It's gut wrenching, you know, to bring all your team into the conference room and say, we have two months worth of capital left in the bank. We're not going to be able to secure anymore. Here's your severance package. We really appreciate all the work that you've done, and we hope to be able to rehire you in the future when times are better. There's, like, nothing worse than doing that.
And then you take, you know, you take the hit along with everybody else.
So the big news has been announced. Like, you wanna do that again, Tim? Like, you than ever.
That's right. We're going bigger than ever before.
Yes. Yes. So the big news announced yesterday that the Startup World Cup, which will host 10 of the next big businesses in Virginia
on stage. I guess, like, beyond next big. I mean, like, there are they're probably the biggest startups in Virginia, but, like, the next series b, c companies. That's what we're looking for.
We're Yes.
But keep going. You're doing great.
Will be able to, pitch on stage at, according to Tim, the biggest event the biggest business event in history. What a lot. I love that.
I I well, I'm I'm meant I'm looking, like, Virginia. But, like, I and I asked a question on LinkedIn. What is the biggest venue that you pitch at? I doubt that and, know, I mean, very few people, I think, will have had the opportunity to to pitch at something like a Sandler Center.
The biggest event for me was 600. I was terrified. But this is bigger than that, the Sandler Center in Virginia Beach. It's gonna be lovely. August 21, '5 to
eight. Tickets are available?
Yep. You can go to innovateinnovate757.org/startup.
And when I say when I say tickets, we're not talking, like, get your hundred and $82 ticket. We're $10.
Plus Ticketmaster fees.
Yeah. But if we're just a nominal fee. Get there. We just wanna make sure you show up. These these startups are putting a lot of effort.
We're we're scouring and searching and turning over every rock to make sure we get the 10 best startups in Virginia. And, yeah, we wanna make sure they have a crowd that's there and supporting them and that the energy is there. So $10 Yeah. Coming coming for your your local startups.
There's the the site, innovate757.org/startupworldcupva, or just reach out to us. You know, comment on the video. It'll be in the description, all that stuff. But it'll be a grand old time if you're one of the businesses that we just talked about or you just wanna see what's the next big thing.
And, you we're we're we're trying to get as many investors there as as possible as well. So from your founder, if you don't make the top 10, you still should be there just to to
You never know who can be in that room.
You never know.
Could be your next customer.
And you never know who someone you're sitting next to knows.
Exactly. So we look forward to seeing you all there. But today, we have episode 259
Crazy.
I believe of this show, that started, I think, in August, actually, of 2020. I think for all these episodes, we've been saying March. But I think when it came around on the old book face, you know, the you did this on this day, I think it was, like, April '2. Don't quote me on that. We're do this for a while.
We're in year. This is this I guess this then means we're in the start of year six. Is that right?
Yeah. The you've been associated with all 259 shows. I took a I took a day off.
This is
I've only been $2.58. Only one day off, but it's okay. Sometimes we thinks think take Thanksgiving off. Sometimes we don't. Sometimes it's recorded on Thanksgiving.
Well, no. That is the one day that we do take off is because we know no one's gonna wash at Thursday at 11:00 on Thanksgiving.
Cooking turkey, bro.
They're, you know, getting ready for the lions game to see, Nickelback play the halftime show or something. I
don't know.
Absolutely. Or Shabuzy. Who's coming to Virginia Beach? Alright. Barry Bruck, what's going on?
Love the shirt.
Thank you, brothers. Thank you, my brothers. I like the title today. We got a lot of alliteration going on there, maybe some Star Trek references. I don't know what we're doing.
We're building boldly in Hampton Roads where no man has gone before.
That is definitely the first Star Trek reference in, all of
the 159
episodes. So congratulations on, checking that box off. We've been waiting.
What's your Tim
and I don't know you, I don't believe.
We don't
know you. Fun stores.
Exactly. Especially when we know a lot of, like, players that have been around the the hood, so to speak, for many, many years and that how our paths have not crossed. What's your what's your like, let's start from the beginning in terms of not, like not, like, beginning beginning, but, like, how did how did you first get involved in the ecosystem back in the day?
Well, I'll I'll take you down a a a short walk down memory lane for all the, first timers here. So I I grew up in Tidewater, in Churchland specifically, graduated from Churchland High, went to Virginia Tech, studied aerospace in Yeah. Sorry.
So My son is a hokey. He's finishing his freshman year. So
Hey. Listen. Listen. My brother went to UVA. It's a house divided, guys.
We can't say.
You went from a trucker to a hokey?
Yeah. To a hokey. Yeah. You know, it it it was a step up, honestly. Went went from one one set of farmlands to another set of farmlands, pretty much, but it was all a good experience.
I ended up deciding not to work in engineering because of a lot of reasons. So I ended up going into the media business and had a career in publishing and cable for about fifteen years, which prior to my shift, I I've moved back to Virginia Beach in late eighties and published the Virginia travel guide under contract with the Commonwealth of Virginia's Economic Development Corporation and the division of tourism. The the company that owned that contract was based in New York in in '90. After securing a really awesome house on 20 Fifth Of Mediterranean, I get transferred up to New York to handle the Big Apple Guide and a magazine called New York Hotel Magazine. So I was there in the city for till February no.
Yeah. Till when? '96. Had a had a lot of interesting time in the city because if you remember the era back then, we're talking the early nineties, it's pre Internet, but media was moving from traditional to what they call new media and digital content on CD ROMs and then ultimately the Internet. So I I founded a management consulting and product development firm in New York City in '92 called the Pinnacle Group, and we were very fortunate to get contracts with all the regional bills, little emerging companies like America Online and Netscape and Microsoft.
