How to match the money in family offices with entrepreneurs.

Speaker 1: 0:24

Welcome to this episode of the Unnoticed Entrepreneur. Today we're going to the sunny climbs of Scottsdale, Arizona. We're going to meet Leif Hartwig. Leif, welcome to the show, Jim.

Speaker 2: 0:36

James, thanks for having me on. This is great.

Speaker 1: 0:39

Hey, it's wonderful to have you on the show because you're building Wealth VP, which is a platform that's helping entrepreneurs and business owners but slightly more advanced business owners to meet funding from, especially family offices. You're really solving this problem where the need for money has actually outstripped the number of VCs that are available, and you've also built an amazing SaaS business. We're going to talk about how you've built the business that helps entrepreneurs, but also how you're building your own SaaS, which you're saying is going to be over $100 million in the next four years. So plenty of things for us to talk about. Leif, tell us first of all about Wealth VP.

Speaker 2: 1:22

Well, I'm really excited about Wealth, VP, and thank you for having me on the show, because the purpose of this is really to help your listeners have an opportunity to meet their dreams, to grow their companies. And what I found about three years ago as I was helping a few companies raise money, that this is the big blocker right for companies if you want to go to the next level. And the marketplace is enormous. It's a multi-trillion dollar marketplace but, interestingly enough, it's all word of mouth and networking. Can you believe that? You know, I'm old enough to remember 8-track tapes. Me too you know, and the marketplace is still the same way working that it was when we were listening to 8-track tapes. So to digitize that process, we developed a software platform that matches, you know, really great startups and middle market companies with investors that have the means to fund them in a meaningful way, and in a way it's like matchcom meets Shark Tank. I don't know if every country out there has a Shark Tank, but also we've done that kind of on steroids because we've recognized that most founders don't know how to put together pitch decks and get other things, the collateral that they need to make that happen. And, you know, not just matching them with any investor, but investors that have the means to get them to that point where they can actually grow the company. And, as you probably know, 90% of all startups go under because of lack of capital.

Speaker 1: 3:08

You know they go out of fashion and sort of choose a product or service that people don't want to fund, but you're also tackling a source of funds that traditionally entrepreneurs don't get to. You know private offices, family offices, because most go to you know a friend of family, or then they go to the angels and then they go down the VC route, and the VC route is often really very cut and dried. Why have you gone for the family offices? Also, maybe you should explain what family offices are for people that are not so familiar with them. Do you know?

Speaker 2: 3:43

what's so amazing is in the US there's about a thousand venture capital companies Only a thousand For about a million people chasing money. In the US there's 80,000 ultra high net worth individuals. That means starting at $30 million of assets under management, probably closer to half a million worldwide. So, truly, who is funding this marketplace? It's ultra high net worth individuals. Now, what is a family office? It's a term that a lot of people use loosely, but it's. Let's say, that you've exited your big company for $100 million. Now what are you going to do with your money? Okay, well, you build a business around that right. A hundred million dollars, a lot of money, and so a family will put together objectives of what they want to do. They'll invest their money in a portfolio of different investments. One of those slivers, or sometimes a bigger part of that pie chart, is private companies. The thing is that, unlike venture companies that get hundreds, maybe a thousand different solicitations a month, families get nothing. Yet they're the main funders. So how do they get their information? That's from a cousin or a CPA or somebody else that does that. So we increase the deal flow to family offices with quality deal flow and we can talk about that a little later but that allows them to expand their networks across the whole globe.

Speaker 1: 5:20

That's really fascinating. And how did you discover this life? Because I've met a few people that run family offices. When I was in China, met them that were in Hong Kong, for example, 10, 14 staff managing the money that their grandparents had made at the turn of the century Incredible. How did you find this community?

Speaker 2: 5:43

Well, my background's pretty deep. I've been in financial services for 30 plus years. I started as an investment advisor and was in the top five people of a national firm here in the United States and was managing over $200 million myself, and a lot of those people were in the family office type business. So I found that. But here's the other thing is, I worked with venture capital companies and I apologize ahead of time for any VCs that are listening, but they're arrogant and they have all the deal flow in the world and they're just interested mostly in money versus trying to leave the world in a better place. That we are. And family offices and ultra high net worth people. They want two things they want to make money, but they want to leave the world in a better place, and so not only is there a lot more of those that do more deals and fund more companies, but they have an interest in values and character, and those are the kind of things that my company is grounded in. And so when you make the comparison and then more families want to go direct, because, if you know, there's something called a two and 20 people don't know Inventure Funds. That means that they take 2% per year of anything that they raise and they take a 20% backside of deals, which is called a carry. So over 10 years, that's a 40% haircut to companies. Right? And also another fact 75% of venture funds don't return capital to investors. 75%, that's an astounding number. We saw this whole marketplace that is trillions of dollars, that has not been digitized, and so we put the digitization in the platform and then we add a wonderful human element of people that work for me, that are kind of like concierge we call them relationship managers that can help connect people both on the platform and off, but also give them other things that they might need. Okay, so that's WealthVP, okay.

