Yeah. And and please interrupt me at any time if if any anything comes up. But it what coincided with that, and I'm I'm a bit of bit of an open book, I don't say it for sympathy or anything. But my mom, unfortunately, was diagnosed with a terminal illness around that time. And it was a big reset for me mentally. I realized that life's too short. You're not promised tomorrow. You don't know how many years on this earth you get.
And so you might as well make the most of them and do what you feel like you were really passionate about. And I found venture and it really clicked for me. I had that light bulb moment to say, Hey, I wanna pursue a career in this full time. I think I can be quite good at it if I set my mind to it. To The Investor, a podcast where I, Joel Palofinkle, your host, dives deep into the minds of the world's most influential institutional investors.
In each episode, we sit down with an investor to hear about their journeys and how global markets are driving capital allocation. So join us on this journey as we explore these insights. Great. So really excited about my guest today, Andrew Will. Andrew Will was in the Sutton Capital Fund Accelerator a little while back and then I think was just amazing is like I you you just get to meet people in person after being with them digitally. I think it was a big thing with COVID.
You know, everyone was digital, but it's still a magical thing when you build a relationship with someone. I think Andrew, actually, I think you were in our Slack channel a while back. Mhmm. And, you know, it's just that human connection. I I personally am really good with faces. So, like, when I saw Andrew, knew it was you. So we got to meet, I think, a couple weeks ago at the Dirty Jobs Summit, which is a really good conference. So excited to catch up with this new friend.
I'm gonna give a couple of quick bullets on Andrew. He is the managing partner at Willpower Venture Capital, which was founded in 2024. Andy Will has six years of experience as an early stage investor across two firms making 23 initial seed stage investments and 14 follow on investments. Held four board positions, two board observer positions across two institutions. He was at ZEAL Capital Partners before that and Listen Ventures.
He's also done a lot of public markets investing as well in the software space. He was at JP Morgan for some time and at Tom's Capital Management that consists of about six years. Also part of the Kaufman Fellowship. He graduated in class 28, has an MBA from the University of Chicago Booth in business with concentrations in entrepreneurship and accounting. And that's the high level bullets on Andrew. But Andrew, welcome to the show. I want to go a little deeper. I want to know who Andrew is.
Tell me a little more about where you grew up, what your parents did, what did you think you wanted to do starting out in your career? And some of the maybe pivotal moments in your decision making. And then obviously we're gonna talk about the origin story of you building Willpower Venture Capital. But excited to unpack all of it, and, you're okay with me jumping in every once in a while with, you know, follow on questions. Yeah. Please do. Yeah. One, thank you, Joel, so much for having me on.
A that is just always a huge pleasure to to go from a digital friend to an in person friend as as the world evolves. So it was really fun to spend some time together in New York a few weeks ago, and thanks so much for having me in this amazing community. I've been looking forward to it all week. But, yeah, Andy Will. I'm the managing partner here at Willpower Venture Capital. Probably had a more esoteric path into venture more holistically, but I come from a military family.
So my father and my mother were in the US Army. My father for twenty one years, my mother for six years. And so we moved around a whole lot as a kid from San Antonio, Texas, Little Rock, Arkansas, Manhattan, Kansas, Wurzburg, Germany, and then the Washington DC area. So my father was actually a facial reconstructive surgeon in the army.
And so when the war in Afghanistan started, we got stationed at Walter Reed Army Medical Center here in DC, And he did a lot of facial reconstruction for soldiers coming from overseas. And so I considered this home, I moved out here in middle school and went to high school out in the DC area before kind of moving away for about a decade and coming back in late twenty nineteen.
But it was really formative experience growing up that way because I never was in a certain location for more than a few years. And so you always had to kind of move around into different communities with different demographics, with different socioeconomic statuses, with remake friends. I always had my brother with me, but it was always, you know, I always found it was fascinated with new communities, new problems, how solutions were being provided in both public and private sectors, etcetera.
And I always had a really inquisitive mind. I had gravitated towards math and science and knew I wanted to pursue a career that was more quantitative in nature. And so coming out of that, I was fortunate when I was in in Maryland to be recruited to play lacrosse at Notre Dame. And so I ended up committing to play lacrosse at Notre Dame where I was a finance major as well And kind of falling in the footsteps of some of my teammates who pursued a career in investment banking.
I thought it would be a great, you know, avenue to develop a skill set, a quantitative skill set and really set the foundation for my career as also figuring it out. I really thought going into college candidly as we were talking about that I would be a medical doctor, because that was my entire family are physicians, including my sister-in-law, my brother, my dad, my mom's a general dentist. So, I always thought that was the pathway for me.
But once I got to college, I realized there was more out there, one. And then two, it felt like I couldn't really manage the lab classes with my athletic schedule and my academic schedule. It was probably a cop out to be quite honest with you. But decided to go in a bit of a different direction career wise. And so after I graduated, I ended up interning at a mid market private equity firm in New York called Arsenal Capital Partners after sophomore year.
Really enjoyed that experience, but knew I wanted to go to the banking path and ended up getting an internship at JP Morgan and took a full time job at JP Morgan after graduating in Manhattan. Spent about five and a half years at JPMorgan, most of the time on the market side trading equity derivatives, mainly in their software book. And so I've always been in and around public and late stage private software businesses and really enjoyed that asset class.
