In this episode of Fundraising Radio Michael Dunn, the CTO at Ultra explains how he sees the future of team building, networking and fundraising and he also talks about the current situation and how early stage startups can use it to their advantage. We also touch onto what value Techstars and similar incubators/accelerators provide.
Michael Dunn's linkedIn: https://www.linkedin.com/in/glemak/
Office hours with Make it Studio: https://make-studios.typeform.com/to/bUvZoSwl - it's time to get some extra questions answered.
How to legally start a startup: https://www.youtube.com/watch?v=xf4qtY6vvBs
And today's a guest speaker, Michael Dunn at Altria, and the mentor at DEC started text starts to do this. Alright.
And today's a guest speaker with Michael Dunn at will,
and a mentor at tech stars,
and this episode will talk about gained early traction,
and also developing tech products on the West Coast,
versus outsourcing this development broad or to other parts of the US.
So, Michael Alaska helped by, you giving us some background on yourself and on old truck. Sure,
thanks for having me,
I'm gonna for,
for the latter half of my career for some pretty big technology and media companies and as a part of that role almost always been involved in the strategic investment weighing of
that company and it allowed me to work with and be exposed to.
Startup early stage, innovative companies and so be able to balance work. I was doing at an enterprise level with the work.
I could do helping progress, early stage projects and companies as also sponsor of MIT Media lab for almost a decade.
And that allows me to get in even earlier on how innovative concepts ideas can be brought to market. And so over the over the last few years,
I got interested in blockchain and start doing some projects as an advisor,
focused companies that were coming through tech stars.
And so the way tech stars works as you go through their, their session or their program. And you get lots of good advice on.
The business side,
the marketing side,
the investing side and and usually what I do is product and technology advisory work,
and sometimes you continue beyond the session and become a either formal or informal advisor to that company as they go forward.
And so, I peak my interest in what blockchain could do for first as sort of a paradigm shift for the way
applications, and monetization is was moving forward.
And I get introduced to to CO founders, they were coming out of the game video game industry, and had this idea for a startup. That would be have as it's foundation it's on block chain.
And so I joined them as a, and one of the original executives of the company. And then build out Ultra to the size it is today,
which is just over fifty R and D,
product product owners,
designers and we've,
we've funded ourselves to be cryptocurrency based fundraising up to this point.
We're in the middle of a, of a fundraising around right? Now, that's equity based that's just sort of the natural maturity of of how how we're going as a company.
And we have a couple of key milestones this year that we're looking good towards our our team.
Well, I'm based in California, because it's a blockchain company, or we're, we're registered or founded based out of the Estonia from a regulatory standpoint.
It just makes more sense and our headquarters in Paris, but we actually have developers all over the world.
So, we're a hundred percent remote and distributed team, which we were before the, the pandemic.
So, when the pandemic kit just a few few changes on our side we, I was in our office, like, everybody did.
And but everybody was able to that had been going into that office, which is a subset of our team was able to work from home and and using the tools we have.
We're able to just continue on.
So, that's that's me that's that's Ultra. And.
Really nice that you already had a distributed team all over the cross rules. So when the came by, you were like, okay, nothing really changed for us. Then they would have to get out of the office. So, nice work there. But, let's talk about your current route.
And specifically about technical, due diligence. I know that usually the role in the fundraising process is making sure that's technologically. Everything's fine.
And whenever the opportunity comes by, they have to go out to investors and show them the tech can explain how it works. You know, go into the backend. So, can you go in depth into what you do in terms of this technical due diligence? Sure.
So, my responsibility is product and technology side of the engineering team and the product team. So we're starting with with the use cases.
And user stories,
and how the product or function you X driven,
and then the decision around the technology stack,
we're using that that started the early stages of the project.
And so the,
the beneficial side I have to my background is for most of those companies I worked,
or as both in a,
as a part of the strategic investment group,
I would be the one performing the technical technical due diligence on.
