Episode 267 - Exit or Bet the Farm? With Neil Ahlsten
Most entrepreneurs dream of a successful exit. For many of us, it’s the reward for a job well done.
But is there a way that Faith Driven Entrepreneurs should think differently about exits than our secular counterparts? How do we exit well? Are there ever times where God calls us not to exit and to continue our work instead?
In this episode, we wrestle through these questions and more with 1 Flourish Capital’s Neil Ahlsten.
All opinions expressed on this podcast, including the team and guests, are solely their opinions. Host and guests may maintain positions in the companies and securities discussed. This podcast is for informational purposes only and should not be relied upon as specific advice for any individual or organization.
Episode Transcript
Transcription is done by an AI software. While technology is an incredible tool to automate this process, there will be misspellings and typos that might accompany it. Please keep that in mind as you work through it.
Rusty Rueff: Hey there. And welcome back to the Faith Driven Entrepreneur podcast. We're glad that you've joined us once again this week. Most entrepreneurs dream of a successful exit. For many of us, it's the reward for a job well done. But is there a way that faith driven entrepreneurs should think differently about exits than our secular counterparts? How do we exit well? Are there ever times where God calls us not to exit and to continue our work instead? In this episode, we wrestle through these questions and more with one flourish capitals. Neil Ahlsten and I even jump in for some of the fun. Let's dive in.
Rusty Rueff: So, William, what's your what's your favorite go to app for when you want to just sort of calm yourself, get into a contemplative state.
William Norvell: Twitter easily. It just brings the tension down. It brings the noise down, you know, And you can just kind of rest rest in the goodness of, you know, just people pouring blessings on top of you.
Rusty Rueff: You're so good.
William Norvell: Yeah. Yeah. No, you know, it's funny. I probably don't have one, honestly. I probably go to a favorite song or two. That's probably my, like, go to like, I need to calm a minute is I got a few tracks that I just kind of always go back to and just kind of rest for a minute and just I know the lyric is no work. It's just like, I know it's, you know, it's there and it's goodness. And so, yeah, I've never got the haters cause I know our guest today. I've used some of these. I just my personality has never been hooked by one of them.
Rusty Rueff: Yeah, I similar and then I got involved with our guests company, which was the Abide Prayer app. And I really found some useful time, I mean, really useful time just by letting my mind clear, letting someone sort of guide me through getting to a state where not only could I calm myself down, but also open my mind up to listen and to hear what God was trying to say to me. Because I think you're exactly right. You know, think about Twitter and everything else is just yeah, clutter, clutter, clutter of our minds. But it's interesting because his app was called the Abide Prayer app, which, you know, abide means to sort of stay where kind of where you are and to be there and sort of discern what that should look like. But today, we're going to talk about something totally different. We're going to talk about exit, which is like getting far away from abiding. And so with that, I want to welcome in Neil Ahlsten. Neil, welcome to the Faith Driven Entrepreneur podcast. You've been a phenomenal founder of Carpenter's Code that you created the Abide Prayer app. You sold that to Guideposts. Now you're with Guidepost as a senior executive working with them, but also doing venture capital work with, you know, a new firm. And so I can't think of anybody better to have on the podcast to talk about this topic of exits, you know, what's it mean? When should we do it? What are we pursuing? What's a good exit, What's a bad exit? Are we ever forced into having an exit? So, Neil, welcome. And we want to get your perspective and really kind of wrestle with this topic. So why don't you start us off with an overview of what you think about the topic of exiting and why it's so important for entrepreneurs to not only understand but also to try to consider.
Neil Ahlsten: Well, thanks, Rusty and William. It's a pleasure and honor to be on the show. And I do think this was something I did not take enough consideration of when I launched the business, I model that all sorts of exits you go to people, you raising capital and you're trying to say what it could look like. But I didn't think of it personally enough about what would that mean to me, why would I do it, and what could actually make it a good exit for myself. One consideration to give to this is that on some time horizon, you're always going to have to exit, like you will not be around forever. And so it is inevitable, like death and taxes that you will exit. And part of the big question for me is how do you build the legacy that God wants you to build out of the organization that you are making, such that when that time comes, the organization is ready to exit in a good way? And that was what I gave a lot of thought to when I finally decided to sell the business. And the main driver for me, honestly, was that I felt like I had used my gifts and talents to the best of my ability to get it there. And I actually thought other people were going to be better suited to continue moving it forward. I'm a starter like a 0 to 1 guy who likes to make things come from concept to exist. I'm not so good at scaling things. I get bored after a while and I was starting to find ways of getting bored with the product. Like I was just going to talk about this problem again. We've already done this problem five times, and at that point I realized other people were actually probably better positioned to shepherd it going forward who are gifted in that area and passionate about that area. And so that was a really interesting realization for me.