Taught me a lot about risk management, fundamental analysis, macroeconomics, etcetera. But I got a little tired of being a market maker, to be quite honest with you, wanted to go deploy risk into high conviction ideas. And we were very constrained coming out of the financial crisis in terms of the proprietary balance sheet positions we could take as market makers. And so I jumped over to Tom's Capital Investment Management after my time at JP Morgan.
We're started as a large single family office for a guy named Noam Gottesman. We managed about a billion and a half of his assets. And then we actually ended up building an internal hedge fund while was there and raised another 400,000,000 in external capital. So I worked on the public market side investing in public software businesses, late stage private software businesses.
And then we had an early stage venture team as well and started to work with that team on more early stage FinTech centric investments given my background. I mean, I fell in love with early stage venture. I gotta be honest, to kinda marrying that financial analysis with more strategic problem solving, being able to have your thumb on the scale five to 10% in the right direction. It felt like you could have a more tangible impact on the outcomes of the investments you're making.
Yeah. And please interrupt me at any time if anything comes up. But what coincided with that, and I'm a bit of an open book and I don't say it for sympathy or anything, but my mom unfortunately was diagnosed with a terminal illness around that time. And it was a big reset for me mentally. I realized that life is too short. You're not promised tomorrow. You don't know how many years on this earth you get.
And so you might as well make the most of it and do what you feel like you were really passionate about. And I found venture and it really clicked for me. I had that light bulb moment to say, Hey, I wanna pursue a career in this full time. I think I can be quite good at it if I set my mind to it. And so no better time than the present.
So I took a hard left hand turn, decided to leave Tom's and ended up being fortunate enough to get into Columbia University and University of Chicago for business school. Chose to go back to the Midwest to UChicago for for b school. Was in the full time program there, but also got a job at Listen Ventures in Chicago, while I was in the full time program. So it really skewed my lap classes towards the night. And I was fortunate to place out of quite a few classes given my previous career path.
And so I ended up graduating a semester early from Booth to move back to the DC area in late twenty nineteen to start a venture fund called Zeal Capital Partners with my former partner. And we ended up raising a little over 50,000,000 for our fund. We scaled that platform to close to 200,000,000 in assets under management over a four and a half year period and had some really strong investment performance during that time.
And coming up kind of towards the tail end of that, I felt like there was a real opportunity to practice venture in a bit of a different capacity, kind of looking at the technological shifts, some of the changes happening in the market from allocators and how they're allocating where the LPU universe was going, etcetera, how liquidity and secondary markets were evolving, etcetera, and felt compelled to jump out on my own and start Willpower Venture
Capital here in, late summer last year and really the fall, is kind of when we launched things. We hit the ground fundraising and got to our close about two months ago. And so we're active in the market, live. I have three portfolio companies that I just couldn't be more excited about. And I just wake up every morning so darn excited to go do this because I'm having an absolute ball.
It's not easy by any means, but I feel like I'm doing exactly what I was meant to do and just feel very fortunate to be in this position and be able to chat with amazing people like yourself. Yeah, thank you so much. Know, one of the questions I have is what were some of the observations that you noticed when you were traveling to different cities? Maybe some nuances of different towns that you lived in And you know, you said there was unique challenges, right?
So different socioeconomic environment. So talk to me about that and then talk to me about some of the skills that you had to build to adapt to different, you know, networks and communities. And obviously, in the military, there's a, you know, different friends you gotta may made. But maybe a little bit about that and then how that's cascaded into you maybe context switching when you're looking at deals and investing. Oh, yeah.
I I think it was one of the more impactful, periods of my life to be quite honest with you because, I mean, we lived in San Antonio, Texas, which was a predominantly Hispanic community, with very different demographics. We lived on base, but I also spent a lot of time off base at Fort St. Houston there.
So seeing all different walks of life from our military friends who were in a very similar life position to us, to those outside the community who were in a very different, both culturally and in terms of the communities that they came from. And so that was a really formative experience. And that was the kind of stop in my life in terms of where we live. Then we moved to San Antonio, Texas, which was a very much blue collar, rural white community.
And so seeing that there was so many similarities between those communities in terms of their struggles, their lack of opportunities, their lack of a lot of higher education and skills development to kind of provide career pathways, etcetera. So I felt that communities were actually more aligned than they were divided, even though they came from very different areas.
And then kind of moving to the DC area and seeing the federal government and private industry at a higher level and more of a diverse community of all different locks of life interacting together in many capacities. And I think the really unifying theme there was the constant moves every few years. You have to be good at building relationships with people because it's either that or have no friends, right?
Yeah. And so I, I think that was one of the reasons honestly, gravitated towards a career adventure is that my entire life has been building trust and rapport with people in a quick manner, meeting new people, seeing new groups of people, being able to relate from life experiences in very different walks of life, etcetera. And that is just wildly fascinating. I love learning about people. I love learning about their stories, why they're doing what they do, what makes them tick as people.
And I think a lot of that analysis lends itself to early stage investment, if you think about it. I probably didn't connect those dots for a couple decades. But but there is just so much life lessons that I certainly take with me as I'm underwriting early stage investments and founder profiles and and all those different attributes that that, you know, can be the ticket to wild success or an underperformance, from an investment standpoint.
When you started your career in middle market private equity, would love to know what was kind of going on in your mind in terms of like why you wanted to start out in PE and maybe some of the areas you worked in that you're allowed to share and would love to know what you think makes a good private equity investor, like especially when you're thinking about middle market and maybe for the audience, just educating people in terms of like how you look at middle market.
