Exploring the Entrepreneurial Journey in Deep Tech: Insights from Ross

Josh (00:00:02) - Hey, good day, fellow dealmakers. Welcome to the deal, Scout. we run a few different, series on this show, that talks about deals. And with dealmakers, we have a one minute educational Ask the Dealmaker series where we create a lot of shorts. We have a seven minute series where we dive into, you know, one specific type of deals, and then every once in a while, I come across a friend or, or a dealmaker that I want to capture their story, their journey. And, so for today's show, we're going to have a conversation with Ross, who's going to share his story from building being a serial entrepreneur. Built a company, had an exit. It's going to share, you know, some of the details there and then was way too young and vibrant and passionate about the world of building that he dove back in again and, want to have a chat with him. So, Ross, welcome to the show, man.

Ross (00:00:55) - Yeah, thanks for having me.

Ross (00:00:56) - I'm I'm looking forward to to talking. I talk quite a bit about these things, but a lot of fun. Yeah.

Josh (00:01:01) - So, let's start with this man without telling me what you do. All right? So you can't tell me what you do. Who are you?

Ross (00:01:12) - You know, it's a funny question. I've been an entrepreneur now almost over ten years, and and I have people ask me lately what motivates you because I work in, I joke that I say I was doing deep tech before it was cool because a lot of the science I work with is very bleeding edge, you know, carbon nanomaterials and sensors. And now we're in gene editing and data, and I I'm not even a scientist. People ask me all the time, you know, I can talk enough. The science people ask, where did you get your degree? And I say, well, I have a Chinese history degree at UCSD. How'd you get into gene editing? And I'm like, that's a funny story. Sort of fell into it.

Ross (00:01:49) - no. But what I'm finding more and more, that I, that that I just can't help myself, I have to do something is wasted potential. And what you find a lot in the science community is there's a lot of really, really great science being developed in universities that is very cutting edge, bleeding edge kind of things. And the scientists come up there and they have like an idea of what that science might do. And so when they go publish their papers, they're like, this is potentially a problem. And here's how we did the science. Da da da da da. Most of the time they're wrong. They don't know what that story is because they don't go to markets. They have to come up with what they think the idea is and then they try to solve it. It doesn't mean the science isn't good, it's just poorly positioned to figure out how you turn that into real value. And so I've seen a lot graphene's a great thing. Graphene is involved in our sensors. It's a one atom thick sheet of carbon similar to carbon nanotubes, which a lot of people have heard about.

Ross (00:02:46) - The field academically was dying even after the government spent $20 billion investing in academic research around it. And we kind of rescued it and turned it around and found a great application and figured out how to fit it into an existing industry and meet a need. And I've been finding more and more that a lot of my niche is partnering with really good scientists, who often want their science to turn into something that means something to somebody, but they don't really want to be the business person. They want to find a business. This is what I hear all the time. A business person I can trust who? Which is surprisingly not common. but, but like someone that they can really pair with and figure out how do you take a science and position it so that it actually means something to someone else and solves a real problem, right. so and that actually relates even to the people the way that I've staffed companies. I had someone tell me the other day, they're like, it's really impressive how you have all these really powerful women around you.

Ross (00:03:50) - You're really committed to diversity. And I'm like, I mean, I believe in diversity from a political perspective. What is it? I'm a failure. you know, I look for value, or value is not well optimized. And what you actually find a lot. And this is advice for entrepreneurs. Women, minorities and minority women often are poorly positioned in the role that they're at in a company. And so you can find really underutilized talent that is maybe doesn't know how to advocate for themselves as well. You know, us white guys, we're actually pretty good at advocating for ourselves. A lot of minorities and women don't really know how to do that, which means if you can kind of look through that and see, boy, there's a real talented person here and they're probably poorly positioned. They can come over, you bring them in, you give them all the responsibility in the world and say, go now, let's figure out what she can do. And they turn into amazing people. They just need enough space to really find that opportunity.

Ross (00:04:43) - And so I've been able to find really great talent that is just in a bad job, and then come over here and it's a great job, and they just turn into all these amazing things. And yeah. And yeah, it's it is a diversity kind of thing. But I don't do it for diversity sake. It's like, no, there's a there's a really great person that is just badly positioned. And so it comes down to this thing about wasted potential I hate. Wasted potential. And I'm like, God, that person could be so good if they just were in a role that really emphasized their strengths and minimize their weaknesses, and then they would turn into this amazing person. And so but at the same thing with science, it's the same thing with, yeah, with people. And so, yeah, a lot of that is just at the heart of everything we've done in my companies. But even we were just talking before the call. Like one of the things I love the most about my company is I found people that didn't really know how to position themselves, weren't well positioned in their own roles, and I brought them in, said, this is what you really should do.

