Becoming One of the Few Black Women to Raise over $10 Million in VC Funding with Shiloh Johnson

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire, brought to you by the HubSpot. podcast network, the audio destination for business professionals with great shows like Finding Founders. Today, we'll be breaking down the story of Shiloh Johnson becoming one of the few black women to raise over$10 million in VC funding. To drop these value bombs, I brought Shiloh into EO Fire Studios. She is the CEO and founder of Compliance, a cutting-edge digital tax assistant that helps small business owners manage their business taxes. And today, Foundation, We'll talk about building an inclusive, productive, positive company culture.

0:43We'll talk about what not to do when it comes to attracting investors and of course, what to do and so much more. And a big thank you for sponsoring today's episode goes to Shiloh and our sponsors. The Product Boss, hosted by Jacqueline and Mina, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Product Boss helps you take your physical product sales and strategy to the next level to create your dream life with episodes like, can I have a successful product business as a side hustle? Listen to The Product Boss wherever you get your podcasts.

1:17Shiloh, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Hello, Fire Nation. What I believe is faking it until you make it is not a real thing. I think that people are doing too much of that and they're never actually making it. So I highly disagree with the fake it to you, make it culture. Well, Fire Nation, I can tell you right now that authenticity, genuineness, you being the best version of yourself, that's what I've found that people really want in this world, not some pale, weak, fake imitation of somebody else. So I love this start.

2:03And we're talking about how Shiloh became one of the few black women to raise over$10 million in VC funding. I want to talk first about the aha moments that you had when you started your company compliant. What is that story? So I had a client when I was working. I ran my own tax practice for a while. And I had a client that she was really misunderstanding how sales tax even works and was exposing herself to like major liability, both legal and tax wise. And so I mentioned to her, how is it that you even figured out who told you that this was the thing you were supposed to do? And she's like, well, I just kind of read myself and like tried to figure it out.

2:52And this was my sort of understanding. And I was like, oh, that was it. That was the moment that I knew like, oh, I've got to do this because people are out here trying to self-navigate and it's leading them down the pathway of destruction. So that was that moment for me. Fire Nation, that's why I'm such a proponent and such a big fan of having conversations with people, asking them about their problems, their struggles, what's working for them, what's not working for them. You know, walking around the world, keeping your eyes open, your ears open and really understanding, hey, what is a real problem that I can create an amazing solution to, that I want to create an amazing solution to because I have the expertise, the passion, the excitement for it.

3:37And when those things lock up, exciting things can happen. Now, Shiloh, not everybody is what you would call a technical founder. So tell us the story of how you decided to solve a problem, which is starting compliance, as we just had a nice little chat about, even though you're not a technical founder. Yeah, so I come from the corporate tax sort of world where no one is tech savvy. If you have ever visited any governmental tax website, you will quickly understand it's all very archaic. No one even talks about technology. They even sometimes shun it as if it's meant to be a replacement for the service providers.

4:20So I knew that I couldn't lean on the people that I grew up or sort of built my career with. They were also CPAs and also in the corporate tax world and were like, technology, why would you do that? That's crazy. So I quickly knew that that wasn't an option for me. And I didn't know any like techie engineers that I could sort of tap and have them help me. And I always felt like it's a lofty ask to go up to someone I don't know and ask them to basically give me their services for free. And I'll give you some piece of some company you don't even know anything about. So I just didn't even try. Instead, I was like, you know, in this day and age, I can I can pay someone to do anything.

5:01So I figured that I would find a contractor that could at least help me suss out the idea. I didn't I don't know that I was as advantageous to believe that I was going to build a usable product at first. as much as I just wanted to suss out the idea and sort of wireframe it out and figure out, like, is this a thing I could actually do? And how could I productize this? Essentially, I was basically productizing like a, you know, a really massive data set. So I didn't really even know what that could look like. And so I sort of really wanted to keep it small and just keep it down to like, do the buttons work.

