness, if you’re a seller it’s getting the business ready and prime for sale, there’s a lot of work that has to happen. And then as a buyer, there’s obviously a lot of due diligence that needs to happen right. On whatever your target is going to be. And yeah, I enjoy M and a, I think it’s fantastic work. Obviously there are some markets right now that it’s M and a, it’s just hot, tech and we’re seeing a lot of consolidation in tech.
You’re seeing a lot in healthcare and pharmaceuticals, all of which areas I’ve most of my work was a lot in. Retail. And you had a lot of franchises and things of that nature. It’s a great space, but I played both sides of the table for
John E: sure. So what mistakes do you. See, and you may not have been advising them when they were startups, but what, when a company is a startup early in their existence, so there are things that they mistakes that they make that later on become very expensive in the M and a process.
Bobby R: I think John, the biggest thing that I’ve seen, particularly for like tech startups is just not maintaining their cap tables. That’s a frickin nightmare, just because you’re so right. And then
John E: you have to put it back. So for the listeners who don’t know, I think most of them probably do, but a cap table is just an Excel spreadsheet typically, or maybe it’s in Carta and it lists out all the different owners and all the different terms that they have in the real estate world.
They call it a waterfall, but it lists out here’s who has preferences here’s who has common stock here’s who has convertible notes. And it lets you ultimately calculate what percentage ownership given. Employees or,
Bobby R: yeah. Yeah. And because of all of those nuances and the varying degrees of ownership, if it’s not tracked properly, by the time we get to the table, it’s Oh, we had these X amount of convertible notes out there, but then there are two missing, there are 10 and then we’re missing five and seven, right?
Yeah. So we, we don’t, we, you don’t know what’s happening there. And so I would say, really good. And diligent record keeping is going to be imperative with regards to, and you’re going to need it anyway with regards to, investment due diligence and so forth. Investors are gonna, I want to know when ,
John E: you can’t give out equity grants to employees
Bobby R: or they haven’t been authorized.
They’re not. Yeah. And that’s important, right? And so a lot of, you know, founders are just Willy nilly, just giving out equity and just throwing out numbers and then putting things on paper and executing documents. And then before, it, you’ve, overcapitalized the business.
And to your point, you’ve issued more stocks than you were authorized to issue. And now we have to do all these amendments and resolutions and we have to right. Size things. And I think that could certainly be a turnoff for a buyer because they don’t know what they’re getting. And then I, and I think that sort of is a red flag with regards to just. Are there subsequent liabilities that I’m just unaware of, right? Yeah. Am I going to get some wild investor to come out of the woodworks to say, Hey, I have this promissory note that you guys need to honor. And it’s important.
So I would say that is one of the biggest things they’re buying it from. Yeah. Yeah. And they want to know who they’re dealing with. And and I think that hurts via acquiring companies opportunity to really maintain some sort of ongoing relationship with the buyer.
Because most times, they’re bringing co founders on in various roles. And I think that sort of erodes the level of trust and your ability to execute a department or lead a team. And so forth. And so I think it’s bigger than just a cap table. It’s the post sort of transaction and the relationship.
And so yeah, we have to clean a lot of that stuff up, flip
John E: to the other side, not the attorneys ever make mistakes, but what mistakes do you see attorneys make when it comes to dealing with startups?
Bobby R: Yeah, I think just with anything else it’s not asking the right questions and really just trying to understand how this opportunity fits in the big picture of the organization.
Because it’s yeah. You acquire this company, but then what or is it just the fact that you just want to squash them as a competitor and just not do anything with it? Or how does this sort of fit within your strategic framework of growth? And I think some attorneys just want to do the deal, right?
Let’s just do the deal. And I don’t really care about what you do with it after that night? I think it does a disservice to the clients really understand let’s think through this. And it goes back to your initial opening question around just separating the legal and the business.
And it’s just let’s have a business conversation about what does this M and a transaction mean for the business and then drill down from there to figure out what legal considerations we need to make to ensure the business is protected.
John E: Yeah. Yeah. It’s that business versus legal distinction is so tough because on one hand, You say, Hey, I just want legal advice.