Investments and acquisitions, and so I already have that perspective of being at the other side of the table, judging decisions that a company makes around product direction and, and.
or methodologies and so,
from my perspective,
I look at things that I'm doing for culture or any other company I work with,
because I'm on a number of boards as well and I look at things from the perspective of what are the right decisions for the company,
the focus of the project,
and not so much what are what is my background and what are the experiences I have,
or the teams I've built have but what's the right tool for the work we're trying to do in a lot of startups I,
I see that.
Misstep of we have this project we're going to build, but we're gonna choose the technology solution that we had good experience with recently. But it may not be the right fit for that project.
And so it's always better to be able to pick and choose what technologies are gonna fit,
fit your needs based on your current needs for always keeping in mind that your background is helpful,
but it's not always the right decision.
You can pick the wrong tool for the for the job and it won't benefit you longer term potentially as you. Go forward.
So, tech due diligence or technical due diligence really takes a look at. First of all. What you're what you're offering. What's your product? And then how does how does the technology decisions you may tie into that?
So you look at infrastructure you look at team makeup because that has, you know, your development team, you look at processes for us. We have a, a fairly well developed agile process.
It's mostly scrum based a little bit of combo and we have a.
A workflow or pipeline going from product into engineering that involves the ability to I haven't properly well defined backlogs,
but then also have the ability to understand articulate what the delivery framework is gonna look like a product development as as it tries to fulfill milestones that we've set and those are,
those are key to I well,
understood across your entire team and so in the tech due diligence,
you're gonna go through and express that.
You're gonna say, here's the decisions we made infrastructure and stack level.
Here's our team makeup and why we have this a lot of times when you're doing fundraising,
you're gonna be asked what you're gonna use the funds for and if you're gonna use the funds to extend your product for extend your team,
then you have to have,
a well thought out and articulated idea of how you're going to grow and use that.
So, for example, with us where we're a squad based.
Scrum model, and so, as we think of growing our team, we add yeah. Squads instead of really individual roles. So the squads can be made up of back end front end. Q.
a product product folks. Maybe dev Ops. Devops is actually more combined aspect. So, it's a supporting team and so those are things you want to be able to articulate the the things.
The nice part about this is most of the time, these are things you articulate in inside your company, and you try to get everybody on the same page on the direction you're taking.
And then, when you're working with central investors, you you can just talk through the thought process and and the strategy behind why you're making those technologies to decisions.
Why you're making the staffing decisions, whether it's hiring employees or using augmented staff. We about half of our staff.
Is augmented staff, so we have relationships with companies that provide us talent that gets directly integrated into our teams. The same way.
We integrate an employee we hire and so it allows us to have much more continuity and how we approach product development and they're, everybody's equally part of the of the team process.
So let's, let's talk about the tech starts here. You've being mentored therefore, I think over three years, right?
Sure, yep. And what do you think is the major value that TechStars provides?
So, for example, I talked to multiple founders who have gone through and I mean, clearly at this point, it's clear that's why C, major values that, you know, it's super easy to fundraise afterwards.
And you have this brand behind, you would you think about TechStars is it similar to those firms or is there something bigger than that?
Yeah, they're they're both incubators the, and I early on when he started that. I did a little bit of advisory work with some of their companies. I didn't work directly with them.
The companies that have come through them I think any incubator and one of the the big media companies that work for, we had an internal innovation group as well. That's provided some of the same capabilities so it's really about.
Easy access to advice and mentorship. It's a structured program. That's pretty fast paced. Even today later today there's a virtual beat up.
That's starting a new session for one of the tech stars DLA TechStars group and so there's ten companies. That are going through that process virtually.
And so mentors will still be involved, you know, before the pandemic what would happen is you, you'd have a theme for the tech stars.
Some, some tech stars locations are sponsored with by big sort of thematic companies. So it could be a media company. It could be a pharmaceutical company could be a, a healthcare company.
Depends on where the interest is. And so those oops sorry.
So the companies would come in and start with understanding how to present their company.