Speaker 1: 7:54

That's one. Now. People might get confused about the name WealthVP. I personally thought it might stand for vice president or wealth or it'd be sort of a personal wealth platform. So, briefly, could you give us the origins of the name?

Speaker 2: 8:11

Yes, First of all, the longer name of the company that we shortened is called Wealth Venture Partners. My daughter, who's a brilliant marketer, helped me. We spent weeks on this and we looked at each one of those names. We love the word wealth because it's a substantial name and it's really in the area that we deal with. Then we looked at the middle name. We're not private equity that has people invest in companies that have been around 20 years. It's really the venture market of companies that are in the growth phases of their business. The last name is the one that we really spent a lot of time on. We looked at Wealth Venture Advisors. We looked at a number of other different last names. We came up with partners because it was our ideal that we wanted to work together with companies, with these families, with our vendors that come in and we can match as partners, not just outside consultants or advisors. We actually integrate with these families and with the companies and we give so much more than just the matching. I think that value orientation helped us be malleable when the marketplace told us, hey, we like this, but you need to move in this direction a little more. As partners, of course you listen. As advisors, you think you know it all. We shortened it to wealth VP just because of the internet and other things easier to remember.

Speaker 1: 9:47

Okay, leifette, I love that in the way that you've worked with your daughter as well. I asked my daughter her opinion as well. The whole generation of young women growing up. They're guiding their fathers on Exactly. It's a SaaS. We all know that. The challenge one of the challenges with building a SaaS marketplace is you have to have buyers and sellers kind of an equal number. Otherwise you end up with too many buyers and no sellers, or too many sellers and no buyers. How did you overcome that challenge? Who did you get on first, for example? What did you offer them?

Speaker 2: 10:25

That's one of the best questions you could ask, because I think because I've done other businesses in the past you need to go in and say you can hit the target, but at the beginning you probably don't hit the center of the bullseye. What we did is we first thought that our main clients were going to be the startups, the entrepreneurs, that we could have a million of those, because, like on a dating service, if you pay 50 bucks a month for a date, would you pay $50 a month to meet an investor? Of course, yes is the answer. But then we went back to our value system and said is that a false promise? If we had a million people, can we get them funded? The answer was no, we couldn't. But who could we get funded? That was companies that had gone through maybe the friends and family thing already and had gotten to a level where they started revenues. We actually flipped our model that the investors. We put them first, which, by the way, puts the companies on our platform first, because now we've got a good match. How do we do that balance? We flipped from wanting a million companies to now maybe having a five to one investors versus companies, because we want, even though our promises to match and we get over a 90, 95% match, so everybody gets matched then they've got to do their thing because we don't share in the backside. We're a SaaS company, so that's really valuable to both sides because we're non-biased. Our goal is to get them funded With that in mind. That our end goal. But we want to stay out of the SEC rules of being a broker dealer. So, even though we work hard to get you funded, that's our relationship To get those people. In our first year we were pretty stealth but we grew by word of mouth. Then I hired now we're just scaling the heck out of it I hired a head of marketing who ran three lines of product for Sage in their biggest division in the United States and worked with the biggest brands in the world. She's my marketing person, doing all of those things of LinkedIn campaigns and blogging and articles and all of those things that SaaS companies need to do on that side. That's a different marketplace to attract those people because it's a lower price and the pain point is so high in the world right now when we talk to people how can I get on? I need money, I need to do it. We can do that digitally because our price is lower, we must. On the family side, it's a relationship sale. We've decided that we're going to go to entities that have multiple people in our target market RIAs, registered investment advisors. I was in London and spoke on stage at Presto and Partner. They had 160 people there. Many of those were high net worth investors. They liked what we're doing. Also, footprints, run by Karen Gould over there. I did another presentation there and they had a similar group. We're forming relationships Because what we found with families there's an old saying if you know one family office, you know one family office Okay, because they're all different. But what are they like? They like privacy and trust. Okay, so I should probably do this trust. So, as a new company, we recognize that it would take us years to develop trust, but to develop an integrated alliance with an organization that has already had that trust and they believe in us, then the sales cycle was shortened. Did that make sense? Yeah, yeah, okay. So the two-sided marketplace we actually have kind of a firewall in between because we don't want our companies bombarding them with stuff every day, but it's a true connection and so we've developed, through listening to the marketplace, our go-to-market strategy. Now we also have salespeople too, and those salespeople are on the phone, going out to relationships in the target markets, using pitch book and other techniques for the families that we can also do that. So at first you don't know exactly what's gonna work best, so you use multiple channels to do that. However, we're having great success with these integrated alliances and now we're scaling that up. We have only two or three salespeople now. We'll go to a hundred, probably by the end of next year if we can scale quickly.