Everybody looks at stages differently, right? Early stage for you might be like, you know, you know, a little later than early stage for me. So would love to kinda hear a little education on just middle market and how you look at it and then, you know, just the DNA of a good PE investor. Yeah. No. It's it's a it's a great point, and I I think it is quite a bit different than a than a venture investor.
I would say, the the things that attracted me to it were some of the most competent and brilliant people that I've ever worked with. I mean, hands down, just, like, incredibly driven, incredibly technically sound, but then with operational experience as well.
Once they own these businesses, they're, you know, instilling their playbook to drive efficiency, to drive margin expansion, to increase increase the the fundamentals of the business so that they can resell that asset over time at multiples of what they paid for. And so you're blending this really unique knowledge set and team set, and your risk is very central, right? You're owning a 100% or close to a majority stake in a business.
And so you really have a control element there that you don't have in venture. So it's just a bit of a different flavor. And two, the thing that really was not quite the right fit for me is it's slower moving. Transactions take many months to years to complete. They you're you're you're really going deep with a specific company for a long period of time.
So I think it it lends itself more to the founder persona of going miles deep on a certain topic or problem and really executing against that versus having your hands in a few different pools over time as you do as a venture investor and having many different line items in the portfolio, etcetera. And then two, just slower pace, right? Like the deals take longer, you're analyzing more factors, you're doing more financial engineering than value accretion, in my opinion, at times.
And so I think there's different elements that are attractive and less attractive for certain people. And you really just have to know who you are as a person. Where does your personality fit? Because if you don't really love what you're doing, you're just not gonna be able to work hard enough to find the ultimate success. And so that was kind of my calculus in private equity. I think I could develop the skill set.
You know, I think I'm a a quick learner on that front, but I don't know that I would really enjoy it to the level that would be required of me, to be great at that. And I'm the type of person if I don't have believe I have the ability to be great at something, it's less enticing to me.
I'm very much an all in or all out type of person, and I think that was a lot of the driving force that led me to start Willpower as well is I want ownership over something to really drive it the way that I feel like it needs to be done, to find ultimate success. And when you define middle market, what's kinda like the gross revenue and maybe like the EBITDA that you guys are looking at as kind of a potential portfolio company? And how does kind of like the investment?
Mean, I know the diligence process is months and months, but what are some of the nuances that you've seen that are different with that whole investment process? I know there's a whole lot of financials that you got to look at where you don't have that data and venture, but there's also just probably a lot more compliance and diligence things that you got to do as well. Oh, absolutely.
I mean, they're they're more heritage, typically services based businesses, less recurring revenue models, less software forward. They are typically heritage industries that are really well known, well understood. They might not be very growthy. They might be stable to slightly declining. And so a lot of analysis is around the market dynamics, the business fundamentals, like how, what are the cyclical tailwinds that are gonna drive growth in the market or lack of growth, etcetera.
And so I think it's changing also quite a bit. I mean, it's been sixteen, seventeen years since I was there. And so one, they're significantly bigger as a firm from when I was there, they were just getting started. But, you know, typically mid market to me would be companies kinda in the few 100 millions of dollars of enterprise value to kinda a billion roughly. In that mid market range, maybe a couple billion. And the EBITDA multiples are all over the place.
I think it typically are really strong. The ones that we are looking at are typically 10 to 20% type EBITDA margin businesses, that have pretty strong free cash flow elements to them. And so it's just it's just a very different calculus, and it's very much centric on the the financials tell the story. The management team is a factor. There's no doubt about it, but you're also control investors. You can always change the management team. You can replace individuals.
You can step in and operate yourself. And so there's a lot of I think the big difference between venture and heritage mid market private equity is that control element because we're betting on the jockey. We want our founders to be in that seat. We want that management team to really, you know, express their vision over time, execute against it, and build something of deep value. In the private equity sense, in my opinion, again, I've a very limited experience in private equity.
I'm sure there will be other listeners who send me an email and tell me why I'm wrong. But I think it's a lot more on the financial engineering, financial analysis and seeing how it fits into the market. And as far as ARR, so you said about 200,000,000 in enterprise value. So what's kinda like the annual run rate that was kind of a good target for middle market for your guys' firm?
Yeah. You know, I I think it's because they're mainly services business, they're typically not recurring revenue model revenue models. They're not quite valued. They're not valued. Like like a traditional SaaS business from a Yeah. From a multiple perspective. Right? And so I think anything depending on the sector and the business model, anything from, like, one to two times revenue to four to six times revenue at the upper end of the range.
So we're talking about a very different growth profile, different margin profile, different unit economics than kind of your classic software venture type play, even if they get to the level of scale that a traditional private equity might find attractive. And we're seeing actually quite a bit more acquisitions from financial sponsors in the vertical market software space. So I think there's gonna be more and more market pool to making acquisitions in that space.
And it's certainly something we think a lot about from a willpower portfolio perspective. And then even in those software business, I mean, non software types of businesses, I think the opportunity, you know, we kind of heard about this at the Dirty Jobs Summit, you know, there's little innovation that's needed to kind of completely transform the industry, right?
So if you add a little bit of like a I forgot what was called, but it's like a it's like a chip or like a module that you can add to kind of I think it's called like an RF like a microcontroller, right? Like there's I learned this because I used to work, know, I did an internship at like a large food company and, you know, they would add they would add these band aids to like innovate in the supply chain, you know, and they use these things called programmable logic controllers.