Ross (00:05:45) - You should be like this and know you're not good at that. I'm going to help someone do that. You do this where you're really great, and they turned into these amazing people. And even when they left, even when I've had to do layoffs, which is all part of startups, they've all gone on to really incredible things. And I and I'm proud of all of them. I have good relationships with the vast majority of the folks that have formerly worked for me, and people who still work for me and, and, yeah. So yeah, like at the end, I've been finding that I just can't stand seeing something that could be great. And it's just not. Being great. It's just not in the right fit. And a lot of what I do is how do I take science and build the right story as a business and meet a need and and show that I can meet that need with this great science. Right? so, yeah, it's it's really about wasted potential. I hate wasted potential.

Ross (00:06:38) - And I'm like, no, let's make that potential be real. Let's bring it to the market. Yeah, let's make this person be better. That's that's what I do.

Josh (00:06:45) - So I love that. That is so cool. What a what a great, what a great skill set. Now, I could envision I'm taking a risk here. I could envision that skill set, that desire. Right. I identify wasted potential, especially in people right there at a crappy job, you know? Wow, what a great person. I could plug them in over here and I could watch them flourish. I'll give them some space. I'll give them the tools. I'll give them an opportunity. Right. But here's here's the risky question that I think I must ask you. That skill set is, is leadership and leadership development right. Growing up, was that valued or did that get you? Did that did that give you challenges growing up because you saw a lot of I'm sure that was ingrained in you and built in you, and you're wired that way.

Josh (00:07:35) - But was there a period in your life where that wasn't valued from your perspective, and you had a hard time figuring out your fit in this world?

Ross (00:07:44) - Oh, yeah. I definitely didn't plan to become an entrepreneur. I, I okay, a little then life story. I my my plan, actually, ever since I was very, very young was to be a career military. Going to, go to the Air Force Academy. I was accepted, and then I was rejected for a medical reason. That was not a big issue, but it was enough to get keep me out of combat. And military career was off the table. So, so I. I went to college with a couple of my friends and just sort of figured out what I needed to do, but it meant that I didn't really have a core plan on where I wanted to go with my career. I sort of built the best skills I had, and when when an opportunity showed up, I said, you know what? I'm going to take that, and I jumped.

Ross (00:08:31) - So I have shifted industry. A lot of times you see people like, I'm in life science now. I've been in life science now about ten years. That's the longest I've even been in an industry. Most, you know, I've shifted from finance to defense manufacturing to CPG manufacturing to life science. you know, every six, seven years I changed, you know, which is really uncommon. A lot of people are just in one industry all the time, and I move industries all the time. But even going back to that, You know, I going back to growing up, even coming up as a kid. I really? I was told all the time by my by my father. How you know, you wear your heart on your sleeve and people are going to take advantage of you all the time and said, you know, I found out. You know what? He's right. People do like to take advantage of people are just as open and honest as they are. But and I learned later that my dad said that because that's who he was.

Ross (00:09:24) - And he built all these layers to protect himself. And I said, you know what? I'm just going to get hurt, but I'm not going to change who I am, and I'm still going to be, you know, because there is a value in trying to understand people from an empathetic perspective. And how do I understand a person at a very deep level and recognize that people are have good strengths and have good weaknesses, and everyone's a little different? And how do I evaluate those? And so I've spent a lot of time learning those skills. And that's how I built on my friendships. And it's definitely hard growing up that way because I have no agenda, I have no layers of protection, I have no armor, and I am just who I am. And and that that in some ways it puts people off. In some ways they find that very authentic. But it also means that, you know. Now, you know, moving into my late 30s and now in my 40s. Maintaining that core of who I am and being just as clear this is exactly who I am.

Ross (00:10:18) - There's no agenda. This is I am who I am. It means that I don't have a problem attracting good talent. I attract really good leaders. I attract really good people wanting to come in. We do really crazy sexy science. That's super fun. It's where everyone knows what's going on and everyone's coming to learn and do something new and exciting and grow. And they know exactly what they're getting into when they come to the company, because the company is, you know, I expect people don't know what they're don't know everything because we merge so many different fields. So you have to come to learn, you have to come to do that. But they know that going in, that's exactly how it is. And if me, as a guy with a liberal arts background and an MBA, can figure out the most advanced sciences of carbon nanomaterials and semiconductors, and combine that with another advanced science like gene editing and build a business out of it, well, then they can figure it out, too. Like, if I could figure it out, they could figure it out.

Ross (00:11:09) - So a lot of that authenticity has it is difficult growing up that way, for sure. But it also means that, you know, I've never let I've just chosen that. I'm never going to let that change who I am. And then. As you get older and people become adults and particularly they're looking for partners. What that does mean is that people understand exactly how they can lean on you, and it becomes a lot easier for you to build a partnership with somebody, whether they're just coming into your company or coming to invest in your company. It becomes a lot easier because they they understand who you are very quickly. They know, if I push this way, Ross is going to resist. He's got me. If I if he if I lean this way, Ross will support me. I've got this and the right because I am that. And so there's nothing unexpected. And it allows for that trust to build good partnerships very easily. And so it serves me better in my middle years, I'll say.

Ross (00:12:03) - But it's harder when you're growing up, for sure.