We had about 60 people doing about 18,000,000 a year. We're doing a lot of innovation for the Bell companies as a kind of a skunk works. Over the years, you know, obviously, the Internet took off. So I ended up moving to Seattle in '96, still running the Pinnacle Group. Hooked up with some guys at the MIT Enterprise Forum that were hanging out with people like, Jeff Bezos and Terry Drayton that founded Home Grocer.
Naveen Jane that founded InfoSpace. This other guy named Bill Gates and Nathan Mirbold and Paul Allen, they were all, you know, riding their bicycles to work. And it it was it was not a heady time because that hadn't happened yet, but I was there during the period that that all evolved. So kind of fast forward about twenty years. I don't know how much detail you guys want me to go into on various companies.
I kinda tick off a few. We, me and some guys, we raised $43,000,000 in July of ninety seven, built a software company to build the first electronic medical record for the long term care industry. Hired about 500 people from all over the world, moved them to a little town north of Seattle. We sold that company in o three to a a large pharmacy company called Omnicare. I got interested in getting seniors connected to the Internet during that experience and founded a company in '99 that was called senior center, senior center dot com.
It's still out there. And we connected seniors to the Internet using interactive television. So kind of think about what you experience in a hotel when you go in and you can you can go from on demand content to the Internet to TV. That's what we were doing in multi dwelling unit congregate housing. So over the course of time, I, was able to we were able to really build that product out into what are called a virtual visit, telehome care, telemedicine type of product, which ultimately got sold to McKesson where we we migrated our our IP and our tech stack into a product that McKesson marketed called patient vision, which if you're in the hospital and you have a TV in your room, which pretty much everybody does, the TV allowed the patient to, interact with staff, do a lot of workflows that the staff may have done, and we evolved this interactive TV interface over a series of several more companies that figured out how to do it better, cheaper, faster, and implemented those systems in hundreds and hundreds of hospitals around the country.
I moved back to Tidewater in 2016 and immediately began to think about the ecosystem that I had left in Seattle that nurtured entrepreneurs with a a very robust group of advisers, former tech employees who had made some money and thought that Tidewater, Hampton Roads, the 757, Cova, whatever we wanna call it today, is, is right for being transformed for a number of reasons. Now that's that's where innovate comes in. Right?
Yeah. What how is this with that journey, did you just follow the path of least resistance? What as you continue to evolve, down
Yeah. You know, it was weird. I hadn't raised I I the company in New York, we didn't have to raise any money for. We had some opportunities to raise money, but it was you know, I I hired one person, then we did a bunch of sales. We hired seven or eight more, and we did a bunch more.
Ultimately, we had a national network, and we're we're generating a lot throwing up a lot of cash at about a 40% margin. The experience in Seattle was different. The the first company with 43,000,000, it was it was actually structured as a strategic investment so that we never had to do a series a, series b, no convertible debt, no safes, nothing. The 40 the 40 3 million was allocated. What we had to do was meet certain milestones on hiring and code development every six months.
And if we met them, we got another $7,000,000. So it was it was kind of a an unusual financing, but it was strategic, from a strategic investor. The other companies that I've been involved in were grounded grounded just had to grind it out. You know, you had I seed funded the first company, and we raised two convertible debt rounds of about 5,000,000, combined in late ninety nine. We closed a series a round of 5.4 in February.
So just think about that that date for a minute. Two weeks later, the Nasdaq bubble burst and shit hit the fan. So we had a $12,000,000 round plan for 02/2001 that never happened. At that point, I had 25 employees. Our burn rate was a couple hundred grand.
We're building products so that people could access the Internet on their TVs. SeniorCenter.com was the product. We weren't part of a .com bubble business model because we actually made money on the implementation, installation, training of the of the people that were using the system. We weren't an ad supported model. It was we made money on the implementation.
And then there was a recurring model as well. But to answer your question, yeah. So that that period of time was was very catastrophic for all startups and all funds. So we were raising money up and down the West Coast and also from New York during the latter part of February, which was a complete shit show. Nobody wanted to do anything except run for cover, triage your existing portfolio, and not put any money into any new companies.
So our b round, which we had slated for around February, Never happened, obviously, not not just because of not just because of the, the .com burst, but also there was a little event called nine eleven in New York, which, again, created a macroeconomic headwind for all of us.
Wow.
Yeah. So then you have to do the hard things you have to do to survive. You know, you lay off 90% of your staff. You, as the founder, stop taking payroll. You pay your people, and you kinda muster through.
So we were fortunate that we had some really good gigs, during the o one or two or three period of time that were funded by the Bill and Melinda Gates Foundation to create opportunities for other digital divide cohorts, seniors being part of the digital divide. We had basically built a system that allowed people to get online without a computer. And, we did some projects for the Gates Foundation, were featured in an article in the New York Times in o three. And then the board told me, at the end of o '3 to go try and raise some money based on the little bit of lift that we have or bumping along the end of the runway kinda hanging on by our by our fingernails. And I went out to two sets of potential buyers, struck out in one one vertical, found a potential buyer in the other, and we sold the company.
It wasn't any great exit event for anybody, but we got out and continued to develop the product under the under the mothership of McKesson, which had a lot more resources than we would have ever been able to secure.
What's your day in the life look like these days in terms of, what are you what are you doing? How are you are you still involved in the start up scene? Are you, giving back in ways, mentoring? I'm sure that you've you've picked up a lot of valuable lessons like today or after the ZERP era, you know, eighteen months ago. Seemed like the number one thing that every founder was being told was cut, burn, cut, burn, cut, burn.