How do I have to word this? But on the other hand, attorneys see so many things
Bobby R: We have to yeah. We’re already at the Supreme court. What if this damn thing went to the Supreme court? We deal with it.
John E: Yeah. Yeah. You touched on this a little bit. But in talking about the mistakes that attorneys make, when dealing with startups, what mistakes do large acquiring companies tend to make when they acquire smaller companies?
And again you, you hinted at this a little bit. Yeah.
Bobby R: Yeah. I think, obviously we talk about the fact that large companies tend not to. Care about innovation as much in terms of internal innovation. And they’ll just acquire these smaller companies because they are innovating.
And then I think it, then how do you carry through that innovative culture within the enterprise? And so that there’s this sort of integration consideration or bottleneck with regards to like how it’s certainly frustrating, for a new, smaller acquired company, that’s super innovative, very progressive to get absorbed into this larger enterprise that’s antithetical, it’s it like, all of this growth.
And I think that is really the opportunity for large enterprise to say. I think they make a huge mistake with under appreciating the level of innovation that’s required and not allowing the true value of that smaller company to thrive within the larger ecosystem of their four walls.
And I think. That, to me undercuts the value of the acquisition to which that you’re not getting the true value that you purchased.
John E: Yeah. We saw that. Luckily we were the first good example where red hat. So it’s, I used to be the COO of a firm called mantra that was acquired by red hat. And we were the first acquisition done under Jim Whitehurst who steered the company to amazing Heights.
The biggest exit in the history of tech was IBM buying red hat for 34 billion. And Jim was hired back when they were a $400 million company. And so we were, the prior administration was initiated the transaction. The board pulled Jim to the side and said, we’ve ruined. I won’t say ruined, but we haven’t done.
We haven’t had a good track record of acquisitions and unlocking value. And so your biggest job is to make sure this thing doesn’t fail. They use the more colorful app, more than fail. And Jim sat us down. Jim sat us down and told us that. And he said, look, we are going to err, on the side of caution, I want you to keep your mentored email addresses, keep your laptops, keep your tech stack, keep selling to your existing customers.
You don’t have to do red hat technology. Yeah. And it was so interesting to see they were so scarred by the prior acquisitions because it’s real easy. You make an acquisition and then you think this has to work the same way we do. And what Jim saw is that where they were trying to go is from selling the system, selling Linux to system administrators, to what they executed on, which is selling to the business.
You’re selling transformation, the businesses and that’s why ultimately IBM acquired them. It was really interesting to see that we were lucky, not a horror story, but we met. We worked very closely with people from prior acquisitions, who there was a lot of carnage, a lot of turnover, a lot of culture clash.
Absolutely. And I think it’s hard for small companies like red hat was at the time to be able to look at how do we do this better.
Bobby R: Yeah. And I think you alluded to a strong point with regards to, just culture and then just general fit. What are we going to do with this right. Post closure and how do we exit?
And there’s really not a clear plan. It’s I love what you’re doing. I think that’s pretty cool. I think we should acquire you, but then it’s how are we going to execute on this within this new framework, these resources and talent. I think that there’s a
John E: ratio of size where, and you can correct me on this because you’ve seen a lot more of these transactions that I have, but I felt like.
We were probably a 20 to $25 million a year revenue company, depending on what 12 months you’re looking at, forward or backward, shocking in a $400 million company. And I feel like it was just, we were big enough to matter enough to their bottom line revenue, that they couldn’t kill that revenue, that it was meaningful.
If you’re 400 million and you add 25 million, you care about every dollar of that
Bobby R: damn penny. But
John E: you can imagine that if an IBM who’s, I don’t know how far they’ve shrunk, but they were at one point a hundred billion dollar a year company. If they acquire a twenty-five million dollar company, I think it’s a whole different ball game.
I also think that if a $20 million business tries to buy a $25 million business, there’s going to be, it’s gonna be tough. It’s
Bobby R: tougher. Yeah. No, I think there’s a lot of validity too, right? The valuation of the dollars. Yeah. Oh, absolutely. Because companies just. For kicks and giggles, just buy up 20, $30 million companies just to get them out of the marketplace, have no intentions to doing absolutely anything.