William Norvell: Hmm. That's good. I want to welcome everybody in a little bit. This may be a little bit of a different episode. I'd say. We all sometimes know some of our guests, but in this case, like we all kind of really know our guests have a set. The stage Rusty was actually on the board of Abide. Neil is a longtime friend, and we went to the same church for a long time and we got all know each other relatively well. And actually the intricacies of the business actually, in this case, two of the people most prominent in the room about whether to exit and when to exit are both here. And so it's a bit of an odd situation that leads to an incredible conversation. So this may feel more roundtable ish than usual. And just for the listeners, William here is going to kind of pull in because I kind of know some of the intricacies of the stories, too, so I'm gonna try to pull some threads from each of their experiences through this process. But I want to continue going down your track for a little bit, Niel, before we get into that and just say, you know, you've spoken about like different ways to think about this and there's this big discussion right now about faith driven entrepreneurs and investors, right? To bring in both podcast, right? I mean, I have heard very strong views on all sides, basically. Right. You know, whether or why you build a company and I've heard you talk about like, well, from God's perspective, what is the goal? Is it to continue to bet the farm and go over and over again and just, you know, roll over whatever he gave you in blessing? So I want to let you have the stage here for your view on that and talk us through how you think through it.
Neil Ahlsten: Yeah, there's a lot to unpack in that. That is one thing that I think a lot of founders don't necessarily know going into this is you're going to have different seasons and even when the world looks at you and thinks that you're crushing it, you're going to be worried about things knowing that you're making decisions and taking risks that are really, really, really hard. And so one thing that we talked about a previous discussion, William, around this was that every time you take on capital, you're basically making a whole new bet, right? Like you're diluting your share of it. There's probably a liquidity preference that somebody else is going to get the cash before you. So you're like, Hey, if I take this much more cash, that means I need to raise the bar for where I can even exit the future before I get anything, because these other people are going to get first cut at it. And so it is something to just really keep in mind, whenever you take somebody's money, it's like, are you going to be in a situation to give it back to them in a good way and have a piece left over for yourself as an enterprise, right? Like a nonprofit, it's a different thing. But if you're an enterprise and you're taking on capital, you want to do believing that you can return to those people and return a good amount of money. And so part of this for me, I did abide, not because I thought it was the best business in the world. God told me to go do it. I was at Google, I had a good job, a good salary, and God was basically like, You got to go build this thing. And I mapped out the total addressable market, how big I thought it could be. I did scenario analysis from the very beginning of what I thought this thing could look like, and I didn't think it was $1,000,000,000 business. It was not going to be a unicorn. I looked at and said, This can be a good cash flow business and I see better business, but it's not going to be that. And so I didn't sell it to investors like that either. I sold it as, I'm going to give you some good money back on this, but it's not going to be 30 x return on capital. So I'm not going out to the venture capitalists and raising money for them. I raised money from a lot of Christians, but the first check I got was from the McClellan's. I was in their office and they literally David Denmark wrote me the first check for $40,000. And I have to tell you, one of the crowning moments of running this business was when I finished and I exited. The first check I wrote was back to them and I wrote I handwrote a big old check because they said they didn't want a wire transfer. And I put it with a card and I sent it in the mail to Tablo and those guys over there and I was like, You have walked with me through this. I know that you are going to use this money for good. Here's a bunch of money. Go do something good with it. And I have to tell you, that was one of the most satisfying feelings that ever had in my life. They prayed for me, they cared for me. They invested twice in the business. And to have that kind of relationship to be like, okay, we went through this together. Here's a bunch of money. Go do something else. And with it was like I was honestly one of the happiest days of my life to have that kind of fellowship with people who I trust that much and really appreciate that much.
William Norvell: That's awesome. I have a dream one day if I can make that because I'm in the middle is because our seed round last week. So I feel some of these things you're talking about right.
Neil Ahlsten: Congrats.
William Norvell: And so in my vision we send like Happy Gilmore sized checks to everyone, just like I'm thinking like comically large checks would be the best use of our resources at that point, and I'm happy fund that. But so as you thought about building that, I'm going take a small detour from exits because you lived this for how long were you in the business?
Neil Ahlsten: Seven years.
William Norvell: Seven year? Seven years. And you took a lot of capital from believers, fellow people, people you knew, but people that wanted to return. I'm going to take a small detour because my co-founder, I've been deep in this conversation lately. How do you think about stewarding other people's capital and how that impacts your view of faith at work? Right, Because I feel like it can be taken so many different directions and I'm not I don't think there's a right answer. I'm just curious how God led you. You have children yet? I sometimes go, gosh all these people who trusted me with their heart and I need to work all the time to return their capital. But then you pair that with Scripture and I need a loving husband. I need to be a father. But. But I've taken the step. I've taken their money. Right? Like I told them a thing. And then there's God doing cool God things and blessing you in the midst of your work and in the midst of your rest on a Sabbath. I just want to give you a little bit of like, how did you steward that and how do you encourage other founders to steward that through your journey?