They're like little things that you can add on to like make things a little more efficient. But that could mean millions of dollars of like efficiency. There was something that I installed that allowed us to pause the system. And this is like a very legacy focused manufacturing system for food processing, but like just pausing the system instead of turning the system off. That's like two hours of the productivity, which is like, you know, probably like $10,000,000 a year in like cost savings.
So just those little things can move the needle if you can do some digital transformation. So I think that's where kind of like, you know, as a private, like maybe as a forward thinking private equity investor, if you're taking control stakes, kind of maybe thinking about, like, digital reinnovation in some of those legacy industries could be helpful. You hit you hit the nail on the head, Joel.
And and I think we're seeing a convergence between the venture and private equity space, in my opinion, in three distinct areas as of late. One is, you know, you're I I was just speaking with a a friend who has a large private equity firm that you that you would know, and we're he was just pinging me on the side.
He's like, what kinda, like, SMB type agentic workflows are you looking at from an investment standpoint that would benefit some of our portfolio companies and how we kind of drive efficiency within the portfolio, etcetera. And we had a really robust and fantastic conversation about that.
And I can tell more and more people are thinking about ingraining a lot of these AI workflows within their majority stake positions in their private equity firm to drive margin expansion, to drive better economics, to drive better return profile for their whole period. So that's kind of one area.
Two is you're seeing I think there was a report about it in TechCrunch, and one of my previous investments from Zeal is actually pursuing this strategy right now is pulling an AI tech stack and then acquiring heritage services businesses as a roll up strategy with the core technology offering to drive more efficiency.
And you're seeing, I think, Coslo is looking at this, General Catalyst has looked at or maybe done a couple of deals in this and it's becoming an emerging theme within venture managers side of things. And then three is, I probably have five or six friends from college and business school who have pursued personal roll up strategies, right?
Is where they start buying small businesses, leverage SBA loans, you know, looking at mom and pop, kind of boomer businesses that are retiring, don't have a family legacy to hand off the business to, and they this is part of their retirement pool. But they typically don't have landing pages. They don't have SEO. They don't have, you know, all this low hanging fruit from an opt digital app. Mhmm. Yeah. Point becomes a really attractive business model. And people have done really well with that.
And so I say all to say is I can feel it converging over in pace over the last six to twelve months. And I think it's incredibly exciting. I you know, so we saw the news, I mean, I think probably about like, maybe three to four weeks ago, Tribe Capital is building a roll up strategy as well. So what's really interesting is I think we saw a lot of these firms develop RIAs because they're essentially just managing the wealth there and providing investment advice.
But, you know, to your point, there's huge opportunity to come in and actually own a significant portion of ownership to get better upside. And then they have teams already. Like, think about Andreessen Horowitz, like, they have this whole operator team. Right? These people that come in and there is I was actually gonna, you know, push out a post this week.
There's a role in private equity called the operating partner where you come in and you actually, like, you know, are these these people that come in and they just jump in and pinch hit on all these different deals and help them get to, like, you know, like, come in and work on a specific AI company and get them to like, you know, 20,000,000 in revenue. And then when that's done, they come in off the shelf and work on another project.
So I think there's a whole sir insurgence of these operating partners that are coming out and supporting a roll up strategy essentially. Right? Because that's how they scale. They got this team of marketers, team of sales, you know, sales reps. They could pretty much close for any kind of business. And then they got the dev teams. And then now with AI, you can cut and paste different workflows into, like, a new into a new vertical. So I think that's pretty interesting.
Oh, I I I couldn't agree more. I think it it's super interesting. And I you know, like, the cynical side of me thinks a little bit that a lot of these kinda large multistage funds have gotten so big that they just have to deploy large quantums of capital. And it's a pretty fantastic model to deploy large quantums of capital into and not say it's a good or bad investment.
I think on average, it is a good investment if done the right way and have the right expertise and have the right operating partners to kind of build that strategy from the ground up. And they certainly have enough money to do it. But I think it's more a reaction to the large fund model and expanding fund models, over time, versus, you know, hey.
We can make venture type returns on this exact model because I think on average, from a multiple perspective, you're just not gonna see there's there's there's very few very little potential for an 100 x type outcome in this strategy versus a pure software strategy like you've seen in driving that power law dynamic. Now I think it has probably lower loss ratio, better risk adjusted return profile.
There's probably a justification to have a barbell type of strategy in the portfolio for a fund of that size. But I think it's really interesting thought exercise to say not only are these good investments, where are they happening, but, like, why are they happening, and what's the driving force here? Is it AUM, or is it set? And I don't know if I've shaken out in terms of my opinion of that.
Yeah. And I think and to your point, like, mega funds and franchises, essentially, they have to offer different products to offset the disadvantages of, like, maybe the products that their LPs are currently bought into. Right? So if you're only doing venture, it's heavily illiquid. There's no redemptions or there's no ways that you can pull out. Right? Because it's not liquid. So to offset that, maybe there's a roll up strategy where there's some more ownership and probably a faster sale time.
Mhmm. That's much more favorable than, like, just leveraging secondaries. Right? Yeah. At a higher ownership. And then when I think about it, yeah, there's like the there's private equity with a roll up strategy, then there's venture studios. Where they're building a bunch of ventures and crashing them and then hoping that one will stick based on the parameters that they set. And then there's a whole search fund methodology, right?
We're like, you're essentially kinda like in my mind, way I think about it, like, it's the Harvard grad that's pretty much giving himself a job. Right? He's kinda like giving himself a CEO role to operate a company where, like, private equity, they're the capital allocator, but they are they do have the decision making power to, you know, completely remove an entire team and turn a company around, but they're not coming in to stand in always as a CEO.
