How a first-time founder bootstrapped her way to a $47.5 Million Exit with Ashley Tyrner-Dolce, FarboxRx

0:00I think it's hustle when you see that somebody bootstraps. Typically, I'll see that that founder is the salesperson. They run the sales team. Maybe they have somebody else that manages sales, but they go and they get in front of their customers. And that I think is really, really important. You do not want to invest in somebody that's not willing to go sit down and see their customers. In the words of Kris Jenner, like no means you're not talking to the right person, right? Like, yes, well, anybody will give me money now because I've exited. Right. Yeah. Because I've got one under my belt. If you are a founder that does not have that traction under you, it's it's difficult to get funding in this day and age.

0:40Isabelle Johannesen: That was Ashley Turner Dolce, who spent more than a decade building Farmbox RX without taking a single dollar of outside funding. This season on Build Mode, we've been discussing how to raise venture capital. But in this episode, Ashley shares the upside to not raising venture capital. She walks us through what bootstrapping actually looks like when you don't already have money from a previous exit or wealthy networks to fall back on. We talk about getting creative with cash flow, stretching vendor terms, using credit card points to fund travel. and all the times she stopped paying herself so she could make payroll.

1:13Isabelle Johannesen: And now she's sitting on the other side of the table as an investor herself. She explains what bootstrapping signals to a VC and why she thinks more founders should consider waiting until they have real traction before raising at all. I'm Isabel Johanesson and you're listening to Build Mode. Hi, Ashley. How's it going? It's going great. How are you? I'm very good. Thank you for joining us on Build Mode. You flew all the way out for us today. I did. I was in LA and bounced up here just for the morning to hang out with you. That's awesome. We love it. I'm really excited to dig into your story from starting FarmboxRx all the way to becoming profitable to eventually exiting and a lot of resilience along the way.

1:52Isabelle Johannesen: So if you can kick us off by introducing yourself and telling us what FarmboxRx does. So I'm Ashley Trinier-Dolce. Twelve years ago now, I started a company that's been acquired since called at the time it was Farmbox Direct, which morphed into Farmbox RX. It really came out of my lived experience. My, oh my gosh, I can't believe I'm saying this, my now 15-year-old daughter, when I was pregnant with her, I ended up on food stamps. And, you know, I lived in a rural food desert. And at that time, there really wasn't this like term food desert. It really just didn't necessarily exist until mostly the Obama administration really brought that word and that term forward because that was Michelle Obama's main initiative was eradicating food deserts.

2:33And it would be a 30 minute drive for me to get to a Walmart to go buy any amount of food, let alone fresh food. And so when you live in a rural food desert at that time, being on, you know, SNAP and EBT, that was before the world, you know, like allowed the USDA allowed food stamps to be accepted online as a form of payment. So you had to go in person to use your card. And so I thought there must be a better way. Fast forward, I had my daughter. I lived in New York City. Launched Farmbox Direct as a direct-to-consumer business. It was during that crazy meal kit phase, came a couple months after I launched the company.

3:11And then, you know, over time, really, we had to listen to where the market would take the business. I think that's a really important thing that I tell to, you know, any founder or CEO is the market is going to tell you what your product is going to become. Right. Your vision, your North Star should always stay what your North Star is. But, you know, for us, we always wanted to eradicate food deserts and get healthy food, fresh fruits and vegetables to those who need it most. And for us, that was low income individuals. And so, you know, over time, we morphed into Farmbox RX and we really became a health care company.

3:47Isabelle Johannesen: Well, let's dig into it. So, I mean, you bootstrapped from the very beginning, but you're also on food stamps and you're also a single mother, it sounds like maybe. Yes. OK, so not anymore. Not anymore. But I mean, so that's, you know, already a situation that that sounds, you know, challenging. And then on top of that, to be bootstrapping a company, how how did you manage that? So I ended up getting off of food stamps when my daughter was like a year, year and a half old. I didn't launch the company until she was almost three. I worked in fashion in New York City. I took a corporate job and I saved money and I lived in what was deemed a New York studio or New York one bedroom apartment.

