Become an investor with as little as $50K

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Imagine you are someone who’s deep into a sector of tech, like maybe you’re the crypto person who really studies this, who understands it has inside access to the founders, or SaaS, or some other sector. And you say, “You know what? I’d like to make an investment in a company that wants me as one of their investors, because they want me to give feedback. But you don’t wanna put in all your money.”

Well, what you could do through VAUBAN is create a Special Purpose Vehicle, go and raise money from others, maybe smaller amounts from other people, put it together with your money, and then invest that in the company or companies that you believe in.

That’s what they do. I want to find out how it’s possible.

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Ulric Musset

Ulric Musset

VAUBAN

Ulric Musset is the founder of VAUBAN, an online platform that makes it easy for you to raise capital from your network to invest in private companies.

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Full Interview Transcript

Andrew: Hey, they’re freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy, where I interview entrepreneurs about how they built their businesses for an audience of real entrepreneurs, building their businesses. People like today’s guest Arick Ette. He is the founder of Von here’s. What VO bond does.

Imagine you, my listener. Are someone who’s so deep into a sector of tech, like maybe you’re the crypto person who really studies this, who understands it has inside access to the founders or SAS or some other sector. And you say, you know what? I’d like to make an investment in a company that wants me as one of their investors, because they want me to give feedback.

Well, they want me to help them, but you don’t wanna put in all your money. Well, what you could do through VO on is create a special purpose vehicle, go and raise money from others, maybe smaller amounts from other people, put it together with your money, or maybe not your money, and then invest that in the company or companies that you believe in.

That’s what they do. And that’s just one aspect of how they make investing easier. For people like you, who are listening to me, which is probably why Alrich is here. He’s like talking directly to his people. All right. We can find out about Von how he built this up and how he’s growing it. Thanks to two phenomenal sponsors.

The first, if you need to hire developers, you already know you go to lemon.io/mixergy. And the second, when you’re ready to do email marketing, I’m gonna tell you later on why the smart move is to go to send in blue.com/mixer GVA first, all good have here.

Ulric: Super excited to be here.

Andrew: Uh, what’s the smallest amount that somebody, the smallest fund or special purpose vehicle that somebody has put together on your platform.

Ulric: So, yeah, I mean, you’re right. It’s exactly what we do, right? Like we make it very easy for, you know, venture manager to launch farms and to launch a SPV as well as you mentioned. So it can really, you know, range from like a 50 K you know, 50 K dollar, um, SPV as an investment to things. The biggest that we’ve ever done was 20 million.

So 50 K to, to 20 million

Andrew: So meaning one person has an opportunity to invest in a company, $50,000. Instead of investing it themselves, they might go to 10 other people and get five, uh, get 5,000 from each of them, put it all together. Now they manage a fund, they get some management fees, they get a share of the upside. And in return, the people who are investing get access to an investment that they wouldn’t have otherwise.

Ulric: Exactly like, like the beauty of the system is that, you know, let’s say you are an angel investor, you know, you would write like, you know, one K check, maybe five K check, um, You know, at some point after maybe 10 20 investment, you know, you’re gonna grow your network. So you will have a lot of, you know, other angel investor friends, you will, you know, know more founder, et cetera.

And you know, you want to step up like you want to professionalize your, your investment activity. So instead of going to a company and ask them for another location of one to 5k, You ask them, oh, actually, can I get, you know, 100 K or, or 200 K because I know a lot of people and a lot of friends operators that can be, you know, helpful as well.

Maybe they’re gonna introduce you to some, uh, you know, clients partner, maybe they’re gonna help you with your financial, you know, modeling or, or whatever. And you ex essentially joint forces with all of your friend and all of the, you know, people from your network to invest in this company. And in exchange of that, you know, you get a, what we call a carried interest, right?

It’s like a 20% in general. Um, Return on the, on the profits after, you know, the company, uh, exit or IPO.

Andrew: And the way this whole thing started was you and your co-founders you and your friends were reading tech crunch and starting to say, you know, we’re spotting these companies because we’re deep in it. What are some of the companies that you noticed and wanted to invest in?

Ulric: I mean, I was reading tech crunch when I was, uh, 12 in France, because there was a French tech crunch that no one remember

Andrew: good about, about going international. Yes.

Ulric: uh, and, uh, and yeah, it’s funny because, you know, so we were reading tech crunch, et cetera, and. We thought we knew, you know, software and the startup ecosystem quite well. So we went, we wanted, you know, to invest in all of this company, like, you know, Airbnb, et cetera.

So, and, and to put our, you know, friends money into it. But when we talk to, um, you know, lawyers, accountant, et cetera, is a completely like discourage of doing that because, you know, there was like regulation, you know, Stuff, a lot of, uh, you know, admin things. You, you really don’t want to deal with that. And, uh, we were like, actually, you know, there is an opportunity maybe to, to, to make this process better, to make just, you know, to make it easy to invest in, in this company.

So that’s when we started, um, yeah, exploring, you know, this, uh, this idea of having a platform to solve all of your, you know, admin problem. When you, when you set up a founder, when you set up a, a syndicate.

Andrew: So was it just to be the legal backend for people who were setting up funds? Was that the initial vision?

Ulric: Yeah. I mean, it’s, it’s not only the legal, um, essentially when you are a venture fund manager, you want, you know, two things in life. Like you just want to raise money, invest money, that’s it. But. All the rest, you know, all the kind of, you know, legal documents. Uh, you need to do the accounting as well, you know, to report to your investors or financial reporting.

Uh, you need to comply with a lot of different regulation. Uh, so I’m not gonna Bo the audience with that, but, you know, anti antimony laundering regulation, um, Compliance, et cetera. So you need to, to have like kind of a back or middle of history to support on, on your investing operation. And people say, just don’t want to deal with that.