And, so you've you've experienced that firsthand.
Yeah. It it it's it's, it's gut wrenching, you know, to bring all your team into the conference room and say, we have two months worth of capital left in the bank. We're not going to be able to secure anymore. Here's your severance package. We really appreciate all the work that you've done, and we hope to be able to rehire you in the future when times are better.
There's, like, nothing worse than doing that. And then you take, you know, you take the hit along with everybody else. But as a founder, you can't leave. You have to stay because even if you take it down to just one person, you've gotta maintain the, the the organization's forward motion regardless. Now at some point and let's say, you know, you mortgaged your house, your three payments behind on on your on your payments, and your car got repossessed.
It might be time to think about opportunity cost and go find something lucrative to do that, isn't isn't, where you don't have a % equity. So it it it can be a it can be a wake up call too. At some point, you you may have to just say, I gave it the old college try, and it's time to move on. I've seen a lot of founders do that who busted their ass for seven or ten years, you know, raised $10,000,000, with 300 angels. We're working with a company right now that is having having the consolidation done for their cap table to get 300 investors that put in about $12,000,000 into one entity.
So it you do what you you do what you have to do, Tim.
Yeah. Yeah. That's rough. Signatures. Oh, that's what I was thinking too.
When you mentioned 300 p, I'm like, man, that cap table's gotta be a nightmare.
Well, yeah. I mean, just think of the the legal fees to do the consent resolutions that are happening right now with, in in in, the West Coast. Yeah. It's ridiculous. That founder should have had somebody beat some sense into him, like, early on in the process.
But, yeah, you come across a lot of really, wrecked deals that you are trying to maybe resuscitate. I'll go back a little bit because I I wanted to focus on, the angel group that's predominant on the West Coast or actually nationally. When we were raising money for senior center, I one of my board members, one of my angels was, the chair of life sciences committee for the Coretsu Forum in the Bay Area. So this is 1999. Coretsu was pretty new.
We pitched. We didn't get any money. We ended up getting money elsewhere. But in 02/2005, Coretsu Forum decided to branch out from the Bay Area, they wanted to open a Northwest office. So two friends of mine were the people that opened Kuritsu Seattle.
I was one of the first hundred and fifty members, you know, and their model is it's a 50 accredited investors max per chapter. Now as they have grown around the country, they can syndicate deals across, the other chapters because once you're vetted by one chapter, you can do others. So I was on I was one of the 25 people that was on deal screening for about nine years. We would typically get about a hundred deals a month. And we would we'd look at it and we'd carve it down to maybe 10 or 15.
We'd have the CEOs come in and pitch, and then we, you know, curate it down to three that we present at the monthly lunch meeting that we'd have at the Bellevue Club or the Ranir Club or, you know, someplace nice. And people would write checks. I mean, Kuritsu Forum's performance vastly outstrips seven five seven angels or any any of the angel groups that are in, Virginia. Koretzu does have a Mid Atlantic, group now as well as the Rockies. Our Seattle group, now is Seattle, Bellevue, Portland, Boise, Vancouver.
So if you get selected to present, you could basically do five different days of presenting to 750 angels over a five day period. And it it it is what it is. I mean, not not everyone in the audience, unfortunately, is gonna write a check, but you'll get, you know, you'll get you'll get awareness, you'll get buzz, you'll get word-of-mouth and things that are going on. The real value of Coretsu Forum for the investors is that there's a very rigorous due diligence process that they've created over the years, much like seven five seven here. And that gives the investors some confidence that the deal has been pretty well vetted by people that actually might understand that space or be a subject matter expert in that space.
So our, you know, our ecosystem here could learn some things from other parts of the country that are more known for their investment capital formation I agree. Groups. Right? And and that's what that's what we need to do here is to build that up.
I just whole like like, I think that we're really, really slow on the whole idea of sharing deal flow. I mean, it's just everyone is so protective here, whereas, like, sharing deal flow, I mean, that's that is that is a really, really key element, sharing upside. And I guess on the other side, sharing some of the downside protection as well, but that that is one area that I think that could really, really be improved.
You know, each each each high-tech company or each company that raises money pollinates the community with people who have been successful. So here, you know, you've got some traditional, old money kinds of investors. You know, you can go to the Princess Anne Country Club and hang out and, you know, see, you know, with your business plan, see what you can secure. But the the energy that we're trying to create here with what you guys are doing and and and what we need to do a better job of is success breeds success. Right?
So if we're gonna build boldly in Hampton Roads, we need to have some successes here. Like, maybe the guys that have thrown up are gonna hit hit a couple home runs, two or three other founders will start some other companies. That's just an example.
Yeah. One of the things that I'm curious about I I I tell everyone part of when I'm talking about what innovate Hampton Roads is is that my my big, hairy, audacious goal, if you will, I wanna I want us to be able to create a unicorn on each of the seven cities. And, people think that it's crazy, and it might might be a little crazy. But when you look at drone up in Virginia Beach and we have SVT Robotics at Norfolk and you have Scionic in Hampton and you have IV Watch and Newport News, you know, that's where there's four of the seven cities that are, yeah, at least on the right trajectory. Will they hit unicorn status?
I don't know. But the thing is is, like, it just takes one. It just takes one company to hit that one IPO, and then it's gonna change the landscape. I'm curious what your take was as you saw Seattle transform. I mean, you've got Amazon and Seattle there.
