 thank you for joining for Adventures of Commercialization. Today we have the pleasure of speaking with Erica Lill, a CEO and family office advisor, serial entrepreneur, investor, and an incredible mentor, not only for myself, but also for Plethora of early stage startups. Hi Erica, how are you today? Hi Zoe, thank you so much for having me. Appreciate it. Yes, of course. Please tell us what you're up to these days. Well after a long time at home it felt like through COVID out here in Seattle it's back on the road and it's nice to be nice to be out in the finance world again looking at deals and getting in getting in the middle of the conferences and getting back going again. So I'm working with a variety of companies and projects and working with the early stage crypto company that's working on federating a stablecoin inside the traditional banking system. So they're working trying to work inside the system. So that's very exciting trying to figure out how to bridge that gap between DeFi and institutional banking. So that's very interesting and leading to a lot of interesting conversations. So that's one project. Very cool. Well when we first got to know each other you were working for a capital fund and so in past episodes we've been speaking a little bit about individual investments and angel investments but what exactly is a fund? How does that work? Well funds work in a little bit different ways how they're set up but generally a fund is essentially a bank that is run by a private manager that collects investors from investment and based on an investment set of criteria they invest the money for those investors whether it be into real estate or into startups or healthcare or companies can be into anything and structured in any sort of way loosely but generally that's kind of the simplicity way of kind of having a look at it. Okay and I know that you have a past experience with advising family offices and so how does that structure and model work? Generally when I work with family offices you know family offices is a business around their family money and legacy right? So that that means that they have some staff that looks at deal flow and advisors but they're always doing business it's a family office and it's creating a business of investment and investments around their family wealth and that does that also means that just like entrepreneurs which they oftentimes are they need to go meet meet new people for strategic partnerships for capital introductions for a variety of reasons so for the same reasons that an entrepreneur would want to come and work with someone like me to help market their business in front of these ultra high net worth investors many times family offices want to meet other family offices so they're doing it oftentimes in the same way. Okay great and what are some of the pros and cons of instead of rather doing an individual investment going to say a fund or a family office for an entrepreneur? Well they're they're two different things really right so if you're going to a fund for an entrepreneur it's it's about fitting that checking the boxes right so it's very similar to just going directly to a family office or a straight investor it just sort of depends how far along the company is and how far along and what size the fund is so that you can match those up right so early stage funds like tech funds for example are often oftentimes a bit smaller because they're doing smaller checks into earlier stage companies where if you're doing a secondary or b and c rounds you'll see that hundred million dollar funds and up because they're writing five million dollar checks into later rounds of the companies so that's kind of how you can think about that. And what would be the minimum criteria for say an early stage company that you would you would want to see in to be in a fund or in a family office or well great question let's say for a family office. Many family offices invest very similar to the way angels invest they just tend to have more staff to help them do it right so easily they can have a staff of of analysts and lawyers and CPAs you know doing diligence and making sure that that company aligns with what they want to see as a family office for their investment criteria but oftentimes that alignment of investments is really key for family offices so you know everybody knows that Warren Buffett's one of the greatest investors of all times and one of the things that he really keeps in mind all the time is the alignment of his investments and so I think that that's really important. If you have an investment over here and this company can help that investment grow then then you know many family offices you know invest like that so just getting in front of the right people it's all timing there's only a small amount of family offices that actually do really early stage investing so you know you you really want to make sure that you're ready to go out into that room and when you do you're you're speaking with the right people. Okay and what recommendations would you have for say a pitch deck or say like a term sheet if somebody wants to go like you mentioned they should be ready what what kind of things would you consider ready? Well yeah pitch deck they should have had done you know way early so hopefully they're have that pretty dialed in by the time they're speaking with the family office. Family office is a very sophisticated investor you know they you know could easily you know have well over a hundred investment and thousands of deals in their lifetime again have a staff of people looking at things so yeah I mean you want you want to be prepared and ready and you okay so we're kind of putting them in the same buckets with the funds and family office but my suggestion is yeah have your ducks in a row have your due diligence together make sure everything is easy to see keep your deck short and concise and have your pitch completely dialed in that you have other people talking about you I mean that's the key to try to get early stage investments I think in the family office space is to kind of go out like wildfire and get a bunch of people talking about you at once and and that is what gets rounds filled fast and and closed quickly. So to separate the two so we have the family offices which is just a group from family money where they are making educated group decisions to invest in specific companies or group as in the family correct and then with the fund we're investing in a group of companies and then it's generally if there's an investment screening committee and again a little different type of analyst and so it's a little bit it's a slightly different but as long as you're really same with the family office it's easier to find out what the funds do right so you can look in crunch based pitch book and you can find early stage tech funds and kind of doing that research if you're an early stage company and targeting those if that's where you want to go next to get funding that seems smart and efficient to me right I would I would not really