In today's episode, we sit down with Lenny Criddle who has helped secure over $1,000,000,000 in funding for his clients and their businesses throughout his career.
This interview is going to provide some amazing value on how much ideas really matter, how to create a business plan in 5 simple steps, and so much more.
Grab your notebook, and your coffee, and let's dive in.
Grab your drink and get ready. This is the caffeinated hustle. The best place to learn about entrepreneurs and FTS and life expert advice and guest interviews to launch your business and NFT journey further than you ever imagined. Now, here's your host, entrepreneur, coffee fanatic and founder of the NFT project, caffeinated creatures, Ben Carson. Hey, Team. Welcome back to the caffeinated hustle. I'm your host, Ben Carson. thanks for stopping by. Today I've got a very special guest. I'm just really excited for you to learn from Lenny criddle is the founder of LJ consulting. His firm helps companies strategize success and create business plans. Lenny has received an MBA from University of Notre DOM and he has previously served as a chamber of commerce president and sat on a $1 million granting board. He's a level two Fiverr Pro and has assisted clients and securing over $1 billion in funding. Lenny welcome the show. Thank you very much pleasure to be here. Absolutely. Man that uh, that interest something else a billion dollars in funding? I don't know many people that can say that. That's a that's just wow. Yeah, you know, there's a lot of money out there. And there's a lot of investors looking to give them money, you just need to know, you know a little bit about what they're looking for and how to approach them there is, no matter what kind of financial climate you think it is, there's always investors interested. And that's good to know. So what do you feel like you help the most with Is it starting businesses creating the first plan is that you're helping people after they've established themselves a little bit to get to the next level? Where do you feel that the most value comes in a little bit of both. But I'd like to focus really on newer businesses one to three years, zero, maybe zero to three years, I like to start, generally, I love startups, the only thing about startups and a lot of time is I'm the bearer of bad news. Because they have this amazing idea that no one's ever thought of everyone says that, and most of the time, it's either impractical from a financial sense, because, you know, for anyone that is coming to me, they need some they need money, right? They're not coming to me, just to get my blessing, they're always coming to me to get help finding funding. And a lot of times, you know, with a lot of startups, they think that someone's going to pay them a bunch of money just to do what they want to do to live their life. So I tend to, I really like businesses that are already started. And they're looking for that next level, they're looking to expand or grow, that is a lot more fun and a lot more realistic. Because they have a realistic sense of their business. Not to say I don't help startups, I help them all the time. But like I said, a lot of them are hard headed and don't want to hear what I have to say. And so I provide them the best service I can, and you know, wish them the best. There's a lot there to unpack. I think we got to start at the very beginning. You know, we have a wide group of audience members here, some experienced some not. And so at the very beginning, I get hit a lot with I need to have someone sign an NDA before I can even tell you my idea. And I just I hate that. And I just I'd love for you to just kill them. Right? Because the way you're laughing Yeah, you know what I'm talking about? Yeah. So just for anyone out there that's ever thinking of approaching any funders, angels, even banks, anything like that with an NDA, they're not going to sign it, no one's gonna sign those. It's ridiculous. Because your IP, while it can be potentially very lucrative, anyone that's coming that you're bringing in, is coming at it from an attitude of trying to help you and have a mutual agreement. So, you know, I hear that a lot, too. I have a lot of especially those startups that want me to sign an NDA. I'll do them. I don't deny them. But my advice to anyone, your NDA is just as good as the paper it's written on like, it is unenforceable in 99% of the cases you may be it makes you feel good. But really, there's no point. I laugh. I do too, because I mean, I have one on the ready. You know, I'll sign one for everybody on the planet if you want me to. It doesn't do anything. It's it's not. It's just a feel good. It's a security blanket. That's all it is. Yeah, and insecure security blanket, you want to do that. That's great. So I think we got to talk a little bit about about business plans in general. So whether or not let's start here. Do you feel like every company every startup should have a business plan? Do you feel like you don't need to mess with it until you hit maybe a certain revenue metric? Or where do you stand on that? No, I believe every single not only every business needs a business plan. Everyone that's thinking about creating a business should have a business plan. A business plan is more than just something you need to give to a bank or to an investor in order to vet your business. It's a way to think through your business to establish who your what your market is to establish who your clients are, to establish who your competition is to establish what your financial outlook could be. It's a way to really think through your business from beginning to end. And it's, even if you're starting a lemonade stand, you know, a business plan can help a lemonade