I mean, that totally transformed Seattle from from when you first moved there to what it is today.
Well, it it it and and that's gonna happen here in Virginia. And and I've I've been forecasting this and telling anybody that would listen for the last five years that Amazon is using Crystal City for h q two. People are gonna put in their their seven years, but during the seven years that they're there and let's say you're a two income Amazon family and you're making 400 k. You know, if when you go on PTO, you you're probably gonna end up at the beach at some point, the Virginia Beach. Maybe you go to Ocean City.
Maybe you go, you know, somewhere else. But what's gonna happen if you leave Amazon is maybe they're gonna end up here. Maybe they're gonna end up in Fredericksburg or Richmond, but they will definitely be moving outward from Northern Virginia and finding a nice place where they can raise their family and start a 10 person company and raise $5,000,000 and grow it into a hundred million dollar company. That's a given. I mean, that happened a thousand times in Seattle.
That's why you have that's why you have the much larger ecosystem there, which which, again, is pale well, not pale in comparison, but smaller than than, you know, than the Bay Area or even Boston to some degree or even New York, you know, with Silicon Alley, which is where I started out. So we're the crown jewel in Mid Atlantic area. There's a lot of great stuff happening here, but what we've all seen over the years well, first of all, the seven cities have been noncooperative for since sixteen o seven. Right? I mean, since since the original settlers came into town, You know?
Chesapeake's pissed off at Portsmouth. Portsmouth, you know, is a second, you know, stepchild in Norfolk. Norfolk wishes that they had a beach. Norfolk's got the airport. You know, the the lack of, and this is not something that you and I or the people on this podcast are going to be able to do much about.
There's a lot of, let's say, there's a lot of sticks in the mud in leadership positions that need to be retired out so new people can come in and actually make a regional cooperative happen. It's it's not I mean, we've been fighting for that with, the magazine that we've been publishing, which we we don't have to talk too much about now. But the the the old guard here, are are not doing us any favors. I mean, how much money did we blow on the new rebranding a few years back where the consultant came up with, we're gonna call this region the 757, and then Verizon goes and drops another area code on us. Right?
That was really a good use of funds to come up with we're the 757. But we're you know, the postal service said we were Hampton Roads in the eighties. That's been bad enough to try to market that or brand that area.
Yeah. It so we've talked about that.
I'm gonna be a of some some really tough shit we gotta get through here.
Yeah. Well and I think that that's, like, part of the thing that that makes Innovate Hampton Roads Innovate Hampton Roads is that, you know, like, we're not real if we we don't we're the we are a founder's first focused organization, and we don't care where you come from. We are the storytellers. We're here to amplify your voice. You know, we we have, like, two things that we're working at the same time as one, we're educating outside capital about the companies that we have here.
And then at the same time, it's like, hey. If if you're an accredited investor, you know, and you have some of this old money that you wanna put to put to work and possibly get a 50, hundred thousand x return on your dollar. You know? Like, we want you to be able to participate in that as well. We're gonna teach you, you know, about the opportunities.
Don't get mad if those opportunities pass you by. But Right.
Well, so, two weeks ago, I I spoke at the TomTom Festival in Charlottesville, on a merger and acquisition topic. TomTom's great. It's the thirteenth annual thing. Mean, Charlottesville is happening, and, you know, there were plenty of VCs, and we there was a pitch contest with seven companies. So we're all really interesting.
I mean, I'm glad that the international spotlight of the, the second startup academy thing is happening here. But I had, my concern as a founder is you've only got so many hours in the day. So if you're not focusing on the things that are going to generate return on investment of your time, you need to qualify those very carefully. You know, the as much buzz as everything that we're gonna raise with bringing that group here again, It I knew founders that took their last $25,000 and went to Vegas to to gamble so they could pay payroll.
Wow.
True story. And and, actually, we won and were able to
I didn't say, hopefully, they won.
They did. The yeah. I mean, that that was that was excessive, but it yeah. I guess it was what he what he felt he needed to do at the time. Wait.
Wait. Wait.
Wait. Are you just telling the story about Rain Man?
No. Maybe he had Rain Man with him. That's maybe that. No. This this was actually a I'm not gonna name names, but a Seattle Founder that actually did that.
It's probably Google Googleable. My thoughts are you're right. We need we need a well, we need one unicorn, which would be great. But think about this for a minute, guys. AOL was DC based.
Right? Northern Virginia, DC based. I mean, Steve Kay still has revolution, you know, up up, you know, in Georgetown. You can go up there and pitch them. But, you know, he also has the smaller fund, the rise of the rest, to Yeah.
Specifically put money into areas that are not your typical hotbed of venture capital or angel financing. So I would love to know how many of our budding entrepreneurs here have even gone up to DC to talk to ROTR or or Revolution. I mean, they're they're health care focused, of course, but Rise of the Rest isn't. So that's right in our backyard. AOL pollinated that area with, you know, proliferation of many people who made big money when they merged
Exactly that firsthand.
Yeah. Yeah. I I met Steve Case in, in my few moments with him. I said, thank you for creating this traffic nightmare that is Northern Virginia, and I blamed him for all of it. What do mean for all grew up in Sterling, which is Uh-huh.
Right basically, right next to where AOL was. Yep. So, yeah, it's it's interesting. You you're saying I wonder how many how many founders are are going up and looking maybe not in their backyard, but in other places to get funding and and stuff like that. Like, do you how do you think these founders know to look for something like that?
Is that an educational thing? Like, why do they need to look for that? Like, just generally, like I don't know. I I feel like people think, okay. You can get all these things in your backyard.