How a picture company how where there may be shortcomings in their and their business plan my side. Most of the time, there's a few companies I've worked with.
Actually, we're founded by someone who's building who has an idea on a solution.
But hasn't fleshed out there the technological way. They're going to do it yet. So they're missing a technical founder.
Let's say, and so in that regard and I would step into that role and offer them advice, not only on some of their new term decisions.
But on how to judge what's needed in the technology cofounder,
let's say others that are coming with a fully fully staffed engineering team,
and most companies that I see going through that sage textures stage or anywhere from two to twelve people,
depending on how mature they are in their process,
how far along they're in their process,
and they'll go through and meet with a number of mentors that have skill set.
That makes sense. And that were identified as these are areas where they need guidance or opportunities to advise on my side.
I I almost always start some way to do with most things I do start with understanding the, the project and the product. And then how that relates to engineering or technological decisions.
If there's any specifics around whatever niche they're going after that are, you know,
it could be benefitted by partnerships or could be benefited by clearly identifying what's the intellectual property that the company should focus on?
And we're a commodity areas where they should just make the decisions about.
Licensing or or partnership, and then from there add in. Okay. Now, how are you gonna do it? How are you gonna build the team to do what you're trying to do? And those are again to me based on my background.
They're a little formulaic, but a lot of times. You know,
I'm I'm a fairly seasoned and so I've seen the number of different companies and different ways to do things,
but a lot of times with early stage startups,
most of the,
the technology Co founders are very early into the career.
So maybe it's their first founding role. Maybe it's a first role. Maybe they've been a, you know, architect or senior developer and now they're, they're, they have an idea that they can step out and and create something unique.
And so there's just some things they haven't been exposed to. So it's always good to have an advisory you can bounce ideas off of. And so that's usually the role I, I play and I like playing that role.
You know, I, I like the stimulation of thinking through new problems to solve and how to help companies that are in their early stages.
So, it's on my side for wording, but it also stimulates, you know, that you're always learning. One of the reasons I got asked early on why I went down the in my career. Why I went down the path versus the path.
And I really felt like, was the role closest to the product and the life of the company, and tended to be running in minute administrative areas. And I've been to Seattle before.
I know what it takes to do it, but I'm more drawn towards. Where's that? Where's the growth side of the business, and being a technology leader that.
You know, ties into that and so that's, you know, helping, bring that out and the concept learning that you have to do as you go, as you go down that path for me is helpful when it's been mentoring pays off as well.
let's talk about the development now,
your team at old trot was distributed all across the world,
would you recommend other startup founders to do the same thing or what's basically the reason for founders to stay to keep their team their development team on the West Coast is it worth the money that requires.
so the reason why we're set up the way we are is is really,
since we have central our blockchain foundational company it's,
it's more advantageous to to do the project in Europe with the,
with the astounding registration that we have.
Because the US is, can be challenging on the regulatory side. So we made a decision that European based the founders are from Europe. They located me. I happen to be in L. A.
but, you know, I, I join the company knowing that it would be a globally distributed workforce that we're gonna we're gonna grow and that allows us to, you know, look for talent.
No matter where they're located. We're, we're a global project. So, our goal is to be available and distributed as a, as a platform globally.
I've done other projects that are purely based in, in one location whether it's New York, when I lived there or aloe, and I moved out here to do a project. That was meant to update the company public.
The I, I think.
A lot of people are getting exposure to what's needed to be productive work from home environment because of the dynamic and the tools that are available that are at tools,
in confluence slack for collaboration,
we happen to use Google suite for our email and.
Video conferencing and screen sharing. We use a virtual whiteboard tool called Miro.
Here's a design tool called Sigma. These are all really great at supporting distributed teams. Probably.
The only challenge we have is, is time management, you know, being able to have a developer. That's an Australia developer.
That's in Brazil on a developer that's in Paris, be able to collaborate together and, you know, pick the best time.
So they can have some direct interaction versus interacting through the tools. I think in in having us.
So most of the time you're going to look at what your needs are and start with a a basic makeup somebody that's focused on the product.