They might have to every once in a while, but like I think the big delineation between, you know, the PE with the larger ownership versus the search fund is, you know, the search fund is in in my mind, you tell me how you think about it in terms of those three three different, you know, approaches. I feel like the search fund, you're kinda coming in as a CEO until you maybe replace yourself.
No. I I agree wholeheartedly the way you kinda articulate that, but I would almost add a leg of the stool as well in terms of I'm seeing a lot of, like, long duration hold codes being formed as well.
Yeah. It's, like, thirty year home lives where they're acquiring kinda cash flow positive, smaller but slower growing vertical market software companies or service based businesses, and they have a central kind of hub of resource allocation in terms of how do they bolt on new businesses, increase the aggregate revenue profile and EBITDA profile of the of the businesses as a whole, and every kind of step up and you get a kind of multiple bump in terms of the size and scale of those organizations.
And so I went to a conference down in Longboat Key at the end of last year around holdco strategies where you had, like, folks from Constellation and kinda more emerging brands like that in the market. And, man, I I took so much away from that conference in terms of, like, how they're setting up, what are the things they're paying attention to.
And a lot of it is, what do I wanna avoid as an early early stage vertical market software investor from a venture and PowerLock perspective, where, you know, we don't want an exit that they're looking for. We might have a few of them, and we're certainly happy to facilitate those transactions, help generate cash flow for for our investors and and, you know, generate a good result for our portfolio companies. That's actually a core part of our strategy.
But I wanted to identify those characteristics that they're looking for in those businesses so that we can kinda, one, see if we have companies in our portfolio that fit that criteria and it's a good exit opportunity for them, we'll certainly help them with that transaction. But two, how do we actually avoid getting into those scenarios when we're getting into net new investments? A new one, like a stool, I would say, or a leg, I guess of the stool that has been quite novel.
And I don't really know what the name of it is, but I've seen the consulting for equity model emerge too. So marketing agencies, the problem is, you know, if you're trying to charge a retainer or if you're doing like sales consulting or whatever service you're doing, if you're not successful in those two, three months, the retainer expires and now you're to find a new client hopefully to like give you fresh retainer revenue. And you're strapped on capacity to do a good job.
So I've seen some people that have done really well that don't need the cash flow based on whatever their services to actually deliver consulting services in exchange for equity. But the kicker for this is the equity is not phantom paper equity like we see in venture. The equity is actually in the form of distributions.
So that's something that I thought was really so you'd actually get cash but you only get cash if you deliver that performance and there's also an equity ownership stake in the company. And I think that could be really interesting too if you're if you're like starting out of college and you can't get the SBA loan, you can't get funding, you can deliver services for people. Right?
Like, hey, maybe what I'll do is I will arrange like 10 LP meetings for you and in exchange like because of that service you give me some of the GP stake or you give me some equity or some carry or something like that. Maybe in combination with a little bit of cash, but like a lesser amount of cash than it would be like of a salary. And like the upside is that you get that equity, which you would only get that equity if you had capital, right?
So that's I don't know what that category is, but I just think the consulting for equity model is something that I've been seeing a little more. If you're not able to raise capital or if you don't prefer to raise capital, if you don't have the capital. I couldn't agree more. I've definitely seen a lot of that in the market.
And I would say one of the things that I advise our companies and just companies that I talk to on kind of engaging those type of relationships, whether it's consulting or if it's just adviser who's gonna have some type of equity stake in the company, etcetera, is to just make it really milestone based in terms of hard data of what value they got. Candidly, now we're trying to it without, you know, completely divulging this.
But I know an individual who's a very early adviser of a large neobank that may or may not be IPO ing this year, who maybe worked with a company two or three hours in totality. You're gonna make, you know, figures on this exit. Yes. Like, I mean, if you hire a coach for equity. Right? I mean, what is a tangible? Like, I think, like, there needs to be cash coming in the door. Right?
So if you're doing sales and bringing in real money in the door, that is, like, hard tangible lifeblood results, right, versus, oh, I coached you for two hours. So Exactly. 10% equity in the company. And it might be great. It might be worth it. A 100%. I always just try and make a point system. Right? Like, whether it's hours worked, whether it's relation introductions made, whether it's, you know, however you wanna structure it.
But I I do encourage people to be very thoughtful about that because once the equity's gone, it's gone. I know. And so you really wanna make sure that you're getting the value for those because that's the other thing is when people are distributing equity, they don't think about it in dollar terms as well. Right? And so if you're if you have a, you know, $10,000,000 company and you give them 1% of equity, you're giving them a $100,000.
Yes. It might not be fundamentally valued that way yet, but I think you have to train yourself in thinking in that manner if you're confident in what you're building, etcetera, and you will make different decisions in terms of how you structure those relationships. Yeah, and disclaimer always talk to an attorney. I know some really great ones, but I would say I would yeah yeah and I will. The only thing I would say is you know we do in venture land.
We do have some of these templates like we have the fast agreement. And I think I've used the FAST agreement in the past and like, you know, it is kind of structured in a way where like it is bound by either cash or equity. And then there also is like some hours of commitment as well to earn that. So I think that's interesting too. But, you know, you always wanna probably talk to somebody that's qualified.
They can you know, especially if it's, like, impacting your ownership or control in the company. So it's definitely important. If you were to hire somebody and we'll talk about venture in a few minutes. But if you were to hire somebody in middle market private equity, what's kind of the hard skills and the soft skills that and maybe culture Yep. Fit that you would look for? Yeah. I think it's evolving.