4:29Isabelle Johannesen: But it was actually a studio apartment that they said was a one bedroom closet for the window. And that was my my home with my daughter. And it was my office, too. So I had to cut expenses dramatically when I launched the company because I knew I had a certain amount of runway to be able to pay my own bills, but also support the business. I was very fortunate that I came on to an idea that, you know, I felt like I was not the only New Yorker that wanted fresh fruits and vegetables delivered. And by the way, in New York City, you could have a can of soda delivered to you at 3 a.m. It was the land of delivery.

5:01So I knew if there was anywhere I was going to launch this business, New York City was the place. So we actually had pretty significant growth in the beginning as a direct to consumer entity. And then, you know, Amazon Fresh came on the scene. There's, you know, there's other like local delivery companies out there. And then the meal kit craze started. So I did go out and try to raise capital my first like couple years of the business. And every VC that I talked to really wanted me to become a meal kit because there was this meal kit craze. And I'm like, well, I'm not focused on people that can afford$10 per meal because my customer that is my North Star cannot afford$10 a meal times three meals a day times maybe four people in the home.

5:44They can't afford that. um so nobody wanted to give us money uh and so it really came down to a moment i was actually out here in san francisco and like by the way like i didn't go to college i don't have an nba and here i was like you know holding my own with uh you know individuals in the room that are vcs most of them never have operated a business they are from the finance world so i don't know what it entails to operate a business but um you know you're talking about like how much you're burning and what you're growing and what you're doing. And we completely like struck out. I mean, it was a really, really painful experience.

6:19It was not pleasant at all. And we call it the burrito moment. Me and my my old chief operating officer, I was sitting at the San Francisco airport and I was eating a Chipotle burrito. And I was just like, you know, I don't know how we're going to fund this, but we're going to figure it out. And really what it came down to was we cut expenses and we would do, you know, 75 jobs. There was never a job that I was too good to do. There's never been a job she was too good to do. And it really came down to hustle. And so, you know, when you go out and you raise a ton of money, I think sometimes, especially young founders can really get lost in the, okay, we just got a$3 million check or we just raised, you know, a$10 million round and we can burn, we can hire an assistant.

7:07And like, I still don't even have an assistant. I didn't even have an assistant, you know, up until the day I sold the company.

7:13Isabelle Johannesen: Wow. I mean, there's a lot there I want to dig into. But going back to what you said about, you know, the investors on the other side of the table have never run a business themselves. That's, you know, sometimes the case, of course, sometimes they have founder backgrounds, but even more so, many of them have never been on food stamps. Most of them have not. Right. Most of them are not also not women. Right. Correct. And I'm guessing that there was probably a challenge for them to even understand or empathize with the problem that you were trying to solve that you had experienced yourself and obviously your customer base had experienced how did you go about pitching that to them i distinctly remember and i actually still hear this term but i distinctly remember a man at a very prominent venture capital fund i won't say the name here in san francisco who literally said to me do poor people want to eat healthy food and and like i mean it's just like amazing like nobody wakes up and says like I want to be poor or I want to be on food stamps or I want to have type 2 diabetes like people don't wake up and say that they don't have accessibility they can't afford healthy food and they don't know what to do with it also once they have it because they've never had it typically right um so you know it was really difficult to get the idea across of the food deserts that we were looking to eradicate the food deserts we wanted to be able to take snap an EBT online as a form of payment.

8:35And at that time, the government was not even looking at doing that. It was just like it was like a crazy idea to them. And then that's when I brought in Sam Cass to my advisory board. And Sam was the senior policy advisor to the Obamas for nutrition. And he was the executive director of Michelle Obama's Let's Move campaign. And, you know, Sam was like, I don't know how we're going to do it, but we're going to figure it out. And him and I went to the USDA and he was like, she is an example. She's a literal example of why we need to take SNAP and EBT online. But it wasn't until COVID that actually the government rolled it out.

9:13Before that, it was only in 13 states. And then it went to all states during the COVID time. But I think it's really difficult for people in general who have never walked a mile in somebody's shoes that you're trying to solve a problem for. And I actually think that that was why we were so successful, especially in healthcare. Because when I would walk into a room to talk to a CEO of a health plan, a president of a health plan market, or a head of product for a health plan, I've walked a mile in their member's shoes. I was on Medicaid, I was on food stamps, and I know the hard choices your members are facing.