Right. It’s very adminy et cetera. So that’s why we, we came up with this idea of having a platform to really streamline all your legals, all your accounting, all your regulation, your taxes, et cetera, uh, online. So to make it very easy. So you can focus on what you love, right.

Andrew: When

Ulric: it was back in. Um, yeah, it was back in, um, I think when we launched the landing page, it was like December, 2017.

Uh, it’s funny because at first, so the landing page was very simple. It was, you know, we make it easy to launch your phone and we had two options. One was hedge funded. The other one was VC found. And, um, because it was, you know, during this crypto boom, where everyone wanted to launch a crypto fund, we kind of specialize, uh, in 20 18, 20 19 in, in crypto hedge fund, um, that we stop, uh, AF afterward for

Andrew: this was, let me see if I understand it though. It, it was at first, just a landing page saying, this is what we wanna do. You pick what you’d like, they gave you feedback by signing up, and then you were able to go and build this product for them. And by product, I mean, a set of legal documents, a set of, uh, service providers, right?

Ulric: Exactly. So, so it’s funny because I was, uh, reading, um, our early conversation with, with Remy when we were launching the, the London page. And, uh, and I was like, okay, I put 80 euros of ad worlds, but I need to stop now because we have so many leads. Like we have so many, uh, you know, people signing up, et cetera.

So I stopped at 80 Euro and with 80 Euro, I think we had. 50, uh, you know, people interested and it was very qualified people. Like one of, uh, one of them was a top, uh, poker star, like the number, uh, four. Um, and, uh, and, and we were just, you know, it blew my mind, right? Like it was just a landing page, summit world.

Uh, you can actually, you know, get in touch with, um, you know, this type of like high profile. Uh, I invests.

Andrew: if I understand this right Orrick, what was happening was there were people who were seeing that cryptocurrencies or coins were going to grow and all they wanted to do was buy a collection of them. And they wanted investors who would fund this and share in the ownership of the coins. That’s that’s their model.

Ulric: Exactly.

Andrew: okay. And did you have anything beyond the AdWords that you put up to test this or at the time? Was it just a set of AdWords?

Ulric: Uh, no, it was just really odd worlds. I mean, I, I’m really a big believer, you know, that you need to, uh, kind of test the, the demand right before build building a project. I mean, it’s, uh, you know, it’s very basic, uh,

Andrew: but it’s basic, but we’ve all made the mistake of not doing it. And I say, oh, including you, your previous company was what? The one where you spent months in isolation.

Ulric: Yeah, no, no, exactly. I mean, we made this, uh, mistake, like so many time where our, uh, previous company, so it was a, a fashion marketplace, some kind of Tinder, but for, for fashion. Um, and we spent like, Six months to eight months just building the application, not talking to any, you know, customers and we were not the target audience.

Right? Like we were the least fashionable people, uh, at uni. So we just spent yeah, eight months building it and then we launched it and then it was not a great launch. Um, but you need to make like all, all these

Andrew: then what happened

Ulric: Say it again.

Andrew: it, when you launched it? What did you have? You say, Tinder for fashion? I’m imagining I could just kind of swipe through different, different, uh, shirts, pants, hats, et cetera. And then if there’s one that I like I could tap in and buy it

Ulric: And buy it.

Andrew: buying it, that sounds like a good idea, but I’m not a fashion person either, but.

I would maybe scroll through it. I could use some hats here now that I’m in Austin. Um, the sun is beating down on my face. seems to make sense when you finally launched it, why, what happened and what did you learn about why it didn’t work?

Ulric: Um, I mean, I think what we learn is that, I mean, first we didn’t spend any time like talking with potential users. So we didn’t really understand if even they had this problem. Right. Like we were not really solving a, a problem. It was just an idea. And we were like, okay, let’s do it. Like, you know, as you said, it seems like.

Not a stupid idea. Right. Um, and then we, we try, you know, to pivot out like a couple times, et cetera. But I think what, what is important as well is, um, is you need to be passionate, you know, about what, what you do, because you’re gonna, you know, walk like 100 hours on a, on this project a week and you need to have.

Really this, you know, this passion to, to wait for the product market fit. And for us, um, you know, I, I would really prefer to talk to, you know, venture capitalists and entrepreneurs and the fashion influencer. Even if I have nothing against them, it was just not a, it was just not a fit with the, with the industry.

Andrew: know what you mean, dude. My dad used to sell jeans and sneakers and stuff like that in what was considered the hood in Brooklyn. The dude was born in, in Iran. He was far, he spoke Fari first. He didn’t understand the hip hop that they were talk, that they were listening to the language they were talking.

He couldn’t communicate with them. He couldn’t spend time with them because he wasn’t part of their world. And it was really challenging to understand what the latest sneaker was. It was always someone who had to translate for him, what was coming up. And I remember think. I don’t ever wanna do that, sell to people that I don’t fully understand it just because it’s opportunistic, it’s really painful and it doesn’t really make much money.

So I get that. And meanwhile, before VO Bon, after this Tinder for fashion, you and your co-founders were kicking around a bunch of different ideas, 40 different ideas. I think you talked to our producer and you said you went through including a bakery in London. Why a bakery in London and we’ll get back to Von in a minute, but I wanna get a sense of how you were.

Ulric: I mean, the thing is that we were just, um, There this break to do something like it could have been anything, like, at some point we wanted to launch a zip line, you know, in belly, like between two Hills, like we just wanted to yeah. To do something in just a business, any kind of, of businesses. And so we explored this idea of yeah.

French back queen in London. I think we were a bit late because I mean, to be honest, like there are so many already, you know, friend French batteries, the, yeah. I was watching, you know, like YouTube videos on how to bake a. You know, French craft song, et cetera. Like I, you know, we were really serious about it.