stand, put itself in the right place, have the right product have the right marketing. It is, I think one of the most important and often overlooked, and, for that matter, any business that selling any widget, if they only focus on selling their widget, and that focus on strategic planning, they will get beat, they will get beat out at some point. And so every business should have a business plan. That's awesome to hear. That's, I firmly agree with that, from a investor standpoint, you know, a business plan, you could Google how to write a business plan, and you're gonna get a whole massive range of options here. So what's what's a professional investor a bank? What do they really want to see in that plan that makes you stand out from somebody that spent, you know, half an hour one night and just thought they figured it out? Online? Right? Yeah, the most important thing that they really want to see is in the In the financials, it doesn't need to be, you don't need to put together financials that make make it look like you're gonna make a lot of money, you need to put together financials that are credible, and that makes sense, and that you can support. So the reason that there's the narratives is really just to support the financials that you're putting in their business plan. If you're showing your target market, you're showing your demographics, all of those things, you have to say how many people are out there, that's gonna buy your thing? How many of them? Can you relatively expect? What's your acquisition costs, all of these things that break down into someone can read that and say, Okay, this actually is legitimate, it's not just a guess, you know, you can't just put the difference between what I do. And what you'll go do yourself, unless you put in the time is I look at the actual demographics. And I look at the market, and I look at the competition, and I say is, how much of this pie Can you even expect to get? And if you do, what can you charge? And how many of those things can you expect to sell? And what is a realistic percentage increase over time, you know, a lot of people as well think they're going to come out of the gate hitting home runs and triple over time, and, you know, time and time again, that everyone can point to the unicorn and say that I'm that next unicorn, but but investors and banks don't want to see that, like, they want you to be very realistic, look at your competition, you're going to be on par with them, you know, you're going to compete with them in different levels. And, and if it's, if it's credible, and if it if it's feasible, then they'll give you the money to support it. Because it's, it's it has returns, you just have to be honest with that. Yeah, very well said, what I feel like we should probably talk a little bit about competition, because I was doing this a while back for a software company I ended up not running with but I did this whole plan creation and I couldn't find competition for a while. And it actually kind of turned me off of it because of you. In my view, if you don't have competition, it's not a good thing. It shows that you're so new to market, it's going to be difficult to get off the ground because you have to educate the customer what you even do. If I feel in my in my perspective, it's easier to go with the competition and improve the nigga with no competition. What do you think? It's an interesting question. So rarely have I found no competition. There's many businesses it's in this case, established businesses always say we're the only one that does this. I had a client that was in a state where they were the number one rug cleaning service in the state. So they said, you know, we don't have any real competition, we beat everyone out. Well, that's not true that your competition isn't from your perspective, your competition is from this perspective of the buyer, and what they're going to if they're looking to, to buy or service versus who else are they going to look at. And there's direct and indirect, of course, and indirect can go way off left field. So I think a lot of times we can be a little short sighted with competition, because there's a lot of people competing for the dollar. But you're right so if I was deciding to create you know, a skateboard for outer space or something yeah, there's probably no competition for that. It just doesn't make sense like it it's it's something that you would question that if there if there literally was no competition I agree with you because you're you're out there forging new paths that probably no one's ready to buy it. I just heard an interesting story actually about I think it was and I'll probably get this wrong, but it was like the founder of I think it was a major company anyways, not the point. The point is 10 years ago, they had the idea of being the first company deliver groceries to your house and it was an utter failure. It did not work and lost the company. Millions of dollars. You know, fast forward to today where everyone's getting their stuff delivered. You know the right time is important as well. But being like you said, being the very first person out there can be very, very dangerous if you're too too early. And reminds me of I saw tick tock of Barbara Corcoran from Shark Tank. And she was showing the video where she turned down a lady that was making custom face masks, pre COVID. And it's like, no one's gonna wear this. And I was like, wow, that would have been a great company to have like, yeah. Be first and sometimes it hurts. But that's, that's cool. Okay, so if you have a business plan, you feel like your business is ready to go to the next level, whether you have just an idea or an established business, if you're gonna go to a