5:34And to me, that was enough. I didn't care if it was pretty. I didn't care if I had a UX designer or anything. I just wanted the buttons to work. And I wanted to make sure that I could put it in front of someone that was not from the tax world and it would make sense to them. And that was my only goal. I didn't realize that was going to be enough to do the next thing. I just wanted to get to the first thing and then I was just going to sort of navigate it through there. But thankfully, it was enough to get me my first bit of dollars in, which allowed me to hire who is now our head of engineering.

6:01He was a brilliant gentleman by the name of Lee Hilton. So that was sort of how we got it going. Fire Nation, this is a great lesson on the fact that you do not have to do everything. In fact, you should not be doing everything because you are not great at everything. So find people who are great in the areas that you aren't excited about or don't have any skills or knowledge in, no expertise. Hire those people and fill the gaps. Build that right team. And then when you have that team around you, that allows you to do what you do best, what you thrive in, what your zone of fire is, and it's going to be a better business as a result.

6:44And speaking of team, your company now has over 20 people, Shiloh. You built an inclusive, productive, positive company culture. How'd you do it? I tried to put in a lot of intention early, like before I ever had any employees. I wanted to think about and ideate around building out what I knew this could become you know once I started to get funding I was like oh yeah you guys gonna give me money to build this? Great let me figure this out and I wanted to make sure I put intention early on like what is the perfect work culture to me and what did I need when I was in corporate that I didn't have and I just started jotting things down and making sure I could like ideate a vision around that because it's really difficult to galvanize a group of people toward an end goal if you don't have any goal for them to get to.

7:34They're not just going to come in because they think you're cool and they just kind of want to tinker. That's usually people that you have relationships with prior. But if you're going to hire people you don't know and ask them to come and help you build something, you've got to give them something to galvanize around and sort of move forward. And so building that vision out early was really important. And then starting to ideate around what is the culture we'd like to have? What is good work to me? And what is what is a place where I would like to foster? What's somewhere where I want to be working every day if I had to?

8:02So that had to happen a lot earlier than I think sometimes if you're thinking about culture after you've built the team, you're thinking about it too late. Fire Nation, lots of key takeaways here. And of everything you just shared, Shiloh, what would you say is the place for our listeners to start to build this inclusive, productive, positive company culture? If they were just going to take step one, what is that? Think of the five things that to you would make it really great for you to work somewhere, anywhere. What would have been the five most important things that you needed or would like to have?

8:42It doesn't even need to be, they don't even need to be real, right? It could be really lofty goals, like, you know, four hour work days or, you know, extended vacation or whatever kind of ideals that you think matter to you. healthcare? Like, what are things that matter to you? Jot those things down. You can create policy and culture around it later, but just starting to ideate around what are some things I care deeply about as a person, guiding and supporting other people. That's something you can do right now. And then also step one can be just figuring out what kind of leader you want to be.

9:19You know, it's hard to understand when there isn't a bunch of people looking at you for decisions, but that will come, right? There's going to be people who are going to look to you and your leadership skills to guide them. And so doing the work early days to identify what kind of leader you'd like to be is I think a great place to start. I love that. That's a great step on Fire Nation. We're going to be talking about a lot of important stuff around this topic when we get back from thanking our sponsors. We all want the same things for our business. More leads, faster sales, and better insights so we can serve our customers at the highest level.

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11:46That's T-I-D-I-O.com slash fire. Tidio.com slash fire. Shiloh, we are back and a lot of our listeners, they are looking for investors. Give us the best ways that you found to attract investors. And then also on the alternative, things that we should not be doing when we're looking for investment. The things that you should be doing, I'll start there, is you've got to build. it's very difficult, especially now in this current sort of investing environment to galvanize, you know, investment around an idea alone. And if you are doing that, it's because you've got a history of building and people already know your track record.

12:31So if you're new to the industry or new to investing or investment in any way, you really got to start by showing improving. And it doesn't need to be a massive built out thing. So that's probably on the don't do list is you You don't need to be perfect. If it, you know, if your first product is, if you're not embarrassed by it, what's the thing? If you're not embarrassed by it, then you launched it too late. It doesn't need to be beautiful. It just needs to work. Even if it's a list of people that are interested in something you're selling, that's something, right? That's some galvanized sort of momentum.