Like we had a business plan. Um, and, uh, and yeah, I mean, at some point, you know, we realized, um, you know, maybe it wasn’t really, um, it wasn’t really a, you know, a good idea. Like, I mean, thanks, God, we, we didn’t do it because I couldn’t have, you know, worked in a, at like 4:00 AM to do the baking for, for the day.

Like it would’ve been a, a really, really tough life.

Andrew: This is you and Remy are the two co-founders right. The, the two really close friends. What is it about Remy that you made that made you wanna start a company together with him?

Ulric: Um, so we met at, at uni, like in, in freshman year. Uh, so at first we, um, we became, uh, friends by, uh, trading, you know, we were like passionate about like trading, um, for X and inequity, et cetera. We are like the earlier Robin hood, uh, traders

Andrew: Okay,

Ulric: we were spending our, yeah, our time, like just trying to develop, you know, algorithm on, on, on trading.

Uh, we lost like 400 Euro each,

Andrew: did wait. How’d you get 400 Euro to lose. And by the way, keep talking into the mic. Whenever you looked at the side, it doesn’t sound as crisp. How did you get 400,000 euros to lose?

Ulric: I mean, it, it results our, you know, pocket money. So we would, you know, like save, uh, I don’t know, like 50 Euro amounts that we would put, you know, that we would inject in our, uh, algorithm and, uh, and yeah, I mean, we just, we just, you know, lost money, like 90%.

Andrew: Euro here and there from, was it from summer jobs or something?

Ulric: Yeah. I mean, it was, it was just really our, you know, P pocket money, like instead of, you know, going for bills, uh, with our friend, we would just, uh, yeah,

Andrew: Got it. And I’m guessing it wasn’t that you put in 400,000 Euro and lost it all. It’s that you put in some amount of money. Got it. To 400,000 Euro plus, and then lost 400,000 Euro from the high to the low was a 400,000 lost. Got it. I, I feel like you’re so uncomfortable as we’re talking about this, did you end, did you end up losing money in the end or doing okay.

Ulric: no, I mean, we, we lost that. Like we lost, you know, just yeah. This 400 Euro and we were like, okay, maybe, and we spent a year of that. Right. So it was a, a year of, uh, trying to, you know, hack the stock market and, um, and it was just a, yeah. A net loss.

Andrew: Wow. All right. So was it just

Ulric: yeah.

Andrew: a bunch of

Ulric: No. I mean, what I exactly, I mean, what I really like about, um, you know, Remy and why I think it it’s working great, um, together is that essentially, uh, you know, is gonna promote and I’m gonna build, so, you know, promo, if you have promote and build, you can create, uh, you know, really good company.

Right. But it’s, it’s very, yeah. Separated.

Andrew: Has always been a good, uh, good combination in tech. Okay. So now you put out the Google AdWords, 80 bucks down the drain, but meanwhile, you. 50, not down the drain. 80 bucks gets you 50 different potential customers. Now you have to go and build this thing. I’m curious about what the first step you took to actually create the legal work, the accounting, uh, work.

And so on. By the way, before you get into that, I should say, this interview is sponsored by lemon.io. We’ve been doing really great for them, which is why they keep coming back and buying more, more sponsorship spots for me. And the reason that we do well, it’s a natural fit or listen to this. You need developers.

What do you usually do? You go to your friends, you go to your contacts, you start putting ads out, right? Maybe you hire head hunter, expensive time consuming. And when it comes to developers, it could be especially expensive. If you look locally, where are you now? You’re in, in the UK.

Ulric: UK. Yeah.

Andrew: Super expensive. What the team over at lemon does is they go to Eastern Europe.

They find you developers who are on par with the people you’d find in London, in San Francisco, in Austin, et cetera. And except they happen to be in, in Eastern Europe. And so their prices are lower. lemon will match you with them. So you don’t have to put an ad up and hope that you find the right person.

They will match you with them. Within 24 hours, they have a replacement guarantee because they feel so confident that they could find you the right people. And then they’ll make it easy for you to work with them. Full-time part-time, they’ll help track time. If that’s what you need. They are amazing at doing this.

I want you, if you’re listening to me to not just go to lemon.io and get the same great low price that everyone else gets, I want you to get a discount on their already low price by using my URL, which by the way, gives me credit with them. And I really want them to know that I’m I’m doing well for them.

Here’s my URL for people who are listening. It’s lemon.io/mixergy lemon.io/mixergy. You’ll talk to a real person who will hook you up. It’s like, uh, I don’t know, uh, like a Yetta, remember Yetta from the movie. She will talk to you and find you the perfect match. That’s what they’ll do. All right. What’s the first step legally that you put together

Ulric: Um, so the thing that we. You know, we are a, a full stack startup. Um, so essentially it’s a startup that has a operational component, right? We are not just pure software, but we actually provide a professional services. Right. Like to get your legal documents, do your, your accounting, et cetera. It’s like a delivery, right.

So they have the app, um, yeah. Delivery. But you, you actually need to manage the writers, et cetera. Um, And the ultimate goal of this type of, of startup is to automate, you know, everything of course. Right. So, uh, but you can’t do that at the beginning cuz it’s just, you know, like very difficult to automate accounting, to automate, you know, legal documents.

Um, so how did we go about it? We just, um, started by outsourcing everything. It’s like, you know, different service provider, different lawyers, et cetera, to learn as well. You know, how they do things and very quickly then build a product and start, you know, automating each, um, step of the process and, you know, starting replacing it, all of the service providers.

Andrew: The first, the first nine people, all you were doing was going to find the right service providers, asking your clients, what do you need or understanding from the lawyers, what, and the, and the accountants, what they need, making the match, watching it unfurl for them, and then saying, what can we repeat? What, what process can we systemize? Am I right about that? Understanding?