bank, that's probably gonna be the first thing friends and family or a bank, are you having to put up like, do banks loan out businesses just off the business? If they don't have real either inventory? Or revenue? Are you pretty much gonna have to pull against your house? Like, how do you get a loan without being established? Yeah, even for an SBA loan, you're going to have to bring some kind of assets into the deal, you know, you'll have to show that there's something that you are I haven't seen, I mean, it probably, there's probably plenty of people that put a lien on their house or anything like that. I mean, you have to show that you believe in it so much that you know, you're willing to bring something to it now with SBA loans, especially and those are still very popular, that requirement is lowered. But that is not a lot of people don't understand SBA loans, while they're government backed their bank decisions. So you have to go to a particular bank, to get your SBA loan, you don't, it's not just you show up and they'll just give you the money, they will evaluate your financials, personal financials, they will evaluate your personal credit, they will look at you as someone that there they are lending you money for this business. And so yes, you definitely have to bring something to the table. If you're going the angel round. In a lot of cases, you don't have to do that as much. However, angels in general do want to see some kind of prototype or some kind of proof of concept or, or something that you a lot of people, this another thing I get these all the time, you know, people think that they just show up to an angel investment meeting and the angels give them $100,000 Or whatever. It's not like that, like you have to, you have to have already put in a lot of work and done your hard overnights and built your thing and soldier thing and show that this is something that I can do, and then show up. So there is no like, free money out there. There is a lot of money again, like I said in the beginning, there still is a lot of money out there. But you have to have you have to bring something to the table more than just your idea. Everyone's got a good idea. Yeah, it's about the execution. Yeah, our last guest, he went through Angel pad. And they basically staked him and then got him interviews moving on, I think he pitched Sequoia Capital and then backed out the last second, just decide he didn't want to go down that path. But basically, to do something like this, if you want to go past the bank route and go to the angels if you have the plan in place. So let's talk about the advanced businesses here that are ready for the next step they have the plan? Where do they go to find them? Do they just start cold calling these investors? Is it best to find some sort of middle middle man, middle woman that kind of makes those connections for you? So you don't you look professional that way? How do you do it? I would say every way you can, you know, there are invading Angel connectors, understand that if you work with any of them, they're going to be looking for some kind of equity stake, probably upfront cash from you to help them their business like everyone else. There are a lot of competitions. And this is another great way to get in front of angels is to submit to business plan competitions. Those are always supported by either a granting body I used to sit on one like that, or by angel groups, submitting to different organizations is another good way you really, that is as part of the struggle is getting to the right person or getting to the right group and getting in front of them. But you know, there's institutions all over the place that support this kind of thing. The angel investors are always looking and they generally the bigger groups will support some kind of business plan submission group, use your connections, use your LinkedIn, use your personal network and try to find someone that's a part of this. I'm sure you know someone and try to get at him that way. If nothing else, you'll get some experience, get ready to hear no, get ready to be told that this is not for you. And you just have to believe in it. But all the while you can't just be peddling your idea. You have to be working it you have to be doing something with it as you're trying to find that right? Team up because even if you do get in front of angels, they I mean, you know, we're, I feel like I'm a good person. And I feel like I'm always trying to do what's best for the world. And I think I do, but when you're in a business deal, you know, Ben, you and I are in a business deal. I'm going to try to get the most I possibly can from you. And so angels will will do the same. And so even if you finally get in front of them and they're like okay, we're gonna give you you know, 500k or whatever the big number is, for 80% of your business. There's always the second Part of it, that gut wrenching moment like, right, right. And of course, there's the argument to you have $0 right now. So you want 20% of 500 or 100%? Zero. So, you know, there's no direct line idea, I guess I would I always, if I have any clients that come to me and say, you know, who should submit to? I like to look for who's in their area, or who is angels also, and some investment groups, and banks also like to invest in certain sectors, they specialize. And so you look at, alright, what is, you know, what is your thing that you're doing, what sectors it in? These are the guys that look to invest in that you can Google that stuff, and and try down that path. Be diligent, you know, follow up and ask for feedback? If you get told no, say, you know, can you help me understand why you didn't support us at this time or whatever. I mean, you've