9:55They're facing choices like, do I pay for my groceries or my medication? Do I pay for my medication or my housing? And I think that, you know, anybody, when you're a mission driven company, it's really hard because you do have to still make money to keep the lights on. Right. But you have to really make sure that you're in what you're doing, that you're keeping that North Star where you originally started the company and what that mission is.

10:18Isabelle Johannesen: But it's interesting because, you know, I think sometimes VCs hear about mission driven companies, impact companies, social good companies and think that they're not venture scalable. Right. That's kind of the first they'd get a little turned off by some of those those terms. But of course, you were profitable and you exited the company, which is what these VCs would have wanted in the end. I'm wondering if any of the VCs you talked to initially, if you've ever reconnected with them and, you know, they've seen your success in the end. Yes. It's funny because the VC that I work at now, it's hilarious that I actually went into the investment world because I was so anti-investing.

10:58You know, they gave me a lot of advice. What I will say where I am now at HLM Investments, they gave me a ton of advice. You know, they didn't invest in me because I didn't need it any longer. But I would call them like as if I was one of their portfolio companies and I would ask for advice. And the ones along the way that really just completely did not agree or not the mission, you know, I run into them because the healthcare world especially is very small, especially the investment world of healthcare. And yes, a lot of them have said, okay, you were onto something. But yeah, it is great when I run into VCs that turned us down and just said like our idea was crazy, especially that I exited and never took any money.

11:42Isabelle Johannesen: And I mean, hey, that must feel good. Full circle. One of them, one of them was just it was actually it was shocking. It was a woman and she was just like so unkind to me because my husband was on my board and she literally said to me, well, you know, I would like to know who's sleeping together on the cap chart. And like, that was like the worst comment I had ever received in any of my time dealing with investors. And it came from a woman and I just, I've seen her since then. And of course she was very nice and friendly to me, but it just was like, I think that that, that gives a bad name to like women, you know, you should be supporting women because there's so few women in, in the investor world and finance world and in founder world.

12:31Isabelle Johannesen: Yeah, absolutely. But of course, one of the other benefits of having VC backing is that you get introductions oftentimes to some of these potential customers and networks. Yeah. So how when you approached these potential customers, what was sort of your pitch to them? Why do you think they chose you over some of these more tech based competitors? Well, when I originally started out, I was like cold calling like Humana, like trying to get anybody to talk to me. And I got one plan to work with me out of Pennsylvania. And once I had the roadmap of one plan, they started to kind of fall like dominoes.

13:06And in health care, you know, health plans are really selective over who they will work with because they're you're a middle person to their members and their members are everything to them because their members have the choice to go to another health plan. So once they find a vendor that they know does well in the world in the industry, they don't make changes and they use that vendor. I've had, you know, I've called on different advisors. I've met some really great investors, by the way, that have made intros for me and have helped me along the way in health care. And, you know, truly the firm I work at now, if I would never have met HLM Investments, I would have not known to become a member engagement company.

13:47And I think that a big piece of it was I was the salesperson. So like we did the whole like, let's hire like a head of sales because I can't be everywhere. And that was disastrous. And I think it's because that founder magic when you're a new company and we weren't a new company, but we were a new company in the health care world and a new product. And we created the food is medicine or food is engagement category in health care. And I think that they, you know, these CEOs of these plans or these heads of product that would make decisions to work with us, they needed to see that the founder was there, that I was going to pick up their call when they had a problem or their members had a problem.

14:32And I think that that is something that a lot of new founders and CEOs miss is because they go out and they try to hire for everything. And I did that. I did, again, the head of sales job. And then I realized that no one can articulate the product better than me. And it was in my lived experience that this company came forward and that I know what individuals, these health plan members need and the change, even on a policy level, that had to come forward in order to try to solve all of the complex issues we have in health care. And that means something to my customer at the end of the day. Yeah.