Josh (00:12:06) - So I love this conversation because as as a founder, I've, I've built some companies and, you know, being a CEO, being a founder, especially in the world of start ups, man, there's ups, there's downs, and then there's getting your ass whooped. Right. And then those in those in those times where times are tough, layoffs happen. you know, you got to have tough conversations with investors or people who believed in you, you know, for the the people like you and me who are vulnerable, who, are open. I am what I am. You're going to get an honest response like, how does that. How does that come across when you're having to pass off bad news to an investor or to a an employee, right?

Ross (00:12:54) - Yeah. I want to add before I answer that, I want to add a little bit to that too, because one of the things I also tell a lot of entrepreneurs, you know, a lot of people, you know, there's this sort of fetishism about being an entrepreneur.

Ross (00:13:06) - Now, Silicon Valley has done a good job of like hyping these people that should not be hyped. this this is risky for me to say on a public podcast, but no one really. You know, people admire people like Jeff Bezos and Elon Musk. No one wants to be those guys like that is a hard life, and you have to be a difficult person to go that whole journey that they go, that is a that is a difficult life. because the thing is, is that this is not a job. This is a life. I never put it down. I'm married. I have a kid. I bring it home. I try not to, but the stresses you bring home. And so it's not just hard conversations with your employees or your investors, but it is also hard conversations with your spouse or your partner or your kids. Like, this is what these things mean. Sometimes they need to take a deferred salary or, you know, in order for the company to be successful, that that's a hard conversation with your spouse, right? But you gotta have those.

Ross (00:14:05) - And so going back to that, there is a very real motivation that I feel right now is literally filling out all sorts of forms for some investors, prospective investors today. And there's a very real motivation to say, boy, this isn't so great about the company or both. This doesn't look as good and you kind of want to hide it. You kind of want to like, no, I don't really want to be as open about these things because it doesn't look as good. And you don't don't you never do it. And when you experience tells you that, what you find is you're if you're open about those challenges, what you're going to find is that is a way to filter the right people that you want to work with. You know, one of the more telling conversations, you know, so I've had some investors who look at, you know, the warts on our finances or whatever, and they're just like, well, you aren't doing this right. This is not blah, blah, blah, blah, blah.

Ross (00:15:02) - And, you know, and you're like, you know what? If I had all those words figured out, I'd be bigger. I'd be too big for you to invest. You want to write a $25,000 check, but you want, like, a toilet made out of solid gold here? Like, come on, like this is startups know where you're at, know what the stage is. But then on the flip side, you know, when I did my first layoff, I have one investor. With this guy. I love this guy. He's a blue collar guy, and he's set up this company that's now very successful, making John Deere tractor parts, and it's $100 million business. And he's out in the Midwest and he's like, oh, Ross, I never went to college. I hired guys, I went to college. you know, you got all these different things he does and, and, you know, he gives me advice about his business very, very, again, very blue collar kind of advice and stuff.

Ross (00:15:49) - But I went and said, yeah, you know, we're struggling through this gap, and I think we've misaligned what we're doing. And I had to do a layoff and it was really hard. There's only 4 or 5 people. And he looks at me and goes, now you made it, Roth. Now I know I can trust you because you understand exactly what it means to put on your big boy pants and make the hard calls for the company to be successful. And so what you find is that actually being open about the things that you may feel embarrassed about and have hard conversations, it shows you that it shows your investors, it shows your employees that. You're not going to sugarcoat things, you're going to be honest about things, which means that they don't have to wonder about stuff. If you're that your word. I mean, your word is everything that your startup founder. And if you're open about the challenges and you're open about the stresses, and you can even show a little vulnerability like God, it was really hard.

Ross (00:16:44) - Like it crushed me to have to let go of for people, you know, where these guys like, I laid off 50 people. I don't understand what it is. You know, it's it's that's part of the business. That's part of the responsibility of being in the chair. That's why this is so hard for everybody. Because you feel for people. You're still you and being you feel for people. You don't want to let them go. but, but what you find is that everyone that I've had to let go has, has a positive relationship with me. They also they're disappointed. They were upset. There's a lot of tears. But they also moved on to great things because they did great things for me, and they appreciated that. I was very honest about stuff, that I told them what was going on, and they didn't have to sort of wonder, are they going to lose their job? Which is the kind of thing you find in big corporations and corporate climbers. Like, I left big corporations to do this and to build relationships with my employees, my investors, and and that honesty creates clear communication.

Ross (00:17:42) - And you build a deeper level of trust because they know you will tell them what's going on, you will be clear, and then they'll tell you what's going on. And then what you find is people are willing to back you more when you're willing to be honest about stuff. So it's it's it's a way to filter out the people that shouldn't be investors, that shouldn't be partners, because the people who respond positively, that understand our calls as part of the game, that that means they're going to back you again and again and again. Right? And that's that's how you survive as an entrepreneur is having that community of people who get you and get how hard it is and appreciate it.

Josh (00:18:20) - So good, Ross. one of my friends, probably most influential lady in, capital space, capital formation. She says, she calls it the three W's of of, cap raising and investor relations is you want people with wealth, wisdom, people that are willing to go to work with you. And, I think I think that there's another one maybe like network or something like that, but like, I, I'd like to add what what you said is the is that the.