Ulric: Correct. Yeah. I mean, at first it was very, uh, manual, you know, for one, uh, client we would need to manually create, you know, like 100 document and versioning, et cetera. It was like a giant, uh, Google drive. Like it was pretty bad. Uh, but the thing that we, you know, the force of a startup is that you, you have to love your clients, right?

So you would. Anything for them, which is not the case of, you know, traditional professional, uh, service provider, like lawyers, et cetera. So we would go, you know, above and beyond to satisfy them, even if the experience, you know, were, was not, um, was not so great. And then slowly, you know, you, you started automating thing and, and the product, uh, take shape.

Andrew: How much was it costing you to service each new client? I, I kind of like that you’re calling them by the way, a, a hedge fund, but in reality it almost makes the, their role bigger than it really was. It’s kind of like a, more like a super, like an angel investment that they were putting together. Right.

It’s just one person. I want to invest in this one project, crisp Chris, uh, crypto project or these collection of coins. It’s not a hedge fund. Who’s sitting on wall street. Who’s got all these different investments. We’re talking about individuals who just wanna make investments and pull other people’s investments to do that.

Right.

Ulric: So, yes and no, because at first it was really hedge fund. Like it was

Andrew: really was hedge funds who needed you?

Ulric: Yeah. Yeah. Yeah. It was, it was really hedge

Andrew: what, why do these, he funds need two dudes. Who’d never done this before. Couldn’t they just make the same phone call and get lawyers themselves.

Ulric: No, because it’s difficult. You know, like when you walk in, um, you know, in like in wall street or in investment banking or in trading, like your dream is to create your own fund, right? Like your dream is to, uh, resign, quit, and then start your own hedge fund, but you just don’t know how to do it. Right. So you go on Google, how to start my own.

Hedge fund. And then you would, you know, see us like on a, you know, on ad world and we would help you to, to get started, cuz it’s a very, you know, opaque, um, industry where you don’t know exactly how to do these things

Andrew: how much were they looking to invest millions or tens of thousands in the beginning.

Ulric: for hedge fund. It was millions like one to 10 millions.

Andrew: wow. Okay.

Ulric: Yeah.

Andrew: And they still couldn’t just hire F. A lawyer and an accountant to figure the whole thing out. They needed you to do it.

Ulric: could, but you know, it would’ve, it would’ve been a, a very painful, uh, experience if you do that. So it was really, you know, the easiest way to get you started.

Andrew: Okay. All right. I like how, how clear this was for you and then you were charging them. How were you taking a yeah. How were you charging?

Ulric: It was very simple, you know, pricing because what I hate about lawyers is that they will tell you, okay, it’s gonna cost 50 K. But then, you know, one week before the project is finished, they, you know, tell you, oh, actually, you know, I went through the billing, et cetera, and it’s gonna be 150 K. And so you are mad, et cetera.

So you try to negotiate down and they say, okay, we can settle at 100 K. So it’s such a bad experience. Right? And for us, the pricing was very, you know, clear. It’s like 20 K set up and then one K per month, uh, like, you know, recurring every month. And it’s simple, right? We, we are not gonna renegotiate the pricing, et cetera.

It’s a very transparent, uh, pricing that is on the website.

Andrew: It was one K every month for the life of the fund.

Ulric: yeah, one K every month for.

Andrew: And you had nine people who are willing to do this. If I understand, right. In the beginning, when you were doing this all manually,

Ulric: Correct? Yeah.

Andrew: that means you were bringing $90,000 and your expenses beyond your co-founder time was what, how much were you paying on lawyers?

Ulric: So at first. I mean, we had maybe, uh, not a lot of margin, right. It was maybe like 10, 20% margin. Uh, so we were not yeah. Generating a lot, a lot of profit at all. Cause we were, you know, expecting that, then we gonna automate et cetera. Yeah.

Andrew: Okay. That’s still great. That’s $9,000 for you coming in on a monthly basis that you could, obviously you’re not taking it and going and partying. If you were even in school, if you weren’t gonna take your $50 and go blow it on beer, you’re not gonna take this 9,000 and go blow it on parties.

I get it. But now you’ve got real profits coming in. No outside funding at this point for, for Bob.

Ulric: Yeah. First funding was, um, eight months after we started.

Andrew: Okay. So then it’s the two of you doing this? You’re spending money on legal work. You’re doing this yourselves being the in between. You’re learning from each one of these, uh, different funds that you’re putting together so that you can bring the learning back to the others. And now it’s time for you to say we could either be service providers who go crazy being middlemen between these other service providers.

Or we can create a systemized way of doing business that reduces our headache and speeds things up for our clients at that. What’s the first thing that you start to systemize that you start to automate here.

Ulric: Uh, it, it was legal documents. Cause the thing that, you know, even a, a lawyer and that’s what we, we didn’t know. Right. But we realized it very quickly, a lawyer can make mistakes, right? Like it’s actually very hard if you. If you have like 10 legal documents for project and you want to make a change, but the change, you know, will impact like other documents.

So every time you change something, you need to rep you know, the, the changes all across like a set of documents. So it’s actually very hard to keep a, you know, a set of legal documents, very consistent. Um, so that was a fair thing. You know, we, uh, we’ve done

Andrew: So one thing changes in one place, you change it throughout the document. Did you code automatically, did you code this up yourselves or did you just find software that it.

Ulric: no, we, we, we, I could that myself.

Andrew: You coded it yourself. So now you, as the developer get to take on the actual work of building, Remy can go and spend more time on promoting. You built this out yourselves. How, how did it look? How did that first version that you built? Look.

Ulric: Um, I mean, it was working like , you know, it was, uh, it was working. So essentially, you know, when you, when you launch a phone first, you need to have your legal documents and you need to onboard your investors. So essentially they need to fit in like forms, et cetera. So we were building the platform as our clients were going through the process.

So, you know, every month we would add a, another tab on the, on the dashboard.

Andrew: Ah, yeah,

Ulric: will, that will be the, the process. You see what I mean?