15:13Isabelle Johannesen: Yeah. But, you know, it sounds like you also got very creative with asking VCs for advice without necessarily accepting their money. Right. Or having their backing. How how did you finesse that? I guess I'm curious what happens if a founder just calls a random VC and they're not in their portfolio. Are they willing to give advice generally? How did you play that? uh well yes um they are there are some great ones out there that are willing to give advice and i've learned like just ask right like tap into your network when i was out raising money um when i was looking to only take money from health care venture capital funds because i wanted their connections i wanted to also be able to call them if i had a problem or if i i needed you know, to change product or, you know, also you're dealing with government contracts, right?

16:05You're dealing with the confines of how the government decides how Medicare and Medicaid is going to be, you know, for the next four years, right? And it changes administration to administration. I wanted that knowledge because I was not a healthcare person. And so just asking people will give you advice. And I don't think that just because you're not part of their portfolio, they won't help you because I've been proven wrong on that. And I think too, it's, I think it's hard to tell somebody no, that is literally just trying to put healthy food in front of, you know, low income individuals on Medicaid, but you have to ask, right?

16:45And if a VC tells you no, you should ask them for connections to other VCs that will, that may be, that may fit in their portfolio. That's what I would do for every no that I heard. I would say, do you have any other VCs you could introduce me to that I may fit into their portfolio?

17:02Isabelle Johannesen: Yeah. And I can also imagine it's it might be a refreshing conversation for a VC to have because most founders are trying to get money out of them. Right. But if a founder came to one of us as a VC and is like, hey, I'm not actually here for a check. I just want your honest advice on this problem. It's like dating. You have to make them chase you, right? You have to make them chase you. I love it. But a lot of those VCs, as you mentioned earlier, wanted you to become a meal kit. And I think a lot of founders in that situation might have become a meal kit to make it make their lives easier, but you didn't.

17:36Isabelle Johannesen: What really made you hold the line? And was there a moment that you wish that you had done, you know, done more to appeal to the VCs and taken VC funding? I like to say I'm a rhinoceros. There's this book by Scott Alexander. It's like so old. Like I think it's older than me. And it's called Rhinoceros Success. And it's like only 80 pages or something. But it teaches you like how to charge forward always and never look back. So I don't ever look back because if I'm a rhinoceros, like they literally can't. So I never like sat and said, like, I wish I would have become a meal kid and I wish I would have changed my North Star.

18:12Like I've always my entire life been very, very true to myself. Right. I still very much remember where I came from. And one of my favorite things to do is like have a beer in the backyard with my family. So I am very true to what my vision is and what I am looking to build. and at the end of the day like I think we still have it somewhere we had like made like our roadmap of our notes me and my chief operating officer like I don't know the first six months of the company and like we wanted to be able to get prescriptions for healthy food at the end of like like that's when we were done and so we did that in a sense it's not a literal prescription that's written but the health plan pays for it there was a lot of tears though along the way Like, you know, I can't tell you how many times like I thought we would go out of business.

19:04You know, I've had to cease my salary more times than I ever want to remember. Right. In order to pay payroll to other people that, you know, depend on you. And I think that that's a really big thing as a founder and a CEO is, you know, there's people that work for you that their livelihood depends on your decisions. And that's a big undertaking. So, no, I mean, there wasn't necessarily time that I felt like I really wanted to have changed our goal. It would have been nice, sure, for somebody to write me a check at one time. But also, I think because we created a category in health care, which is heavily regulated because we worked in just Medicare and Medicaid.

19:44So that's government insurance. difference, there were decisions that had to be made. And I think that if I had taken any funding from a health care investor or, you know, a consumer investor before I became a health care company, I don't think they would have let me make some of the tough decisions that I had to make.

20:02Isabelle Johannesen: Yeah. And I mean, I think that's one of the key points that people who are really choosing to bootstrap and are wanting to do that intentionally. They want the complete control over the company. And I can absolutely see that as the upside in addition to, you know, financially the full ownership of your company.

20:22Isabelle Johannesen: But of course, in that world, there's also founders who would like to take VC money but are not necessarily venture backable, especially in today's ecosystem where it is just incredibly competitive. And then the other side where founders from the get go never want to take VC money. I guess, where did you kind of fall on that spectrum? And was there ever a time where it flipped, where you could have taken VC money or you had the opportunity to, but you decided not to? I 100 % walked away from several term sheets. And I walked from several acquisition offers that, you know, would have been very good for me because I owned majority of the company, but would not have been good for the mission of the company.