But you talked about $400 million. Yeah. What the hell are we going to do with them? We need you to, we need you to turn around a bit because a billion dollars. And so yeah, I think there’s a stark difference between, revenue thresholds. Yeah,
John E: absolutely. Yeah. Bobby, this has been great.
Thank you so much for joining. Thanks for coming over to the angels.
Bobby R: I can always depend on you to introduce me to various luxuries of beverages. So
John E: it’s not all
Bobby R: just coffee, some down. It can be bourbon, man. Yeah. When you throw that on the table, I’m like, I’m definitely in right now, right? So
John E: before we do sign off, are there any other things you would like to touch on or groups, companies you would like to
Bobby R: promote or no, man, I’m just working hard to build this influencer attorney brand.
And so I’m really just trying to connect with, brands and agencies and influencers that are working together and need some support in terms of just general brand protection, including athletes. I know you’re big into sports and there’s this whole, movement with student athletes monetizing their brand.
John E: glad you brought that up. So Micah Minarik would kill me if I didn’t,
Bobby R: he, then I spoke about it. We had a conversation about his daughter sorry. I sent him an article that I had written about. This particular topic and I’m actually working with the farm on putting out some additional talk to me about this.
Yeah. Yeah. Not specific
John E: to Mike, his daughter. Yeah. I understand. She’s a soccer
Bobby R: player. Soccer, Clemson. Clemson. Yep. So that’s specific to that,
John E: but the
Bobby R: general what’s the short, so the concept is that a historic NCAA has prohibited student athletes from endorsing products or services or monetizing their brand for compensation.
So that they feel as though it violates the whole rule of amateur sports. So it puts student athletes on a professional level if they were to be compensated. Which is crazy
John E: to me because when I was an accounting major in undergrad, I would have been.
Loudest for finding a way to make
Bobby R: maps and it’s interesting because you’re absolutely right. Everyone on campus can make money, but student athletes. And there has been a push to allow student athletes to now monetize their brains. Like these kids are, I say kids, but, they’re monetizing their social media.
They have huge followings on social media. And they have every right, to how many
John E: followers did Zion Williams
Bobby R: design have he had a crazy amount, but I can’t remember the kid from Clemson, the quarterback Trevor Lawrence. Lawrence. Yeah. TV house. I blame it on the angels.
Yeah. Blame it on angel there. But he had a massive, there was like a study done in terms of like how much he could make like per year. And I think at the time it was like a million dollars or something like that and like endorsements. And anyway the NCA is reviewing the roles to, to change that.
Of course, there’s going to be some stipulations around them, not partnering with brands that also sponsor the institution and things of that nature or sponsoring products that may not be good for the body. So maybe CBD products or some other products that they could not endure. So there’s going to be some restrictions.
But the interesting thing is though that there are some States that have gotten ahead of the NCAA, such as Florida and California and Nevada. And they’re using it as a recruitment tool to say, Hey, come to our schools. You can monetize your brand. You use the sort of the platform of the school.
So a lot of schools are using it as recruitment tools, get some of the top talent to their institutions. And so what I’m doing now is really just helping these kids start thinking about do I form an LLC? Do I follow a trademark? Do I get a domain name? Do you know, like their domain name, squatters who will look at the top athletes in high school and will acquire all of them, but I’m not surprised that they will acquire and then try to sell it back to you for thousands of dollars.
And of course there’s legislation around, there’s existing legislation and kind of push back on that. But it happens all the time. And it happened to the Washington Redskins. There was a. A guy who bought up all the trademarks for, the Washington residents potential renames that they
John E: didn’t do a Washington football team because that
Bobby R: was, yeah.
That was why you ended up with that name.
John E: I happen to be a football fan.
Bobby R: Yeah, there you go. There you go. So that’s why I ended up with that name because there’s this guy up there with that. So that’s a huge opportunity. And in my estimation, I think student athletes will become the next rising class of influencers to which that I can see them with sports apparel brands and vitamin supplements and all of the, music and all the things that aligns with the brand, weightlifting equipment, all of that.