Andrew: Yes, yes, yes. All right. And then tell me more, what else did you start to update? And then how did you learn from your customers? What you should be updating.

Ulric: Um, I mean, in terms of update at first, we. So when we developed this, um, investor onboarding, uh, you know, to comply with regulation, we thought it would be, you know, only like individuals that will invest in, in these, uh, funds, but actually, you know, you have like a range of investors. So that could be, uh, you know, institutional investors investing through their family offices are holding, et cetera.

So the first thing we we had to update was to, um, Include, um, like a onboarding application for companies as well, plus individuals.

Andrew: you wanna make sure that the money that’s going into the funds is not shady. It’s not illegal funds. It’s not going in. And so you created a process to onboard them that would allow you to investigate them. Who’d you use? What service did you use to investigate the investors?

Ulric: Um, so at first we use this, um, it was like a background check provider where basically you won tell the name of an investor, and then, you know, the service is gonna match on all the, you know, like terrorism list, money laundering, you know, leased across the world. So they have like all these databases and you dress

Andrew: but it’s basically you connecting with this service through their API. Got it. And now you onboard an investor, you get all the CRM information so that they get added to the, uh, to your funds, uh, address book, essentially. And at the same time, your a, you make API calls out to this other company that checks the investor.

Make sure that they’re okay. Golden. Why do you need to check out the companies that are being invested in? I understand the investors, but why the companies.

Ulric: because you, you don’t want, um, You know, you, you don’t want, uh, investors to invest in a fund that is going to invest in, uh, you know, in scam or like, you know, shell companies or, uh, you know, companies yeah. Are legit as well. Yeah. Cause it’s your role as a fund administrator to, you know, check that the investors are fine and the investment are fine as well.

Andrew: Okay. I’m with you so far, this is starting to make sense. You said after eight months you raised money, what was it that told you that it was time to raise money? How did you know.

Ulric: Um, we just needed more automation and, you know, I, I was the only, uh, developer, so I was, you know, completely , uh, overwhelmed. Right? Like they, they were like just so many, uh, things to, to do. So it was the right time for us to, um, yeah, expand the team, right. Like build out a proper. Product engineering team.

Um, go after the market, hire our first, um, you know, sales people, operational people as well to, to help us just to, to grow.

Andrew: By the way the company name is Von, it comes from, uh, A military engineer’s name, right? A French military engineer. Why did you pick his name? What is it about him?

Ulric: at the beginning we were called Citadel new, like, like a fortress. Um, but you must know that there is a very big hedge fund called Citadel. Yeah. Investment firm called Citadel securities. So they sent us this, uh, season disease letter only like four months, uh, after we started. And, um, and we were like, okay, so we need to, to change name, right.

We, we are not gonna fight. Um, And essentially VRBO was yeah. French military engineer during the sun king. And he built all the Citadel, like all the fortresses in France. So we were like, okay, you are a Citadel, but we are gonna be the guy that are

Andrew: Who built you?

Ulric: all the F dresses. Yeah, exactly.

Andrew: now all these funds are like their own citadels. They’re protecting money. You’re the one who sets it up for them. Got it. Okay. And I also like that he’s an engineer, not just a creator and builder, but he’s an engineer and frankly, the military side of it makes me feel like you guys are ready for, for the hard work of battling your competitors.

The whole thing feels, feels right. Um, at what point did you start. Replace the outsourced accountants and the outsourced lawyers that you were bringing in.

Ulric: Um, it was after a year where we started first to, um, to replace, uh, the account. Uh, and then, I mean, we still work with, with lawyers now, but it’s not on a project, you know, not client per client. It’s more like, okay, we, we want to build this new, um, Fund structure in the us. For example, we, we want to make it easy now to raise from us investors.

So let’s work on, you know, some template, et cetera. Can you provide us the template? And then we automate the template instead of doing on the client by client.

Andrew: Okay. Do you, you’re saying though, to this day you still use outsource lawyers in addition to in inside lawyers. Okay. And you started bringing up the us versus Europe. You were European based in the beginning. How hard is it to go from France to another country, to another country still?

Ulric: I mean from day one, we knew that we needed to go international because when we started in London, you know, UK is a, is a small, you know, market. Right. So we were like, we can’t just build a big company in, in the UK. Like we need to start from day one. How we gonna, you know, like expand and go international.

So the entire platform was build around this idea, you know, where it was very easy, add new product, new prediction, new country comply with, you know, different regulation, et cetera. It was very important for us.

Andrew: Okay. guess now I’m starting to see how it all comes together. I’m seeing the building. You now need to go get more customers once you, once you started automating, you can go beyond the nine without going crazy. How’d you get the next batch of hedge funds, venture capitalists, anyone else who wanted to raise money?

Ulric: Um, so we just scale our channel, you know, so ad words and, um, content, you know, content marketing and, and really world of mouth, because you know, all of this in all of these, um, hedge fund managers, they network a lot, you know, with other hedge fund managers and other investors. So that’s really how we, yeah.

How, how we, we scale it. Um, but yeah, two, two to three years after we, we, we started on hedge fund. We realized it was, it was not really, um, like we were not in the best place to, um, To create a big company with hedge funds, uh, only because it would make more sense, for example, for Robinwood, you know, to do it with like copy trading, like for very small hedge fund, right?

Like you don’t need a very institutional platform. So we pivoted to, um, to venture capital, like private market and, and, and venture capital. So we Debo all of our clients, like all of our hedge fund clients. Um, that was very, um, yeah, tough, tough decision. It was not easy at all. Um, because it’s, you know, all

Andrew: because you saw that there wasn’t going to be much growth in hedge funds in hedge funds on your platform. You said someone else can do a better job than we can. Why not keep those current clients keep servicing them while you’re bringing in new ones?