21:03Isabelle Johannesen: they would have dismantled it or it wouldn't have been you know ran how i i i envisioned it to be run when i'm not there um i was very happy with who acquired us and you know this market is very hard to get a check um if you're not profitable or if you're starting something and like i'm so sick of hearing the word ai because i look at health care decks you know um so everything is ai and so it's like okay you have to have a little more than that especially in the health care world world AI is a piece of it um and so it's a very competitive market and you know everybody feels like it's really sexy to be a founder and a CEO but it's really not it's actually really really hard it's very very hard to run a company it's very hard to be the decision maker of you know having to do layoffs to keep the company going um like I had to lay off like even family you know like you you have to make really tough decisions and at the end of the day it's almost like the business is the child like you know i'll make very tough decisions for my daughter um and i i had to make very tough decisions along my founder journey that you know some people don't talk to me anymore because they took it personally but it's it's business yeah and and it's not for everybody right i think you know there are certain personality traits i imagine it takes to be a bootstrapped founder versus the type of person it takes to accept VC money, because that is a different kind of totally way of running a business and different people you have to answer to at the end of the day.

22:36Isabelle Johannesen: I guess I'm curious as a VC now, when you have a bootstrapped founder in front of you who's looking for VC funding, what does that signal to you? And is there something about that person that either is a positive or a red flag or something that signals to you? Well, typically it means that they have hustle. Like I like to say that, you know, the only reason is that we really made it is because like we had hustle. Like if you came to work for Farmbox RX, like it was made very, very clear to you, like you're being hired for this job, but there's going to be like three to five others that you're going to have to manage because we are not a venture backed company.

23:15We are bootstrapped and we run a very, very tight ship here and so i mean i think like we only had like we we were the sales and marketing engine we had like outsourced everything for like our distribution and things and like we had around like 40 employees when we sold the company um but when i see someone come in that has bootstrapped it tells me that they hustle and you know typically it's the founder's money that's involved in the company. You know, when I sold the company, I had a significant, you know, founder's note that I had to write just over, you know, the 11 years. Well, not really 11 at that point because we were profitable for several years, but you know, the first like five, six years that I would have to like put money into the business to keep afloat time to time.

24:03So I think it's hustle when you see that somebody bootstraps, but I think it's also typically I'll see that that founder is the salesperson. They run the sales team. Maybe they have somebody else that manages sales, but they go and they get in front of their customers. And that I think is really, really important. You do not want to invest in somebody that's not willing to go sit down and see their customers. And also, again, I like to look, does somebody have an assistant? Do they have an assistant? Do they have two assistants? Not everybody needs an assistant. Because maybe you have an assistant that runs for five people's calendars or something that manages travel and things when you get to a certain size.

24:45But, you know, just hiring to hire, I think a lot of times comes when you get a venture check and then they have to bring in like an experienced CEO and then you're no longer there as the founder.

24:56Isabelle Johannesen: I'm sure there are many ways that you have to get sort of creative with the money you do have when you're bootstrapping. Oh, we used American Express points for all of our travel. If we if if we could not fly there with our Amex points like we didn't go. I'm curious if you ever looked into other sources of funding that weren't necessarily venture capital, but I mean, debt financing, grants, other loans, anything else that you use to kind of get by in those days? We looked at like that, you know, early on the small business loans and we just we couldn't ever get funded like because we were so lean and we were not profitable, you know, the first few years.

25:36So nobody's writing loans with that type of risk because I didn't have collateral to put up. Right. And so we were we had our American Express. I know I just talked about our Amex for travel. um so but i had good credit like i'm very crazy about my my credit score like i check it very often during the month um and i had this american express so we were very smart in our terms of our negotiation with our vendors right so our our customer would pay us and we probably had you know maybe 60 90 day terms with like fedex and different vendors so we had cash to kind of float the operations of the business, you know, just every month for our cash flow.