Josh (00:18:54) - The understanding of what you're going through and having having been there, that experience. And then also like the empathy for the founder of going, I understand I had to lay off people and I get it. We're on your side. Let's see how we can figure this out together. And I just love that because sometimes people go, hey, I'm raising money. I want to raise money from anyone. And, you know, like, I'd rather have a strategic partner that's going to go ten rounds with me, that we're going to have some, you know, an IPO and then we're going to do another business. And we're lifelong inner lifelong. You know, they call it investor relations. It's really investor relationships I want to have that forever. And those are the kind of people I want to build, you know, build good stuff with. Now in terms of capital raising. Ross, could you give us a range on how much you've helped raise over the years? I know that you guys, there's some things that you just can't say on open, open air, but, like, give us give us an idea of of what you've accomplished in terms of cap raising.

Ross (00:19:53) - Yeah. So my first company, Cardea, we raised, we raised a healthy eight figures. I was, the I was the lead CEO for a good half of that or so, and then. Also talking about talking about journey is this open up a whole separate thing. I also realized I had a good experience when I, in my early years, was in defense, where I was able to see the long story there, but I was able to see how important the role of the CEO or the leader is, not based on what you've done, but based on what's coming and knowing that it doesn't. You may not be the right person for the company, not because you've had success, but because of what's coming next. Or do you have the right skills for what's coming next? And and it's it's not a knock if you leave a CEO. I we went and merged with a company I helped to kind of create. Long story. but I encouraged that CEO of that company to take over CEO of my first company, because I knew there was a commercial model coming that I didn't know how to build, and I didn't have those skills.

Ross (00:21:02) - And I knew that this is what was going to be needed. And I convinced the board and did all these different things and and, you know, and advocated that that was the right role. So I recruited my own replacement. But again, it wasn't for me. It was about what is the company going to need next? Right. so I was involved, I was still on the board, and I still helped operate a lot of things. and then was in a space to start setting up Crispr QC, of which now we're in the middle of a, a $10 million series A, we're about 40% of the way through it, you know, and raising more capital for that. so, yeah, so I've raised, you know, a couple million dollars now across two companies. I and, it's it's it's different. Things shift very quickly. there are a lot of trends in venture, venture funding. The trends have all changed in the last year or two. So people need to adapt very quickly.

Ross (00:21:59) - but, Yeah. And then also we were able to sell the first company. it was acquired in April of last year, and I was being on the board. I was a I was still a big part of that process as well. So, and that was a that was a good exit, for everybody. It was an equity swap. So it wasn't a great it wasn't a cash exit. it was, you know, companies merging together and combining assets to kind of move forward. So, you know, the investors are still, are still looking for that liquid return. But we were able to separate into multiple assets and their values growing in different verticals, across multiple entities as part of that exit. So, so it's a little more complicated than just a straight everyone made this kind of money, but it is it is going well for everybody so far. So, so everything's working out in the right direction. but, but yeah. No. So I think that's the quick overview. I would say I've raised, you know, you know, now north of, you know, you know, in the tens of millions of dollars now across two companies, got a good exit for for my investors and, you know, pretty decent for me, although, you know, still looking for the liquidity side of that, but we're it's all going the right direction so far.

Josh (00:23:07) - Yeah. Super cool. Two two things that I want to touch on that. You you mentioned, venture trends and how people need to adapt rapidly. And then, I'll go over the second one so I don't, I don't, I don't distract, but let's, let's first talk about venture trends. What's been going on? We're recording this as of, you know, 2024, in May. And, that's.

Ross (00:23:28) - Important because it could probably change next year or two. It could change.

Josh (00:23:31) - Tomorrow, right?

Ross (00:23:32) - Yeah, yeah.

Josh (00:23:34) - What are your. What are you.

Ross (00:23:35) - Saying? So one thing, because I've done a lot of different things, I worked in finance for many years and I've worked in manufacturing for many years. So I have a diverse set of experiences. I do understand finance to a certain degree. And when I first got started, you know, VC was VC. There are venture funds out there. They're investors out there as angel investors out there. And most startups come out and they say, I'm going to go raise this much money, and that's the wrong thing to do, because as we were talking about earlier, finding the right investor is actually key.

Ross (00:24:03) - And people you hear that, but you never really know what that means. So I did the same thing. I got started, I was like, oh, I'm going to raise money from VCs. VCs are here to fund me, right? They're not. And that was a hard thing for me to understand. And I get it much more now. You know, first of all. Because there is so much venture money floating around in the last ten, 12 years. That was the thing. Build your pitch deck, go to the different investors. Let the investors sort of decide if you're part of the group. They set all the terms, their control. What it didn't really appreciate was VCs are a marketplace. They are not investors. They are the connector between people with money, like family offices or pension funds and startups to invest in that category. So they. And their customer. While the startup is part of who they serve, their customer is the LP. So you have to understand that.