It really just positioning myself to help educate those guys. And everybody’s getting out there that. It’s going to be a damn shit storm. That’s one,
John E: that’s been so tough for me. I just feel like the NCAA it’s hypocrisy to take these athletes and to say, we’re not going to pay you.
Bobby R: gosh.
John E: The coaches make how much money, the, how much money. It’s billions and billions of dollars that the elite universities,
Bobby R: I think about like EA sports and, I saw something where they’ve reentered the whole gaming thing. And then, they’ve just stripped name, image, and likeness from it.
So you have these generic players without numbers or anything of that nature. At the
John E: NCAA level, not at the
Bobby R: MBA level, correct? Correct. And that’s really important. So I’m really excited to see where this space goes. I think it’s going to be great. But I think for the initial several years, it’s just going to be the wild West until, folks, there’s a consistency in the application of law, every right now it seems to be patchwork that every state’s kind of gonna do their own thing until either the NCAA or Congress or some federal laws enacted to provide some consistency in terms of how this thing is facilitated.
John E: Did these type of tests though, I think are what really? And I’m an outside writer. I’m not certainly an expert on NCAA, but it seems like the conference, the power conferences have more power than the NCAA. And if they can’t figure out. Some guidelines around this. Why does it even exist
Bobby R: a year?
Got it. Yeah. And I think over time and I think he just hit the nail on the head with regards to just their ability to strong hold the influence
John E: picture of the sec. If the sec decides where ECC decides
Bobby R: doing work it, it diminishes their opportunity. And you think about just recruitment and the vitality of the conference overall with regards to talent.
It’s going to be an interesting opportunity. And I never thought about just even the conference angle. Cause you’re not the only game in town, but you definitely are super significant with regards to, just NCA, everyone just that’s the conference, that’s the go-to conference.
John E: It was interesting to me just to see how some of the. The more powerful conferences, like big 10, and this, we saw this in football and in bed, the
Bobby R: whole thing about, yeah, who’s going to play in a player. Yeah. And
John E: that, that that’s a really interesting dynamic. I I it just feels so broken to me.
And there’s so many scandals around the NCAA. It’s, that’s one of the institutions that I’m just completely fed up with in our country and maybe that’s my own personal bias, but it’s frustrating for
Bobby R: sure. Yeah. And I th I think it’s time for a change, right? To your point your roommate shouldn’t be able to monetize their brand and you can’t just because you got a scholarship too.
John E: Yeah. It just seems unfair if I it’s just, if I can review, online video games or unboxing of things, and I can make millions of dollars on that, but you’re telling me that yeah. Because I’m making hundreds of millions of dollars for my university. I can’t make any money. That’s just fundamentally unfair.
Bobby R: It’s flawed. It’s flawed. And I think many of these kids come from various backgrounds to which that those dollars could to your point, right? You think about a small percentage of them will actually go pro, but this could certainly be a different path to generational wealth or economic equality.
If they’re able to maintain some reputable presence for themselves on online. And you see that right? Many of them are getting into media and becoming other personalities and getting into entrepreneurship. And that could certainly be in springboard if they’re able to monetize their brand in a meaningful way.
So I’m really excited and happy to be a part of that ecosystem, in terms of helping these kids with brand
John E: protection. Yep. That’s awesome. I’m glad you brought that up. Micah literally was like, you got to ask him about that.
Bobby R: Yeah. Yeah. We we spoke about it. I sent them, send them the article and I think, yeah, I’d love to come back man and really talk sports and legal and all that good stuff.
I know that’s outside of VC, but I think there’s definitely going to be a lot of tech platforms around, connecting athletes to brands and a lot of opportunity there. And I think, it, it’s gonna create a whole new space of opportunity. So it’ll be interesting to see where it goes.
John E: Look, man, I’m sorry that we took this long to this conversation. Yeah. Yeah. It feels like our days at the
Bobby R: coffee shop. Oh my gosh, man. We’d spend hours with a
John E: microphone and
Bobby R: a camera and I think undercurrent was the name
undercurrent. Yeah. Yeah. All right.
John E: Thanks brother. I appreciate
Bobby R: I appreciate it, man. Cheers. Appreciate it.