I think one is I think almost all mid market buyout companies tend to hire out of banking programs to your to your analyst programs and investment banks just because you're getting that core modeling skill set. Right? You're doing it day in and day out, you know, multiple times a day, many hours a day for two years. You're a rock star at modeling by the time you're done with that program. And that's a big part of being a private equity analyst. Right? You're modeling out the financials.
You're doing a lot of the grunt work around making sure all the information is there and so that the c more senior folks can really underwrite the investment and decide do they wanna do this, how do they wanna operationalize it, you know, etcetera. And so from a skill set perspective, it's very quantitative.
So you wanna be able to display either you know, I think they tend to grab tight towards finest majors, accounting majors, mathematics majors in undergrad who typically have some banking experience. I think the Old Guard typically will give you a two year contract to come in at a mid market buyout shop with the knowledge of saying, hey, you're gonna go to business school and we'll either sponsor you at business school or we'll hold your role or they'll just turn it out and hire someone new.
There's many kind of structures there, but kind of the old path is, hey, beginning analyst at private equity, go to business school for two years, come back as a senior associate and kind of climb the ladder that way. I think it is shifting just because I don't think business school is perceived quite the same way as it was previously. There's more flexibility in outcomes, but I think it really comes back to that core technical financial skill set that is a necessity to go do that work.
And it's not rocket science by any means, but they want you to be very competent going into that. And then from a personality standpoint, you know, any private equity firm that I interviewed at, we always do personality tests, which is I I find very interesting because I think there is a huge cultural fit there.
I think it tends to lend itself to more introverted people who can, do siloed work, who get energy from doing more quantitative analysis, who are patient and have longer term time horizons and less instant gratification. I think those are some of the attributes that tend to thrive in that environment. And me personally, I'm a little ADD. I like to move quick. I don't know if you can hear how quickly I speak. I love to build relationships with people, etcetera. Let's not say I couldn't do that.
I just didn't get energy from that environment. And that's why I gravitated towards the trading floor because it's the polar opposite. It's chaos at all times. Loud noises and and people interacting and all those type of things.
And, clearly didn't stay in that career path, but I feel like venture has actually blended the two together because I'm constantly meeting new people on a daily basis, whether it be LPs fundraising or founders building interesting things, new hires that we're bringing on, etcetera. That is something new every day. We're learning every day. You know, it's it's something that's incredibly exciting to me, and it really fits my personality. So that's what I always encourage people is Yeah.
Take personality tests, be really introspective about who you are as a person and what skill sets you think you have and give you energy and then pursue a career path that fits that mold. And so it takes testing. I went on a few before I found what I believe is right for me. And I plan to do Yeah. No. I mean, hear I've pivoted my career like three times. So I got the same question for Venture, but one dial tighter with kinda aligning with your culture.
So tell me about the values of Willpower Venture Capital and, like, what you look for from a culture perspective when you're looking to make your hire and then also the, you know, obviously, like, the the technical skills that you're looking for and and and the soft skills. Yeah. No. It's such a it's such a good point, and I I'll I'll take this from from one of from my biggest mentor, a guy named Kevin Compton, who runs RADAR Partners in Palo Alto and formerly a Kleiner Perkins GP.
He's just an incredible individual and has taught me a lot throughout my career. And he always talks about being a servant leader, and that's always struck a chord with me because I do think that is a core element of venture. Because, look, at the end of the day, we're financing companies. We're always minority owners of the business. We're certainly not the stars of the show.
The founders are the stars of the show who are, you know, putting, you know, years of their life and hours on end on daily basis building something of meaning. And we certainly play a role in that ecosystem, but it's not the main role. And I think too many people in our industry, take credit for the the accomplishments entrepreneurs. They overrepresent how much they did to drive that outcome, etcetera. And this isn't me kind of bad mouthing our industry because I love it.
And I think there is a ton of value and such honor in it. And there's a lot of patriotic elements to it that I talk about often And I truly love it. But I think when we think about our culture, it's honesty, integrity, and focus. And so we wanna if we say we're gonna do something, we do it a 100 times out of a 100. And if there's, you know, a one in a 100 chance that it doesn't happen, we're gonna amend that and say, hey, this didn't happen for this reason.
Here's how we're gonna remedy the situation because it takes so long to build that trust and rapport, but so easily lost. And so we always say what we mean, mean what we say, and do it in quick order or tell why we can't do it that way. And so when we're hiring people, we really underwrite for trust and honesty, a skill set we can teach, drive less teachable, but we wanna underwrite for having extreme drive, grittiness, willpower. It's not a mistake that we named willpower that way.
It's really the attribute we love in founders in terms of their ability to persevere through up and down times. Like, there's always gonna be a roller coaster ride when you're on this journey, but how do you kinda keep that mental fortitude to keep pushing forward and keep driving the the the vision that you see as possible and execute on a daily basis? And so the skill set itself as a venture, it's more art than science at the end of the day.
But I think the core components are that trust, honesty, grittiness, drive, and ability to be a constant learner. And so those are the attributes we try and underwrite for folks who join us. We try and underwrite for founders that we partner with and we try and get better about on a daily basis. I have a little sticky note up on my computer right here in front of us every single day that just says focus on the inputs, the outputs because the outputs take care of themselves.