26:21And then we would put everything on the Amex. Like I remember FedEx was like, we're not going to take your credit card. And I'm like, well, we're going to go with UPS. Then they ended up taking the American Express because that gave me like another 30 days of stretching out terms. So, you know, you have to get really creative in how you're going to fund the business. And not all companies companies have that luxury where their customer pays them and then they have terms to pay. But I think that that's a huge piece of advice. Stretch your terms as long as you possibly can starting out.

26:57Isabelle Johannesen: Yeah. So we've talked about some of the challenges and the hard parts, I think, of bootstrapping. But what are some of the upsides and the positive of bootstrapping overtaking VC funding? Well, one of the positives was my exit was very nice for me, where it wouldn't have been. I, for fun, looked back at a lot of the term sheets that came in for us when we actually didn't need money. But I feel like as a founder, you're always raising money, even though I didn't need it. You're like perpetually raising capital because you never want to not talk to an investor that comes your way. And I saw like what I would have taken if I would have taken the term sheet versus having not raised anything.

27:38So I'm glad that I stuck to it and didn't take any capital. And, you know, I think, again, really going back to when you create a category in something like health care, it is so regulated and it it it's risky. Right. Because, you know. You know, like Trump could put out a tweet today and it's like Medicaid changes, right. Or RFK makes, you know, a different change to vaccine, whatever it may be. And it puts health plans, they get very stressed about the changes that are coming to the Medicaid and the Medicare market. So I could only imagine looking at how stressed my customers would be with changes that were coming and how they were going to implement those changes, how an investor would have reacted to these changes where I'm like, no, we're not a food company anymore.

28:35we're a member engagement company and we had to redo all of our branding at that point. I don't know if they would have let me do it.

28:42Isabelle Johannesen: If a founder came to you today and says, you know, like I've been rejected by 20 VCs, I have 50K and a great idea. What's the first thing you would tell them to do? Find a great chief operating officer. Why? You know, my last chief operating officer was like my ride or die. You know, she was in the trenches with me and I could bounce ideas off of her and that chief operating officer should actually be the opposite of you. I was always like the visionary and the creative and I was a salesperson and she can like live in an Excel sheet, which I get sick, like looking at Excel. And but she was the exact opposite of me that she could ground me when I would say like, oh, I want to do this.

29:26And she would be like, we can't afford that. We're not doing that next. And, you know, you need somebody that's going to be in the trenches with you that is going to hustle it out and and go raise capital, because, again, you are going to perpetually be raising capital. Even if you're not raising capital, you're still raising capital, even if you're not going to take it.

29:45Isabelle Johannesen: Just the fact that you're continuously pitching VCs and taking those meetings. Because they're reaching out to you, too. I mean, I would get, I don't know, maybe one or two reach outs a week always. And I would meet with every one of them, even though we weren't raising capital. You get to talk about the market with them, you know, what they're seeing, some of their portfolio companies. And so you're always raising capital because you never know, maybe you're going to need capital for something one day and you call them back. They liked your idea. But you've got to have a great partner or co-founder.

30:14Isabelle Johannesen: And what about getting your first customer? I mean, especially I mean, you went from B2C to B2B, which are obviously very different in terms of getting started. Well, let's start there. What would your advice be to a B2C company versus a B2B company from day one? So, you know, a direct to consumer, that market right now. It's hard, but I think it would be easier than when I started it because this world of TikTok, like, you know, like TikTok and Instagram reels and things of like influencers are very different than it was when I was a, you know, a direct to consumer company. company. You've got kids that are marketing things, and other kids are buying it.

30:56So I think it's a little different now to launch a consumer product. You've just got to have a really great pipeline of even small influencers. It's no longer you have to have a million people. There's a thousand people, as long as you have a really tailored audience. For business to business, it's tough. And I didn't realize how tough it was until I got into it. And especially in healthcare, because of the regulations. And you've got to be HIPAA compliant, your tech stack. And when you're sending things to the members' houses, you've got to work with a HIPAA compliant mailing company. There's so much that goes into that.

