This is Bloomberg Business Week with Carol Messer and Tim Stenebeck on Bloomberg Radio.
So Arianna Huffington calls her next guest new book quote a must read for anyone, from seasoned entrepreneurs to recent grads.
Cheril Sandberg says that quote every entrepreneur should take advantage of her experience and knowledge as they start their own journey in business.
So's so true. Please to have back little, Please to have it back with us, Liz, I blame John Tucker for this.
It's okay, we're not live, Carol, that's fine.
Take two. Please dad back with us. Liz Elton, co founder of the translation company Transperfect. They began back in nineteen ninety two at NYU Stern School of Business. She's also the founder and CEO of the Elizabeth Elting Foundation, and she's got a new book out, Dream Big and Win, Translating passion into purpose and creating a billion dollar business. I'm Liz, great to have you here in studio. Ah starting a business, though sometimes you have to have a
lot of failures along the way. Did you have a lot of failures?
Yes, Carolyn, I had many, many failures, and that was what prompted me to write the book. I thought, I can create something based on what I did right and the many things I did wrong.
What's the absolutely what's the biggest thing I always think about, like you know the mistakes that you really learned from?
Okay, well, one thing that is very big that I learned was when you start a company. And it seems so obvious now, but you need the right paperwork in place, A proper shareholders agreement which determines roles, responsibilities, debt, what happened or sorry, roles responsibilities, what happened in the event of how decisions are made, dispute resolution, debt, what happened in the event of death, disability, a buy sell provision, and an exit strategy. That's critical and we did not have one.
Well but but come on, if you're just two people in your twenties with an idea, you know, a in a dorm room at NYU, you know this is not what you're thinking about. You're thinking about the idea of translating the world's business documents exactly.
And the goal was to bring in the business.
We had no money, so we couldn't even hire an attorney and hire an accountant, so We certainly couldn't get together a shareholders agreement.
There was nothing to fight over it.
Give people your story about business in case people aren't familiar with your story. I mean, you built this business with your co founder to hundreds of millions of dollars a year in revenue, and then he eventually bought you out. But talk a little bit about that and sort of like the lack of shareholders agreement there and what happened.
Sure, And so one issue was we did not have a shareholders agreement, and I looked at getting one along the way. We talked about it, but we could never agree on one once there was something to fight over.
So that was one issue.
And related to that, we couldn't agree on decisions day in and day out. And we were fifty to fifty owners. So that's the other piece of it. I advise against being fifty fifty owners whereby you have no one to resolve deadlock, no tie breaker, And that was the case, fifty to fifty owners and no deciding votes.
Were you in a unique situation though? Correct me if I'm wrong. You didn't raise outside funding.
We did not.
Oftentimes with companies these days, especially if they go after venture capital. Then you get like a you know, VCS with experience on your board, you get all the answer to right and you do have to answer to them.
Yes, you're absolutely right.
And what happened is with the original company, trans Perfect, we didn't raise outside funding. We did start a sister company in nineteen ninety nine, seven years after we started, called Translations dot Com, and for that we did raise some raise some outside funds initially, so for that we handled it differently, but we ended up buying those investors out. So back to the original company, no shareold agreement, no tiebreaker when we didn't agree, and fifty to fifty ownership,
and I advise against that. I say, you need a shareholders agreement. You want to own more than fifty percent if there are only two of you, or you want to be the decision maker if they're more, and that's critical.
What would you say in terms of advice of going into business with someone who is your partner.
And your partner meaning.
Meaning you have a personal relationship, so I should be no, No, absolutely, he was my boyfriend at the get go. And again, as I said, we started with no money whatsoever, and we just focused on sales, not on raising money. And what I advise is, no matter who the person is that you're starting the company with, whether they're your boyfriend, your girlfriend, your husband, your wife, your child, brother, sister, you need a proper shareholders agreement specifically to deal with
the issues I was saying. And so over the years, we didn't agree many times, day in and day out because there was no tiebreaker, and we kind of diverged ultimately, and then we had a very interesting and crazy situation at the end and a very intense litigation where I spent fifty million dollars selling the company on legal fees and the process because we didn't have a proper shareholders agreement.