Speaker 1: 15:13

Well, yes, you mentioned that the goal is to get up to over a hundred million dollars worth, and that's a fees from family offices, isn't it predominantly? Well, it's both sides.

Speaker 2: 15:22

So we charge. We think I always say free is a great price, but it really isn't, because it doesn't denote quality. And especially in this market, a lot of the families aren't used to paying. They get lots of free stuff, but truly at $25,000 a year for a family. If they had to form what we can give them hire a deal person, a networking person, find software, go to local events. It's a lot of time and effort, but it would be two to $300,000 minimum as a do-it-yourselfer to do that. And so on the company side, who's gonna go over your pitch decks? Who's gonna introduce you individually to people? And so with that marketplace we can do the monthly recurring revenue for both sides and, as you know, in a normal market today it's about 10 times top line revenues that we get value. So that would be at a hundred million, which is only five to 7,000 subscribers worldwide out of half a million. So we think that we can get there and perhaps much more.

Speaker 1: 16:53

So the idea that you're going through existing trusted relationships a great one. Leif, is there something that you've tried with wealth VP, from a marketing perspective, that hasn't worked quite. I never tried to embarrass guests, but it's always useful to share our learnings. Call them learnings, maybe not mistakes, but from a marketing perspective.

Speaker 2: 17:21

Yeah, I always like to tell groups like this. The reason I can maybe be in front of you is I made more mistakes than all of you put together, and so there's an old saying in Silicon Valley fail often and fail fast, okay. So we try a lot of stuff and see what works. One of the things that didn't work believe it or not is having this for free. So when we charge companies at first to come on, just to get populated, we thought we'd do a freemium model and get them on, and you know what? They didn't value it. Oh, interesting, yeah, and maybe we didn't value ourselves so much. So I like to say you want to come from abundance, not from scarcity, and so it's always hard to change prices or raise prices, but it's the right thing to do many times, and it puts you in a position of power that you say well, if you don't want it, you don't have to be on. We want to help you and this, but we can't afford to do it because we give you a lot of value for what we're doing. So one thing that didn't work was the freemium model. That was, we were Devalued in that, and since we believe that we have quality companies and quality investors. It's got to be reflected in the price. So almost every one of the free people went off, all the paid people Stayed on, and we've risen. We've rate like right now for our companies. For instance, you can choose $300 it's night 299 a month and you can get our software, or you can pay a thousand dollars a month and get pitch events, pitch deck, review, personal service. Nobody has chosen since we've done that, the 299 month. So that's got to tell you something. And I think, though, that, because I've owned a business coaching company all over the US and Canada, with Thousands of people going through that, the hardest thing for people to do as beginning entrepreneurs is set a price that is equal to the value of that what you're doing. So that that was a mistake.

Speaker 1: 19:28

Yeah, very interesting that you've. You found that there's more traction With that, with a premium price course. Then you can provide more service as well, can't you otherwise? You're trying to save money all the time, rather invest back into the, into the customer leave. If there's Something that you feel as an entrepreneur you know, who's also had a long corporate life, you know so you've had illustrious career on both sides of the fence Building wealth VP and also with your coaching business. Is there one thing that you could say you would recommend entrepreneurs do to get noticed, one thing that you feel has really moved the needle?