recommend an early stage company to go out into the family office space unless they're really unless they really have a reason to do that so if you're opening a luxury business of some kind a luxury travel company a luxury service business a business where marketing to the ultra high net worth client is going to make a difference in your business and your branding and your name recognition that would make a little more sense but but to be honest you should probably be at B and C rounds a little later rounds before you're going into the family office space because they're not generally accustomed to writing checks under a million under five million and so they just don't want to deal with that many k1s at the end of the year wow great okay that's that's great insight thank you okay well um if we had say I so let's just say I know for a fact that you are the guru of networking and that nobody have I ever met with as many business cards collection as you do so what are some of your tips and tricks for for networking you said you go to conferences is that do you do you have a minimum amount of conferences you need to hit a year do you have go in with the game plan of who you're going to see and meet how does this work yeah well it kind of depends where you are in it in the timing of your race and your marketing of your company and what you want to do and honestly this is where sometimes you know paying a consultant can make sense because it accelerates your timeframe you know if you're trying to raise you know 10 or 20 million dollars and you can have a consultant take you through the family office space and do introductions for you for six to nine months you should have enough you know leads enough marketing enough name recognition that you should be able to be doing a lot of follow-up as a CEO and and hopefully putting your business forward but unless you're ready to really kind of commit to that kind of timeframe and do that you're going to spend two three years maybe running out of money going through the family office space it's very hard to stand out in the room it's a little bit easier post COVID because the conferences are smaller I will say that but as we were talking about earlier Zoe the the room is full of men most the entrepreneurs that are coming through our men and it is a little bit hard to stand out in the room and to be honest I mean you have to work on that you wear a hat do you wear an orange tie do you have a cool shirt you can I mean anything that you can do to kind of stand out a little bit honestly make funky pair of socks like whatever it is that that you feel comfortable doing and then you have to be outgoing I mean you really have to be able to walk up to a total stranger and start conversation and if you are uncomfortable doing that then that's something you need to really practice and work on join at Toastmasters or join you know start in your local area where you can just practice and that's the best way to do it so they've said a lot of CEOs especially of tech companies are like these introverts that just may not be the best person to stand up in front of the crowd and be that outgoing individual that you're you're saying is going to stand out do you think that it is valuable for a company to bring in somebody who is that yeah outgoing person or do you think it looks bad for the CEO not to be representing his own uh company well depending upon the stage of the company most investors want to look the CEO right in the face and in the eye right early stage company investments are very risky and no matter what their platform or profile or product or idea is it's you're investing in the CEO you're investing in the team in the jockey you know can you get it past the finish line and nobody really knows that and so you're taking a bit of a gamble and so there's no way that the CEO can get away from it or avoid the conversation but certainly they can have a consultant a chief marketing person another very top tier co-founder that can go out and start the process or help the process but ultimately that CEO will need to speak to the investors and and the the investors will make the decision based on that meeting ultimately so I think when you're dealing with a CEO like that is try to keep them comfortable in the space that they're comfortable so if it's a brainy scientist put them on the brainy scientist panel and let them shine in what they do right so spotlight their talent and and focus on that and you know have a marketing person or a consultant bringing introductions but if if you focus on that and get them at the right events then they'll have a line of people waiting to talk to them just because it's what they do well right and then people also do want to invest in that you don't have to be a social butterfly to get investment you just have to be you know super smart and have a compelling story but everybody does like to spend money when they're having fun yeah that's true too okay well as you mentioned and as we spoke about prior to this call we it is a male dominated industry and you have led a very successful career and I just wonder what kind of hurdles have you faced as a woman on the industry and how did you overcome them? I mean you know I'm a woman so we deal with hurdles professionally all the time every day I mean not every day but a lot throughout our careers and that's part of being a woman and I think you know I've also had some advantages I think being a woman too right not not being afraid to ask for referrals and assistance and information you know particularly when I was young and starting out you know I think it's important and I think other women helped me a lot of ways I think there is this kind of oftentimes it's underlying band of women where we really will stick together and really will help each other out particularly when you get kind of you know past the early 20s because we're all in it together so it makes a big difference I think having a good tribe professionally of women that can help mentor you help when you're stuck answer questions give referrals you know I think it's great I mean there's all kinds of things you deal with with male investors particularly if you're a female entrepreneur and you're out on investor meetings that sometimes can get very fuzzy what the meeting is for and so you do have to be you know very careful and and you know keep friendly friendly and professional so it's a challenge but you just persevere and if you have a great big tree in your way try and to knock you down you just go around it and you just keep going that's the way I've always done it where you chop the tree down I mean there's only two choices I see you chopping it down powering through it as you are so if I know that you have invested in over 33 companies yourself and you mentioned you were a serial entrepreneur of several of those companies and can you tell me a little bit about your experience a beat what how do you go about your serial entrepreneurship what companies have you looked at and do you align with personally well um so