helped raise a billion dollars over, I'm sure that's a long career there. But that's still a lot of money. So you had to see some businesses get funded, and then it didn't work out. So I want to go dark here for a second. And let's talk about a business that gets funded, that it doesn't work out, I'm assuming there's a connection of these angel investors were like theirs, they kind of tell each other who's who's just not very good at it, I'm assuming it's a one and done chance, or can you fail at this and really come back, or, if you're going for this, you really better make sure it works the first try, or it's going to hurt. I have seen business creators, entrepreneurs that have failed at business and then have been able to come back, a lot of times those guys have even heard. So here's another thing that isn't maybe talked about as much a lot of entrepreneurs have their own money. They are independently funded, but they want to grow, and they want to get more of them, you know, more support, and they want to kind of reduce some of their risk. So those guys will show up to an angel group. And they'll come out with something and it maybe just didn't hit the mark. I can think of one client where they, they're in lasers, which is an industry that I learned a lot about while working with them. Huge, huge industry. And they had an idea that they put together, it was actually really cool. Well, I'll just tell it because it doesn't matter because it didn't work out where they were going to use lasers to tattoo cars. It was it was called like Tesla tat or I don't remember what the working title was. And they got some funding for that. Because it was like where you drive into like a carwash. But it's this like laser ring, tattoos, whatever you want on your vehicle is awesome. Yeah, it's a cool idea. And I can see myself I'm like, Yeah, I get one of those cheap, but it didn't work out. And they did get a lot of funding up front. Now. They were in a position where they could have done this thing on their own. And they all kind of the group that supported it kind of mutually decided that this isn't working for it was mostly a lot of like insurance or eases because it can be a dangerous thing. So they're still there, what they kind of did was they didn't, they kind of put it to bed, they kind of said, let's let's not focus on this. And let's focus on a different part of that. So there are some things that were created through that project that they then move forward with. So it's not exactly a complete failure, because they found pieces of that, that they were working on. There. Obviously, there are companies that every day that fail, you know, they get funded and that don't work out. The angel groups know that they're, they're not hitting 100%, they know that it's, it's a long shot, you know, one out of 10 might pay out. So it's not their side is is much more they think of it more realistically, they know there's not always going to work is exciting when you get a call from a client that they've been funded. And you know, everyone's very excited. Every time they're always like Lenny Brandt, we want to bring you with us like this is gonna be great. And while it is a big time, you know, it's the time where I tell him at the most like this is where you really need to buckle down, be very careful with your money. Make sure you focus on building this thing from the ground up, you know, don't go out and spend it all on big office things and all this other stuff, you know, stick to your budget, standard budget and stay focus. And I've seen some companies have a lot of success with that. And I've seen companies follow that. And it just not work out. You know, there's a weird time with COVID Post COVID The way that that changed the behavior of people. And we're all trying to figure that out the way the crypto market has blossomed and the way projects are coming out of left and right field with that has been very interesting. And so I've had guys that have 500 I think I had one that had a million that just it just didn't work out. You know, and I've had some those are not normal funding numbers. So a normal funding numbers like 20k to get started and to go to these Big homerun, you know, $2 million, it has happened. And it is something that is usually in tech or usually in bio or something like that, where they'll put something together that is well funded. And those guys are still out there grinding. It's not like a overnight, you got that money, and now you're blowing it away. But I've had some that have done their sell out where they've taken their business, and I've taken it through, and then we've been able to exit, I'm still relatively new this I've been doing it about 12 years, so Well, in the sense of watching companies mature far enough, where, you know, the the guys that I helped have been able to do, you know, to offer to bring me to Vegas for the weekend or whatever, because that doesn't happen as often as I'd like, but it had some that have been great. Well, I mean, it's all Yeah, I mean, if you're an entrepreneur and you fail, you got the grit, you're gonna keep trying, you know, like, I totally understand, I would imagine it gets harder. But yeah, if you, if you bring some value out of it, even if it burns up in the fire, if you find something you might be able to keep it going a lot easier, right? Either way. I mean, it's a journey. And I think if you're down that path, you're doing it for a reason. So it sounds like the guidance, and like the mentorship is almost just as valuable as the money for a lot of these startups that go down this path. Would you say that? Yeah, I think you're right, like entrepreneurship is a lifestyle more than it is like, creating a successful