13:02So I would say work on getting, you know, some momentum around what it is that you are ideating and do a little bit of work to try and work through some of that motion. The product, the technology can come after, but do something so that someone can see some forward movement. It was a lot simpler for me to get yeses because I already had customers because I had self-paid for the first version of the tool. So a lot of people I know don't have that same luxury. So I would just encourage people to try to find ways to get some version one of a product out the door, even if it's minimal, extremely minimal.

13:43Another thing I would say is there's a lot of focus on pitch decks being the thing that gets you money, and I would argue that it's not. I would argue that the story you tell, while there are some decks going around, you know, up in the air, is far more important. Spend more time on your storytelling skills. Spend more time understanding how to talk about the product and your passion for the industry. Spend more time how to like talk through your skill set or your subject matter expertise or whatever it is that you, you know, have that is your competitive advantage in any way. Spend that time doing that work versus trying to perfect a deck.

14:29To be honest, I don't know that I even pitch with decks. When people ask for them, I just say I'll email it later. And then sometimes I do it, but sometimes I don't. I just never do it because it's very difficult to express what is really happening on a slide, right? I'm far more compelling by giving you the truth of my experience talking to these small business owners and being out there with them and helping them suss out their tax problems and how I've thought through the problem. That's far more compelling than like, here's my slide deck on some graph I made up with numbers I made up. So I would say try not to focus so hard on a deck and focus more on the story that you're trying to tell and the problem you're trying to solve.

15:10And hold tight to your why. Like I said, it's a lot easier to galvanize a team around a why. The same thing is true of investors. When you're really clear on your why and you're passionate about that. They see that passion and I think people are drawn to it. And do the work to read the book to understand how venture capital works. Venture Deals is one. Brad Feld wrote it. Really great book that talks about the ins and outs of venture deals so that you understand how the negotiation process is. It's really just what are the good deals? What is someone willing to give you to invest in those good deals.

15:52And if you understand that dynamic and how it works, you can position yourself and your company appropriately so that you can be viewed as a good deal. Rather than assuming that someone is believing in your idea and galvanizing around you as the person. Yeah, sure. But they barely know you. They really want to understand how this is a good deal and how it's going to make them a lot of money. And so if you can understand how to communicate that, you'll be in a far better place. Fire Nation, tons of great feedback. I hope some of you are already downloading that book, Venture Deals, because just like Shiloh shared, you've got to become the subject matter expert in what you're moving into.

16:27And the reality is, Shiloh, there's an investor bias of black women in fintech. How did you overcome this hurdle? It was a blend of a few things. Timing. So I was building during sort of the George Floyd era and the Black Lives Matter movement. And so there were a lot of corporations and venture capitals you know, limited partners that were trying to invest in VC funds that were led by Black people so that they could sort of try and create some version of equality at a time when everybody was asking for it. So the timing with which I showed up was almost perfect. Everybody and their mom's mom had a minority-focused fund or some minority arm, which I was able to sort of leverage.

17:11But the other part of that is I am a tiny bit naive. And that naivete serves me in the sense that I am almost absolutely fearless. I don't worry about what somebody may think about me being a Black woman or my perceived, you know, the perceived expectations for who I am or what I can do and can't do. I'm more of a show and prove. I also am unbelievably confident. And I want to encourage anyone that is coming into something with a disadvantage, you've got to be. You've got to be if at any point you are not the best version of you, it is really difficult for someone else to believe in you and your ability to move this thing from zero to one billion.

17:52And so I just try to be audaciously brave at every moment and unafraid to double tap and unafraid to walk away from deals that may not be, you know, good deals. And, you know, daring someone to assume that I can't. Like you can, and there's probably lots of people who have told me or said behind my back that I'm not very good or I'm not going to be any good. And none of that is my concern and it can't be. It can't be. All I can do is show, show, improve and work every single day to be the best version of me and, you know, allow you to eat my dust. Let's end with a bang. I want to talk about your area of expertise, which of course is taxes, because they're such a critical part of the success of every company.