so some of those companies when I was when I was quite young a lot of the early stage kind of tech companies we had an apparel company a radio station travel company a lot of those we really uh all right I was co-founder I was first money in I was had a board seat some of those companies were straight real estate individual builds or investments that I was also a big part of big part of the build project manage watch it you know I'm an Aries I think some constant learner and so having different types of businesses and different types of structures is this this constant part of my learning process in in life I guess and so I'm always interested that's why I'm in crypto now I mean I'm not full in crypto but I mean it's I'm certainly going to salt in crypto Bahamas at the end of April and I love being on that kind of bleeding cutting edge of just continually learning about new industries a certain amount of business that is the same you know you got a set of a structure and got to have documents and marketing and you know there's certain amount of no matter what the business is the structure will be very similar but trying to at least learn and stand next to really smart people that are talking about stuff and and write and try to continue moving forward with my own education and my own career I think is really valuable for any entrepreneur yeah as it sounds like you didn't stay within the same industry for very long they kind of when you finished one you moved to the furthest end of the other side of the spectrum so you could learn something different actually many of the businesses happened at the same you know at the same time to be honest with you so like the travel company I had for like 10 years and the radio station we had for a fair amount of years until we exited to Disney and you know some of them failed and went into the garbage you know I mean and some of the investments disappeared before you know I could blink and so I had everything happen well that sounds successful what is so some companies when did you feel it was the right time to exit because that's something that you know some people will hold on to a company because it's their baby forever whereas when I worked in the industry a lot of these companies are like serial entrepreneurs people who come in they get on a board of a company or or become an interim CEO and then next thing you know they're like just trying to take it to exit but what what do you see as a successful turn for that well I mean each each of each experience I had was slightly different so um when we exited to you know we had the radio station company that I really wasn't running day today but that was a fairly decent exit not giant but irrespectable and it was time it was other investors were in the company and I think whenever you have investors to answer to you you have to really be cognizant of that exit and so you have to be careful as an entrepreneur not to attach it as your baby and remember that um it is a business and there is a time to let it go and that you if you take investor money you're going to have a responsibility to return to them um so I mean that's the reality of it that a lot of entrepreneurs forget for many of the companies that I really started or was really a part of fortunately I didn't take investor money and so the exit of those companies got to depend on on my own personal experience of what I was happening in my life you know as I was having children you know for progressing through my life I was able to move through my own personal businesses in the in the manner which worked for my life thankfully when some companies would come to pitch to you what are I know that some green lights are potentially a board or a good consultant and network are there any other things that would really catch your eye that you're looking for in companies that I mean yeah I mean I think a great story a great product like what are you doing and how cool is it like is it cool is it cutting edge is it fairly unique is there a niche in in the industry that it would fill um so that it has a great chance of success and then who's running it like what is how do I feel about that CEO how do I how do I feel about that the way that person is growing the business how they manage the business and what their path is for you know exiting the business and and having a success with it and are there any things that would be a giant red flag for you like a lack of transparency and lack of communication so yeah I mean if the diligence room isn't like super clear all the legal docs need to be in there and and just most things are are not very secret and entrepreneurs really like to just my work my work my work and I think that they can get in their own way doing that I mean if it's it'll either be IP or patent protected uh if it if that's the required space and if it's not then some other business has already done this and maybe 10 others I have and so then it's just a matter of can you run the business in a way that it can be successful right so get the information out there and make it clean and concise and so that's key yes and so these companies I mean they we do a lot of NDAs I've seen companies come through and have everybody in the room sign an NDA would that be a red flag for you that they're not quite at the stage and willing to give out the information or maybe they have a little bit more work to do or they're just top secret and you need to know about it right now I mean again yeah unless you're trying to do like some talk top secret government report that is really something that no one else could possibly have it's probably not necessary and a bit of overkill and if you are making people sign an NDA you better make it super easy for them right you doc you sign it the document populates right after it you better be immediately on that if you're expecting people to sign things or even use their own adobe to get things back to you you're probably not going to get it back or you're going to miss some opportunity and I see that all the time I see entrepreneurs I see especially female entrepreneurs honestly you just get in their own way with stuff like that so you know getting out of your own way is this part of it wonderful well all this has been fantastic and thank you so much for coming on our show if we had one last piece of advice that you give to entrepreneurs what would that be you know follow your passion and listen to all the good advice and let the rest fall to the ground awesome well that's amazing thank you so much Erica for coming on adventures of commercialization it's always a pleasure to see you and speak with you and potentially reach out to you with more mentor mentor advice for us thank you so much though and best of luck with this thanks have a great evening thank you so much for watching think tech hawaii if you like what we do please like us and click the subscribe button on youtube and the follow button on vimeo you can also follow us on facebook instagram twitter and linked in and donate to us at thinktecawaii.com Mahalo