Somebody that's focused on the decisions around architecture and stack.
It could be the could be, as you go your team, someone on the engineering lead role and then you're gonna look at what the, the the stack needs are from a front end.
Back end. We happen to I have very specific delineations between what a front end developer would do and what a back end developer would do.
We also have a data team because we're a fairly intensive data driven. Solution and then we have QA dev ops designers.
And those, you know, that's sort of, I think of, you would think of as a, a startup that's out sort of that maturity level, you know, got some, the delineation for our makeup. It's very squads.
But and how you approach producing your product, but for a smaller for smaller project or project that's gonna start small.
Let's say a mobile app for you mainly have a couple of developers, and you have maybe a founder that's focused on what the product's going to do.
The that's desired and then a lead engineer that's acting as your technology lead. You can you can do those remotely, or you can do those in the same location.
I think there's we'll see what happens as we come out of the pandemic. How what sort of businesses will want?
They're folks to come back in house and what will realize that they can be highly productive with people working out of home offices or a Co, location space time will tell on that.
But I think based on the technology side, from what I've seen, there's, there's a ton of good advancements and, and trying to support how we're able to keep working now. And I, I think it will carry over.
Right, totally think so as well. So, let's move onto the stage to to do the part where we discuss your actual investment preferences.
So you've been on the investor site before and question is, do you invest right now as an angel investor or do you only do mentorship for tech stars?
Yeah, so I do still invest, but everything I've invested is is locked up so I'm, I'm.
The, I'm not liquid right now, I guess, is the best way to put it. And that's me personally. And and the only thing I've done in the past is angel level investing,
but I've been a part of so many,
fairly robust strategic funds and work with a lot of pretty well known institutional investors.
And again, on my side, I, I, most of the.
Funds I've been involved with are semantic, so they may the investing in early stage technology.
They may be investing in the change that's going on,
in the in the media industry,
because one of the areas of focus,
most of my career I've spent in and around the in the industry or technology and Internet in general and I think it's always about the risk dynamic with those funds,
so there's usually some general rules with with who will invest when so are you investing at an angel level?
That's usually individuals people that are sort of prolific in their investments. It's usually fairly small in early stage, and they tend to have themes and in the areas they like to look at it and invest in.
Sometimes angels are involved and.
And the seed seed groups,
or seed funds,
and so there'll be investing in with a number of other angel investors that allow for a bigger pool and bigger access to a broader amount of startups shares the it shares the pool of funding.
But it also shares the risk solution advantageous for that. So,
geographic location here in New York law,
Paris I know from the experience and those,
and there's tons of others that a number in the Asia Pacific side as well that there will be sheet funds.
Our angel funds that are made up of a large variety of angels and seed level investors that have come together.
And they're good to look at the geographic ones first and then more broadly just because it's close. Proximity does does help.
And a lot of times they are themed around what the development focus for the startup focus will be in those areas.
So, in New York, the financial industry, advertising media.
Makes a lot of sense in L. a entertainment L. A. is becoming much more of a Internet hub as well, Internet development or an Internet focus startups. So it it varies based on the location.
And then as you go forward and you're looking at equity based raises. And or substantial series, ABC, whatever.
those are the,
those tended to be the types of fundraising that I was most involved with and those are fairly,
fairly intensive due diligence from a market product company and and technology footprint.
And so I'd be pretty involved in all aspects of those, sometimes as a contributor sometimes is doing the direct work.
So, on the financial side could be some financial analysts that would look at the market and look at the financial structure of the company.
And then we tie that in with what the product trajectory look like, and what the technology is gonna be able to fulfill what they're on for nice. Good. So, we're moving on to last two question of today's episode.
And the first one of those last two is, what's your advice to those early stage founders toward just trying to raise money right now during this dynamic where would you recommend them?
So, the golden rules, if you don't have to take somebody else's money, don't do it because, you know, that's if you boot strap on your own, that's always that's always gonna once you start, once you add.