Ulric: Yeah, it’s very, yeah, it’s very interesting question. Um, cuz you know, you can, I mean, focus is so important, but you tend to, uh, forget it, right? Because as founders you are so trained

Andrew: but so is money. Money is also important, right?

Ulric: is important. Yeah, because the thing is that, you know, if you keep like chasing the newer shiny object and you keep adding product, product, product, et cetera, I mean, at the end, you, you’re not gonna create any great product and, and you can think, okay, but wait a Musk, you know, is going to, to space, et cetera.

Why can’t I serve hedge fund in, in venture capital? Right? Doesn’t look. Is that hard, but actually it’s hard. Like actually it’s, uh, like we realized we, we just needed to, to focus more on one single product where, you know, we really believed in and execute on that and create the best product.

Andrew: How did you know that it was going to be venture capital, that it was going to be these angel type investors?

Ulric: Cause when we, when we released a product, we really saw a, you know, the start of an exponential, even though venture was only like 10, 20% of our revenue, it was growing much faster than hedge from, uh, so we were okay. Maybe it’s time to yeah. Reconsider the, the strategy and, and make the switch.

Andrew: I think that makes

Ulric: So we lost like 80% of our revenue.

Uh, yeah. You know, in a single day, that was pretty tough.

Andrew: I’m wondering how you acquired so many people in the venture space in the startup world. But first let me say anyone out there who’s, uh, building a business knows that email marketing is a great way to reach out to your customers. Right? You know, this all Rick, you get somebody’s email address. You keep teaching them, keep staying in touch, and eventually they’re going to buy.

I. The problem with email marketing is a lot of email software just stinks. All it does is pound pound, pound people with email and all Rick, you know this because, you know, send in blue, we talked about them before we got started. What they do really well is they say, okay, if somebody already bought, if somebody already converted, you could just tag them, you know, that they’ve actually bought and you don’t keep pounding them with sales messages.

And you definitely don’t do the horrible thing of saying, Hey, by the way, we offer this big 50% discount today, which is such a painful thing for somebody who just bought from you. intelligent email marketing will avoid that by understanding when people have taken action, you can send follow up messages that are different from what everyone who hasn’t taken action gets.

That’s what send and blue does the problem with a lot of email marketing software, is it doesn’t do it, or if it does, they start out kind of inexpensively and then they Jack up the price to outrageous levels. Not send in blue, send in blue, starts out inexpensive and continues as you grow, staying reasonably priced.

And you could see this for yourself. It’s hard to change email marketing companies. So pick the right one that yes, we’ll be, uh, inexpensively priced. Yes, we’ll have all those features that you love. And frankly, Goes beyond email because you might discover that SMS gets you better response than email. And if it does, why go and sign up for another service that then has to connect back into your CRM with email?

You don’t need that. And then if you wanna have live chat or, or, um, everything else that’s out there, work with it, send in blue will work with all those external services or frankly, they have a lot of internal services that are already built. And if you’re paying for them, you might as well use it for them.

Use their landing pages, add more email addresses using their tools that are included. In the already low, low price that you get when you go to send in blue.com/mixergy, why throw the slash Mixergy at the end? Because yes, you give your old Paul Andrew credit for sending you over. But number two, You get an even lower price than other people who sign up for send in blue, go investigate them, look into them.

I have absolute confidence that you will love them. Once you look into them. And once you try them, you’ll love them even more. And use my URL to get started right now. Send in blue.com/mixer G. And of course your influencers. If you’re listening to me, tell your friends that’s the company they should be using for email marketing, send in blue.com/mixer.

All right, let’s talk about the rest. Was it going to ventures still all about getting into, uh, buying ads and getting into the, uh, well basically, was it all about spending money or was there something else that you were doing that worked.

Ulric: It was the exact, uh, same playbook, you know, start with Google ads because I mean, Google ads work so well on, on VRBO, just because it’s the best time, um, to reach out to a potential, uh, client, right? Like the, when you are launching your, your phone or when you, you want to launch a Cate, the first thing you do is you go on Google, how to launch a VC fund or

Andrew: Is it, or do you start to think, who do I already know in the space? And I’ll just go and talk to them. Is it that, or is. Who do I know who’s been offering this? Cause I don’t know that people think of Google for something like this, for certain things you think about, like you don’t look to Google necessarily when you’re looking for a doctor, you look to your friends first, right?

Ulric: No, I, I agree, but you, you would be surprised like it, it works. Yeah. It worked out so well. And then the second, uh, you know, part of the, of the playbook we tested on, on hedge fund is, you know, really to build this kind of brand and, and word of mouth. So it’s to start with, with Google ad world, like to get the first, um, you know, users like to get the first client, but then you really scale with the world of mouth, as you said,

Andrew: All right. I noticed that you went even beyond this, that the other thing that you did was you now have a, a product for an entrepreneur who’s trying to raise money. I got a buddy, by the way, he’s doing this. I, I told him and he, he’s not at all in the tech space. So he just went off on his own. Got a great business idea.

He’s he’s in real estate going great, but he’s managing all the safe, all the agreements, all the investments using fricking PDFs that he’s emailing people, which is such a real estate guy thing to do. And now he’s keeping track of the, do I go, dude, there’s a better solution. At what point did you say we’re gonna offer that better solution for entrepreneurs who are trying to raise money from friends and family?

They don’t wanna have all this stuff handled by themselves. We can do it for them. What point did you say that’s an opportunity for us too?

Ulric: Um, I mean, it was very natural because we use it on ourselves. Like when we raised our, um, series a like two, two years ago, um, we were like, you know, we have so many of these, uh, you know, angel investors, like guys from our, you know, networks that want to invest, but we can’t have. You know, like 35 investors on the capable and, you know, the VC would lose their mind and , and they would just, uh, you know, stop the process.