Neil Ahlsten: That is a good one, and I think each founder probably has to answer it for themself a bit. But the way I answered it. I basically had only two priorities. I think simplifying and focus is really important to be successful in anything but especially a startup. And one is my family. I was not going to sacrifice my family for this business. I would come home at 6:00, cooked dinner, sit down, eat dinner, hang out, read the kids bedtime stories, and then go back and work at night. right, like. And so I worked really, really hard. But my number one priority is family. Number two is the business. And that was pretty much it. You know, that was all I did for five years until the business was cash flow positive and doing really well. And I could take a breather and I would counsel people similarly, is that if you want to win in a startup, you have to focus and cut out everything and just be honest with yourself. I know a lot of founders, some founders who have tried to say, Hey, let's have a lifestyle startup. You can do it. It's not a hypergrowth business. If you're going to do that, you can build businesses like that, but it's not VC funded high growth startup. That's a different kind of a business. That's a great business is just call it what it is. If that's how you want to live, that is going to be a slower growth, more long term, and this this is great businesses, but part of it. Decide what you want. But if you want to build a hypergrowth startup and you want to build something that doesn't exist from scratch and find customers for it and pivot into it, man, you got to put gas in that fire. I was constantly working 50, 60 hour weeks, but a part of my time that way. Monday I would work from 7 a.m. until about 10 p.m.. Every Monday I was like, Honey, you don't see me on monday for dinners. We had an after hours work where you invite in bunch of friends from Google and stuff who volunteered at abide. But I put in basically like a 13 or 14 hours day on Monday because I'm like, if I do that the rest of my week, I can take the gas pedal off a little bit and spend some time that evening with my kids. And then weekends I tried to, you know, I'd probably work one or two Saturdays a month, but, you know, that was my schedule, but it was pedal to the metal for a lot of hours. And then I would just hit the brakes and hang out with my family for two or 3 hours and pass out and get up and do it again.
William Norvell: Yeah, Yeah, that's good. Thanks for sharing. And so let's go back to exit. So you had a chance to do this. Walk us through the process. How did it come about? When did it come about it in the business? There are so many things to consider. You know, I think we mentioned those most faith driven entrepreneurs, I am not going to say everyone has some sense that God's called them into this, and you probably have a little less of a sense when someone calls to buy your business that that's time to go. Because, I mean, at least I'll speak for myself like, gosh, like letting go of that seemed so hard. It was so hard to take the leap in the first place, right. To all of a sudden say, Oh, yes, like it's obvious time to move on to something else there. Spiritual effects. You've hired people, you've got customers. Now. It's not going to be under your leadership anymore. But, you know, step one, I would love to hear how did the exit possibility even come and how did you figure that you were ready for that? And then how did you discern Actually, yes, this is the clear time and this is the clear person to even buy the company. Right.
Neil Ahlsten: Well, one good thing is it wasn't my first rodeo. I've had other people walk in and make offers before, like faith based and non faith based people. So that was helpful because I had set expectations for myself around what I wanted to see out of an exit by that point in time. And one of my big requirements was that I wanted them to see it as a strategic fit for their organization. I didn't just want somebody who wanted to cash flow from the business and just squeeze it and get whatever they could out of it. I wanted them to see it as something that would help their whole organization function better because we have such a talented team of great people, great process, great customers, and they really checked the box on that one when they came in to buy because they wanted us to help transform their organization. Make no mistake, I was expecting that to be a challenge and it has been hard on some levels, but they were very open and loving about that. So I think that was a really nice one and they really honestly want a buy to exist very long term and grow in that space and actually have a similar mission. So I think all those things helped me. There were other weird idiosyncrasies that helped too. After running abide for three or four years, I realized they would actually probably function better as a nonprofit because it just gives you another revenue source. You can ask people for donations and give the stuff away. It's like, why would you not want that as a way to operate that, Hey, I can get people to donate money and then I'll just give it away for free to people who can't afford it anyway. So that was actually a really cool additional bonus to it. So when they came asking, I think that one interesting enough I was ready and two, I had a baseline for what the offer needed to be and it was above that in terms of a lot of different elements and the space is different. One thing I would say about the Christian space versus the other ones, I didn't actually go take it to shop it around because I was afraid that could kill the deal. Right? Like a lot of times at this point you're like, okay, well, now, well, let's get a bidding war going, right? That was not the tone that was going to get the best deal out of this, which is I would advise a lot of founders say like, hey, if you are selling, go make a bidding war, get more than one offer and whatever. Unfortunately, I already had other offers. I could compare it to say like, Yeah, this is reasonable. But I also wanted the relationship to be one that felt very mutually looking out for each other. But that was just the nature of how I wanted to exit. So, no, that's great.
William Norvell: And Rusty, bring us into the boardroom. So I think you were one of the first few calls that Neil made. How did you react?
Rusty Rueff: Well, I was getting ready to ask. I wanted to ask Neil a question. So, Neil, what did you do with a board member who was sitting there going, well, wait a minute. Like, the tailwinds for us are really good. Headspace is growing, calm is growing. Mental health concerns are there, man. You know, we could be the company that, you know, just sort of breaks all this open in the faith based space. And are you sure we shouldn't go raise more capital? How do you deal with the board member who was asking you those questions?