Ross (00:24:55) - And so how did so then you start thinking about, well, how do VCs raise money and what is their business? Because a lot of VCs, particularly with the Seed and series A, they're startups too. They're usually starting their first fund or maybe the second or third fund, because a lot of the experience guys have, you know, they get more capital and they move up and category into like private equity or series C, which is sort of not private equity, but it is in some ways, So what is their deal? Well, when they're out raising money and they're going to LPs, they always come with, I have an investment thesis, I believe X. So I have a friend here in San Diego. She is Gen Z. She started own funds straight out of college. She's a I know Gen Z folks, I this is an underserved market. A lot of people with money don't really understand Gen Z, but I can be that facilitator for these great opportunities for these innovative Gen Z folks.

Ross (00:25:46) - So I'm not Gen Z. I can't raise money from her because I don't fit her investment thesis. So she would invest in me. She'd have to explain to investors why she's going outside her thesis. So understanding what is the model? How do they explain what they're doing? You know, initially they propose to a prospective LP. I'm investing on this thesis. I think this is going to be the next big trend. Life sciences, the next big trend. AG is the next big trend. You know, certain sectors, the next big trend. AI is the next big trend, right? Whatever. You have to kind of fit into that model. and then you have to understand where the money really comes from. So you hear a lot of people talk today and this is where things have started changing. So. There was a lot of money floating around in venture for a long time, and it does come down to to some degree, it comes down to interest rates and people are talking about interest rates and things like that.

Ross (00:26:41) - I think that that sort of obscures what's going on in the field. Interest rates are related to it, but it isn't really the issue. When interest rates were low, the AVC. They don't actually have any capital. They grow to raise money and say, I've built $100 million fund. They don't. People don't give them $100 million. And then they just sit there, collect management fees all day long. Oh, and then they take forever to deploy. No, that's not how it works. What that means is the LP has committed to giving them up to that amount. They collect it all and that's $100 million fund. Then the VCs going out and they're looking to deploy capital. They're looking for investments to find. When they find that investment, they say, great, we're about to make these investments. And they're trying to line up a few deals at once so they can make a cash call. And then the LPs are required to transfer their money, and then they make 3 or 4 investments at a given time.

Ross (00:27:28) - Right. So that's broadly how it works. So there. So and once they get the cash call now they're able to start getting their own payments their management fees. Right. So they've got to start deploying when they're theses quickly. So the VCs their LPs give them money so they can start getting paid and they're funding the startups. And what is the VCs track record. It's the stories. So you look at a lot of VC websites. They have their little a lot of them have these little tiles kind of mentality. And it's always like they're all they need to be able. Explain to the LPs how does this fit in their thesis? And it's always got to be this buzzword kind of thing, right? Where this, this, for that. That's why there's always like the we're the Uber for so-and-so or Uber for trucking, or where the, you know, Airbnb for this or whether we work for that. These analogies allow people to, in a buzzword way, kind of explain. I've invested in this in my thesis, and this is what we're doing.

Ross (00:28:17) - We're meaning the thesis. I'm ready to raise the next plan, and they start going through it and rolling through. And that's how VCs work for a long, long time. Now the LPs are sitting there saying, okay. I don't want to sit there. I've got $100 million as a family office. I don't want to sit there with a bunch of cash. So I'm going to keep that invested. And when that LP makes a cash call, I'll just borrow a margin and I'll send it over. And when interest rates are low, it's like 3 or 4%. That's fine. I'm not making more money on my normal investments. I can cover the margin, you know, payments on that. So now I'll go back. So why is all that changed? I get all that context because I have heard from several of invest VCs who said they've passed on deals they'd love to invest in because they weren't sure the LPs would actually meet their contractually obligated capital calls. And I'm like. What? I've never heard of that before.

Ross (00:29:05) - But why is that? Because the LPs are in the situation where, hey, maybe my 100 million portfolio. I've got 30 million in treasuries, you know, for the stable assets, I've got 30 million in stocks. While the stock market's up, my treasuries were a lower interest rates with higher interest rates. All that treasury value went down. So my portfolio is out of whack. Oh, and I had 10 million in Bitcoin. And Bitcoin's fluctuating 40 or 50% all the time. So now I've got this big lump of margin. Now I'm at risk of making a margin call. Oh, by the way, margin rates are like nine, ten, 13% now, not 3 or 4%. So the cost of them to fund the LP is a lot higher. Their own liquidity is much more difficult to access. So now the worst thing for VC is I make a cash call and the LPs are like, no, no, I'm not going to do it. When the LPs are sitting on the side, the VCs are sitting on the sidelines.

Ross (00:29:54) - It's kind of like, I'm not worried. I'm worried if I'm even going to get the cash to make these investments. So do I really want to do this? So you see a lot of that saying, you know, there's some data that just came out the other day. There's half as many venture funds as there were since 2014, and the amount of dry powder has dropped. I think it's even less than that, because if an LP can actually access the capital they call dry powder, then it's not really real. There's not really money there. but understanding that, I also think that that has forced a lot of VCs. When money was free, a lot of people got into the venture category. The probably shouldn't. So now you're seeing a winnowing of venture, and there's a lot fewer VCs in the space. Now, fundamentally, I think that's probably a good thing for the market category. This is a contraction and a re you know, rejiggering of the economy. This is what happens when you look at the history of American economics.