Right. So we are okay, actually, we have this SPV product, right? Why can’t we use it for ourself where, you know, we wrap all of the angels in an SPV and it takes only one line on, on the capable and it’s all, uh, you know, manage automatically on the SPV. So you, you know, you just focus on, on your own and you just, you know, send a link.

Investors and angels that want to invest and they go, you know, follow their, their own process online. So you don’t have to, to manage them. And it worked out. Yeah, super well. You know, with our round, like we raise, um, 300 K from, uh, from angels and the experience was great. So we are like, actually we can, you know, productize that for other founders.

Andrew: What about, uh, pricing? How did you figure out how to price did you. Did you stick throughout the early days with, uh, monthly fee? What was it that you, how did you adjust pricing?

Ulric: I mean, pricing is a, is a very interesting, um, topic. You have two ways of doing it, or you spend, you know, weeks and weeks, like trying to, uh, optimize your, your, your pricing and, and try to be, you know, smart and outsmart the competition. And I think, you know, you would lose time or you just, um, reflect the pricing of the competition.

Like you basically. You know, have the same pricing as them, but you beat them on the, on the product and on the features, et cetera. And you build a better product, but with the same pricing, like you don’t want to win just because, you know, you are, you are cheaper. Um, and we went with a yeah. Second solution.

So very easy.

Andrew: out there already. Let’s just match what other people are doing and improve the feature.

Ulric: Yeah.

Andrew: Speaking up there are other, um, other companies out there there’s Asho there’s angels, et cetera. How do you, how do you compete? Some of them have real brand names because of the, the entrepreneurs behind them.

Others are just kind of institutions in the space. What do you do? That seems like a tough battle.

Ulric: Yeah, it seems like a tough battle, but actually when you think about it, uh, our unique selling point is that we are truly global. Like we are international and it’s very important in our, in the VC world cuz venture capitalists. Are very social creators, right? So they would always, you know, travel around the world.

They would meet like investors in Paris, in New York, in London. And so they need a platform where they can onboard investor, you know, all across the world. Um, they can create, um, you know, phones and SPV in the us, in the UK, in Luxem, you know, in Europe, um, to accommodate for any type of investors. Um, whereas you know, the, the platform you mentioned.

News. They are great, right? Like it’s, it’s a great product, but it’s very, um, us centric. So it works well, you know, if you have 100% us investors, but you don’t, you don’t want to go. Yeah. Global.

Andrew: And then where you, I didn’t realize that. I thought that they were working globally well, too. Where do you see that people are globally? Like where is the outside the us? Where are the majority of investors on your platform coming from?

Ulric: Everywhere really. I mean middle east, uh, you know, France, Lux, Sambo, UK, Singapore, Hong Kong, South Africa, uh, us as well, of course, but I mean, us is just 50% of global venture funding. So you have, you know, the other 50%, right. That are coming from. Rest of the world. I mean, I don’t like the expression rest of the world because it sounds like a

Uh, but yes, that’s, that’s the truth, like 50% of, you know, VC funding, uh, come from elsewhere as well.

Andrew: all right. And so if I create one SPV, one special purpose vehicle, can I then take investors into it from all over the world? From the middle east, as you said, Europe and the us.

Ulric: Exactly there you can, you can do it on, on,

Andrew: Oh, okay. All right. One of the things that you told our producer was that it was hard to hire then somewhere around 20, 19, 20 20, the market changed because you were starting to see that, um, there were layoffs, the layoffs in 2020 were because of what? In other companies mm-hmm,

Ulric: Yeah. So, I mean, it was because of, uh, COVID first, uh, and then now, you know, there are just a, a lot of, you know, layoff because of the, you know, current macro environment. So actually it used to be a very, um, hard problem, like Haring, because you need to, you know, compete with like so many other startups that raise like million and millions.

Um, but now it, yeah, it’s getting easier.

Andrew: Got it. You, so when there were layoffs around, uh COVID you were able to start hiring how many people on the team right now?

Ulric: So there are 50 of us.

Andrew: 50.

Ulric: Yep.

Andrew: can you talk about what the revenue is publicly? Where are you now?

Ulric: So , I, I can’t tell you exactly the review, but I, I can let you do the, the math. Um, so currently we have 300, uh, clients, like 300 fund managers, um, and we do 40, 45 SPV per month. And on average, on SPVs around 10 K

Andrew: 10 K per month of managing it.

Ulric: 10 K uh, lifetime. It’s a, it’s a one-off transaction.

Andrew: 10 K lifetime. And then how many do do you onboard every month?

Ulric: Uh, 45.

Andrew: 45 new ones. And you just set it up for them. They just pay 10 K. They have their SPV and then they move on.

Ulric: Exactly.

Andrew: and then managing

Ulric: where you.

Andrew: managing it, making sure that the, uh, the financial paperwork goes out at the around tax time and so on. Is that on them or is that also included

Ulric: It’s included, like essentially everything, uh, is, is included where, you know, you just do U S P you make your investment engine. You forget about it. Like you forget about all the filings, uh, yeah. Tax filings, regulatory filings, like

Andrew: for the life of the fund?

Ulric: Yeah.

Andrew: and you have no ongoing revenue from any of this,

Ulric: So we have recurring revenue for VC fund, but not for SPV.

Andrew: not for SPV. So if it’s it’s SPV means investing in one product in one

Ulric: In one in one company.

Andrew: that’s it. And so for that, you have no ongoing for funds who are investing in multiple. There is, and what’s the fee for that. What’s your ongoing revenue from that?

Ulric: So to launch a V for and VRBO, it’s 20 K uh, one off for the setup and then it’s 25 K a year.

Andrew: Okay. All right. I’m seeing the model. One of the things that you told our producer was we then had an existential dilemma. I love existential dilemmas. I love that Ari can actually get people to admit that we had a crisis or a dilemma that made us wonder whether we could survive. And the existential dilemma was what do we do next?