31:40And those sales cycles are so long. They can be a couple of years. I would talk to somebody and maybe they wouldn't work with me for a year or two years because you've got to get many approvals or they've got to get they're looking for next year's bid this year for next year. So those sales cycles are really long. So you're going to have to really make sure you have enough runway. And we were fortunate we had a big amount of runway because of COVID because we were a direct to consumer business. All of the grocery stores had nothing on the shelves. We were still operating nationally to ship fruits and vegetables.

32:14So we had a huge windfall of cash that I used to fund us really flipping ourself and becoming no longer a direct to consumer entity. We shut it down completely and became a health care company. Wow.

32:30Isabelle Johannesen: But how do you advise founders to even get in the room with their first B2B client, to even have that conversation? Because, you know, without a VC introduction, without the network, without even university connections that maybe you didn't have, right? These things that are all sort of a leg up in this world, but you managed to get in front of the right people at the right time and convince them that you were the best option. What was that secret sauce? Not taking no. In the words of Kris Jenner, like no means you're not talking to the right person, Right. Like so I didn't take no. I would I would call health plans.

33:05I was cold calling the summer of 2019. I was cold calling health plans. And by the way, I had no idea who I needed to talk to from the health plan. So I'm like calling Humanist's corporate office in like Louisville, Kentucky. And I would get on LinkedIn and I would start to look at like who I thought would make those decisions. And some people would answer the phone and say like, oh, you're actually looking to talk to the head of product. And OK, well, who is that person? But then you learn like, OK, the head of product is market by market, state by state. And so then it's like, you know, it's a slippery slope then.

33:39But it really is a matter of like you can have no shame. you literally can have no shame. I mean, I guess like in a different life, maybe I was like a telemarketer or something because I just had no shame to all and and and I and go like when I got the lady from Pennsylvania, like she said, OK, yeah, I'm interested in this. And I'm like, can I come visit you? How's tomorrow? And she was like, well, tomorrow doesn't work. But how about, you know, in two weeks. Right. She's like, I'm a little busy. But I got in front of her and I showed up. So you just can have no shame. And then you need to be in person and you need to go see your potential customer.

34:23We can't hide behind screens forever. You've got to go be in front of customers. The hustle is real. The hustle is real. And so if you were going to start another company today. But yes, go ahead.

34:38Isabelle Johannesen: Hypothetically, if you're going to start another company today, would you take VC money? I'm a VC now. This is such an unfair question. No, no. Well, because I have enough money, I could self-fund it for a certain amount of time. And then maybe I would take money. I definitely wouldn't take a seed round. That I would say. Why? Because, you know, I think like the seed round is like truly when you like lose most of your control. you know maybe i'm sure i could call on some people for some angel investment i'm sure everybody i would call would be like are you serious you can't afford to you know give yourself a few hundred thousand dollars to launch something i probably maybe at one point would take risk off the table and raise maybe like an a or growth you know like like for growth once i had proved product market fit i proved profitability well i mean now what we do at hlm we're we're growth stage now we're no longer doing early and early stage investing.

35:31We're doing growth. And that does give a founder, you know, or early operators in the company the ability to take some to de-risk, to take some risk off of the table that I could see myself doing, but not to launch it now.

35:43Isabelle Johannesen: Do you think other founders should simply wait longer to take funding instead of either this black and white, take it or don't take it at all? Absolutely. Yeah. I mean, it's amazing if you start. I mean, like we see what's going on with the guy that's like trying to buy spirit airlines i don't know if you've seen it like he's crowdfunded like i don't know like a hundred million dollars or something um it's amazing when you tap into your network you know five hundred dollars times you know 25 people to help you start to launch some things um you know go somewhere right and then you get a little further down the path.

36:23I very much believe in not going out and raising anything until you've got some traction under you. And, you know, I personally wouldn't invest in somebody that just had like an idea per se. I'd want to see some amount of traction. Like if I was going to, you know, be an angel investor to something, I see some amount of traction.

36:44Isabelle Johannesen: Yeah. I mean, things are so crazy these days with the AI boom. And I mean, we're seeing companies that don't even really have an idea yet. I feel like they just woke up that morning and made an idea up, but their backgrounds are so impressive. So yeah, I mean, it takes a lot of hustle for bootstrapped founders, but we've seen a lot of different types of bootstrapped founders in my days, of course, of founders who really start from zero, from scratch and build a company. But then of course, a lot of founders that have a previous exit under their belt, if you were to start another company today and can bootstrap with that chunk of money.