Maybe that's not the case. But then how far outside of your backyard do you look? Just what are your general thoughts on kind of founders looking in places that maybe they weren't thinking about?
I guess it depends on the the company and the product that they're thinking of building. I mean, if you're looking at something media related, you know, go to New York, it, you know, would be a great place. If you're looking at something kind of a life sciences, biotech, you know, Boston would be my first my first stop. Let's not go let's not go to Sand Hill Road in Palo Alto just yet or talk to the VCs in in Seattle. There so how
do
you find out? That's that's a really great question because we didn't have the resources back in ninety nine, two thousand like there are today. And I guess you without knocking the organizations that are here, go get connected with them and leverage them to the extent of their ability to help you and then move up the food chain if that's what you're doing. You can get really bogged down in spending a lot of time pitching angel groups, for zero results. Mhmm.
I was I was an investor and a a board member of a fitness company back in Portland, Oregon. And, honestly, the CEO was one of the most prolific presentation CEOs I've ever met. He probably did 2,000 presentations all around the country. They raised money. They were very successful.
They ended up not having a very good exit. But and the and the company was Journey Gym. It was a briefcase, like, Porsche design, the gym you could take with you everywhere. He was selling out on Amazon, selling out on QVC. Hotels were putting it in the rooms.
He was a serial entrepreneur. He actually this is a great sidebar. He founded a company in Portland for CEOs of startups, and it's called Starve Ups. I'd put that up in chat. Go check out Starve Ups.
It's a CEO only group, and they have amazing metrics for raising and exiting and mentoring. We we we could probably follow that model here. It wouldn't be a bad idea. My my thoughts on the resources that are available now are they're just so much more available than than when we were raising our first couple rounds. When I started in Seattle, there was a there was a really old group called Puget Sound Venture Club that was made up of a lot of timber, magnates from, like, Weyerhaeuser.
So old money. There was, Alliance of Angels. There was no Kuretsu back then. There was a tech tech alliance. There were a lot of VCs there, you know, Madrona, Voyager, you know, companies that, emerged in the February because they had made money, early real real network guys that made money, early f five guys that made money, early Tableau people.
So they were all starting up two and three man funds. And you had to get into the click, or into the become an insider so you could get introduced to these people. And that's how you did it. Now I think it's a little bit more mechanized and easier for a founder to network into potential investors. But the comment I made earlier about going to the Princess Anne country club and playing tennis and hanging out with peoples.
There there's still a lot of that being done.
Pickleball. Yeah. So send you a podcast.
Pickleball. We're gonna pickleball. Is that right? Yeah. I would I would assume it's pickleball.
Second. They were saying, you know, the recommendation, it was as you clearly, I mean, I mean, you know this, Barry, but, like, every investor has their thesis. They have their vertical. They have their stage. They I mean, they have everything that that they're looking for before they invest.
But the recommendation was, you need to have a list of 202 people or organizations before you eve you know, before you when you're prospecting investors. And then it's a numbers game. Just like when it comes to investors finding that outlier, that's a numbers game from that standpoint. But as a founder, it's in a numbers game when it's looking for investment. And, yeah, you really gotta do your re your homework and your research to find, you know, to to compile a list and then narrow that down.
And you gotta take the stairs. You gotta do the homework to figure out who these people are, and it's not rushing out, finding a name, schedule a meeting, and then, rush out, find another name, schedule a meeting. I mean, you have to
have a
pretty tactical way of doing this. You have to be strategic.
Yeah. I completely agree. I guess, also, back then, angels, they weren't they weren't organized, so it was more of a one off. And maybe you'd maybe you'd run into a bunch of, guys and gals that were, you know, friends, and, maybe they could they create some kind of tag along opportunity.
Yeah. I mean, I can't even imagine, like, back in the nineties, how late nineties, how difficult it would be to come up with a list of 200 people. I mean, like, that would that would now like, one thing that amazes me is that how especially on x, formerly Twitter, that's where all these VCs and angels hang out. They're all looking for deal flow. And, Hampton Roads, we seem to be really, really focused on LinkedIn, and, I don't know if that's necessarily the the right platform.
That's all the I see a lot of deal flow being shared on x. And
What are they doing?
That's oh, they're talking about deals. They you know, I mean, they're they're they're talking about the deals that they're interested in, deals that they participated in, talking about companies that they're working with. But, like, that's all stuff that you can do research on. Like, I just I have a I create a group and, like, the the different investors that I see, I just throw them into a group and then start my little list dossier, if you will, of the different, people that are out there because investors now, I mean, they're looking to go earlier and earlier and earlier because, you know, that's one aspect that's the AI is changing the game is that you you you don't need as much capital. You don't need as many people, and, you're able to to get out there a lot quicker and faster.
So investors now know they have to get in earlier because, a company may only have to raise one time.
Knowing those numbers I'm I'm and either of you guys can answer this. But, like, historically, an economic developments when they whale hunt and recruit bigger businesses into an area, there is a an association. I don't know what the exact words are, but they're they're providing money, incentives, whatever based on per seat, per job type of thing. Knowing that, you know, maybe you know, before, it would have been recruiting a thousand people, companies, you know, a a thousand employees to an area. Now maybe it's only gonna get to four people.
You know? Right. Where, like, where where are economic developments going to still incentivize, but they're gonna have to figure out a different way to do it? Is there just not gonna be that anymore because we're so remote? And companies can be wherever they want now.