Ross (00:30:52) - it sucks to live in it. It sucks to be a startup who needs that marketplace to be functional in order to fund what I'm doing. But, but overall, it does mean that. As the market trends start correcting and more liquidity starts opening up. That means the companies that survived were forced to be very focused on operational efficiency, revenue generation. Actually think about EBITDA, not growth for growth sake by just burning piles of cash for growth. You know, you're actually thinking about building a real business, which means that the companies that make it through this stage will be poised to raise big amounts of capital, because there'll be a lot of capital that flows into big, big value. So the guys investing now in companies that have good business, clear value propositions, good teams are going to grow like crazy when that all turns around and you just got to get through the gully. And so you're just understanding the market dynamics of VCs is really important for founders. I think for the LPs like family offices and stuff to.

Ross (00:31:57) - It also means that I think there is, because venture took off so much the VCs where the the relationship that an investor had with the startup founder. And so that relationship was always through someone else. And there's an opportunity, I think a lot of family offices, when I meet them, they're more sophisticated than they ever have been, and they have that opportunity to build a personal relationship and invest in people and teams and value and those kinds of things. And, you know, it's harder. The VCs did make the market efficient. So it's harder. It's a little bit inefficient to get those sources of capital. But it also means there's a real opportunity for with the VCs marketplace being a bit nonfunctional right now for the for the family offices to really develop those skills and be that sophisticated investor and have those deep relationships and invest in really good and find those really good people. Yeah, you got to do a lot more work, but there's a lot of good value opportunities right now that, that that will show, I think really good three, 4 or 5 year returns.

Ross (00:33:01) - Really, really good. Yeah.

Josh (00:33:04) - Wow. Super cool. I could tell you studied history.

Ross (00:33:07) - I just firehose a lot at you. Sorry. Yeah.

Josh (00:33:09) - And actually, we didn't even hit record, so you might have to repeat. I'm just kidding.

Ross (00:33:12) - Oh, well, that'd be.

Speaker 3 (00:33:13) - Terrible if I freaking forgot to hit record.

Ross (00:33:16) - Okay, I toggled, I could talk all day long, so that's fine.

Josh (00:33:19) - All right, so, I promise the second question I'm going to ask you a bunch more questions, but from the from the prompts we had earlier, you talked about you built a company, and then at some point you saw what was coming down the pike. So you hired your replacement because you didn't have the skill sets for, commercialization. Right? That takes. Now, I think this is my hypothesis since we're talking about hypotheses. Oh, I said it right. All right. So I think, I think it takes ego, piss and vinegar to build something from scratch, but I think it takes humility and a sober assessment of self and skills to pass on your to your replacement, to have a succession plan to bring in someone better, smarter.

Josh (00:34:08) - Whatever you've mentioned recruiting your replacement. What struggles did you have internally as you saw this? Like, am I going to miss out on some some, you know, slicing pie and equity up in the front? Am I going to lose out of money or are we going to? You know what? I'm handing off my baby to another human being. What was going on in your brain when you, recruited your replacement?

Ross (00:34:31) - So, I've told this analogy a few people before. Some people resonate, some people don't. but when I raised the series A for my first company, my son was born within a month. So I was learning to be a dad while also learning to be a startup founder. Yeah. there's very similar analogies to being a parent and building a startup, right? Startups are a lot like toddlers. There you go. The drive you crazy. They keep you up at night, they stink. Half the time you're like, I just want to drive you crazy. But then they make some little success.

Ross (00:35:07) - You're like, this is the greatest thing ever. So there's a lot of that similar emotions and learning how to navigate all those emotions as a new parent and also being a startup founder. There's a lot of parallels to that. In that vein, I also have always been fortunate to have people of multiple generations growing up, and I could see the perspective of people who are in their 80s when I was eight and people in their 50s when I was eight, people in their 20s when I was eight, you know, and grow up watching them go through those journeys. And all of us, I think, can recognize that, you know, we all have different relationships with their parents. I don't know everybody's relationship there, but our parents play a role. But as we grow as people, there comes a time where someone else comes in who will teach you something that your parent can never play that role, a mentor, someone who trains you in a way or will hold you accountable in a way, like a coach you know when you're in school who will hold you accountable to certain things that your parents can't do because their parents have a job.

Ross (00:36:08) - And sometimes now, as a parent, you know, my son is now nine, and I look for that role because I want to be a certain person to my son. But my son also needs certain people who are going to hold him accountable and learn how to do those things. And so that it's the same piss and vinegar, as you said, of being a parent, but also that same humility that sometimes the best thing for my child is to have someone who turns around and toughens them up, you know, and might, might push them down and tell them some hard truths that as his parent, I would want to help them through those hard truths. But someone needs to tell them those things, right? And it's the same thing with startups, right? There's a what it is. It's not about the hard part for a lot of founders is understanding that I built this, I did all this. Look at all this I did for years. Yeah. That's great. Nothing's ever going to take that away.