business. And a lot of times to, you know, a great entrepreneurs a terrible, you know, boss or president, because they're not the kind of people that want to just stick to something and grind it out. It that's another hard look that they have to take it themselves, once they get going, you know, who's actually running the show, you can have a great idea, and you have the determination to bring it up and get it going. But are you do you really want to do this every single day of your life? That's another hard question to kind of consider before you go building this thing. You know, I've helped a lot of folks start like their, you know, a local mom and pop shop. And unfortunately, while that sounds great, you know, in some cases, you know, realizing that that's your entire life, that you are there every day all day that that is what you're dedicating yourself to it's like raising another child, and, or maybe even more, so it's like raising a favorite child because you can't abandon your business. Need your other children? Yeah, and I've seen some of those as well. But I think you're right, you know, my, my goal is not to dissuade anyone, but to just make them to give a realistic view of like, this is what it entails, like it's a grind and it and you hear people say that, but you don't take it seriously because you have this dream. But it really is like you just have to really love it and really want to do it. And if you're built that way, you're built that way. I mean, that's why I'm built like, it's, it's just how it is. Yeah. I mean, I feel a good test when people ask, you know, like, why do you do what you do? Or how do you tell like, I know, I'm an entrepreneur, because I can sit in a chair for 10 hours and work and they can go by like that. But I have done plenty of other things that you know, I can count the minutes. And like, if you're doing what you love, like time goes by quick if you're not doing what you love, like, you know, you notice the time. And so that's that's a really top level gauge, just see if you actually enjoy what you're doing. So let's talk about success, then let's go back if someone gets funded, and you basically make it all the way through, how much are these angel investors looking? Are they looking for for like 10x multiples, like you said, like a lot of these things can go under? So how much does they how much they take before you can make it out yourself? Well, in general, now, you know, every deal is different. So there's no one size fits all. But yeah, you are looking, I'd say seven to 10x is a definite look, they all usually want an exit plan. There are no angel groups that I'm aware of, they're looking to fund a business that doesn't intend to then sell itself or have some kind of exit strategy, which is a hard thing to think about too, when you're coming to an investment group that they want you to just sell out, they want to be able to get their money back out of this. So that's a part of it. If you're if you're set on going through with it and agree to the terms, generally you're going to be giving up a good percent of your company, you may definitely have to give up some decision, or at least you won't have all control, generally you're going to have a board seat, or you're going to have share equity that will kind of control some of the decisions that you can make. And you know, it's just for safety from this but from their aspect. You know, somebody was coming to me for money, I would do the same thing. I'd want to have some kind of control over that. Oh, with all that being said though, your ROI is you know this Are we the business plan does to it'll project with that five, seven year exit strategy is what the return is for the investors. If you don't do it, they're gonna do one on you, they might do one anyway. Because their diligence is usually top notch. You know, if you're not building a business that has this 710 X potential that you probably won't even be able to get in any kind of angel funding, like I said, they're looking to get in, put some money in five years get out. Okay? So because you're working with entrepreneurs, and most of them don't like the nine to five, they don't like answering to a boss. How much pushback do you get? Because you're basically taking on a boss to get this money? Yeah, yeah. Well, a lot of them, you know, it comes down to do you have another choice? And how badly do you want to do this, I always say, you know, here's the good thing about angels, I have a lot of good friends that are part of these investment groups. The good thing is, is if you're with the right group, angel group, there are people on that team that want you to succeed, and they're connected to everyone, and they can help you in the industries that you're in, they can help you with, you know, wholesalers, they can help you with distributors, they can help you with any of advertising, they can help you with all these things, the mentorship and the guidance that they give you comes from experts. And it's people that really know what they're doing. And so you should listen to them. And you should follow those goals and those any kind of guidance that they give you. It's for the best. Yeah. And I apologize if I'm coming across as bashing them, because I like in my, in my own project we're doing right now I've got several advisors I brought on. And I know what I'm talking about. I'm I know the space and I'm still bringing on outside, you still want outside counsel. So I'm not bashing angel investors or anything like that, I just want people to see that. It's not just sunshine and rainbows, and go for it if you want to go for it. But just make sure that you understand the full picture and not just the upside, because there