Like, it like, is is there any communication around that? Is there any thought around that these days that, like, hey. Like, these companies aren't gonna be super they're gonna be super big in revenue, but they're not gonna be super big in in Headcount. In headcount. Yeah.
Well, you know, both UVA and Virginia Tech have funds, so they're they're they're LPs in funds. And one's in Roanoke, LPS, like Carilion Health System out there. And, you know, their their their their economic development group out there offers some pretty significant incentives. And so does so does the Commonwealth at large, for, per individual hiring, you know, per person per year spiff of some sort for bringing in a high-tech organization. We we were we were looking at bringing in a medical device company from Boston to Virginia Beach when Taylor was economic development director.
Was through some people that I knew from the advisory board company. I wasn't specifically, any any sort of leader in this effort, but, I think it was 300 jobs. We had a signed LOI from the city for 5,000,000, 1 million cash, 4,000,000, I think, in kind of real estate to be situated over there off at Princess Anne next to the the other stuff that they were talking about at one point in time about having George Mason do the cyber security, startup here. So, yeah, those are those are low probability conversations, I think. You know?
I used to hate it when the guys that were invested in our company were saying, well, you know, why don't you just go sell some more, you know, stuff and create some more, you know, ARR? And it's the the problem with that model, if you have those kinds of investors I'm off on a tangent here a little bit, but you you have this stair step thing. So you raise some money and you you walk up the first flight and you hire some people and you generate some revenue and then you take the next step up. Well, what's happened, actually, pre the elections of twenty three late twenty three, twenty four, there were a lot of ten year old companies that were hovering around 2,000,000 ARR that have raised 10 to 12 over the course of their lifespan, and we're actually out, at organizations like or other regional angel groups or boutique VCs that were focused on their sector and were they had open rounds, and they were literally unable to raise any money. Their existing investors were unresponsive, I guess, be the right way to say it, and they were they were stuck.
I was running into because I was sitting in on deal screenings, you know, three days a week listening to seven or eight pitches. And, I mean, these are just really solid companies with, you know, revenue, and, you would think they would be great targets. But the market, the last eighteen months, has been very brutal for anybody trying to raise money even if you have revenue. I'm I'm I'm not sure what any pre revenue experience has been like because I I don't really don't see those that much. Maybe you got maybe you guys have some input on that.
Yeah. Put AI in your in your deck somewhere, and then you'll get some attention. Not necessarily saying it's gonna close any any any deals, but a lot of seems like all the focus is on AI.
Yeah. And, you know, these these companies that were stuck there, they're ten years in, and if they've got venture or even if angels are in know, most of the angels now are very sophisticated. What the angels are now are really, like, really, like, VCs. You know, angels expect, you know, there's a a representative for the board. You know, they're expecting, you know, quarterly reports, monthly reports.
You know, you need to have good kind of good communication with your investors. But the the the problem is that, really, there's been very little money flowing into early stage investments or companies that are under 5,000,000 in revenue. I mean, on the m and a side, that picked up a bit after the election. It was Yeah.
I was gonna ask you that. Is it is it Yeah. Is it a lack of dry powder, or is it a lack of successful exits on the m and a front that's freeing up capital to continue the investment cycle?
The the companies that need money to expand are finding that it's better to go ahead and be acquired now at some kind of reasonable valuation. The the the acquiring companies are not circling like vultures. They're actually giving, you know, decent valuations. But what's what's good so so you've been so you're on the stair step model. Right?
You you've done you've got two or three steps. Well, it's not giving up to sell your company to a big company that has 800 salespeople and a $500,000,000 marketing budget that can just blow you up from 2 or 3,000,000 to 30 or 300,000,000. That's a win. That's a big win. And, the acquiring companies, you know, they want to provide, like, an aqua hire path.
In other words, they want the key team members and probably all the team all the team members that wanna go, key developers, leadership people, chief growth officer, top salesperson, they move over to the the bigger company. They get they get a paycheck every two weeks. They get benefits. They got some stock in the bigger company. They stick around for three years, and then the resources of a bigger company take them out.
You know? And then maybe they get a second bite at the apple down the road. So that's not that's not failure. If you've been if you've been an entrepreneur and you've been, you know, kind of beavering away for ten years and you can't get over the 2 or 3,000,000 hump in revenue, And it's really time to think about other options other than, oh, if I only could raise $10,000,000, I could get to that other level. Well, just do it as part of a bigger company, and then then everybody's happy.
If you're I'm curious. You're you're just named breaking news. You're just named czar of Hampton Roads. What from an early stage standpoint, what what are you what are you doubling down on? What do you think that what the focus area should be on the from a start up standpoint?
Yeah. You know, springtime is big time conference, season for health care. I mean, I've I've been in health tech, you know, pretty much the last twenty five years, so that's my domain. Although, on the on the m and a side, we do have some fintech and ag tech and some some others. We're not industry we're we're industry agnostic.
So but my my background is health tech. So if I hear one more thing about an existing company now has an AI version of their application, I'm I'm just I'm just gonna hang up on them. I'm just starting here. I'm just starting to oh, yes. Of course, you do.
We we know you do. That's table stakes now. So if you don't, I'm gonna hang up on YouTube. But I'm I'm I'm I'm getting a little annoyed at the people that are popping up and saying, hey. We just relaunched our product, and it's got AI.
Wow. Okay. So I I said at the beginning, I might be a little curmudgeonly today, but I I'm actually I'm actually feeling pretty pretty optimistic. So I'm I'm going to try and give good good results here for the, the audience. So if so what would I double down on?