Speaker 2: 20:08

Well, gosh, you know that that's is also another great question because, as we know, getting noticed is is Complex and in this world, I think you have to do more than one thing right. I mean, being on a podcast like this is one of the things that we do and I think our objective of Of getting noticed isn't so much from our ego standpoint I mean, I used to like to get a lot of awards, we used to like to have a lot of press releases, and you know we got noticed, but did it really drive revenues? Because that's the end result, isn't it? I mean, at the end of my life, I'd like, you know, to have grown these great businesses, but no one know me because we want to make a whole difference in the world. So the objective of getting noticed is to drive revenues to the company and to create your brand, and so what we do is we try a lot of things and say how, what is the most effective way that we can get noticed but also drives investors or and drive subscribers in revenues and has the shortest time duration, while doing that, because Duration of your clothes from start to finish is important to create greater volume. Okay, so, getting noticed is is, and in creating your brand and your brand and and this is really important to me your brand should, should, should somehow project your internal values. We started before the how you do things or the why you do things. We started with what are your values and how is that going to be projected into your mission of leaving the world in a better place? Okay, so, character, integrity, family, faith, you know hard work all of these things that are important to us, and I think that that is a better way to get noticed. And you know what you attract the kind of people that you think about all day, and so it's attracting great people. It's attracting, getting noticed in the right ways, and then that great brand that all of you out there are building, that people will see through that, and then you're going to get noticed in a way that will help you build your business into something greater than just the revenues, but something that you know you're proud of.

Speaker 1: 22:35

Dave Hardwick. What a what a considered and insightful response. Thank you for that.

Speaker 2: 22:42

You're welcome. Thanks, it's a great question. I preach every week to our employees and they all get that. Yesterday I sent a little thing in our HubSpot and it was always believe that something wonderful is about to happen. Okay, and that helps people come from abundance, not scarcity. Because you know, everybody out there is listening. I know how hard this is. It is the hardest thing in the world to be an entrepreneur. You get beat up, you get depressed, you don't know where the money is coming from. You know failures right around the corner all the time and many times we can get down and when you do, your team and your potential customers can see right through that. So you know, I think it's really important that we keep this positive attitude and I know it sounds like you know, ms Mary Sunshine, but it's not. It's necessary and anybody that's ever made it at the highest level will tell you that.

Speaker 1: 23:44

Dave Hartwig, you know it's been wonderful to hear that, coming from you with such a world of experience and building such a wonderful platform on so many levels, from a sort of seeing an opportunity perspective as an entrepreneur, I really respect what you've found there with the matching of the community of family offices with entrepreneurs that otherwise they could never have met before, so that's fantastic. And also that you're leading with values and actually you're quite happy to be the unnoticed entrepreneur because you want the brand to be sustainable rather than it being ego driven project. It's really a value driven project and that is really what I'm hoping for this show to find, because they're wonderful people like yourself doing great work. We're not doing it for themselves, but doing it for the mission, and that, I think, is so worthy of being on the show.

Speaker 2: 24:33

Well, thank you, but I do want to say that and you are so kind to say those things that I like the expression that we love Mother Teresa, but we don't want to be the Mother Teresa business that selfishly. I want to grow the business and continue to grow my wealth too. So it's a difficult place to walk that type of road, isn't it that we want to create value, but we also want to make money. But I think if you create the value, the money is the way that people are showing you you have value. So the more that that your business makes, the higher value, and, of course, the Elon Musk's of the world and all that. The reason they've made so much money is they've created so much value that they're getting compensated for that. So I do have a selfish interest too, but it's really our main focus is leaving the world in a better place and through entrepreneurs that can not only help themselves but give the world their great products that can make our lives better.

Speaker 1: 25:34

Lave Hardwick, founder, ceo of WealthVP. You've left my show in a better place. Thank you so much If you want to find you where can they do that?

Speaker 2: 25:44

Well, people can get ahold of me directly if they want. Leave leif at wealthvpcom or just go to wealthvpcom and you'll see a place that you can seek out some of our people that can be in contact with you. Jim James, thank you for having me. This was so much fun. It's been amazing.

Speaker 1: 26:03

Thank you so much for coming on the show Lave. It's been an unexpected pleasure, just because I'm glad that you're willing to talk about the bigger purpose and not just about money, because the money is the end result, but what we're doing is something bigger than that, and so I'm really delighted that you've been willing to go down this path with me. Thank you so much today. Well, thank you, thank you. I love being out here. Great, well, what a great opportunity we've had to listen to such an experienced and wise entrepreneur who's doing so many things for so many people for the right reasons. If you've enjoyed this, do please share it with a fellow unnoticed entrepreneur and, if you've got the time, to rate it on the player, that would also really help. Let's the players know that we're doing the right things over here, and until we meet again, I just encourage you to keep on communicating. Thanks for listening.