Ross (00:36:59) - But it's not about what you just did. It's about what's coming. And you look at yourself as a shareholder. Is the CEO, meaning yourself. Do they have the right skills for what this company is going to need? I can't you know, my son is in a Spanish immersion program. I love that he's learning Spanish. I can't teach him Spanish. I don't speak Spanish, but I love that he's doing that. So I found someone who's going to teach him those things. And it's the same thing with a startup. It's about what's coming next. And how do I build in the right things that I think is necessary. And then the second question is, am I the right guy or am I the right person who has the skills for what the company is going to need next? And take myself out of it. Does it take away from anything that I did to get the company where it was? The guy I recruited could not have done what I did, but when we got to the next stage, could I have done what he did? Maybe.

Ross (00:37:57) - I probably could have learned. I probably could have figured it out. But he had the skills. He did it better. It's as simple as that. And it's all about getting the company to where it is. And by the way, my whole community, my investors, my employees, everybody benefits by having the right person at the helm. It doesn't take away from me at all what I did, but it is about what is needed next. And that is a hard thing to take out your own ego because. I empathize when you. That's gonna be a harsh thing. But you look at all these startup recent startup founder issues that have been in the news and people going to prison for a lot of those things. I definitely am not one of those people, but you can definitely understand that the challenges that you go through as a startup founder, it is it can be soul crushing. It's very, very difficult. And. It doesn't surprise me that there's a lot of people who have tremendous narcissism that get into being entrepreneurs, because narcissism is a shield from all those challenges.

Ross (00:38:59) - Well, it's not me. I it's not my fault. It's other people's fault. I'm the best I can do these types of things, and you can deal with all the stresses and the challenges. It's I just I refuse to be that person, but I can understand how the, the, the, the pressures on you as a founder can shape you into that kind of person 100%. Again, I chose not to be that, and that means I take on all the emotional challenges with that. But, but, But yeah, that is really what it comes down to is. It is a little bit about just doing whatever it takes to make it happen, but also accepting that it's not about your ego, you know, or your ego. It doesn't have to be bruised when you are making the best decision for your for your ship, your ship being the entire crew and your passengers, your investors, your customers, your employees, everybody take yourself out of it. What's the best for the community? It doesn't take away from what you did.

Josh (00:39:59) - Yeah, I think great, great point, great great, great point. Ross. I think as a founder, right. We sometimes we put on our founder hat. I love hats, by the way. Right. Yeah. So we put on our founder hat and then we dive and then we, you know, like, we we get the thing moving and go from 0 to 1 and, you know, and then we start making money and then it starts, we start building teams and we're the for the person who did that. And there's so much great things that come, especially when you start getting some attaboy out of girls right now. It's it's so hard to take off the founder hat and to remember the shareholder hat. Right. Because there's tons of shareholders who have come to the table to help you get there. And if you look at it as a shareholder hat and you put that on, I think it's for I think it's actually better. Because you could have a bigger pie to slice up if you bring in the right person who could take it from the 1 to 10 because there's people that great, take it from 0 to 3.

Josh (00:41:00) - That's a great skill set. 3 to 7, 3 to 10. Much different game.

Ross (00:41:06) - Right? Absolutely is. Yeah. And. A great video. You look at some of the kind of top CEOs and like public companies, they would fail. As a startup CEO there. There are different types of CEOs. And this is why I say, like when you look at sort of the sort of celebrity startup founders, you know, the Jeff Bezos and Ewan Musks and stuff, that's a very rare skill to be the person through all versions of the company. I really like the I've got a napkin and no money. Let's get started. I like that phase and getting it to a level. But you know, if this company does really well and we start going public, do I want to be a public company CEO? Fortunate enough to answer that question right now. But I look at what is involved with public company CEOs. And there's a you know, and so then I sit there and say, well.

Ross (00:41:54) - As a shareholder. Do I want to keep building this company, or do I want a rock star building this company and I own equity in it. And by the way, now my time is free to go build the next frickin awesome thing. And then I sit there and say, well, wouldn't it be great if I was living on the beach? And I had six rock star CEOs growing the value of my assets, and I didn't have to do anything. I mean, I never will do that because I'm addicted to the stuff, but, but it is that thing where it says, you know, it's actually not a bad idea to have someone working who's great at what they do, building the value for everybody. And your time is now freed up. I've come to appreciate again, being a parent that the most precious resource I have. It's not money. Money is important for startups, for sure. but it's actually my personal time and how I utilize that time, to make sure that I'm making breakfast for my son every day or, you know, getting help with his homework or but also making sure I'm doing my company time together.

Ross (00:42:52) - Like anything that frees up more of that time means I can do more value added things. And, and that even means sometimes that means, hey, the companies are a great place, and there's a great CEO who knows how to take a company at this stage and bring it to the next level. Let's bring that guy and let's grow it up. And now my time is free to go do another 0 to 1 thing and build another thing. And that doesn't mean that what I'm building is fine. Like I married it off and. You know, they're happily married. They're off doing their thing. And I'm like, great. I'm working on the next one. This is great. So yeah, it is, it is, it is there. And I think, one other element I'd add, I'm. I'm, When it comes to ego. The thing that's really helped me with that a lot is understanding, how that being an entrepreneur is choosing to be an entrepreneur is actually enough, right? there's a really great, speech by Teddy Roosevelt.