Do we just keep perfecting this one product? Is the market big enough for us to make this the most perfect thing? Or do we need to start to move to a different sector? Like maybe real estate, right? If somebody wants to invest in real estate property, they also need the same type of system that you’ve created for somebody wants to invest in a startup.

How do you decide where to go?

Ulric: I mean, we, we, we are still, uh, figuring it out. Um, I mean, it comes back to, you know, what we were discussing, right? Like the focus is so important and I still think we have so much to, uh, you know, to, to build in, in, in venture capital and to go, uh, more, um, you know, vertically than, or reasonally, and, and starting to launch, you know, like commercial KU really estate, et cetera.

So we are gonna do it for sure. But right now, Remain a, you know, soldier of, uh, the venture capital industry.

Andrew: So as long as there’s more growth in venture capital, you’re gonna continue with it as soon. Start to see, you know, what we’ve exceeded the, like the, the benefit is not worth putting in more effort, we’ve got a solid product, then you might look into something else. Um, and then the other thing you told Ari was that there are a couple of times when you almost gave up.

And one of them was the thing that you and I talked about earlier, crypto hedge funds. And I guess part of it is that there’s so much fricking volatility. I mean, as we’ve seen now, we’re in the middle of 20, 22, like tremendous volatility. You were seeing that even before. And how did the volatility impact you and your business?

Ulric: So actually it’s pretty fine. Like from what we, um, you know, from what we see, like, we are still growing, like the number of. D investment, SPV and phone are still growing. I think it’s actually the best time to launch a VC phone because, you know, would you prefer to have started a VC firm like two years ago and invest in companies at peak valuation or start now and invest in, you know, very reasonable valuation where you have your time, you know, to do your due diligence, et cetera.

Because a year ago it was crazy. Like, you know, the deals we just. You know, last for like two or three days, and you needed to commit without any due diligence as a VC, but now you have, you know, like a month, right. To do your due diligence and to invest and to actually do your job. So I think it’s actually the best time to invest, you know, in long term

Andrew: about getting investors right now? Yes, it is the best time to get a good deal and a smart deal from a company that you’re investing in. What about from raising money? When people are looking at their crypto investments and. Wall street investments and they’re all down, feels like that would make it tougher.

Ulric: That’s a challenge. It’s really fundraising. And it’s really about, you know, how you approach investors, but from an investor perspective, essentially, they don’t. A lot of option, right? Because all they stay in cash and they get crushed by inflation. All they invest in bonds. But the prime is that the interest rates, uh, have not match inflation inflation yet.

So you can get crushed. And the volatility on the stock market, you know, is so high, right. That you can lose like 10%, um, a week. So actually, if you, you know, if you, if you take a step back and, and you look at the macro, you know, investing in, in the, in the long term is actually. Yeah, pretty good. Um, pretty good solution.

Right? Pretty good options.

Andrew: Has your business gone down in the last, say two to three months

Ulric: No, we are actually growing like 20%

Andrew: still growing, despite all this more people, creating funds, more people creating special purpose vehicle.

Ulric: Yeah.

Andrew: freaking a all right. Congratulations. All right. We’re in the summer. Let’s close it out with this. What are you doing for fun when you’re not working? What’s the thing that you gravitate towards.

Ulric: Um, I really like, uh, reading, listening to a, to podcast as well. Um, like I’m uh, yeah, I, I just finished this very good, um, book about, you know, the, the culture map. Have you heard of it?

Andrew: What the culture map?

Ulric: The culture map?

Andrew: No. What is it?

Ulric: No. Um, Essentially talks about how to work with people from different cultures. Um, and it’s, and it’s a bit, you know, controversial, right.

Because, you know, nowadays it’s really about, um, the individual, right? Like you can’t say, oh, all French are like that. All American are like that, et cetera, but actually in the workplace, when you interact with people from different culture, you. You can see that things, you know, are, are different, right? For example, in France, it’s not super rude to arrive like five minute late at a meeting, but if you’re in the UK or in Germany, it’s actually very, very rude.

Um, and you need to walk out and to understand all these differences, if you want, you know, if you truly believe in diversity, uh, you need to understand the, the differences in, in the different cultures. Um, and same for America. For example, you know, American are very. Direct right in business. But the only exception is when they provide, uh, feedback, let’s say at performance review, they will be not direct at all.

Right? Like they will wrap everything up in a, you know, with a lot of positivity, et cetera. So they’re not direct, but in France, We are not very direct for, you know, when we do business, but for performance review, you know, we are very direct where we just say, okay, this work was really shaped. Right. so you, you need to understand that otherwise, uh, it can create, you know, like huge misunderstanding.

Um, so yeah, I found it very, very interesting. It’s one of my favorite, uh, book,

Andrew: What’s the name of the book,

Ulric: the, that K map.

Andrew: the culture map, I’m reading the two hour cocktail by Nick gray way lighter than what you’re talking about because. I’ve forgotten what it’s like to get people together and having a two hour cocktail party with a few people, especially now that I moved to Austin, I wanna get to know more people it’s such a, such a helpful thing to do.

And it’s such an efficient way to connect with people that I’ve gotta remember how to do that and get back into doing that. All right. Alright. This has been fan fantastic. I appreciate you coming on here. Thanks so much for doing this.

Ulric: Thank you so much, Andrew.

Andrew: All right. And for everyone who’s listening, the site is VO bond. Wait, it’s VO bond.io input output VO, bond.io, V AU B a n.io.

And I wanna thank two sponsors who made this interview happen the first, if you need to hire developers, you already know, go to lemon.io/mixer G. And the second, when you’re ready to do email marketing, right? Especially when you’re starting a company, your friend is send them over to send in blue.com/mixer G I’m grateful to them, to you all Rick, and to everyone.

Who’s listening by everyone.

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