Neil Ahlsten: Well, you know, Rusty, I actually have some personal experience with that. First off, I listen because I had wise board members, so I really listen to Skip. I listened to Rusty as to where they thought things could go and how I could think about it playing out. And I always love Rusty as a board member because he would ask those really challenging questions to make you think about the problem differently. And so I did that. But then you have to make your own assessment because you're the CEO. And I think part of what I looked at in the market was, yes, those things might be possible, but how likely are we in the situation we're in to make those be true and what would need to be true in order to get there? And I think looking at that, what Rusty's saying is true is in order to make that happen, we needed to go out and raise ten or $20 million and swing for the fences and hope maybe there's a 5050 chance you hit a homerun. And if not you, hopefully you get far enough that you can sell it. And I think that the other thing in that calculation is like you as a person, do you have the commitment right now to go put in 3 to 5 more years to make that happen? Like, are you ready to go in at 50, 60 hours a week and crush it with that capital? And honestly, when I looked at it, I was like, I'm not at a position to put that level of effort into the business for another 3 to 5 years to get there. And that was part of my assessment. It's like, am I as a founder ready to do that, knowing probably the effort that it would take? And part of the answer for me was, I don't think so. I think that I had burned from both ends on this project for long enough that there wasn't that much wax left. And I was like, Actually, I think it's going to be better to sell.
Rusty Rueff: Yeah, that's the part that struck me so much during the decision on what to do. And I think this is a lesson for anybody who sits on a board or works with any entrepreneurs. At the end of the day, the person who's steering the ship. You have to listen to them. You have to understand where they're coming from and also understand that, you know, this is an arc. I think the entrepreneurial journey is not always up and to the right with our level of commitment, our level of energy, our sustainable, you know, work patterns like what you're talking about, Niel. And while people will talk about, oh, I'm a serial entrepreneur, I'm a serial entrepreneur, I believe that. And there are some really phenomenal serial entrepreneurs. But I think we also get wiser and we figure out that, you know, there's just certain hills that we may not want to climb or if we are going to climb and we're going to climb of differently than we did last time. And it's important that if you're an investor or a board member or even a co-founder, you know that you're finally attuned to that about the founder or the person who's helming the ship. And in this case, you know, as we struggled through because I did see the upside, I saw the you know, there was enough family office money out there. I mean, we were hitting on all cylinders. There was really not big competition. I mean, you were even Niel at that time, you know, starting to partner with the other app there was out there in the Catholic space with Halo and started to do things with them. And it was like, wow, man. Now it's going. But yet the founder, the CEO is going, Yeah, but this is kind of how I feel. And that, in my estimation, always is the most important factor. And, you know, you could be callous and you could say, well, no, no, no, no, no, no, no, no, no. The shareholders are the most important factor. And if the founder is at that point, then you replace the founder. You know, go get somebody else. And that's to Neil's point about the type of capital you bring in. Know, you were fortunate because you had patient capital, right? You had patient capital because you raised on that premise. You didn't raise under 30 X. But, you know, those of us who've been there done that right, who have people who are sitting there going, no, no, no, no, in my portfolio, I need you to be a 30 X. Otherwise, I don't hit my goals. You know, they won't be so patient and they may not be as finely attuned to what the founder wants to do. So I think that was the big thing for me. And you were honest and authentic about it and that, you know, made the difference.
Neil Ahlsten: Yeah, it's still a good question, though. Like, should I have rolled the dice and gone out and gotten more capital into it? And the short answer is you can't. No, No, you.
Rusty Rueff: Can't. No, you can't. Hey, if ifs and buts were fruits and nuts. Oh, what a feast we'd have, right? You can't look over your shoulder. You know, you close that door behind you. And I think that's a lesson that everybody should also remember about exits. Like, if you're going to question yourself in the future and say, what did I leave on the table? Or, you know, did I give up too early? You know, then you're probably not in the right headspace yet.
William Norvell: I want to everybody because, you know, Rusty, you've been a CEO that's exits as well. I mean, it's just so difficult, right? I mean, and you turned down other offers, Niel. Right. So, like, I mean, you you were at a different stage, you know, at various times as well. And we don't get too much into mechanics. But I think it's always interesting. Like, I'm curious, was it actually your decision? Did you control your company at that point? Like, was it your decision, Neil, or did you have to convince the board?
Neil Ahlsten: The only person I needed to convince was my co-founder. Given the equity stakes in the voting we didn't really have. I wanted other people's opinions, but no, we kept it very closely held.
William Norvell: Yeah, it's just an interesting part of this discussion because there are probably many people listening here that don't actually control the voting shares of their company. And so when this comes, this might actually not be their decision, right? They have a lot of input in the decision, but it's not their decision. And so when you wrap all of that together in a spiritual lens, right. I mean, it's really difficult. And so I want to go one layer deeper to the employee base. How did they take it? These are people that you sold a dream to, I assume you sold a big vision to. How did that go at the organization level? And were there disappointments where their excitement was there, everything in between? Because, you know, so often the founder conversation could leave out all the people that did so much work for so many years to be alongside you. And I'm curious how that conversation went.