37:17Isabelle Johannesen: What does that difference mean to you sitting on the other side of the table now? Kind of how do you view different types of bootstrap founders? Well, there's I think the bootstrap like how I bootstrap with like basically nothing and just reinvested profit forever into the business. And then I think that there's also, you know, the bootstrap founder that maybe has had a successful exit of some sort. And then they launch a company and they're not out raising a seed. but they're going to bring in other people's money once there's product market fit, once there's some amount of traction, they've got some amount of revenue and de-risking.

37:59And I think that that's okay. That's very different, I think, than the hustle of bootstrapping for years. But look, I mean, if you look at a lot of family businesses that are successful, and there's quite large family businesses that are successful. They've bootstrapped in some way, shape or form. Typically, they're not in they're not bringing in VC dollars there. They've they, you know, farmers are a great example. They've been maybe generationally or they have started farming and they take out, you know, loans in order to, you know, support the business because they know they'll be able to sell their their grain or their you know their vegetables different things like that people like to say all the time that farmers are not great business people they actually really are but i think that's a different type of you know when you bring in institutional capital i think it's a matter of who you're working with number one and what time what what time you're going to take that having been bootstrapped i still like the idea if I was to ever start a company, I could see myself de-risking, but I still, I like to be able to control my direction.

39:12So I think I would have a hard time if that de-risking was me giving up control. I probably wouldn't take capital.

39:21Isabelle Johannesen: But I think bootstrapping comes in many shapes and sizes. And I think there's a version of bootstrapping that has a stigma around it, right? Maybe you weren't able to raise capital and that put some kind of filter film over the business you're running. But then there's also the bootstrapping that we're talking about now where you have family money or you have a previous exit. And that bootstrapping is almost a badge of honor. That's like, you know, I bootstrapped and it's because of my previous success. And they're not they're not the same. Right. It's a different type of founder. It's a different type of hustle.

39:49Isabelle Johannesen: It's a different place in life. I feel like it's a very different game between those two founders that they're playing. And the level of risk is very, very different. Yes. Well, anybody will give me money now because I've exited. Right. Yeah. Because I've got one under my belt. I'm now, you know, investable, I guess. Is that a word? That that would be easy for me because I've had that exit. If you are a founder that does not have that traction under you, it's it's difficult to get funding in this day and age. Sometimes I like to say like the the best entrepreneurs are not ones that went to college they have that hustle and that grit and they just have I think if you're an entrepreneur you have a natural you have a natural calling to it like I was hustling beanie babies at 16 years old to pay for my first car so you know I I don't look at that bootstrapping necessarily if you've already exited um I don't think it's a bad thing when you use your own money, but I think it's a it's not the same.

40:52You know, like me, me putting, you know, half a million dollars into my new idea is not anywhere near the same of the hustle and the bootstrapping that I had to do when I first started Farmbox, because I would put the half a million dollars. I would hire the chief operating officer. I would hire the CFO. I would do a lot of things right from day one that I didn't have the luxury of affording to bring on from day one, like truly bootstrapping. So like when I see these entrepreneurs out there that are like, you know, married to somebody wealthy or something and they're starting something and like, oh, I'm not taking any funniness in that.

41:31It's like, yeah, actually, you did. You wrote yourself a check from your family's money. And that's very different. Yeah.

41:39Isabelle Johannesen: But I mean, what's inspiring about your story is you've really seen the full spectrum, right from the absolute definition of the hustle in the beginning all the way to if you wanted to start a company today having the network having the credibility and the traction from your exit and your success um so i really appreciate your your insights and and hearing your story today so thanks for joining us thank you for having me build mode is a tech crunch podcast each episode is produced and edited by maggie nye and hosted by me isabel johanneson our art and design is also by Maggie Nye. A big thanks to Morgan Little, who leads our audience development, the Foundry and Cheddar video teams, and most of all, to you, the builders, and everyone else in the wider startup community.

42:19Isabelle Johannesen: We'll see you back here next time.