Well
but you've, you've been around the block. You've seen, you've seen some things, and you're I mean, I just would think that you're like, gosh. These folks in Hampton Roads, they just don't see it. It's right there before in front of them. You know, you know, why aren't they focused on this?
And I'm just curious if something stood out to you. And it's because
I I I I appreciate that on ramp there. It yeah. It's it's really for all of us, we need to team up and be a lot louder and a lot more aggressive about the value that this area represents to a start up ecosystem. You know, their cost of living is relatively inexpensive. We've got great government and military resources and people that are leaving government or military positions are coming into the market that are highly trained.
The
Yeah. I I personally think that, like, doubling down on defense tech I mean, we should be like the defense tech area. I mean, like, we are so close to so many warfighters across every branch of service to include NATO that, like Yeah. We that is something that we are just in such a great position for that.
And You know, for so many years, people people didn't want people are like, we need to diversify. And I was was like for a little bit, I was like I jumped on that bandwagon because I didn't really understand it. And I was like, woah. Woah. Woah.
Why wouldn't why would you diversify instead of double down? It's like, if this is what you're good at, we should be going after this. And I understand why people were trying to say we need to diversify because it's government spending and yada yada yada. If this is what your bread and butter is, don't be afraid of it.
No. You know, I I'm I'm gonna I'm gonna second that motion there because we're we're not a community known for gaming. We're not a community known for mobile. We're not a community known for biotech, although some some of that's coming in through the universities. The other parts of the country sort of have you know, you know, we're not a hardcore software area, you know, like Seattle or The Bay Area.
But what we do have is innovation around well, first of all, we have the pathways into finance through the government, which I'm not sure many entrepreneurs think about that. Unless maybe you come from a military family or your your parents were in or maybe you served for a bit. You know, I've got a son up in working for a defense contractor in top secret stuff going on, up in DC that, you know, he, he's looking at things from a, perspective of the education that he got, but then also seeing coming up with all kinds of entrepreneurial ideas about satellite imaging and the other stuff that that he's doing that he can't talk about. So I think you're right. Now the other piece would be, you know, Amazon has 40,000 open positions in Crystal City.
So if I was in college, or high school and about to go to college, I would be thinking about, you know, that's a possible possible career path. Obviously, you know, we've got major problems around the health care worker shortage. So anything that you can do to optimize workflow in a health care setting through better technology, that's that's gonna grow. Not only from the aging out perspective, just the, yeah, way more patients and you got caregivers, and it it's it's it's imbalance. So technology is playing a role there in making things a lot more feasible.
A lot and a lot of the stuff that that we've been doing for twenty years around telemedicine, telehealth is now now reimbursable. Back then, it wasn't, so people had to pay for you know, provider had to pay for it.
Yeah.
So now so I would probably double down in that space, because I I know it.
I mean, one of the things that keeps me up at night a little bit is, like, hey. We gotta keep on building these aircraft carriers here. However, like, these thousand dollar drones that are in creating swarms, you know, like, we've gotta diversify. We have to modernize how we're fighting wars today. I mean, not all wars are gonna be like air carrier group wars or f 22, f 35 wars.
Yes. We need to diversify from that standpoint as well and become more innovative and and fight the wars of today and tomorrow as well.
Well, look at what look, Tim, look at what we have in our backyard. We've got Langley. We've got Jefferson Labs. You can't tell me there isn't stuff going on over there that entrepreneurs shouldn't be participating in Yeah. With with those kinds of ideas.
You know, the the I'm just looking at the time here, I wanna make sure we cover what what we need to cover. But the there would be so let's think about this. How about if we set up a a monthly dinner event and invited 300 people like they do at the MIT Enterprise Forum in cities that have MIT Enterprise Forums. And we have an event where you buy your own dinner, and you have a speaker like, whoever, somebody famous or not emerging famous. Because when I joined MIT in '96 in Seattle, you know, Bezos came and talked like, who is this guy?
And and then Terry Drayton, who raised a billion dollars for home grocer and then sold it to Webvan, you know, he comes in. So it's it's and see, we're kind of at the space, the spot here that I think Seattle was in the mid nineties where there are people who are not famous. The the CEO of Drown Up, use them as an example. They come and talk. You have 300 people for dinner.
You invite all the lawyers, all the accountants, all the service providers, the marketing people, the entrepreneurs, the investors, and we we set up through Innovate, you know, you know, monthly dinner session probably from, like, September to April and not do it during the summer. Be easy to do. You know, hotel would probably be thrilled to have us come in with a bunch of movers and shakers. That would be an easy thing to do. So I'm down for that if you want.
Yeah. You wanna you wanna help get that.
Let's talk.
Yeah. One thing I do wanna say, so we touched on this a bit ago. You know, I'm an old media guy. So when I moved back, I realized there was a void. We won't go into the Batten family and creating the Weather Channel and making a billion dollars and selling the paper to the Tribune, and then the Tribune sells it to a hedge fund.
We won't go through that whole story. But there were some magazines here, and and I wasn't really happy with either one of them. I I mean, I love distinction, and I love Coastal Virginia because Randy's a friend. So as a hobby, we my one of my other companies, we started a magazine here, a quarterly life's regional lifestyle magazine that we send digitally to 95,000 people locally, which its entire focus is on economic development and the cool ship that we have here. So I we've lost money every single issue.
The new issue is due out today. Our cycle is February, March, April is the first issue of the year and then every quarter thereafter each year. This is also our sixth year just like you guys, and, we focus on all the cool things that are happening here.
What's the URL?
Cova, b 0 c0bablbd.com.