Neil Ahlsten: Sure. The quick summary is that every conversation with every employee was different depending on their point of view, because they brought in a lot of their own feelings about it. I think most of them were probably accepting but not excited about it would be the short answer because of a lot of them love the feel of working in a startup. The branding of that, the fast moving this of it, the kind of just trying to go out and change the world every day and make the world a different place than it was yesterday. And that was very the mindset that that's why you work for us. And if you're working for us and you're not thinking about that, you're work at the wrong place. You should go somewhere else. It was very much of how we ran it. And so I think that people were like, So we're going to quit doing that. And my challenge then was they know we need to do that in this new environment and helped transform an organization to be more thinking like this. So most of them did come along. They were one or two of the younger people, like one actually decided she was going to go off to med school afterwards. She was like, you know, just chose life changes and career changes. But the vast majority of them were fine with it and they went along with it. And, you know, we're still friends today, and most of them are still working with guideposts.
William Norvell: And for both of you, that's really interesting. Is there a way you learned, just as I'm like it went okay. Right. So no disasters, but like, is there a way if a founder's looking at the show and they're thinking, you know what, I'm I'm kind of at that stage that Neil's talking about, Right. And I'm going to start making some overtures to maybe exit the business. Is there some things you tell a founder just started preparing their employee base or is that like, now you keep that really close to the vest until it happens. You don't do anything. Like, how would you all counsel someone to think about the people that have worked so hard for them? As you know, you're going that direction, right? You've made the decision. You're heading that way. How do you steward those people? Well.
Rusty Rueff: Well, I'll jump in first. I mean, I'm always of the mind that once you've made that decision, right, that's when you open up the door. Right. But when you're just thinking about a decision, you're contemplating a decision. There are those that you talk to about it, but you don't necessarily open up the door because you open up the door. There's always a draft from that point on. Right. You know, and what if you change your mind or what if you do that? But when you've made a decision in most things in business, I think it's wise to move, you know, to the next step quickly and begin to bring people in and explain what you're doing. But I also tell you this William, that, you know, there's another type of exit that none of us like. And I mean, the one I went through with snowcapped was not one that, you know, I wanted to do. I mean, the market had proven that now was the time and none of us were really ready to give it up. But it was a conclusion we came to. I had a conversation this week with two founders who likely might listen to this podcast. They're both believers and I invested in their company and advise them, and they called me this week and said, We've reached the end of the road. And both of them had put a significant amount of money into the business themselves and not taking a salary, you know, for over a year plus. And that was really hard for them. Right. That's an exit. That's the last thing they wanted. It's a negative exit. It's not the positive exit, you know, So there's every one of them have a different set of dynamics, I guess would be a way of looking at it. I don't know. We started the conversation with positive exits and exit, meaning, you know, somebody bought us. But I think it's important we talk about that, too, as a part of the process.
Neil Ahlsten: Absolutely. And if you're not ready for that possibility that you might exit under negative circumstances, don't found a company.
Rusty Rueff: Right.
Neil Ahlsten: You're just being naive if you don't think that that's a possibility. Typically going in to find a company that's going to be some sort of a growth startup.
Rusty Rueff: I think you should talk about the relationship and the conversation you have with your co-founder, Eric. You know, without, you know, breaking any trust that the two of you had, but, you know, be as open as you can about those conversations and how those went, because I know that was really something that was very important to you. And for anybody who's a responsible co-founder, it's going to be important to them.
Neil Ahlsten: Yeah. You know, and that conversation goes all the way back to how we started working together. I think the tone and the trust that we had with each other was always very, very strong and very in it for the collective to win. And so even in thinking through from founding the company and how we divided up equity and what vesting would look like all the way through to how we got treated and when people got salary, who got salary all the way through to exit, I think we had very open and clear communication. And that's just if I could say one thing about the founder relationship, I was extremely blessed because my co-founder was always 110% in and we always were able to share with each other directly the things that we needed out of the company in the arrangement for to work for us. And so when we got to that point, it wasn't really like he didn't know it was a surprise. I think that he was, you know, my closest confidants through the whole thing in terms of sharing. And that made it great. I think it made a great because we felt like we went through it together and we exit together. So it wasn't actually that hard of a conversation was much more of a we did this knowing that this could be the kind of outcome and this is a good outcome. You talk about Rusty that we were able to sit down and say like, this is not a bad outcome. Everybody's going to get a really nice check out of this and our legacy should continue into this organization in the future. And that can be a really good thing and a good home for the product that we built. And so our conversation fortunately was great going into that. As far as I recall. Now, if you asked Eric, you might say other things, but.
William Norvell: Also a friend later and you know, see what we get. Okay, let's switch the discussion a little bit. I'm going to bring both up again here. So, Niel, you've flip the table now, right? So you're on the other side and actually looking for the 30 X investment. So my guess is you would not have invested in your own company, from what I can tell from that.
Neil Ahlsten: That's correct. So isn't that funny?