Well, I don't want I don't want people to get the wrong impression about the company that you built. However, because even though you had all these challenges while you were building, the company, ultimately became a very successful company that brought in hundreds of millions dollars of revenue per year. And today you're able to do whatever you want after selling.
Yes, absolutely, And I am so fortunate. And that's one of the things I say. I say, work today like no one else will, so you can live and give tomorrow like no one else Can, and it did end up being the largest company in the industry. That was the goal from day one, because there were thousands of
translations companies out there when we started. It wasn't a brand new idea in the early nineties, but the goal was to build the biggest, a top tier company along the lines of a high level law firm investment bank. And fortunately, after twenty five years, we were able to accomplish that goal and become the largest in the industry and be a billion dollar company. And so now I have the good fortune of having a foundation and being able to focus on other things.
Well, talk to us about that focus and how you're helping maybe others create their own dreams.
Sure.
Well, one of the things I'm doing is I do focus a lot on entrepreneurs I'm a big believer in entrepreneurship and education.
I think they're the two great equalizers.
So I'm involved in the entrepreneurship accelerator program at and Why You Stern. It's called Endless Frontier Labs. I think it's the best accelerator program out there. I'm also involved in the American Heart Association Social Impact Fund, which is also funding entrepreneurs and marginalized communities. And then I fund other entrepreneurs and then I speak a lot about entrepreneurship
and HYU Business School, Columbia Business School, Stamford. And now I've written this book largely to share the lessons.
Do you do any investing, yes, what's exciting to you right now? What types of companies?
Oh?
As far as companies, yes, absolutely well. I do love supporting other women entrepreneurs and ones that are doing good as well as doing well. So you know, things related to climate change or you know that are fighting climate change, things related to technology AI and so I have investments in each of those types of companies.
So do a lot with that as well.
What do you look for in a leader or an entrepreneur.
I look for someone who is incredibly proactive, curious, a hard worker.
Focused. Now I say focus pocus.
If you're all in and you don't get distracted, and make it all about the company and talk about it and make everything you do related to it.
That that's very important.
You know, we saw a real surge in entrepreneurship coming out of the pandemic. During the pandemic and out of the pandemic. I'm just curious from your vantage point if you can tell us you know, whether that momentum is continuing or have people kind of moved back and are going into more established companies.
Oh, I think it's definitely growing, and I think it's a wonderful thing. It's a great way for all of us to determine our own destiny. I mean, I'm a big believer in that, and I'm seeing it more and more and more.
So does it worry you though, that with rates going higher, venture capital funding might be drying up? We did see sort of a risk.
I don't.
I can't.
We can't call it a resurgence, especially with the way that IPOs have performed over the past couple weeks now. But you know there is some talk of a resurgence. I mean, are you concerned that we're not seeing the support for companies that are starting right now because VC funding has dried up so much?
Well, I have seen that, But as I said that, I think that's how we started the company, no outside funding. And in the book I talk a lot about bootstrapping and how to build a company without it outside funding. And I'm a big believer in that because for so many reasons. I mean, one is you retain ownership. You don't have to be distracted by investors and their short term goals rather than the long term goals at the company.
I think you don't have to dilute ownership. There are a lot of reasons, of course, so if you can do it without outside funding, all the better.
And that's a lot about what I.
Focus on in the book, because that's what we did and that worked incredibly well.
You know, we've certainly had a fair amount of entrepreneurs who have come in and it's all that bootstopping. They've done it for themselves, but it can be really, really difficult, and I think sometimes they would like that assist with some extra funding. Thank you so much, really appreciate it. Lizelting. She's co founder of the translation company Transperfect, and her new book Dream Big and When translating passion into purpose and creating a billion dollar business