We'll, we'll make sure that we, throw that in the show notes as well.
That would be awesome. It's free to subscribe. We make money on advertising, although we I gave so I started in January of twenty twenty. They're pretty pretty new regional magazine now. There's there's nothing there are no events to cover, and nobody had any money.
So after joining the restaurant association, the hotel association, the chamber, all of that, the seven five seven alliance, the Go Virginia initiative in Richmond, the retail alliance, everybody. We when we we were gonna publish right after something in the water in May of twenty twenty, killed that idea. We were gonna bail until 2021. During the summer, I was getting depressed, and I said, let's bring the magazine out anyway. We need to inject some goodwill or optimism into the community.
So we ran a bunch of ads on TV for August and September. Boulevard is coming. Boulevard is coming, and People didn't know what the Heck Boulevard was, and then we ran a more detailed ad in September. So we launched in October of twenty twenty. And I told everybody in all their organizations, send us your ad.
Tell the community how much you love them and how much you appreciate their their business and that, we will rise again, that kind of, theme. So for three years, we gave away all the advertising, which is about 300 k per issue in lost revenue. We recently so all of our hashtags are Cova Boulevard, you know, IG, Facebook, x, Blue Sky. And and our drip campaign, you know, runs basically on IG. But, yeah, it's become a labor of love, and we're still I've got a great team of people that do it.
I spent maybe an hour a a week on it, and we just launched the May issue today.
Awesome.
Yeah. Yep. It's got a killer's color. The the the cover shot is amazing. It's the new ballet of the great Gatsby that that opens on the third at Chrysler.
I was looking through some of the covers, and there is definitely some cool covers on there.
Thank you. Yeah. So when we position the magazine, we wanted it to be between distinction, which was very high end and Coastal Virginia, which is 35 years old. And if you wanna know where the best cheeseburger is, that's where you go. Or but I wanted to have 2,000 I know.
I told Randy that. I wanted to have 2,000 word articles or more with, like, real journalism and stories that that appeal to the innovators in the community. So the whole focus of our distribution is innovation. We moved entirely digital after 2022 because I was printing hard copies for enormous amounts of money, and I never knew who got them. So we control we we have a curated list of 95,000 local households that are the kind of people we think are the move will are movers and shakers or should be movers and shakers.
And I would I would love to run some preadvertising for Innovate.
Awesome. We gotta we gotta we have some talking to do once we're once we're off air.
Sounds like it. I always think it's hard to tell a story in ninety seconds, couple of words, and a headline. As a former journalist myself, and I feel like I'm allowed to say things like that here. Yeah. Get the Jordan Bell for her in there.
We're So
you talked about food, and I think that maybe it's a burger. Maybe it's something else. But when you came back to town or maybe even now, was there, like, a go to spot that you wanted to go to that, like, you you you had to you had to try out? Like, is there is is Hampton Roads? Is is is Coastal Virginia, the 757, Tidewater?
Is there a food of the region for that, or is there a spot that, you have to check out?
Well, a little shout out. I've been going to El Jardino for thirty five years, especially when I lived down on 20 Fifth And Med. But is there a food of the region? Yeah. I would say, you know, my family's in the commercial fishing business up on the Eastern Shore.
So I would go get a crab cake at some really great crab cake place. And I'm happy to name a few, but I I don't wanna give them any free promotion. Crab cakes, an orange crush, and, maybe some hush puppies. And then Okay. Then maybe, you know, a cigar out on the boardwalk with a big glass of cognac or something.
Okay. Well,
funny you mentioned orange crushers because I was I saw a video the other day that Maryland was doing, like, a promo. Like, yo. This is ours, not Virginia's. And I thought it was hilarious.
There there there's there's the Ocean City, Virginia Beach, war on who who had been in the crush. We're we're I think we're think Mike Mike at Waterman's, might, have something to say about that.
Yeah. We we we can't we can't get we're we're we're holding on to it tight. We're not giving it away.
I'm I'm I'm still Yeah. Apprehensive to the whole thing. I think that someone in this is lying, and I am gonna have to do my journalism to to figure out who the real creator of the orange crush is. Because for all we know, it's some place in Cheyenne, Wyoming.
I'll tell you what, Zach. I'll take you up on the orange crush challenge. We we will we will have to go taste as many orange crutches as we can.
Hey. I'm down with that. Let's roll.
I'm terrible. Like, I was I was at Waterman's a couple weeks ago.
Oh, yeah. It was definitely a It's It's a war. You do not bring that up. That's that's like fighting words.
Well, Barry, this has been a pleasure. It's been fun learning about you. We appreciate your time. Any final words, Tim?
No. I again, I appreciate the you taking the time. I think you have a lot of wisdom to share. Appreciate that. Looking to forward to continuing the conversation, to see what we can build together.
And what can we do to turn hand to rose into what Seattle is today by by helping some companies grow and with some successful exits.
That's a mission I'd like to be part of, guys. Really would. And I thank you for doing this. Thank thank you for starting this and keeping it going because, in some ways, I can see the labor of love here. But, I'm here to I got your back here.
Okay? So let's figure out what we can do. Awesome. Well, thanks so
much. That. Like like and subscribe this page. If you are interested in attending this year's StartUp World Cup, August twenty first, five to eight PM at Sandler Center at innovate seven five seven dot org backslash start up world cup b a.
Now that we're we need to find, like, an orange crush sponsor or something. See, may maybe we can do something like that. That'd be cool.
I'm I'll take on that. I'll take that on. Let's go. This has
been great. Appreciate it. Peace.