William Norvell: It is. That's why it's a fun conversation. And so this next topic, I know, Rusty, you've been investing a long time and actually taking money. And Neil you've taken money. Now you're on the VC side looking for 30 exits. Both of you. I want to give you both a chance to talk about capital business fit, right. We know our listeners, not everyone here is building a venture backed startup that is not the majority of the audience. Some are right, but a lot of people are looking for a lifestyle business. There's a lot of people are looking for five xs. A lot of people are looking for 30 xs. A lot of people are looking for, Hey, I'm just still trying to make this thing. Don't even know what it could be. But I do need some money to buy some equipment or I need some money to buy this or to buy that. How important is and how do you counsel people to think about capital business fit?
Neil Ahlsten: I mean, I honestly can't think of that many more important decisions. People say it's better for you're getting married when people are putting money into your business. And I would say that that it feels that way. So part of the biggest challenge that I see with founders is not enough self-reflection or understanding of what kind of business they're actually making to know what kind of capital they should court. Because it's hard, especially to your first time founder, and you don't know the different types of capital that are out there, the different types of businesses. I think even understanding that can be hard, but I would hugely counsel people to consider that. And I try to counsel startup companies that are raising from us about where they fit in the spectrum of like super high returns market or above market rate returns all the way to your donation. And you look like a business, but it's really donation because you're probably going to go broke and people invest. You aren't going to make any money. And I think that it's important to understand where you are in that spectrum to the extent that you can be honest and seek counsel in that.
Rusty Rueff: Yeah, I would say different philosophies for different times. Like, you know, if I rolled back 12 years ago when I was angel investing or doing things like that, it was just a different time. Right. You roll the dice, you covered a lot of numbers and you know, guess what? It would all work itself out because companies would quickly get to a point where they exit. And, you know, it was all good. It was very, very frothy times. You know, I would say post 2008, after the Great Recession, you know, the world of investing, especially as an angel investor, is totally changed. You know, it's not two years to an exit. It's minimum 5 to 7 years. A lot of capital going into companies. The early guys, you know, have a good chance unless you pro-rata all the way through of getting washed out and so different philosophies different times and and I think you know you change as an investor. So my philosophy has always been you know I bet on jockeys, right? I mean, if it's a great co-founder, I believe in her or him. And I think that they're the kind of people who can persevere. And I align my values and my principles with them. You know, I'm open to talking about an investment and I've always invested on jockeys. Now, that's being said, the horse has to have at least four legs, right? I mean, it can't be a three legged horse. It just doesn't work that way. But, you know, whenever I've gone into those situations where I'm investing in the founder and the co-founders in the team, I've never really been disappointed because I've been fortunate enough that each one of those people have been people that, you know, on the back side, even if it didn't work out, I would consider investing again with them because of their integrity and the way they treated their employees and their customers and how they ran their businesses. And then along the way, you know, some of those actually worked out really great. So I think, you know, you have to go in eyes wide open into any situation. And I always think about, you know, I'm not going to invest money that at the end of the day I'm going to regret that I invested like I'm not taking that much money out of my pocket and making that investment because, you know, I might well be disappointed because how many actually work and how many don't if the odds are stacked against us. But I love it. I mean, I love it because there's no greater form of affirmation validation to a founder that you're working with than to say, I'm writing you a check. Right? I mean, we're in now, we're in this together now. And I behind you, you know, and sometimes it doesn't take many of those checks to be the thing that just ignites the fire.
William Norvell: Yeah. Words of affirmation are great. Moving the banks a little better on the fundraising trail. Niel, you said, hey, is the most important thing a founder potentially can do. Prepare some founders listening. What are the right questions to ask when they're raising capital? Who do they ask them to? Where's that line? What is reasonable to ask? What is unreasonable ask? What should an investor tell them? Right. And of course, you know, a lot of people are saying, I've been there, gosh, how much can I ask? And I still want the money. I don't want to upset up, you know, how does that relationship work? How quickly can you get to that? How quickly should you get to that? And what's reasonable to expect an investor to answer back? You know, in that conversation.
Neil Ahlsten: Well, there's a wide range there, depending on who you're talking to about how they're going to respond and what questions they're going to ask. If you're a founder coming into this and you're wondering, like, what should I be putting myself up for, to go into these investor meetings and have good discussions about, you know, obviously try to repay yourself with a lot of great books on there about how to talk to VCs or whatnot. But I think number one is actually comes back to something that Rusty said that I love is if you look across the table from the person who's going to write you a check and they look at you as a human being who is valuable, whether or not that check ever gets returned or gets returned with a 30 X or five X or whatever, those are the kind of people you want sitting around the table with you, because those are the kind of people who, when you hit Valleys, every founder is going to hit valleys in their founding experience. I think having people around who aren't going to be the ones who are like, Hey, now you're down in the valley, I'm going to take shots at you, but hey, you're in the valley. Like, how can we help get you out of that or counsel you through it? Those are better people to have a lot of investors. And just keep this in mind, the founder, right? When you double down on the winners, you triple down on the winners. You spend your time with the winners and not with the losers. And I was just talking with a renowned venture capitalist who Rusty, you know, out of London and he was saying that the most valuable week he ever spent was with one of his winners, and he spent a week with them and helped them win even five X. More than they already had that led to this huge multibillion dollar exit. And he's like, out of all the 50 weeks I spent that year, that was the only one that actually I did anything really valuable. But it's a hard perspective as a founder, because what winds up happening with the investors who invests in your companies is that they tend to feed the winners and starve the losers. A lot of them do. And so just be a little mindful of that. Try to have people around you who won't starve you off if you're the one who's in the valley for a while because you might have otherwise made it. But they won't help you get through like you want the people who are at least going to be there who shoulder you can cry on and who are going to say give you at least words of encouragement, even if they don't write you another check and some words of wisdom and refer you to some other people other than being like, Sorry, you're just roadkill, but just sweeping you off the road. I'm going to keep going forward. I think you want a few of those people on your cap table as you can have.