is downside, of course to bringing on someone else. Because now you have their money to play. And they want to protect their money, they want to make sure that they're you know, they gotta make sure you're a winner. And so it takes a lot to prove your winner. You know, we've talked a lot about a business plan haven't really talked too much about the best way to start one up. So is there a Google website, like someone could just Google this website and kind of run through a free version? Or is there something that you recommend to do a paid version, how's the best way to actually set up a business plan? You know, there probably is, there's probably a lot of different versions I can give you here, I'll walk you through it right here. Here's Lenny's free, how to create a business plan you need or you need only really a few things, okay? First, there has to be a problem and a problem that you're solving. So first thing is to define what your problem is. You can call it an opportunity if you'd like. But there's something there's a hole in the market, and then you're going to solve solve it, and how are you going to solve it? If you can answer those two questions, you're halfway there, how you're going to solve it needs to be pretty well thought out, whether it's a a service or a good, you know, exactly what makes your problem your solution to the problem viable. So you have your problem, you have your solution. The next important part of any business plan is who are you? Why are you the right person to solve this problem? What experiences do you have, what do you bring to this particular business that makes you someone that can get it done, then you're going to need to look at some kind of financial outlook. If you're doing this yourself, and you don't have much experience with this, I'm sure there's a way to look online and look at what a pro forma is, it's a financial forecast, and you need to at least build at least some kind of cost benefit analysis, some kind of outlook, what you're going to spend money on how much you're going to make, what kind of assets you need to bring in to get started, you know, if you're someone that's going into something that is asset, heavy, you know, that's going to cost a lot of money. And you have to think through that. If you're selling a service, you know, this can be very simple. So you need the problem statement. You need your solution, you need your financials, you need to talk about who you are, that's very important, especially going back to angels to they're pretty good judges of like characters and looking at who the people they're investing are in our and it's very important to them. So make sure that you attach your CV, your your res or your LinkedIn, who you are socially, all of that stuff is important to anyone that's reviewing that stuff. And that's pretty much it. You know, when you get into market analysis, when you get into competition, those things are very important to deliver a business and to be able to show that you're that you're credible that you have a chance but if you're not able to just answer, what's the problem, how are you going to solve it? How much you know, how, how, why are you the right person to do this? And what what is the kind of financial outlook if you could put that stuff together, you have at least thought through your business and you have some kind of plan. A bank won't take that kind of If you're you're probably going to end up going somewhere to get something done. And I could be wrong. But you know, my business is both I actually I work on fiber, and I have my own consulting company. And both of those are, they can be a little expensive, I guess. But in the long run, it's, you're investing, you're, you're exchanging money for time, and you're getting someone that puts something together that won't have you spending days, weeks years, putting together a plan that is going to pass through these hoops. And you're not spending that money with someone that you know, has done it once or twice. I mean, you've raised a billion dollars over a career. I mean, you have legitimate, very valid points in what you're saying. And that can be really helpful. So yeah, I really appreciate this. I think our listeners have really learned a lot from this. And I mean, you said your website and fiber. What's your actual website? Yep, it's www dot L. J consulting.co. Co not co M CO, LJ consulting.co, Lenny crittall. Easy to find on every everything I use my name or my handle. I also have done a lot of projects, more recently for crypto NF T's that kind of stuff. So my Discord handle that we're all using is a lowcock, which is I want to spell that LECOQLECOQ co Q. Yeah. Awesome. Lenny. I appreciate this. I mean, the last question, we always go out on caffeine hustle is what's your favorite caffeinated beverage? Oh, baby, I am on a fast right now. And I miss my coffee. So but I cannot stand it. I have two more days. So I just like so I'm from Florida. And we have a local brew called buddy brew coffee. And I live and die by it. And so I miss them. I miss it. I put a little bit of almond milk in there. And it's it's perfect. Just gets us through the day. Well, Lenny, I appreciate your time. And I just thank you for the value dropped here and people will reach out they've been told where to go. So just we'll catch you next time. Awesome. Thanks, man. Thanks for listening to the caffeinated hustle. Sponsored by caffeinated labs LLC. For more information or to connect with Ben, check us out online at caffeinated labs.io. Or email us at support at caffeinated labs.io. Be sure to subscribe so you never miss an episode. Or give us a follow on social media by checking the links in the description. We'll see you next time.