Ross (00:43:50) - People, sometimes people talk about who are the people you admire. So Teddy Roosevelt, Teddy Roosevelt's like the guy for me, right? This this really great speech called The Man in the arena. And he talks about and you can get these clips on YouTube. It's the best. And he talks about how, you know. How? Everyone who steps in the arena, you know, speaks high achievement. And even if they fail, they fail. While daring greatly. They only come second to those who actually succeed. But everyone else who criticizes you is way, you know, are these cold and timid souls who will never know the the, the triumph of victory or the or the bitterness of defeat, but actually trying, right? I mean, like, it's so it just means that taking that step to go try this means you're part of a group of people who are willing to do that. That's enough, that's enough. And, and you don't, you know, to to not everyone can actually do that.

Ross (00:44:47) - And that just means you're part of that. You're part of that group. And that is enough for your ego. It should be enough for your ego and to be able to step out and go do something else.

Josh (00:44:55) - Yeah. Super cool. I was going to add something to that, but I don't think it would do it any justice. Man. Really great. I love, I love that man in, in the arena. I think it they wrote a poem about it, and it's it's so many good things. All right. Ross, we are freaking out of time, man. And, I want to give you an opportunity to tell people, where they could go to connect with you and to do follow ups if they want to know more about the business that you're building, learn about what you know you need help with or where you're going next.

Ross (00:45:29) - So I'm findable on LinkedIn. we've done some TV interviews and a couple of things. There's a lot about our company that you can easily find, to learn more about us, but also just reach out to me.

Ross (00:45:37) - LinkedIn is a great way to do it. you know, I and I eventually move you directly to my email, and they can people, you know, kind of find us about it. I mean, I will say this, about our space, because we do a lot of science, but the actual value of what we're doing is, is everyone should understand. So there is a small pitch, the company a little bit. so, there's been this thing now for decades, since ever since we discovered DNA. And what it means that can we control DNA and change that? Can we affect genetic diseases? Can we cure genetic diseases? Can we modify crops? Can we do these types of things? it's very, very difficult. People been trying for decades to make this work. It's still expensive. There's still a lot of risks. So gene editing has come along. It won the Nobel Prize because in theory, we can programmable alter DNA exactly what we want. It's still difficult to do, but it's showing some promise.

Ross (00:46:30) - But what we're doing is saying, look, can we actually make this simple and empower people around the world to create these solutions by modifying organisms to solve problems? Our pharma customers are targeting diseases that have. Never had a cure. And now we're potentially curing people. There's Crispr has been showing they're curing people of hereditary blindness and sickle cell anemia, and there's all sorts of cancer strategies and different things they're doing. But then you see the ad guys who are on the other side, they're talking about, can we minimize the degradation of, say, bananas, which means the farmers get better yields, make more money, like they're helping the bottom 30% of the world when it comes to things like food security, better products, changing crops so they're better adaptable as climate change becomes a real issue. So there's a lot of really killer innovators out there in this particular space. And. Our role in Crispr, QC is how to make Crispr and gene editing much more accessible, so those innovators have the tools to really solve those problems.

Ross (00:47:38) - And you know and understand it's common to everybody who listens to this and all around the world because it is a really, the, the attractiveness is that we can controllability, adjust our own bodies in a way to cure things that we didn't have before or even adjust our environment, the living organisms in our environment, to meet these changes that we're all dealing with. And so gene editing could be the thing that defines the 21st century, the way the silicon transistor did. If we have the control, that's what Crispr QC is doing. we're growing, we're scaling. I'd love for people to come talk to me if they're interested in learning more. but, it is a very attractive space. There's a lot of really neat things out there. and, and it really, you see what people are working on, they're really going to make a difference. And so that's what I like to do is say, how do we make it? So those people actually get to get those solutions out there now have that wasted potential.

Ross (00:48:38) - And how do we give them the tools to make this super effective, affordable, so that people have access to it. They're not just these, you know, things for the one percenters, but they actually get to a level where we can cure people and make it affordable. So you're changing people's lives in a meaningful way that is coming. and, so, yeah, I'd love to I will talk all day long about it. It's a really exciting space.

Josh (00:48:59) - So yeah. Super cool. Well, Ross, thanks for coming on the show. Fellow dealmakers out there, as always, reach out to our guest and say thank you for being on the show. If what they're saying is of interest to you and you want to connect with them, though, just go down to the contact information and reach out to them. and then find a way to do a deal with them. Right. Like that's the mission and purpose of the show is to put deals and dealmakers together as we learn and grow from each other.

Josh (00:49:24) - If you have a deal or would like to talk about a specific type of deal, maybe like something you heard today, head on over to the deal scout.com, fill out a quick form and maybe we'll get you on the show next. Till then, we'll talk to you all on the next episode. Love you guys and we'll see you soon. Bye bye.