William Norvell: Yeah, that's good. You know, as we come near close here, how do you. So once again, you had a very significant path. We heard. Right. You know, Christian investors sold to a Christian led company. The legacy was able to continue. And so and you and you were actually quite confident in that, right? I'm sure it's different. And after an acquisition, it always is. Right. It's different than you actually thought it was going to be. But it sounds like directionally all those things held true. Now you're investing in companies. And, you know, I'll go Neil first and then Rusty and but that may not be true. Google may come to buy them right now. I think Google's a bad company. That's not what I'm trying to say. But just like you might not be as clear that it's going to go just like I thought it was. And they are going to hold my vision just like I thought. And so what I'm getting to is how much the spiritual legacy and impact. Impact an exit decision when there isn't that. I think yours is a rarity. I think on average there isn't a lot of confidence that it's going to go great and this is going to be a perfect marriage and they're going to grow the business more without me. It's like now you're probably thinking they may shelve my company in two years, they may fire all my employees, but it's still the right decision to all the stakeholders. But I'm worried about it, and so is that 5% of the calculus? Do I say no because of that? Just how does spiritual legacy and impact what God's called you to do? What you've been building the business for way into this type of decision?
Neil Ahlsten: For me. I think, though, I have to give myself an air of humility and all this. One of the most common exits I see in the Christian space is the founder led church that dies when the founder goes away. There is just I can't even tell you how many thousands of churches out there that just died after the founder of a founder led church never handed it off. And so I think that the opposite is often more true is that as the founder you hold on to long past the point when you're youthful and you don't build up the people to take it over after you because you think you're the only one who can do it. And if you think that you're the only one that God can raise up to do something, you are wrong. God can rise up all sort of people. So that's actually a little bit of a personal, philosophical thing that I have is if I do not believe God can raise up the next generation to keep moving forward. Boy, somehow God has done that for a lot of generations. So I think that that was just my own perspective. Everybody has their own perspective on it, but so I didn't feel some weight and talking about spiritual legacy and now I can be on the proud side of it. I'm pretty sure that a lot of companies out there, like Pray.com and Hello, were able to raise the capital they were because we were a top 40 grossing health and fitness app and other venture capitalist said, Shoot, that's actually a thing that you can be a top 40 grossing health and fitness app as a religious app. Why aren't there more? And so Party wants to say maybe we helped inspire also other people to write checks to our collabors in Christ so that they could build great businesses, too. So part of me looks at it and says, Yeah. Some of that capital they raised. Maybe we helped inspire it because we're the first ones to prove that you could actually make money and cash flow really well being a Christian app, to my knowledge. And so I don't know all the spiritual legacy that I brought, but a part of me takes a little bit of pride in that to be like, Hey, Alex did Hello, Maybe you got a check because the guys looked over and said, Hey, you know, this can work. And maybe Steve could tell you that the same thing. But he got a check because people whatever. So that can work. I don't know for sure, but it's hard to know what your spiritual legacy is because you don't know how many people you touch. And the other thing is these reviews, like, I mean, every single day I'm still get all the reviews coming in and it just blows my mind. The reviews that people give where they're like, Man, you know, I came to Jesus through your app. My husband died listening to your app convalescing in a home somewhere, and the last thing you heard was Abide Meditations before going to meet Jesus. I mean, there's just so many different versions of these testimonials that I'm like, I don't know, Lord. Hopefully I did something good running his company. Time 105 is probably not going to be what you need from me. I'm going to do so. But you know, each founder has to deal with that in their own way with that product and that team and answer that question for themself. Honestly. It's a very, very personal question.
Rusty Rueff: Yeah, I'll come in really quickly. I think it comes back to something we explored in one of our earlier podcasts with one of our guests. I can't remember exactly who it was, William But you know, what do we really own? Right. What are we really own? I mean, if we are believers that are, you know, faithfully surrendering our lives, our vocations, our skills and talents to Christ, we don't own it. Right. We're just renting this company that we founded, you know, for this time frame that God's given it to us. And if it's taken from us or it's His will for it to go someplace else. And you really believe that, then you let it go. Because it wasn't really yours from the beginning. And so I think that that's one of those faithful, willful decisions we take, too. Now, if you're not a believer and you don't have faith and you know, I understand why people get really disappointed when they hang on so tightly. And then if it goes someplace else and then it gets shut down and then their own self-esteem, their own ego, like it didn't live and what did I do wrong? And I should have stayed there longer. But, you know, we don't have to be that way. It's our choice not to be that way, because, you know, God's will supersedes all of that.