If you have a true to your culture, stay true to what you wanna do on every day and get just 1% better every day. Not you don't have to be 20% better every day, but just get 1% better every day. No. That that's super inspiring, and I really appreciate that. That was really helpful. I wanna talk a little more about leadership, and the reason why is, I've read a lot of books. You know?
I don't know if people have read John Maxwell, but, like, there's all these but he has a book called, like, the five levels of leadership, and there's different ways that you can motivate people, right? There's people that motivate people with fear. There's people that motivate people with incentives. I've had GPs that have hired executive coaches to kind of train them on culture. But like what's advice that you would give on just leadership as a whole, right?
As a GP, as a founder building a firm, obviously you talked about servant leadership, which is probably the main answer, but how do we, do you think leadership has learned or do you think it's innate in some people or do you think it's a combination of both? I you know, not to take the cop out answer. I do think it's a combination of both, but I'll kind of further further extrapolate. And similar to you, I'm a huge student of leadership.
I think it's such a crucial element to anything you do in your life. Right? And so I try and read books on it. I listen to podcasts on it. I also listen to a lot of military leaders because I think there's a ton of lessons to be learned at echelon to, to what we do in private industry.
And it's one it's actually one of the passions in my life is I specifically work with former special operators as they're getting out of the military to understand quantify their skill sets and see where they might fit into private market and help kind of make that transition a little bit easier. And so I say that all today is that this is definitely a big, big, big, big focus for us.
And I think everyone is born inherently with a different kind of cup of where does their leadership aptitude lie, right? And some might be bigger than others. And unfortunately, life's not fair. Everyone's kind of born with a different skill set, a different IQ, a different opportunities based on where you grew up, family dynamics, etcetera. But you can certainly get better at it.
And I think someone I've I've I I learned a lot from is a guy named Jocko Willink, who's a former, Navy SEAL officer, who who is the the task force command task task unit commander in the battle of Ramadi. And he wrote books or has multiple books on leadership. And he talks a lot about this concept of good. As a leader, you take a 100% accountability for every mistake the team makes, And he doesn't mean that lightly. He means like something terrible happens. You say good.
Here's the benefit to that. Like, I got a no from an LP that I thought was gonna be a yes. Great. Learned something from the feedback that they gave me. I probably didn't present it in the right way. They didn't get this part of our strategy the right way. We have this. That's on me. That's not on them that they didn't see something in me. I didn't present it in the best way possible, and I need to learn from that experience in the next one that we do.
And so I try and take that attitude to everything that we do is that whatever happens on the negative side, it is a 100% my fault, and and you have to own that. And even if you don't feel that way, intrinsically, do some introspection because I will almost guarantee you'll be able to figure out a few things that you could have done better that could have shifted the result to something different. Or if it's something that's just complete bad luck.
Like for instance, we we did our close about ten days after Liberation Day. So you can imagine how that was a little funky going into a close there and not every investment that was intended to come in came in things of that nature. You could certainly get very upset about that happening. And look, I can't control policy at the federal level. I can't control market dynamics around the time we were closed, etcetera. But I can I can control how I handle that?
And I was angry the day it happened, and the next day I said, you know what? We need to get back to work, and we need to fill the gap, and we need to continue to build relationships. And I bet you we can actually turn some of these investors who got cold feet at the end of the day. And so it's all just kinda that Yeah. I saw something in my feed, like, literally three days ago, and it was pretty groundbreaking for me. And it it's just, very stupid and very common sense.
But the fee the the the video was like something in my Instagram or something, but it was like sales is a reset game. So you could, you know, do fundraising. You could do you you could try to go on, you know, multiple dates. And, like, the thing is, if something didn't work out, there's always a new person that maybe not may not know about all the reasons why it didn't work out. And you can actually just hit reset and start over again without all the baggage, you know?
And and probably, you know, kinda to the to the point when you said good, it's good because you probably are not gonna do the the you know, maybe follow-up with the same mistakes that you made two seconds ago on the previous prospect, but there's a brand new prospect right afterwards. You know? So it really is if you think about it. Fundraising, sales, dating, job searching, it's a reset game.
You're gonna get rejected hundreds and hundreds of times, but there's that one new prospect that's there ten minutes later. Totally. And I though someone said this to me really tangibly the other day, and they said, you only get upset at nos if you have a pipeline issue. Right? Like, you have a limited number of opportunities and you get a no and it's, one of 10, that's 10% of your opportunity spot. You have a 100 of them, like, oh, whatever. Next one. Let's let's keep moving forward. Right?
Mhmm. Yeah. And then I think, you know, you get better. I think tech teams, sales teams, enterprise teams, they, you know, they measure this down to the t with data. Right? So you can take data to really understand, you know, how many on average, like, how many leads do you need to have in your pipeline to possibly have a conversation?
And then, you know, you kinda go down the funnel like that conversation turns into a a sale and, like, there's a rate at, like, that that sales process of, like, closure. And if you can measure that and, you know, hopefully make it somewhat repeatable, that helps. There's nuances with b two b versus, consumer. But I think the power of software is you can just sell one thing thousands and thousands of times, which is great. Totally agree.
And, you know, I'm so nerdy that on this fact that, I record every meeting, every pitch that I do, and then I feed it into, AI to give me a voice readout of that meeting when I'm driving in the car and things like that so I can learn from it and be like, oh, I see. Are there any tools that you're that you recommend that will synthesize your call and how you did? Like, that'd be really great for GPs.