18:41So what should founders outsource when it comes to small business tax literacy? I am a huge proponent of the individual getting as much financial literacy as humanly possible. I am always weary when folks are like, I don't know. I don't want to know. I'll just hire someone to do it. And here's why. There is so much fraud and there are so many people that are not who they say they are. There are so many people faking it until they make it and never making it. And because of that, it doesn't allow you, the business owner, to be in the best position that ensures the success of you and the company as a whole.

19:29So jumping off of day one saying I'm going to go find an accountant without actually doing the work to self-understand is huge. I do not recommend in any way, shape, or form people not learning about tax, at least in its basic degree. Because when you sign on the dotted line for a tax return, you, the person, the business owner, is taking responsibility for the accuracy of the return. The IRS is not going to solely hold the person who filled the form out responsible. They're going to hold you, the person who signed, responsible. And so you've got a duty to make sure at bare minimum, someone is explaining to you, hey, what is this line?

20:09What is this line? And what am I agreeing to here? Even if it's in a basic level. So yes, obviously, you're a business owner, you're busy, you don't have time for the foolishness. But there's some things you can do early days that you can implement to get yourself across the border. You can understand what tax types you're supposed to be paying. A lot of CPAs only tackle income tax. They don't touch sales tax. They won't help you with your business licenses or annual reports. And so you not knowing that is on you, not the CPA. Also understanding that there are deadlines to things and the expectation that you pay by a certain deadline is on you, the business owner.

20:46So having an eye on that, similar to why we made compliance so that people can understand those things, because ultimately the onus is on you. So, yes, hire a CPA as soon as you can afford to do that, but also make sure that CPA is walking you through understanding bookkeeping and chart of accounts and how to read profit and loss statements and balance sheets if you don't know that. And then also understanding what's on the tax form that you're agreeing to. Again, it's your responsibility if it isn't right. So you want to make sure you protect yourself. Fire Nation, critical advice from somebody who knows, has been there, has done that.

21:20And hey, if you can't keep up, you're going to eat her dust, Fire Nation. Let's just remember that. So Shiloh, let's end with a bang. What do you want Fire Nation to get from our conversation today? What is the biggest takeaway that you want to make sure Fire Nation is really understanding from what we chatted about? Then give us the best way to connect with you, call to action for our listeners, and we'll say goodbye. Absolutely. So the takeaway I hope you got from this is that you can be anyone from anywhere and look anyway and still make your dreams happen. And if you've got an idea you're sitting on and don't think that you have the chops to build it, you're absolutely wrong.

22:02You do. So go after it. Do the work, learn, hustle, research. You can absolutely do it. If I can do it and I'm not even from tech, then I know you can do it. You can find me everywhere on every platform at Shiloh Johnson. And then you can find Compliant everywhere at Compliant App. and that's compliant with a Y. And the call to action is just check us out. Let us help you navigate your entire tax landscape as a business owner that you're not having to worry about the headache. Fire Nation, you're the average of the five people you spend the most time with and you've been hanging out with SJ and JLD today.

22:42So keep up that heat. And for links to everything we talked about today, visit eofire.com, type Shiloh, S-H-I-L-O-H in the search bar. the show notes page will pop right up. And one more time, compliance Fire Nation. That's C-O-M-P-L-Y-A-N-T. So search for it that way. And Shiloh, I want to say thank you for sharing your truth, your knowledge, your value with Fire Nation today. For that, we salute you and we'll catch you on the flip side. Hey, Fire Nation, a huge thank you to our sponsors and Shiloh for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 3 ,000 of the world's most successful entrepreneurs, and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment.

23:28I put it all into my first traditionally published book, The Common Path to Uncommon Success, personally endorsed by Seth Godin and Gary Vaynerchuk. The Common Path to Uncommon Success is the step-by-step guidance that you need to achieve the lifestyle of your dreams. Visit UncommonSuccessBook.com. Order your copy and I'll catch you there. We're on the flip side. The Product Boss, hosted by Jacqueline and Mina, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. The Product Boss helps you take your physical product sales and strategy to the next level to create your dream life.

24:06With episodes like, Can I Have a Successful Product Business as a Side Hustle? Listen to The Product Boss wherever you get your podcasts.