What you add other other equity holders into your company,
it diversifies the direction of the company and the opinions of the company that being said, if you're gonna attract smart money,
minded believes in what your project is and that's gonna be,
you know upgrade help and,
I think the biggest change right now with the pandemic and fundraising.
Is the investing industry in general? Just at the broadest perspective is a tends to be intended to be a face to face experience.
And so you would have startups or founders meeting with investors, and, you know, let's say you traveled to New York and go through and do, you know, twenty meetings over four days or something like that.
And so it was a face to face pitch and interaction.
And I think everybody had to change how best to do that virtual video conferencing how to how to
write a pitch deck that.
Have enough information in it to be self contained.
There are times when you go into a startup, would come in and be with with an investing group, and they would go to the whiteboard and address questions that weren't addressed and, you know, the the pitch deck that they have.
And so that's a that's a great experience. You know, it's.
Sort of on the cuff, see how the management team reacts to tough questions and is able to be creative and and at the same time structured and so that face to face was very helpful.
we're trying to create that same experience,
the virtual methods and so it's,
from from what I've seen with the folks I've interacted with,
as we've gone through fundraising,
it took a couple of months like like spring,
early summer for the venture community itself to to understand how to still be productive and re engage and for startups to
recognize how to present their offering and the value proposition and do it in a in a virtual way.
So what I've seen lately. It's, we're, we're in a good place now, but there's definitely some latency there and that spring, early summer time, period when everybody was just trying to get used to how to I take the next step.
I think finding that idea of smart money is always key having somebody that you're going to have interactions with the same way. You'd have interactions with your extended executive team.
The investors is going to be a part of that. So you want somebody that. Understand and believes,
and what you're doing,
bring something to the table with not only the direct experience,
but they're the other portfolio companies I have if there's some value in the team so that they're working on if there's value there could be partnerships could be.
I've seen some really great portfolios where technology decisions, and the reason why technology decisions were made can be shared with other portfolio companies.
So the game that experience without having to go out and pay for it and I'll be a consultant or something like that. So, that's that's helpful. Yeah, so that's probably the best advice I can offer, right?
Yeah, that's definitely good advice.
And here without a huge base, we're moving on to the last point of this episode, which is a call to action. What's the one thing that you want to list here to do? As soon as the episode is over.
You know, first of all they can connect with me on LinkedIn, I always like meeting new people and talking to them and seeing if I can offer advice or help.
So that's do, do links around this would you can do a link with my yeah, yeah, definitely. Definitely. Okay.
So welcome to do that I think, and just, you know, thinking through how you're progressing as a startup.
the the best thing you can do is if you're if you're if you believe that mentoring and advising would be helpful to your cause and what you're trying to do thing goes through and and look
through LinkedIn is a great resource for for finding advisors and mentors I get I get.
A lot of requests from startups where they come in and and that's why I put that. I'm an advisor and mentor and my and my LinkedIn profile, because I want people to know that I'm open to that and I do that on boards as well.
And so look for those people that sort of seemed to have that interest in your whatever you're focused on and could offer advice and then interviews and, like you to interview and employee.
Because it's important to understand what the, what they bring to the table.
I had a founder of a company go through your process where the interview you interviewed me three times,
and he had a shortlist of advisers that he was looking for and it was just like, going through a job interview process.
And then at the end of it, yeah, he, he offered to help me joined their advisory board and it was well thought out and we sort of each new and what I would bring to the, to the, to the board and what he was looking for.
And it was, it was very straightforward. So I think that's useful as well. It's just, you know, you're extending your team, you just happen to be doing it with with an advisor or a mentor versus.
You know, a direct employee. Great. That's great. Advice on, you know, taking it. So, seriously, I think it's great approach to find best advisors and creating a better advisory board. So, here it will rip it up.
I'll make sure to leave a link to Michael's LinkedIn and the description of this episode. So, my call to action is as usually go checkout descriptions. This episodes, I'll leave a few other links.
That will be helpful for you and have a great day.