Like, if they had an LP call, like, maybe just the inflection of how you spoke and maybe how you handle objections. Like, if there there's gotta be I mean, it's not I in my mind now that we have ChatGPT, I feel like there's gotta be some system for, like, sales reps and GPs or people or founders raising money. That definitely exists. I mean, not quite the level of granularity you're talking about.
I know a lot of people in the industry use granola, and it they just had a big financing and, you know, everyone loves that service, and I think it's fantastic. So granola is kind of the closest one? It's kinda? What tactic is what I use. It's very similar to granola on that side, but it gives you the output of the transcript. It has really, you know, fantastic AI summaries of what exactly happened.
You can convert it to a podcast and, like, listen to the actually, like, the verbiage, that way via, Google's, what do call it, notebook outline. Yeah. And so you can just transfer your feed into that, and then I could have a little podcast in the car when I'm listening. I try and find some native ways that we can learn all the time because I drive a lot and things like that.
And if I have to, I'll listen to a call and learn something from that, or I'll listen to a podcast like the founder podcast with, David Senra. Think just think you have to be a student of history.
And so learning from the most exceptional founders over the last hundred and fifty years of American history or internationally, in in other geos, I just think there's so many, whether it's a completely different industry, you can learn about leadership lessons, you can learn about company culture, you can learn about focus on kind of small intangible things that drive performance over the long run. And so don't know. I don't know if it's just me being nerdy.
I don't know if it we'll see over the long term how impactful it is. But I just think I think you have to take every bit of information over the ability because it's it's hard to be successful no matter what Yeah. Meet every advantage that you can. Well, Andy, I know we got three minutes left. I feel like I could still I still got probably, like, another hour I could probably, you know, unpack with you, and we'll we'll do that over cocktails next time.
But but I think, look, we got three minutes. Two questions. What was the pivotal moment that made you decide that you wanted to build willpower? And then you've already shared a lot of wisdom, maybe one more piece of advice from a mentor or like a past work experience. Yeah. No. I mean, I think it's twofold and one comes with a quote from a mentor.
And, I'd say the being, I was on paternity, the paternity leave that I was able to take actually for my child, when I was thinking about willpower, in earnest. And so I had a bit of time for three weeks to be at home with my family and to just have some time to sit down and think about what do I wanna get out of the next couple decades of my career? Like, this is a long game. You know, we're gonna be doing this for a long time.
So how what is gonna drive the most value, the most happiness, the most opportunity, etcetera? And so I started to kind of think about like, what do I wanna build and what are the shifting market dynamics? Why do I feel like I need to build something? Because it's easier to do a joint firm that's already established. But if you think there's a new concept to be had and a new way to operationalize things, then you need to go build it yourself.
And so fast forward, I flew out to the Bay Area to meet with my kind of three core mentors. And one of them kind of stopped me mid sentence and he said, you know, Andy, if you can't bet on yourself, who the heck can you bet on? And that rocked me to my core. I gotta be honest with you. I thought about the entire flight home and had a conversation with my wife about in the morning and I just said, hey, honey. Like, here's what I really wanna do. Here's how I'm thinking about it.
Here's the timeline. Here's what the cost is gonna be in the interim. You know, here's how it's gonna affect our family, etcetera and I had her full confidence to go do it and so, I like to leave it with it. I could never do this without my wife. She is my rock. She's an amazing person. She keeps me focused, when I have moments of doubt in myself. She keeps the family train running on time, etcetera. And so without her and without my mentors, I I just don't know if I'd have the Mhmm.
I'm gonna go to go do it. And I'm just beyond thankful that we have because, I I can see the light of the tunnel getting brighter every day. I'm having an absolute ball every day. I'm learning 10 times more than I ever have in my career on a daily basis. And so, if I'm a betting man, which I am, I think it'll, it'll be a good result in the end, but it only comes from work. It's not gonna happen unless we keep doing this every day. Yeah. No, I totally agree.
I think if you've got family and you've got your health and you've got a support system, you know, you could literally do anything you want, but it's not it's not gonna be a smooth sailing road. I mean, so that's really what's gonna help you mentally to to be resilient along with physically, to have the willpower as you as you stated. And then and and just kinda being able to handle, like, whatever comes at you. So I think I totally agree with that.
I was gonna say something else, but I'll maybe I'll share that later because I can't remember. But Well, one thing I actually forget you mentioned that I just forgot to bring up because I do think it's important and sorry to to push this over a minute No. No worries. Is the physical resilience side things. I do think that's huge. I get up every single morning at 5AM and workout. Every single morning.
Because I built a home gym in my basement because it's just such a huge element to if you're feeling good physically, if you're more clear mentally, you have more stamina to work harder, you have more enjoyment, etcetera. I think it is a missing link that we need to normalize in in the professional senses. You can still work fit fifteen hours a day and still work out. They're not mutually exclusive. You could Yeah. Throw a few push ups in before between meetings, you know, etcetera.
There's many ways to do that, but I do think there's an inextricable tie between physical readiness and mental readiness. Yeah. No. I totally agree. Well, Andy, this was amazing. Really appreciate you opening up about everything and sharing your story, you know, many levels deeper, and I know the community really appreciates it and, you know, appreciate all that you do for the founders as well. And you taking the time out to to come in here and educate us.
No. Thank you so much for welcoming me into the community, Joel. It was an absolute pleasure, and, you know, I'm just very thankful to to call you a friend and, and then get to spend some time together in person and hopefully, much more of that here in the near future. Yeah. Likewise, Andy. Take care, and everybody else have a great day. Alright. Thank you so much. Bye.