William Norvell: Yeah. Reminds me of two episodes. I think that might have been Alan Barnhart, where, you know, he effectively gave away his company but still runs his company. A rather large one. Right. But he effectively has given away all of it to charity. And then also reminds me of a really amazing episode with Randy Alcorn talking about the treasure principle. And yeah, what do we actually own? I hear the echoes of that, Niel, and what you said, like, well, we actually own is actually like, what, what God makes these things on earth into in heaven. Right. And so actually, like, this is just a small foretaste of what he's going to do with our skills and gifts and abilities. And in some, my reading of Revelation, which I see if William was right there one day, probably not. But my reading of it is like there's some supernatural way in the new city, the new heavens in new Earth that, like what we produced here, will still echo there and we have no idea what that will look like or well, it would be. And remind me also, it got so many good episodes. I remember we had Victor on. He talked about going through a layoff and said, you know, this may have been the reason. This may be the only thing that's remembered about my company is how I treated these people during this layoff. Right. Right. That may be all that in matter. And he's not saying that definitive. And that may end up being all that mattered. And we can't know that here. Right. On this side. And so thank you for sharing that. I think that was such a great way to end. As we go to the final end, what we do love, I'm guessing you have no shortage of biblical reflections, so I'm just going to let you go. But we love to end with the word of God. And one place that God may be taking you maybe today in your abide reflection. And and of course, feel free to at the end of that, please tell everybody where they can get a abide, how they can get a abide and all of those things as well, because we know it personally helps so many people. I know and I hope we can obviously do that too.
Neil Ahlsten: Very cool. I'll give you a biblical reflection. One came partly to revelation from God, but also is very much back to the Scripture is that I truly think a prayer that you pray exists through all time and space forever. We talk about the prayers of the Saints being incense before God in heaven. So pray a lot would be the short answer and pray scripture. But it just had this very clear understanding from God that when we recorded this little podcast prayers that were on abide and then prayed in faith by somebody recording it and other people out listening to it, that prayer is still being affected and the Holy Spirit is still working through that, even though it's being played on a digital podcast somewhere. And so just know that those little spiritual moments that you do to cry out to God, to ask for God to move, etc. they may seem temporal and they pass away, but those songs that David wrote almost 3000 years ago are still active and working in people's lives today. So that's just one of those Don't underestimate the importance and the power of going where God is going and praying in the way God is praying because it will continue. And one of the counsel is that I think the peace of Christ is an actual spiritual tool that you need to use as a founder through hardship, that the the piece of Christ protects you, it surrounds you. It's it's inside of you. And having run hundreds of experiments on people with content, trying to understand what happens when you bring people into the space of the peace of Christ and what that does in their life. It's a thing. And so don't think of the piece of Christ is something that you accomplish or you get to one day that you just feel at peace. But it actually is like part of God's armor surrounding you, protecting you, helping you walk through those valleys that you're going to have as a founder and know that God has a plan of purpose for you through those seasons. Like Victor said, laying people off. Love that dude like that, that you could have the peace of Christ giving people a reduction in force, not a threat like that. You know that This is what I need to do in this season and I can still be okay with it. So treating people right as founders and as leaders of companies walk into every day knowing that you can do that and you can lead to the peace of Christ even through the hard times.
Rusty Rueff: Amen.
Neil Ahlsten: And how you get abide, go download it. You can go to the App Store or Google Play Buy.com. Use it. The things that people do with it that we tested into, they love the most. The meditations are a great way to reflect with Scripture on your own life. We actually have pauses in there. This is you're not supposed to do audio files, right? You don't have a podcast. And second, positive guys, but we ask questions and ask you to reflect on your life using Scripture. And I do it and it works. And the short answer is it helps me understand what God is doing in my life. We invite the Holy Spirit in and then sleep is the other one. I can't even tell you how powerful it is to fall asleep to Scripture and have that Scripture through your brain at night. It rewires the neurons in your head to align with what God is thinking and why in your life or what is true, as opposed to what's false and wrong and broken in the world. So I encourage you do that. If you need a scholarship, just email, help it abide.com and we'll give it to you for free. If you can't afford it. If you're not taking a salary and you're found out there today and you need it, go get it. We'll give it to you for free.
Rusty Rueff: Awesome.
William Norvell: Pretty good pitch.
Rusty Rueff: Niel It's been great to do this. William, Thanks for moderating. Is through what I think is a really important conversation. Hopefully we can have more conversations like this about different points in the journey for an entrepreneur in that entrepreneurial journey. But Niel, in the meantime, man, thank you so much. Really appreciate it. And, you know, you've been a real inspiration to me, the way you've handled yourself as a CEO, a founder, all the way through. It was an honor to be on your board. And, you know, I only wish the best for you and all that you've got going. Blessings over you and your family.
Neil Ahlsten: Thanks Rusty. Thanks, William.
Recent Episodes
Follow the podcast